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

FEDERAL COURT OF AUSTRALIA

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

Parties:	SIGMA PHARMACEUTICALS (AUSTRALIA) PTY LTD v WYETH and WYETH AUSTRALIA PTY LIMITED ALPHAPHARM PTY LIMITED v WYETH and WYETH AUSTRALIA PTY LIMITED GENERIC HEALTH PTY LTD v WYETH and WYETH AUSTRALIA PTY LIMITED

File numbers:	VID 195 of 2009 NSD 596 of 2009 NSD 1124 of 2009

Judge:	JAGOT J

Date of judgment:	8 November 2010

Catchwords:	PATENTS – validity – priority date – whether claims fairly based on matter disclosed in body of specification – whether invention sufficiently described – whether claims clear PATENTS – validity – inventive step – obviousness – whether claims lacked an inventive step compared with prior art base – commercial success PATENTS – revocation of patent – whether patent obtained by false suggestion or misrepresentation – entitlement – whether claimed invention is useful PATENTS – infringement

Legislation:	Patents Act 1990 (Cth)

Cases cited:	Aktiebolaget Hässle v Alphapharm Pty Limited (2002) 212 CLR 411; [2002] HCA 59 Alphapharm Pty Ltd v H Lundbeck A/S (2008) 76 IPR 618; [2008] FCA 559 Alphapharm Pty Ltd v Wyeth (2009) 82 IPR 71; [2009] FCA 945 Apotex Pty Ltd (formerly GenRx Pty Ltd) v Sanofi-Aventis (2008) 78 IPR 485; [2008] FCA 1194 Apotex Pty Ltd v Sanofi-Aventis (2009) 82 IPR 416; [2009] FCAFC 134 Atlantis Corporation Pty Ltd v Schindler (1997) 39 IPR 29 BP Exploration Co (Libya) Ltd v Hunt [1980] 1 NSWLR 496 Commercial Union Assurance Company of Australia v Ferrcom Pty Ltd (1991) 22 NSWLR 389 EI Du Pont de Nemours and Company v ICI Chemicals & Polymers Ltd (2005) 66 IPR 462; [2005] FCA 892 Fresenius Medical Care Australia Pty Ltd v Gambro Pty Ltd (2005) 224 ALR 168; [2005] FCAFC 220 H Lundbeck A/S v Alphapharm Pty Ltd (2009) 177 FCR 151; [2009] FCAFC 70 ICI Chemicals & Polymers Ltd v Lubrizol Corporation Inc (1999) 45 IPR 577; [1999] FCA 345 ITW AFC Pty Ltd v Loi & Tran Pty Ltd (2008) 76 IPR 129; [2008] FCA 552 JMVB Enterprises Pty Ltd (formerly known as A’Van Campers Pty Ltd) v Camoflag Pty Ltd (2005) 67 IPR 68; [2005] FCA 1474 Jones v Dunkel (1958) 101 CLR 298 Kimberly-Clark Australia Pty Limited v Arico Trading International Pty Limited (2001) 207 CLR 1; [2001] HCA 8 Leonardis v Sartas No 1 Pty Ltd (1996) 67 FCR 126 Lockwood Security Products Pty Limited v Doric Products Pty Limited (No 1) (2004) 217 CLR 274; [2004] HCA 58 Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (No 2) (2007) 235 CLR 173; [2007] HCA 21 Martin v Scribal Pty Ltd (1954) 92 CLR 17 Merck & Co Inc v Arrow Pharmaceuticals Ltd (2006) 68 IPR 511; [2006] FCAFC 91 Microsoft Corporation v PC Club Australia Pty Ltd (2005) 148 FCR 310; [2005] FCA 1522 Nicaro Holdings Pty Ltd v Martin Engineering Co (1990) 16 IPR 545 Pfizer Overseas Pharmaceuticals v Eli Lilly & Company (2006) 68 IPR 1; [2005] FCAFC 224 R v Commissioner of Patents; Ex parte Martin (1953) 89 CLR 381 Ranbaxy Australia Pty Ltd v Warner-Lambert Co LLC (2008) 77 IPR 449; [2008] FCAFC 82 Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491; [2002] HCA 10 Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth (2009) 81 IPR 339; [2009] FCA 595 Speedy Gantry Hire Pty Ltd v Preston Erection Pty Ltd (1998) 40 IPR 543 Stack v Davies Shephard Pty Ltd (2001) 108 FCR 422; [2001] FCA 501 The Wellcome Foundation Limited v VR Laboratories (Aust.) Proprietary Limited (1981) 148 CLR 262 Trident General Insurance Co Limited v McNiece Bros Proprietary Ltd (1988) 165 CLR 107 University of British Columbia v Conor Medsystems Inc (2006) 155 FCR 391; [2006] FCAFC 154 University of Western Australia v Gray (No 20) (2008) 76 IPR 222; [2008] FCA 498 Welch Perrin and Company Proprietary Limited v Worrel (1961) 106 CLR 588 WM Wrigley Jr Company v Cadbury-Schweppes Pty Ltd (2005) 66 IPR 298; [2005] FCA 1035

Date of hearing:	15-16, 19-23, 29-30 April 2010, 3-7, 25-28, 31 May 2010

Date of last submissions:	3 November 2010

Place:	Sydney

Division:	GENERAL DIVISION

Category:	Catchwords

Number of paragraphs:	632

Counsel for the Applicant / Cross-Respondent in VID 195 of 2009:	Mr D Shavin QC and Ms HMJ Rofe

Solicitor for the Applicant / Cross-Respondent in VID 195 of 2009:	Griffith Hack Lawyers

Counsel for the Applicant / Cross-Respondent in NSD 596 of 2009:	Mr SCG Burley SC and Mr PW Flynn

Solicitor for the Applicant / Cross-Respondent in NSD 596 of 2009:	Mallesons Stephen Jaques

Counsel for the Applicant / Cross-Respondent in NSD 1124 of 2009:	Ms AH Bowne SC

Solicitor for the Applicant / Cross-Respondent in NSD 1124 of 2009:	Middletons

Counsel for the Respondents / Cross-Claimants in VID 195 of 2009, NSD 596 of 2009 and NSD 1124 of 2009:	Mr AJL Bannon SC and Mr C Dimitriadis

Solicitor for the Respondents / Cross-Claimants in VID 195 of 2009, NSD 596 of 2009 and NSD 1124 of 2009:	Jones Day Lawyers

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	VID 195 of 2009

BETWEEN:

SIGMA PHARMACEUTICALS (AUSTRALIA) PTY LTD

Applicant / Cross-Respondent

AND:

WYETH

First Respondent / First Cross-Claimant

WYETH AUSTRALIA PTY LIMITED

Second Respondent / Second Cross-Claimant

JUDGE:	JAGOT J
DATE OF ORDER:	8 November 2010
WHERE MADE:	SYDNEY

THE COURT DECLARES THAT:

1. The Applicant / Cross-Respondent has threatened to infringe each of claims 1, 4, 5, 8, 9, 10, 15, 16 and 27 of Australian Patent No 2003259586 (the Patent) by importing, marketing, taking orders for, selling, supplying, and offering to supply products included in the Australian Register of Therapeutic Goods under the name “Evelexa XR” (the Evelexa XR Products) in Australia for use by persons in need of venlafaxine for treatment of depression or social anxiety disorder, and by authorising, procuring or inducing or joining in a common design with other persons to do such acts, without the licence or authority of First Respondent / First Cross-Claimant.

THE COURT ORDERS THAT:

2. The draft reasons for judgment provided to the parties on 23 September 2010 be published as the reasons for judgment, except for:

(a) the quote in [624]: 2nd paragraph last sentence, 4th paragraph after “excipients” to the end of the 4th paragraph, 5th paragraph last sentence;

(b) [628] 3rd to 6th sentences inclusive; and

(together the confidential sentences).

3. The parties be provided with the reasons for judgment both as published and including the confidential sentences.

4. The confidential sentences be kept confidential by the parties (other than Alphapharm Pty Limited) and not be disclosed other than to their legal representatives and such other person as may be agreed to in writing by Alphapharm Pty Limited.

5. The Application be dismissed.

6. Order 1 made on 3 June 2009 be discharged and the Respondents / Cross-Claimants be released from the undertakings given by them to the Court in relation to those orders, being undertakings:

(a) to submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as it may direct, to any person, whether or not a party, adversely affected by any operation of those orders or any continuation (with or without variation) thereof; and

(b) to pay the compensation referred to in (a) to the person there referred to.

7. The Applicant / Cross-Respondent (whether by itself, its directors, servants, agents or otherwise) be restrained from infringing claims 1, 4, 5, 8, 9, 10, 15, 16 and 27 of the Patent, including, without limitation, by, in Australia, during the term of the Patent and without the licence or authority of the First Respondent / First Cross-Claimant:

(a) importing, marketing, taking orders for, selling, supplying or offering to supply the Evelexa XR Products (or any other product comprising the same generic extended release formulation of venlafaxine hydrochloride) for use by persons in need of venlafaxine;

(b) applying to list the Evelexa XR Products (or any other product comprising the same extended release formulation of venlafaxine hydrochloride) on the Schedule of Pharmaceutical Benefits;

(d) procuring or inducing or joining in a common design with any other person to do any act referred to in sub-paragraphs (a), (b) or (c) above.

8. Within 14 days of the date of these orders the Applicant / Cross-Respondent destroy any Evelexa XR Products (or any other product comprising the same generic modified release formulation of venlafaxine hydrochloride) in Australia in the possession, power or control of the Applicant / Cross-Respondent.

9. Within 14 days of the date of these orders the Applicant / Cross-Respondent file and serve an affidavit verifying compliance with order 8 of these orders.

10. The Applicant / Cross-Respondent pay the Respondents / Cross-Claimants’ costs of and incidental to the proceeding, as agreed or taxed.

THE COURT CERTIFIES THAT

11. For the purpose of section 19 of the Patents Act 1990 (Cth), the validity of claims 1 to 28 of the Patent was questioned unsuccessfully in this proceeding.

THE COURT FURTHER:

12. ORDERS that orders 8, 9 and 11 above be stayed:

(a) initially until the date which is 14 days after the making of these orders; and

(b) if a notice of appeal to the Full Court of the Federal Court is filed within that period, until the determination of that appeal.

13. ORDERS the Applicant, during the currency of the stay in order 12 above, not to move, transfer, or otherwise deal in any Evelexa XR Products.

14. NOTES the undertaking of the Respondents / Cross-Claimants to the Court that, until further order, they will not make any application to de-list Efexor-XR from the Pharmaceutical Benefits Scheme.

15. ORDERS that the notice of motion filed 27 October 2010 be dismissed with costs.

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.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 596 of 2009

BETWEEN:

ALPHAPHARM PTY LIMITED

Applicant / Cross-Respondent

AND:

WYETH

First Respondent / First Cross-Claimant

WYETH AUSTRALIA PTY LIMITED

Second Respondent / Second Cross-Claimant

JUDGE:	JAGOT J
DATE OF ORDER:	8 November 2010
WHERE MADE:	SYDNEY

THE COURT DECLARES THAT:

1. The Applicant / Cross-Respondent has threatened to infringe each of claims 1, 4, 5, 8, 9, 10, 15, 16 and 27 of Australian Patent No 2003259586 (the Patent) by importing, marketing, taking orders for, selling, supplying, and offering to supply products included in the Australian Register of Therapeutic Goods under the name “Enlafax-XR” (the Enlafax-XR Products) in Australia for use by persons in need of venlafaxine for treatment of depression or social anxiety disorder, and by authorising, procuring or inducing or joining in a common design with other persons to do such acts, without the licence or authority of First Respondent / First Cross-Claimant.

THE COURT ORDERS THAT:

2. The draft reasons for judgment provided to the parties on 23 September 2010 be published as the reasons for judgment, except for:

(a) the quote in [624]: 2nd paragraph last sentence, 4th paragraph after “excipients” to the end of the 4th paragraph, 5th paragraph last sentence;

(b) [628] 3rd to 6th sentences inclusive; and

(together the confidential sentences).

3. The parties be provided with the reasons for judgment both as published and including the confidential sentences.

5. The Application be dismissed.

6. Orders 1 and 2 made on 25 August 2009 be discharged and the Respondents / Cross-Claimants be released from the undertakings given by them to the Court in relation to those orders, being undertakings:

(b) to pay the compensation referred to in (a) to the person there referred to; and

(a) importing, marketing, taking orders for, selling, supplying or offering to supply the Enlafax-XR Products (or any other product comprising the same generic modified release formulation of venlafaxine hydrochloride) for use by persons in need of venlafaxine;

(b) importing, marketing, taking orders for, selling, supplying or offering to supply the Enlafax-XR Products (or any other product comprising the same generic modified release formulation of venlafaxine hydrochloride) together with the giving of, or the publication of advertisements containing, instructions or inducements for the use of the Enlafax-XR Products by persons in need of venlafaxine;

(c) applying to list the Enlafax-XR Products (or any other product comprising the same generic modified release formulation of venlafaxine hydrochloride) on the Schedule of Pharmaceutical Benefits;

(d) authorising any other person to do any act referred to in sub-paragraphs (a), (b), or (c) above; or

(e) procuring or inducing or joining in a common design with any other person to do any act referred to in sub-paragraphs (a), (b), (c) or (d) above.

8. Within 14 days of the date of this order the Applicant / Cross-Respondent destroy any Enlafax-XR Products (or any other product comprising the same generic modified release formulation of venlafaxine hydrochloride) in Australia in the possession, power or control of the Applicant / Cross-Respondent.

9. Within 14 days of the date of this order the Applicant / Cross-Respondent file and serve an affidavit verifying compliance with order 8 of these orders.

10. The Applicant / Cross-Respondent pay the Respondents / Cross-Claimants’ costs of and incidental to the proceeding, as agreed or taxed.

THE COURT CERTIFIES THAT:

11. For the purpose of section 19 of the Patents Act 1990 (Cth), the validity of claims 1 to 28 of the Patent was questioned unsuccessfully in this proceeding.

THE COURT FURTHER:

12. ORDERS that upon the undertaking noted in paragraph 13 below, orders 8, 9 and 11 above be stayed:

(a) initially until the date which is 14 days after the making of these orders; and

(b) if a notice of appeal to the Full Court of the Federal Court is filed within that period, until the determination of that appeal.

13. NOTES that the Applicant undertakes to the Court that, during the currency of the stay in order 12 above, it will not move, transfer, or otherwise deal in any Enlafax-XR Products.

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.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 1124 of 2009

BETWEEN:

GENERIC HEALTH PTY LTD

Applicant / Cross-Respondent

AND:

WYETH

First Respondent / First Cross-Claimant

WYETH AUSTRALIA PTY LIMITED

Second Respondent / Second Cross-Claimant

JUDGE:	JAGOT J
DATE OF ORDER:	8 November 2010
WHERE MADE:	SYDNEY

THE COURT DECLARES THAT:

1. The Applicant / Cross-Respondent has threatened to infringe each of claims 1, 4, 5, 8, 9, 10, 15, 16 and 27 of Australian Patent No 2003259586 (the Patent) by importing, marketing, taking orders for, selling, supplying, and offering to supply any products the subject of ARTG registration numbers 151874, 151875, 151876, 151877, 151878, 151880, 151884, 151885 (the GH Products) in Australia for use by persons in need of venlafaxine for the treatment of depression or social anxiety disorder.

THE COURT ORDERS THAT

2. The draft reasons for judgment provided to the parties on 23 September 2010 be published as the reasons for judgment, except for:

(a) the quote in [624]: 2nd paragraph last sentence, 4th paragraph after “excipients” to the end of the 4th paragraph, 5th paragraph last sentence;

(b) [628] 3rd to 6th sentences inclusive; and

(together the confidential sentences).

3. The parties be provided with the reasons for judgment both as published and including the confidential sentences.

5. The Application be dismissed.

6. Order 1 made on 10 November 2009 be discharged and the Respondents / Cross-Claimants be released from the undertakings given by them to the Court in relation to those orders, being undertakings:

(b) to pay the compensation referred to in (a) to the person there referred to; and

(a) importing, marketing, taking orders for, selling, supplying or offering to supply the GH Products (or any other product comprising the same generic extended release formulation of venlafaxine hydrochloride) for use by persons in need of venlafaxine;

(b) applying to list the GH Products (or any other product comprising the same extended release formulation of venlafaxine hydrochloride) on the Schedule of Pharmaceutical Benefits;

(d) procuring or inducing or joining in a common design with any other person to do any act referred to in sub-paragraphs (a), (b) or (c) above.

8. Within 14 days of the date of these orders the Applicant / Cross-Respondent destroy any GH Products (or any other product comprising the same generic modified release formulation of venlafaxine hydrochloride) in Australia in the possession, power or control of the Applicant / Cross-Respondent.

9. Within 14 days of the date of these orders the Applicant / Cross-Respondent file and serve an affidavit verifying compliance with order 8 of these orders.

10. The Applicant / Cross-Respondent pay the Respondents / Cross-Claimants’ costs of and incidental to the proceeding, as agreed or taxed.

THE COURT CERTIFIES THAT:

11. For the purpose of section 19 of the Patents Act 1990 (Cth), the validity of claims 1 to 28 of the Patent was questioned unsuccessfully in this proceeding.

THE COURT FURTHER:

12. ORDERS that orders 8, 9 and 11 above be stayed:

(a) initially until the date which is 14 days after the making of these orders; and

(b) if a notice of appeal to the Full Court of the Federal Court is filed within that period, until the determination of that appeal.

13. ORDERS the Applicant, during the currency of the stay in order 12 above, not to move, transfer, or otherwise deal in any GH Products.

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.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION		VID 195 of 2009
BETWEEN:	SIGMA PHARMACEUTICALS (AUSTRALIA) PTY LTD Applicant / Cross-Respondent
AND:	WYETH First Respondent / First Cross-Claimant WYETH AUSTRALIA PTY LIMITED Second Respondent / Second Cross-Claimant

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION		NSD 596 of 2009
BETWEEN:	alphapharm pty limited Applicant / Cross-Respondent
AND:	WYETH First Respondent / First Cross-Claimant WYETH AUSTRALIA PTY LIMITED Second Respondent / Second Cross-Claimant

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION		NSD 1124 of 2009
BETWEEN:	Generic health pty ltd Applicant / Cross-Respondent
AND:	WYETH First Respondent / First Cross-Claimant WYETH AUSTRALIA PTY LIMITED Second Respondent / Second Cross-Claimant

JUDGE:	JAGOT J
DATE:	8 November 2010
PLACE:	SYDNEY

REASONS FOR JUDGMENT

A INTRODUCTION

A1 The proceedings

1 These proceedings concern the validity and, if valid, alleged infringement of Australian Patent No 2003259586 entitled “extended release formulation” granted on 11 May 2007 (the patent). The patent relates to the compound venlafaxine hydrochloride.

2 The compound, venlafaxine hydrochloride, was the subject of Australian Patent No 567524 (the compound patent). The compound patent expired on 6 December 2008.

A2 The parties

3 The respondent/cross-claimant Wyeth, an innovator pharmaceutical company, is the patentee of the patent. Wyeth’s subsidiary, Wyeth Australia Pty Limited (together, Wyeth), sells an extended release dosage form of venlafaxine hydrochloride in Australia known as Efexor-XR. Efexor-XR is an anti-depressant. Wyeth released Efexor-XR for sale in Australia in February 1999. Earlier, in mid 1996, Wyeth released in Australia an immediate release dosage form of venlafaxine hydrochloride known as Efexor or Efexor-IR.

4 The applicants/cross-respondents, Sigma Pharmaceuticals (Australia) Pty Ltd (Sigma), Alphapharm Pty Limited (Alphapharm) and Generic Health Pty Ltd (Generic Health) are generic pharmaceutical companies which have obtained registration of extended release formulations of venlafaxine hydrochloride on the Australian Register of Therapeutic Goods. Sigma’s product is known as Evelexa XR, Alphapharm’s as Enlafax-XR and Generic Health’s as “generichealth XR”.

A3 Background

5 Wyeth contends that the use of Evelexa XR, Enlafax-XR and generichealth XR as the applicants intend for the treatment of depression will infringe the patent. Wyeth asserts infringement of claims 1, 4, 5, 8, 9, 10, 15, 16 and 27 of the patent. The applicants’ principal defence to infringement is invalidity of the patent. They also contend that, if the patent is valid, their products do not infringe the patent.

6 On 3 June, 25 August and 10 November 2009 interlocutory orders were made restraining each of the applicants from selling their products pending the final hearing and determination of these proceedings (see Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth (2009) 81 IPR 339; [2009] FCA 595 and Alphapharm Pty Ltd v Wyeth (2009) 82 IPR 71; [2009] FCA 945).

A4 Issues

7 Subject to variations, the applicants assert invalidity of the patent on the grounds of:

· lack of novelty by reason of a deferred priority date and anticipation by another patent known as the Alza or Edgren patent;

· lack of fair basis;

· insufficiency;

· lack of clarity/ambiguity;

· lack of inventive step;

· false suggestions or misrepresentations; and

· lack of entitlement.

8 Although there are differences between the applicants’ arguments, Sigma’s closing submissions provide a convenient summary of the “essence of the attack” on validity, namely:

(a) by amendments made to the Patent specification and claims on and subsequent to 20 December 2006, after filing of the complete specification and prior to acceptance, Wyeth has travelled beyond the disclosure in both the Priority Document and the Patent as filed and thus the claims asserted against [the applicants] are not entitled to claim a priority date prior to 20 December 2006;

(b) if the priority date issue is resolved in [the applicants’] favour, the claims are anticipated by Wyeth’s sale of its own form of EFEXOR XR (an extended release form of venlafaxine hydrochloride);

(c) in any event, the invention purportedly claimed in claims 1 to 17 (and 27 insofar as it is dependent upon those claims) of the Patent does not disclose a manner of manufacture and is not inventive;

(d) the amended form of the Patent was obtained upon the making of false representations to the Commissioner of Patents, which materially contributed to the grant;

(e) Wyeth was not entitled to the Patent. In each of Canada and the United States, Wyeth filed declarations with the respective Patent Offices disclosing that, in addition to Ms Sherman, there were three additional inventors (and evidence has been filed by legal experts in each of those two countries as to the meaning and effect of those declarations as a matter of law in Canada and the United States of America respectively), late evidence filed in the last week of the hearing of evidence seeks, but fails to overcome this issue. Indeed it highlights the nature of the misrepresentation to the Commissioner of Patents concerning the identity of the inventor;

(f) in critical respects the claims of the Patent lack clarity and therefore do not claim an invention; and

(g) the claims are not fairly based on the disclosure in the Priority Document (external fair basing) nor the body of the specification (internal fair basing) whether or not the priority date is deferred.

9 The “priority document” referred to in Sigma’s submissions is United States Patent Application No 60/14006 (the US priority document). Based on the US priority document Wyeth claims a priority date for the patent of 25 March 1996. Wyeth accepts that if the priority date is 20 December 2006, as the applicants contend, the invention claimed in the patent is not novel by reason of the sale in Australia of Efexor-XR from February 1999.

A5 Meaning of terms

10 In these reasons certain terms and abbreviations appear. Their meaning is as follows:

AUC means the area under the curve of the plasma profile of a drug.

BID (bid) means a twice daily dose of a drug.

Cmax means the maximum plasma concentration of a drug.

Cmin means the minimum plasma concentration of a drug.

ER means an extended release oral dose formulation of a drug where, after ingestion, the formulation prevents the complete and immediate release of the drug. The time over which the drug is released is thus extended compared to an immediate release form.

GI tract (GIT) means the gastrointestinal tract.

GITS formulation or ALZA formulation or OROS formulation means gastrointestinal therapeutic system formulation, being an alternative ER formulation of venlafaxine hydrochloride to that disclosed in the patent.

HPMC means hydroxypropylmethylcellulose, a compound used in drug formulation.

In vitro means “in the glass” (that is, a procedure performed in a controlled environment such as a test tube).

In vivo means “in life” (that is, a procedure performed in a living organism).

IR means an immediate release oral dose formulation of a drug where, after ingestion, the drug is completely and immediately released from the dose form (that is, there are no formulation-related factors which impede the complete and immediate release of the drug).

LogP means the partition coefficient or the distribution between water and oil phases, being a measure of the hydrophilicity or lipophilicity of a drug.

NDA means New Drug Application.

ODV means an active metabolite of venlafaxine, O-desmethyl venlafaxine.

PD profile means the pharmacodynamic profile of a drug or the desired biological response to the drug.

PK profile means the pharmacokinetic profile of a drug, being the concentration-time course profile of drug within the systemic blood, which is a composite of the processes of drug release from the formulation, and subsequent absorption, distribution, metabolism, and elimination, all of which may be occurring simultaneously after oral administration of the drug.

PK/PD means the relationship between the pharmacodynamic and pharmacokinetic profile of a drug.

Plasma profile is the measurement of the plasma concentration of a drug over an appropriate period. Plasma profile is characterised by the shape of the curve (or graph) determined from graphically plotting the plasma concentration of drug as a function over time.

SNRI means a selective serotonin and noradrenalin re-uptake inhibitor.

SSRI means a selective serotonin re-uptake inhibitor.

SR is often used as synonymous with ER and means an extended or sustained release oral dose formulation of a drug.

TID (tid) means a three time daily dose of a drug.

Tmax means the time at which the maximum plasma concentration of the drug (the Cmax) occurs.

The Alza (or Edgren) Patent means International Patent Publication No WO 94/27589 published on 8 December 1994.

The compound patent means Australian Patent No 567524.

The DeVane article means DeVane CL, “Pharmacokinetics of the Newer Antidepressants: Clinical Relevance” (1994) 97(6A) The American Journal of Medicine 13S-23S.

The First Troy article means Troy SM et al, “The Pharmacokinetics of Venlafaxine when given in a Twice Daily Regimen” (1995) 35 Journal of Clinical Pharmacology 404-409.

The grandparent means Australian Patent Application No 16400/97.

The Klamerus article means Klamerus KJ et al, “Introduction of a Composite Parameter to the Pharmacokinetics of Venlafaxine and its Active O-Desmethyl Metabolite” (1992) 32 Journal of Clinical Pharmacology 716-724.

The Martindale Monograph or article means Reynolds JEF (ed), Martindale, The Extra Pharmacopeia (31^st ed, Royal Pharmaceutical Society, 1996).

The Merck Index means Budavari S et al (eds), The Merck Index (12^th ed, Merck & Co Inc, 1996).

The MIMS Annual means 1997 MIMS Annual – Australian Edition (MIMS Australia, 1997).

The Morton article means Morton WA et al, “Venlafaxine: A Structurally Unique and Novel Antidepressant” (1995) 29 The Annals of Pharmacotherapy 387-395.

The Muth article means Muth EA et al, “Biochemical, Neurophysiological, and Behavioral Effects of Wy-45,233 and Other Identified Metabolites of the Antidepressant Venlafaxine” (1991) 23 Drug Development Research 191-199.

The parent means Australian Patent Application No 65442/00.

The patent means Australian Patent No 2003259586.

The Second Troy article means Troy SM et al, “Pharmacokinetic and Pharmacodynamic Evaluation of the Potential Drug Interaction between Venlafaxine and Diazepam” (1995) 35 Journal of Clinical Pharmacology 410-419.

US priority document means United States Patent Application No 60/14006.

A6 Table of contents

11 These reasons are divided into the following sections:

A........ INTRODUCTION................................................................................................	[1]
A1...... The proceedings........................................................................................	[1]
A2...... The parties.................................................................................................	[3]
A3...... Background...............................................................................................	[5]
A4...... Issues........................................................................................................	[7]
A5...... Meaning of terms.......................................................................................	[10]
A6...... Table of contents.......................................................................................	[11]
B........ THE PATENT AND ITS BACKGROUND.........................................................	[12]
B1....... The patent.................................................................................................	[12]
B2....... The amendments of 20 December 2006.....................................................	[22]
C........ OVERVIEW OF EVIDENCE..............................................................................	[26]
C1...... Professor Charman....................................................................................	[27]
C2...... Professor McLachlan.................................................................................	[32]
C3...... Dr Marshall...............................................................................................	[42]
C4...... Dr Reece...................................................................................................	[53]
C5...... Dr Rowe...................................................................................................	[62]
C6...... Professor Grabowski.................................................................................	[69]
D........ THE DEVELOPMENT PROCESS......................................................................	[77]
E......... Incorporation by reference GENERALLY........................................	[146]
F......... THE PRIORITY DATE........................................................................................	[152]
F1....... The US priority document..........................................................................	[153]
F2....... The Alza or Edgren patent..........................................................................	[166]
G........ SECTION 40 ISSUES..........................................................................................	[175]
G1...... Fair basis...................................................................................................	[177]
G2...... Sufficiency.................................................................................................	[227]
G3...... Lack of clarity............................................................................................	[239]
H........ Inventive step...............................................................................................	[242]
H1...... General principles......................................................................................	[245]
H2...... Overview of the applicants’ case................................................................	[258]
H3...... The essence of the debate..........................................................................	[264]
H4...... Issues relating to hindsight..........................................................................	[265]
H5...... Problem-solution approach........................................................................	[333]
H6...... Issues facing the skilled addressee – Professor Charman’s evidence............	[340]
H7...... Absorption................................................................................................	[373]
H8...... Metabolism................................................................................................	[393]
H9...... Side effects................................................................................................	[407]
H10.... Therapeutic efficacy...................................................................................	[417]
H11.... Approaches of experts called by applicants................................................	[431]
H12.... Wyeth’s development work.......................................................................	[453]
H13.... Professor McLachlan’s draft affidavit.........................................................	[460]
H14.... Persuasiveness of experts...........................................................................	[464]
H15.... Other points...............................................................................................	[479]
H16.... Conclusions on inventive step.....................................................................	[486]
H17.... Commercial success...................................................................................	[491]
I.......... FALSE SUGGESTIONS OR MISREPRESENTATIONS...................................	[515]
I1........ Background...............................................................................................	[515]
I2........ The completely unexpected and impossible to achieve representations.........	[518]
I3........ Alza representation....................................................................................	[534]
I4........ The sole inventor representation.................................................................	[541]
I5........ Reduction in side effects.............................................................................	[555]
J......... ENTITLEMENT...................................................................................................	[556]
J1........ Background...............................................................................................	[556]
J2........ Facts.........................................................................................................	[561]
J3........ Applicants’ case........................................................................................	[572]
J4........ Wyeth’s response......................................................................................	[580]
J5........ Conclusions on entitlement.........................................................................	[587]
J6........ The pleading point......................................................................................	[591]
J7........ Mr Smith and Mr Sheskey.........................................................................	[594]
K........ UTILITY...............................................................................................................	[601]
L......... REVOCATION OF THE PATENT......................................................................	[603]
M....... INFRINGEMENT................................................................................................	[605]
M1...... The dispute................................................................................................	[605]
M2...... Conclusions on infringement.......................................................................	[620]
N........ CONCLUSIONs.................................................................................................	[632]

B THE PATENT AND ITS BACKGROUND

B1 The patent

12 The patent application was filed on 30 October 2003. On 20 December 2006 an amended specification was lodged. The patent was granted on 11 May 2007. The patent is a divisional of Australian Patent Application No 65442/00 filed on 10 October 2000 (the parent) which is a divisional of Australian Patent Application No 16400/97 filed on 20 March 2007 (the grandparent). According to the patent:

…the entire disclosure of both of these earlier applications is incorporated herein by reference.

13 The patent claims a priority date of 25 March 1996 based on the US priority document.

14 According to that part of the patent entitled “background of the invention” venlafaxine is “an important drug in the neuropharmacological arsenal used for treatment of depression”. Further, that extended release drug formulations are “conventionally produced as compressed tablets by hydrogel tablet technology”. However, where “the production of tablets is not feasible, it is conventional in the drug industry to prepare encapsulated drug formulations which provide extended or sustained release properties”. This part of the patent also states:

Venlafaxine hydrochloride is presently administered to adults in compressed tablet form in doses ranging from 75 to 350 mg/day, in divided doses two or three times a day. In therapeutic dosing with venlafaxine hydrochloride tablets, rapid dissolution results in a rapid increase in blood plasma levels of the active compound shortly after administration followed by a decrease in blood plasma levels over several hours as the active compound is eliminated or metabolized, until sub-therapeutic plasma levels are approached after about twelve hours following administration, thus requiring additional dosing with the drug. With the plural daily dosing regimen, the most common side effect is nausea, experienced by about 45% of patients under treatment with venlafaxine hydrochloride. Vomiting also occurs in about 17% of the patients.

15 This part of the patent concludes with the statement:

The discussion of the background to the invention herein is included to explain the context of the invention. This is not to be taken as an admission that any of the material referred to was published, known or part of the common general knowledge in Australia as at the priority date of any of the claims.

16 There follows in the patent a “brief description of the invention”. The opening paragraph to this part states:

In accordance with this invention, there is provided a method for providing a therapeutic blood plasma concentration of venlafaxine over a 24 hour period which comprises administering orally to a patient in need of venlafaxine a single daily dosing formulation of venlafaxine hydrochloride that provides a peak blood plasma level of venlafaxine in from about 4 to 8 hours after administration.

In a further embodiment, there is provided a method for moderating the plural blood plasma peaks and valleys attending the pharmacokinetic utilization of multiple daily dosing with venlafaxine hydrochloride, which comprises administering orally to a patient in need of venlafaxine a single daily dosing formulation of venlafaxine hydrochloride that provides a therapeutic blood plasma concentration of venlafaxine over a 24 hour period with a peak blood plasma level of venlafaxine in from about 4 to 8 hours after administration.

In a further embodiment, there is provided a method of reducing the level of nausea and the incidence of emesis in a patient in need of venlafaxine by administering orally to said patient, a single daily dosing formulation of venlafaxine hydrochloride that provides a therapeutic blood plasma concentration of venlafaxine over a 24 hour period and a peak blood plasma level of venlafaxine in from about 4 to 8 hours after administration.

In a further embodiment, there is provided a method for treating depression in a patient in need of such treatment, said method including the steps of administering orally to said patient, a single daily dosing formulation of venlafaxine hydrochloride over a 24 hour period with a peak blood plasma level of venlafaxine in from about 4 to 8 hours after administration.

In a further embodiment, there is provided a method for providing a therapeutic blood plasma concentration of venlafaxine over a 24 hour period which comprises administering orally to a patient in need of venlafaxine a single daily dosing formulation of venlafaxine hydrochloride that provides a therapeutic blood plasma concentration of venlafaxine over the 24 hour period with a peak blood plasma concentration of no more than 150 ng/ml.

17 Other embodiments and examples of the invention are then identified.

18 This part of the patent also contains the following statements:

It was completely unexpected that a single daily dosing formulation containing venlafaxine hydrochloride for use in the methods of the invention could be obtained because the hydrochloride of venlafaxine proved to be extremely water soluble. Numerous attempts to produce single daily dosing, extended release or tablets by hydrogel technology proved to be fruitless because the compressed tablets were either physically unstable (poor compressibility or capping problems) or dissolved too rapidly in dissolution studies. Typically, the tablets prepared as hydrogel sustained release formulations gave 40% to 50% dissolution at 2 hrs, 60% to 70% dissolution at 4 hrs and 85% to 100% dissolution at 8 hrs.

Numerous spheroid formulations were prepared using different grades of microcrystalline cellulose and hydroxypropylmethylcellulose, different ratios of venlafaxine hydrochloride and filler, different binders such as polyvinylpyrrolidone, methylcellulose, water, and polyethylene glycol of different molecular weight ranges in order to find a formulation which would provide a suitable granulation mix which could be extruded properly. In the extrusion process, heat buildup occurred which dried out the extrudate so much that it was difficult to convert the extruded cylinders into spheroids. Addition of hydroxypropylmethylcellulose 2208 to the venlafaxine hydrochloride-microcrystalline cellulose mix made production of spheroids practical which proved to be practical for a single daily dosing formulation useful in the methods of the invention.

The following examples are presented to illustrate applicant’s solution to the problem of preparation of the extended release drug containing formulations of this invention.

19 Four examples of venlafaxine hydrochloride extended release capsules are then given. Towards the end of this section another statement is made in these terms:

Thus, the desired dissolution rate of a sustained release dosage form of venlafaxine hydrochloride, impossible to achieve with hydrogel tablet technology, has been achieved with the film-coated spheroid compositions of this invention.

20 The patent then identifies the claims defining the invention. There are 28 claims. The claims include:

1. A method for providing a therapeutic blood plasma concentration of venlafaxine over a 24 hour period which comprises administering orally to a patient in need of venlafaxine a single daily dosing formulation of venlafaxine hydrochloride that provides a peak blood plasma level of venlafaxine in from about 4 to 8 hours after administration.

…

4. A method for treating depression in a patient in need of such treatment, which comprises administering orally to said patient, a single daily dosing formulation of venlafaxine hydrochloride that provides a therapeutic blood plasma concentration of venlafaxine over a 24 hour period with a peak blood plasma level of venlafaxine in from about 4 to 8 hours after administration.

5. A method for providing a therapeutic blood plasma concentration of venlafaxine over a 24 hour period which comprises administering orally to a patient in need of venlafaxine a single daily dosing formulation of venlafaxine hydrochloride that provides a therapeutic blood plasma concentration of venlafaxine over the 24 hour period with a peak blood plasma level of no more than 150 ng/ml.

…

8. A method for treating depression in a patient in need of such treatment, said method including the steps of administering orally to said patient a single daily dosing formulation of venlafaxine hydrochloride that provides a therapeutic blood plasma concentration of venlafaxine over a 24 hour period with a peak blood plasma level of no more than 150 ng/ml.

9. A method according to any one of claims 1 to 4 wherein the formulation provides a peak blood plasma level of venlafaxine of no more than 150 ng/ml.

10. A method according to any one of claims 5 to 7 wherein the formulation provides peak blood plasma level of venlafaxine in from about 4 to 8 hours after administration.

…

15. A method according to any one of the preceding claims, wherein the formulation of venlafaxine hydrochloride is an extended release formulation that is administered as a single daily dosing formulation.

16. A method according to any one of the preceding claims wherein the formulation provides a peak blood plasma level of venlafaxine from 5-8 hours after administration.

…

27. A method according to any one of the preceding claims wherein the formulation is an encapsulated formulation.

21 As Alphapharm submitted, these claims essentially involve one or more of the following four integers:

· administering orally to a patient in need of venlafaxine a single daily dosing formulation of venlafaxine hydrochloride;

· that provides a therapeutic blood plasma concentration of venlafaxine over a 24 hour period;

· that provides a peak blood plasma level of venlafaxine in from about 4 to 8 hours after administration; and

· with a peak blood plasma level of no more than 150 ng/ml.

B2 The amendments of 20 December 2006

22 The amendments made to the specification for the patent on 20 December 2006 are relevant to the applicants’ arguments. Section 116 of the Patents Act 1990 (Cth) (the Act) provides that:

The Commissioner or a court may, in interpreting a complete specification as amended, refer to the specification without amendment.

23 The original specification, as filed, was also entitled “extended release formulation”. The part of the patent entitled “background of the invention” remained much the same before the amendments. The part entitled “brief description of the invention”, however, stated:

In accordance with this invention, there is provided an extended release (ER), encapsulated formulation containing venlafaxine hydrochloride as the active drug component, which provides in a single dose, a therapeutic blood serum level over a twenty four hour period.

Through administration of the venlafaxine formulation of this invention, there is provided a method for obtaining a flattened drug plasma concentration to time profile, thereby affording a tighter plasma therapeutic range control than can be obtained with multiple daily dosing. In other words, this invention provides a method for eliminating the sharp peaks and troughs (hills and valleys) in blood plasma drug levels induced by multiple daily dosing with conventional immediate release venlafaxine hydrochloride tablets. In essence, the plasma levels of venlafaxine hydrochloride rise, after administration of the extended release formulations of this invention, for between about five to about eight hours (optimally about six hours) and then begin to fall through a protracted, substantially linear decrease from the peak plasma level for the remainder of the twenty four hour period, maintaining at least a threshold therapeutic level of the drug during the entire twenty-four period. In contrast, the conventional immediate release venlafaxine hydrochloride tablets give peak blood plasma levels in 2 to 4 hours. Hence, in accordance with the use aspect of this invention, there is provided a method for moderating the plural blood plasma peaks and valleys attending the pharmacokinetic utilization of multiple daily tablet dosing with venlafaxine hydrochloride which comprises administering to a patient in need of treatment with venlafaxine hydrochloride, a one-a-day, extended release formulation of venlafaxine hydrochloride.

The use of the one-a-day venlafaxine hydrochloride formulations of this invention reduces by adaptation, the level of nausea and incidence of emesis that attend the administration of multiple daily dosing. In clinical trials of venlafaxine hydrochloride ER, the probability of developing nausea in the course of the trials was greatly reduced after the first week. Venlafaxine ER showed a statistically significant improvement over conventional venlafaxine hydrochloride tablets in two eight-week and one 12 week clinical studies. Thus, in accordance with this use aspect of the invention there is provided a method for reducing the level of nausea and incidence of emesis attending the administration of venlafaxine hydrochloride which comprises dosing a patient in need of treatment with venlafaxine hydrochloride with an extended release formulation of venlafaxine hydrochloride once a day in a therapeutically effective amount.

24 None of the paragraphs starting with the words “In a further embodiment” were contained in the original specification. Instead there followed a part entitled “detailed description of the invention” stating:

The extended release formulations of this invention are comprised of 1-[2-(dimethylamino)-1-(4-methoxyphenyl)ethyl] cyclohexanol hydrochloride in admixture with microcrystalline cellulose and hydroxypropylmethylcellulose.

25 Other amendments (both by deletion and addition) were made to the specification before that part of the document describing the four examples of venlafaxine hydrochloride extended release capsules and the claims (which were also amended).

C OVERVIEW OF EVIDENCE

26 The central witnesses in the proceeding and matters dealt with in their evidence are set out below.

C1 Professor Charman

27 Professor Neil Charman graduated with a Bachelor of Pharmacy from the Victorian College of Pharmacy in 1981. He became a Doctor of Philosophy (PhD) in pharmaceutical chemistry in 1985. Between 1983 and 1985 he was a graduate research assistant at the University of Kansas. From 1986 to 1987 he was employed at the Sterling-Winthrop Research Institute, as a senior research scientist in the Department of Pharmaceutical Sciences. He was promoted to Institute Group Leader in 1988. He returned to Australia in 1989 to take up the position of senior lecturer in Pharmaceutics in the Department of Pharmaceutics, Victorian College of Pharmacy, Monash University. From 1989 to 1995 he held the positions of senior lecturer, was then appointed Personal Chair as Professor of Pharmaceuticals (June 1995 to December 2006), and Associate Dean (Research) (March 1999 to March 2002). In January 2007 he was appointed Dean of the Victorian College of Pharmacy, Monash University and Director of the Monash Institute of Pharmaceutical Sciences, Monash University. He continues to hold both positions although the Victorian College of Pharmacy has been re-named as the Faculty of Pharmacy and Pharmaceutical Sciences. According to Professor Charman the Faculty of Pharmacy and Pharmaceutical Sciences, Monash University is the “most successful, largest and most experienced pharmaceutical sciences research program in Australia”.

28 Professor Charman’s major research areas include:

(a) lead optimisation and absorption, distribution, metabolism and excretion (ADME) studies for new drug candidates including metabolic profiling, bioavailability and pharmacokinetic assessment, toxicokinetic assessment and preformulation assessment. These programs typically involve extensive collaborations between the disciplines of drug discovery, medicinal chemistry and biological scientists;

(b) a multidisciplinary and collaborative approach to address major issues in drug discovery, drug delivery and the pharmaceutical sciences, especially in the field of malaria and neglected diseases. These studies typically involve the lead optimisation and compound design using a variety of structural biology, in vitro activity and in vivo animal models, pharmacokinetic and metabolic studies and early stage exploratory toxicology studies;

(c) the use of lipids and lipidic excipients to enhance the oral bioavailability of poorly absorbed drugs. This includes formulation design, physiochemical approaches to enhanced absorption and the assessment of the effects of lipids and lipidic excipients on biological factors;

(d) lymphatic drug transport and the major factors that can be manipulated, or exploited, to increase intestinal drug transport. This work includes assessment of the effects of post-prandial plasma lipoproteins on drug metabolism and drug clearance; and

(e) the integration of interfacial and colloidal chemistry for the optimal design and evaluation of multiphase pharmaceutical formulations which include microemulsions, self-emulsifying lipid emulsions, interactive solids and a variety of colloidal-based formulations.

29 Professor Charman has published in excess of 330 scientific papers and communications and given over 150 invited national and international presentations and lectures.

30 In addition to holding the academic positions detailed above, Professor Charman has also held the following key external appointments:

(a) Deputy Chair of the Expert Scientific Advisory Committee of the Medicines for Malaria Venture, which is a leading Public Private Partnership with an annual research budget of $50M USD for drug discovery and development for the treatment of malaria, based in Geneva, Switzerland;

(b) since 2006, the Chair of the Wellcome Trust Seeding Drug Discovery Committee based in London, UK. This is a 5 year, £91M program that funds high quality drug discovery and development projects addressing areas of major unmet medical need;

(d) Member of the Board of Directors of Acrux Limited (April 1999 to April 2003), and the Board of Directors of Sigma Company Limited (November 1997 to December 2005).

31 Professor Charman was called as an expert witness by Wyeth. His evidence dealt primarily with the principles of pharmacokinetics and pharmacodynamics, the GI tract, IR and ER formulations, the process of development of an extended release formulation of a drug, the polypharmacology of venlafaxine hydrochloride, the pharmacokinetics/pharmacodynamics of venlafaxine, the development of an extended release formulation of venlafaxine and hydrogel tablet technology.

C2 Professor McLachlan

32 Professor Andrew McLachlan graduated with a Bachelor of Pharmacy degree from the University of Sydney (First Class Honours) and was awarded the University Medal.

33 In 1992 he obtained the degree of Doctor of Philosophy from the University of Sydney on the basis of original research which he performed in the field of clinical pharmacokinetics.

34 From 1992 to 1994 Professor McLachlan held the position of Postdoctoral Research Fellow in Pharmacy at the University of Manchester, UK. During this time he undertook a range of research projects in clinical and experimental pharmacokinetics and pharmacodynamics, including: the use of physiologically based pharmacokinetic models to describe the disposition of barbiturates, pharmacodynamic modelling of the response to the anticoagulant drug warfarin and the theory and application of drug targeting principles to optimise drug delivery. The research particularly involved medicines used in the therapeutic areas of cardiology as well as medicines used in the treatment of cancer.

35 From 1994 to 1996 Professor McLachlan took up a postdoctoral fellowship in Clinical Pharmacology and Toxicology at St Vincent’s Hospital, Sydney. This fellowship was competitively funded by the Commonwealth AIDS Research Postdoctoral Fellowship. In this role Professor McLachlan undertook research into the clinical pharmacology of medicines used in the treatment of patents with HIV.

36 From 1996 to the present, Professor McLachlan has worked in the Faculty of Pharmacy at the University of Sydney, where he has held the positions of: Lecturer (1996-1999), Senior Lecturer (2000-2001), Associate Professor (2005-2006) and Professor of Pharmacy (Aged Care) (2006-current). During this period Professor McLachlan has lectured extensively. His teaching responsibilities have included basic pharmaceutical sciences as well as pharmacokinetics and pharmacodynamics.

37 Since 1996, Professor McLachlan has consulted to a number of Australian pharmaceutical companies in relation to projects involving the design, analysis and interpretation of pharmacokinetic studies conducted as part of both new drug development and new drug formulation development. For a number of these projects, Professor McLachlan worked with a team on the design of clinical studies for investigating the pharmacokinetic characteristics of new drugs to understand their in vivo characteristics and additionally to inform the optimal dosing regimen for the medicine for evaluation in clinical trials with patients. For other projects he was involved in the design and analysis of bioequivalence studies which compare the pharmacokinetic characteristics of two brands of the same drug. He has also been engaged to provide pharmacokinetic advice and critical appraisal of clinical pharmacokinetic study reports as part of new drug development.

38 Since 1999, he has developed materials for and taught subjects for the Masters of Drug Development course at the University of New South Wales, covering topics such as, the dose-response relationship as a function of pharmacokinetic and pharmacodynamic properties, qualitative investigation of pharmacokinetics variables, use of pharmacokinetic variables in dosage optimisation, methods used in drug development to investigate the pharmacokinetic characteristics of new chemical entities in the pre-clinical and clinical phase, the role of pharmacokinetics in drug selection, critical appraisal of the pharmacokinetic literature, investigating drug interactions and drug population pharmacokinetics as a tool to inform drug development.

39 Over the last 15 years, Professor McLachlan has led and collaborated with teams conducting research into the pharmacokinetics and pharmacodynamics of drugs from a broad range of therapeutic areas including drugs that are anti-infectives, for musculoskeletal diseases, anticancer agents, immunosuppressants, for cardiovascular disease, muscle relaxants, sex hormones, antidepressants and anti-diabetic agents. Each of these research projects involved analytical chemistry, pharmacokinetic data analysis and application to the clinical setting.

40 Throughout Professor McLachlan’s career, he has authored more than 120 papers in peer reviewed journals. He has acquired expertise in the clinical and experimental aspects of pharmacokinetics and pharmacodynamics in special patient populations, such as the elderly. A particular research interest of Professor McLachlan is the causes and consequences of variability in patient response to medicines, and how this can be managed to optimise patient care. Another of his research interests is the use of mathematical modelling techniques to characterise pharmacokinetic variability across patient populations and to determine the factors which influence drug pharmacokinetics.

41 Professor McLachlan was called as an expert witness by Wyeth. His evidence covered a range of topics including: pharmaceutics (including dosage form, disintegration and dissolution), pharmacokinetics, (including absorption, distribution, elimination, drug metabolism, drug excretion and clearance), pharmacodynamics as well as pharmacokinetic modelling and its use to inform the development of modified release formulations.

C3 Dr Marshall

42 Dr Phillip Marshall graduated from the University of Adelaide, South Australia in 1973 with a Bachelor of Science majoring in biochemistry and organic chemistry, and in 1974 obtained Honours in organic chemistry. In 1974 he was awarded a Commonwealth Postgraduate Research Award to undertake postgraduate studies, including studies in the design and synthesis of therapeutically active molecules. In 1978 he was awarded a PhD from the University of Adelaide based on his thesis in the disciplines of physical-organic and synthetic organic chemistry.

43 From 1978 to 1979, Dr Marshall was a Postdoctoral Research Fellow at University College London, United Kingdom, in the Department of Chemistry, where he conducted research in connection with the synthesis of novel heterocyclic compounds. From 1999 to 1980, he was a Postdoctoral Research Associate at the University of Adelaide, in the Physical & Inorganic and Organic divisions of the Department of Chemistry. In 1981 to 1982, he was a research chemist for Colgate Palmolive Pty Ltd in Sydney.

44 From 1982 to 1991, Dr Marshall was employed at Faulding Pharmaceuticals (now Hospira), initially as a research and development scientist, and later in management roles in research and development, process development, scale-up and validation, and manufacturing. There he worked on projects which included:

· pharmaceutics: research, formulation and process development of new and innovative therapeutic and non-therapeutic products including controlled/sustained/enteric release therapeutic products, solid-dose forms, tablets, topical and oral liquids, creams, antiseptics etc.;

· technology transfer, scale-up design, validation and improvement of pharmaceutical and cosmetic processes and products;

· formulation development, scale-up and validation of therapeutic products involving a variety of pharmaceutical processes; and

· discovery and investigation of novel oral drug delivery systems in various oral dosage forms.

45 The pharmaceutical technologies with which Dr Marshall was involved at Faulding included: solid does forms (using techniques such as: wet and dry granulation, fluid-bed drying, extrusion/spheronization/marumerization, film coating, compression, slugging and encapsulation), filtration, emulsification, mixing, materials transfer, spray drying, lyophylization (freeze-drying) and packaging.

46 In 1991, Dr Marshall founded, and remains a director of, Pharmchem Technical Services Pty Ltd, an independent company which provides technical consultancy services to the pharmaceutical and bioscience industry. Since 1991, Dr Marshall has provided consultancy in varying capacities to over 100 companies in the Asia-Pacific region, Europe and North and South America. This has included providing strategic and scientific advice on the development of a number of confidential controlled release formulations to various clients and companies.

47 From 1991 to 1992, Dr Marshall was the Quality Assurance Manager at Pfizer Consumer Health, where he was responsible for all Australian and New Zealand quality issues associated with the company’s pharmaceutical operations.

48 Between 1994 and 2001 Dr Marshall was the Technical and Operations Manager (General Deputy Manager) at Numico Research Australia. His role involved operating and management responsibility for: scientific, clinical research management, regulatory affairs and pharmacovigilance, research and development programme, technology platform (including vaccine discovery and development, infectious diseases, (passive) vaccines, isolation and purification of novel bioactive compounds using various separation technologies to product novel and innovative compositions), and operations.

49 From 2004 to 2006, Dr Marshall was the General Manager, Scientific Affairs at Sigma, a senior executive position in which he had responsibility’s for Sigma’s six Australian manufacturing sites.

50 Dr Marshall holds the following appointments and memberships: Fellow and Chartered Chemist, Royal Australian Chemical Institute (since 1981), Member, Australian Regulatory and Clinical Scientists Association (since 1993), Authorised GMP Auditor, Australian Pesticides and Veterinary Medicines Authority (since 1995), Member, Australian Therapeutic Goods Consultants Inc (since 2001), Member, Australian Pharmaceutical Science Association (since 2001), and Member, AusBiotech Ltd (2001-2004 and 2009 to present).

51 Dr Marshall has previously held the following appointments and memberships: Member, Technical and regulatory Affairs Committee, Australian Health Industry Inc (2002-2004), Member, Australian Society of Cosmetic Chemists (1984-2004) and Foundation Vice-President, Australasian Research Management Society (2000-2001).

52 Dr Marshall was called as an expert witness by Alphapharm. Dr Marshall’s evidence dealt with the general drug development process, extended release formulations, common rationales for developing an extended release dose form prior to 25 March 1996, developing an extended release formulation as at 25 March 1996, developing an extended release formulation of venlafaxine hydrochloride and hydrogel tablet technology (including a consideration of the Alphapharm Enlafax formulation).

C4 Dr Reece

53 Dr Phillip Reece graduated from the University of Adelaide, South Australia with a Bachelor of Science in 1971 and was awarded First Class Honours in organic chemistry in 1972. He was awarded a PhD in medical chemistry in 1976 from the Australian National University.

54 After completing his PhD, Dr Reece was employed as a Hospital Scientist in the Department of Clinical Pharmacology at The Queen Elizabeth Hospital in Adelaide where he had both service-related and research-related duties. His research activities included collaborative research with various physicians and centred primarily on anti-hypertension drugs, anti-convulsives, and later oncology. Dr Reece also initiated several clinical research projects with various groups within and outside the hospital, where he had a small team of researchers working on the different projects. In 1983 Dr Reece was awarded a Churchill Fellowship pursuant to which he studied the pharmacokinetics of anticancer drugs at the Mayo Clinic in Rochester, Minnesota (US). He was also awarded Anticancer Foundation and National Health & Medical Research Council grants to support his research projects. While employed at The Queen Elizabeth Hospital, Dr Reece obtained training in pharmacokinetics, including at the Medical Centre of the University of California, San Francisco (US). During this time, Dr Reece was also part of the Adelaide Pharmacology Group, which allowed him to keep up to date with local and international developments in the area. Dr Reece remained employed at The Queen Elizabeth Hospital in various roles until September 1987.

55 Between January 1986 and September 1987, Dr Reece was also an evaluator for the Australian Department of Health. In this capacity he evaluated the pharmacokinetic component of applications for the regulatory approval of drugs. Dr Reece estimates that he reviewed approximately six different applications over this period, the majority of which were generic applications demonstrating bioequivalence.

56 In September 1987 Dr Reece became the Clinical Trials Manager at Astra Pharmaceuticals in Sydney. In this role, Dr Reece was responsible for conducting human clinical trials of Astra’s new pharmaceuticals for the purpose of obtaining regulatory approval of these products. His group had responsibility for ensuring that the clinical trial data which was generated met international regulatory requirements suitable for submission in support of a new drug application.

57 In 1988, Dr Reece took up the position of Associate Regional Director of Clinical Research at Parke Davis Ltd. In this role he was responsible for the clinical trial research activities of the international group in the Asia Pacific Region. The trials were with new chemical entities such as gabapentin for epilepsy and quinapril for hypertension and cardiac failure.

58 In 1990 Dr Reece became the Director of Clinical Pharmacology of Parke Davis in Michigan (US), where he managed the transition of new pharmaceuticals for central nervous system diseases from pre-clinical (animal trials) to Phase I and Phase IIA clinical studies (human trials). This involved testing prototype drugs in healthy human volunteers and collecting and analysing all of the associate pharmacokinetic and toxicology data. He was also responsible for preparing the clinical pharmacology reports for investigational new drugs and new drug applications and reviewed pre-clinical data for suitability for investigational new drug applications and Phase I studies with CNS drugs.

59 In 1993, Dr Reece took up the position of Director of Research and Development at Biota Holdings in Melbourne. During his various roles at Biota, Dr Reece was responsible for the company’s research and development activities. He was involved in research projects and establishing and expanding Biota’s laboratories.

60 Dr Reece left Biota in 2002 to become CEO and Managing Director of Boron Molecular Ltd in Melbourne and in 2003 became an independent consultant to the biotechnology industry both in Australia and overseas. Dr Reece is also an Honorary Senior Fellow in the Department of Pharmacology at the University of Melbourne.

61 Dr Reece was called as an expert witness by Alphapharm. His evidence covered a range of topics, particularly pharmacokinetic modelling in the context of the development of extended release formulations of existing drugs.

C5 Dr Rowe

62 Dr James Rowe completed a Bachelor of Pharmacy degree at the University of Sydney in 1998 and a Master of Science degree at Chelsea College, London in 1976. He obtained a PhD from the University of London in 1980. His PhD thesis focused on the bioavailability of microencapsulated controlled release systems. After completing his PhD, Dr Rowe was involved in supervising a Masters of Science student at the University of Sydney in a project which involved the production of controlled release formulations for oral administration using pellet technology produced by the ‘Wurster Process’ (a process of coating a drug core with various polymers in a fluid bed system and evaluating the release rate of the drug from that coating).

63 Dr Rowe has over 30 years’ experience in the pharmaceutical industry and in academia working in the field of general pharmaceutics, particularly on dosage form design, biopharmaceutics and pharmacokinetics.

64 Between September 1986 and August 1990, he worked as the Technical Manager at Abbott Laboratories in Sydney, where he was responsible for the design, evaluation and testing of new pharmaceutical formulations, as well as conducting in-house bioavailability studies on new and re-formulated products. This work included the testing of a number of extended release products for oral administration, for example, iron products such as ferrogradumet tablets and forrograd-folic tablets. During this time Dr Rowe also performed contract research for third parties involving the development of controlled release dosage forms for oral administration including matrix and encapsulated devices (for example, diethylpropion tablets with a methocel matrix).

65 From 1990 to 2007, Dr Rowe was the Scientific Director of Technical Consultancy Services Pty Limited, a company he co-founded. His work there included the development of at least 100 pharmaceutical dosage forms.

66 Dr Rowe is presently a Director of CoPharm Pty Ltd and NxGen Pharmaceuticals Pty Ltd. He is currently involved in the development of controlled release formulation of naltrexone, which can be used as an implant to treat drug addiction, and of flumazenil, for detoxification, as well as the formulation of oral controlled release formulations for various drugs for use in compounding pharmacies.

67 Dr Rowe is a member of the Controlled Release Society, Pharmaceutical Society of Australia, the Royal Pharmaceutical Society of Great Britain, the Royal Australian Chemical Institute, the Australian Pharmaceutical Science Association, the Sydney University Chemical Society and the Australian Academy of Forensic Scientists. As part of his work, Dr Rowe has written a number of publications in peer-reviewed journals in his area of expertise and has been named as a co-inventor on 12 patents and patent applications.

68 Dr Rowe was called as an expert witness by Sigma. His evidence dealt with formulation chemistry and extended release formulations of drugs, including development of an extended release formulation of venlafaxine hydrochloride.

C6 Professor Grabowski

69 Professor Henry Grabowski is a Professor Emeritus of Economics at Duke University (US). Professor Grabowski received his Bachelor of Science degree from Lehigh University (US) in 1962. In 1967 he obtained a PhD in Economics from Princeton University (US).

70 Professor Grabowski is the Director of the Program in Pharmaceuticals and Health Economics at Duke University. His academic and research specialities are the pharmaceutical industry, including “Health Economics, Economics of Innovation, Government Regulation of Business and Industrial Organisation”.

71 Over his career, Professor Grabowski has studied the economics of pharmaceuticals and the pharmaceutical industry, and has published numerous articles and books on this topic.

72 Professor Grabowski has been an advisor and consultant to the National Academy of Sciences, the Institute of Medicine, the Federal Trade Commission, the General Accounting Office, and the Office of Technology Assessment (all United States bodies). Professor Grabowski has also had visiting scholar appointments at the International Institute of Management in Berlin (Germany), the Health Care Financing Administration (Washington, DC), the office of Health Economics (London) and the Centre for Medicines Research (London). Each of these positions related to the economics of pharmaceuticals and the pharmaceutical industry.

73 Until 2003, Professor Grabowski was a member of the Board of Directors of Triangle Pharmaceuticals, Inc., a development stage company that specialised in antiviral drug therapies. In this role, Professor Grabowski assisted with marketing strategies for new products.

74 Professor Grabowski has also served as a consultant in relation to the research and development and marketing for several of the major pharmaceutical companies in the United States.

75 Professor Grabowski has conducted extensive research on the economics of competition in the drug industry, including the role of patents and the importance of research and development.

76 Professor Grabowski was called as an expert witness by Wyeth. His evidence analysed the sales performance and market position of Efexor-XR in Australia, relating sales performance and market position to the sales performance and market position of competitor drugs.

D THE DEVELOPMENT PROCESS

77 The parties provided different descriptions of the process of development of the invention. The relevance of this material was in issue, particularly in respect of inventive step. Be that as it may, the development story must be identified in order to resolve the disputed questions of principle and fact. The following summary is compiled from annexure 1 to Wyeth’s submissions with amendments and supplementary paragraphs from the applicants’ submissions where necessary.

78 On 29 April 1991, Mr Doug Smith circulated a memorandum to Dr Robin Enever, among others, in response to a “request concerning the development of a venlafaxine sustained release formulation”. The memorandum provides a description of an exercise undertaken by Mr Smith to simulate a dissolution profile and the plasma levels expected from a 75 mg and 375 mg hydrogel tablet, together with three figures demonstrating the profiles generated. Mr Smith’s work was based on pharmacokinetic data obtained from the immediate release formulation of venlafaxine.

79 Mr Smith simulated a “dissolution profile … that closely resembles that from the etodolac sustained release hydrogel tablet”. The trade name for etodolac is Lodine. Mr Smith said “[a]bsorption of venlafaxine from these tablets [being the sustained release tablets] would be dissolution-rate limited”. Mr Smith used a “one compartment” pharmacokinetic model. On the basis of pharmacokinetic parameters obtained from the “GTR data base” (the identity and contents of which remain unknown), Mr Smith simulated “plasma venlafaxine levels representing the minimum (37.5 mg bid) and the maximum (125 mg tid) dosage regimens from immediate release tablets” which were depicted in Figures 1 and 2 attached to the memorandum. Mr Smith said “[t]herefore, simulations of plasma venlafaxine levels from a 75 and a 375 mg tablet used the dissolution rate data directly as input into the pharmacokinetic model”. Mr Smith then said “[t]he rate of release from both tablets is sufficiently slow as to not saturate the O-desmethyl venlafaxine pathway; thus systemic availability is 70%”. Further, that “[b]oth strengths of the venlafaxine sustained release tablets would be bioequivalent with respect to AUC to their respective immediate release regimens; 100% for the 75 mg tablet and 88% for the 375 mg tablet”.

80 By 5 June 1991 the US and International Marketing Groups of Wyeth had formally requested the development of an oral sustained release dosage form for venlafaxine through a “Project Authorisation Request”. The request records that the elimination half-life for venlafaxine is 3.7 hours making it a candidate for once a day dosing. Under the heading “Proposed Formulation Development”, the request sets out that the “major formulation approach” will be development of a hydrogel tablet: “[a]s a result of our previous experience with this type of technology (ie Lodine SR and Isordil Tembids), this would be the fastest and simplest approach to initially pursue”. Further, that “[i]n order to aid in the development of Venlafaxine SR a simulation has been done predicting dissolution profiles and plasma levels which can be expected from a 75 mg and 375 mg hydrogel tablet. (See attached memo Mr. D. Smith to Dr. R. Enever, 29 April 91)”. It was further noted that should the hydrogel approach prove unacceptable for venlafaxine a pulse dose system “could be looked at”. The Project Authorisation Request also states that the project will take an estimated 8,320 hours, including 520 hours of dosage form development, 240 hours of analyses of bioavailability, 2,100 hours of analytical method development and support, 960 hours of formula optimization and 4,500 hours of NDA stability evaluation.

81 On 12 June 1991, Ms Deborah Sherman commenced experiments to develop a sustained release tablet for venlafaxine. Initial testing by Ms Sherman led to the selection of a formula on 19 August 1991 which fell within the dissolution profile identified by Mr Smith.

82 From 20 August 1991 to 13 December 1991, Ms Sherman created numerous prototype formulations and conducted numerous experiments in an attempt to slow down the dissolution profile of the selected candidate. In the course of these experiments, Ms Sherman abandoned the use of various sustained release agents in the hydrogel tablet approach. Ms Sherman also tested a range of other filler excipients, various levels of tablet hardness, different polymers and levels of polymers and tablet shapes.

83 Ms Sherman’s dissolution testing included several different dissolution conditions in an attempt to isolate the particular factor which was preventing her from slowing down the dissolution rate of the hydrogel tablet. However, despite Ms Sherman’s attempts to identify suitable prototype candidates for further testing, she was unable to obtain three distinct dissolution profiles for a venlafaxine hydrogel tablet.

84 On 27 August 1991, Dr Richard DeNeale circulated a memorandum to the venlafaxine local project team advising them that the timeframe for the completion of the project had already been revised to 37 months (to be completed around October 1994). The memorandum states that “any other clinical input beyond a pilot human bioequivalency study and a final bioequivalency study is unknown and not included (perhaps a food effect study re dose dumping or changes in metabolic pattern?)”.

85 On 18 October 1991, Dr Richard Rudolph circulated a memorandum to Dr Stephen Sasson, among others, describing a meeting with Dr Thomas Laughren of the United States Food and Drug Administration (USFDA). According to the memorandum, Dr Laughren “indicated that if the pharmacokinetic profile for the SR dosage form is within the range of that seen with conventional release dosing once steady state is established that an NDA could be approved based upon a pharmacokinetic evaluation”.

86 On 3 December 1991, a memorandum circulated by Dr Rudolph and Mr Robert Stewart to the venlafaxine project team described the problems that were being experienced by Ms Sherman in formulating a hydrogel tablet. The memorandum also states that “[c]linical requirements for domestic and international approval beyond bioequivalency remain to be defined with certainty”.

87 On 6 January 1992, Ms Sherman circulated a memorandum to Mr John Michelucci, among others, terminating the hydrogel approach. The memorandum states that the change in formulation approach was necessitated “[d]ue to the fact that the development of a Venlafaxine SR hydrogel tablet with three different release profiles proved to be unsuccessful (all formulations tried rendered the same profile)”. The memorandum also provides a revised timeframe for completion of the project of 42 months (to be completed by July 1995). The timeframe included the following activities to be completed prior to the selection of a formula (or reversion to step 1 if the formulation process is unacceptable):

1. Screen formulae for manufacturability of spheroid cores – continuing at the laboratory scale. Complete end April.

2. Screen coating formulae and levels for creation of an array of in vitro dissolution profiles… using both aqueous and organic solvents –continuing, expected completion end May based largely on “grab samples”.

3. Select formulae and levels providing [a range of dissolution profiles]… end May to end July (100 mg strength).

4. Screen formulae in dogs to provide best guess as to the most appropriate candidates for the pilot human bioequivalency study – end May to end August.

5. Issue “at risk” formula memos, specification, and manufacturing directions for no more than three formulae of 100 mg. strength [to proceed to clinical]- end July (assumes receipt of request for clinical materials).

6. Confirm candidate 100 mg formulae (NMT 3) for human pilot biostudy based on stability results and initial screenings in dogs – late August to mid-September.

7. Prepare M&C sections of IND and submit to Radnor – end September.

8. Manufacture clinical materials... – mid September – early December.

9. Place clinical stocks on stability as bulk spheroids… - mid December to mid February ‘93.

10. Issue “at risk” formulae memos, specifications and manufacturing directions for no more than two formulae of all strengths requested as matched dosage forms for clinical trials – April ‘93. (assumes receipt of request for clinical materials).

11. Conduct human and dog pilot bioavailability studies; analyze samples; draft report – late December to late April ‘93.

88 On 9 January 1992, Dr DeNeale circulated a memorandum describing “Items of Interest from Venlafaxine Project Team Meeting 7 January 1992”. The memorandum notes that during this meeting the venlafaxine project team “suggested that external efforts be considered to expedite the development or improve the chances of success”. The memorandum also notes that, with respect to regulatory requirements for the approval from the USFDA, two additional studies are needed: “(1) multidose crossover pharmacokinetic study measuring Cmax and AUC’s for the parent drug and the O-desmethyl metabolite and (2) open label randomized crossover study comparing fasted vs fed states”.

89 On 10 January 1992, Ms Sherman commenced experimental work directed towards learning to make spheroids. This initially involved working with propranolol hydrochloride, which had previously been formulated into spheroids by Wyeth. As part of these experiments, Ms Sherman created a number of batches of propranolol hydrochloride spheroids. At page 53 of her laboratory notebook, Ms Sherman states that “it is obvious that the amount of water in the granulation is the most critical factor in this process.” Ms Sherman states also that “work will begin with Venlafaxine next week”.

90 Ms Sherman’s experiments between 24 January 1992 and 4 February 1992 explored the effect of a number of different excipients on the manufacture of spheroids. Ms Sherman’s laboratory notebook identifies difficulty finding an excipient that would make the extrudate “more plastic – to keep the water in” yet would not cause the extruder to clog up due to high viscosity.

91 At page 76 of her notebook Ms Sherman records a phone conversation with Paul Sheskey at Dow Chemical Company. She notes: “they suggested using the K chemistry HPMC’s low viscosity… Should use K grades at levels of 0.5 - 1.0%”.

92 On 5 February 1992 Mr Sheskey sent Ms Sherman a letter setting out the suggestion of using low viscosity K chemistry HPMC. “Low viscosity K chemistry HPMC” is hydroxypropylmethylcellulose 2208.

93 On 10 February 1992, Ms Sherman reported a major breakthrough. Ms Sherman’s notebook records that when a change is made to the order in which the excipients, drug and water are added the spheroids appear clumpy, but not wet. On 13 February 1992, the notebook records another breakthrough with the use of HPMC K3 in the formulation resulting in a formulation which “goes through extruder very well”.

94 On 20 March 1992, Ms Sherman’s notebook records a change in the highest strength of interest from 125 to 150 mg. As a result, Ms Sherman performed a number of further experiments to determine the appropriate level of each excipient for the 150 mg dose form. The laboratory notebook also records further experimentation to determine the optimum water levels in the formulation.

95 On 27 March 1992, the notebook states that Ms Sherman prepared batch 3246-123. This batch is reported as the final formula for uncoated spheroids in the Development Pharmaceutics Report – Venlafaxine ER, although subsequent changes were made to the way in which the formulation was manufactured.

96 Between 27 March 1992 and 15 April 1992, Ms Sherman prepared further batches of the spheroids which were then combined into a blended batch (3246-135) for coating trials. The combined batch included spheroids from a batch of “milled” venlafaxine hydrochloride, but was otherwise created using the same formula as 3246-123.

97 On 8 April 1992, Dr DeNeale wrote a memorandum to Mr Stewart, among others, describing the intended pharmaceutical characteristics of the extended release formulation of venlafaxine. Dr DeNeale notes that “[o]ptimisation studies will be required on a basic formula to be identified through appropriate pilot in vivo studies (to develop in vivo-in vitro correlations and an animal model if needed for further screenings) and through adequate stability testing”.

98 On 15 April 1992, Dr DeNeale circulated a memorandum regarding the “Venlafaxine/SR Project Team Meeting, 14 April 1992, Items of Local Interest”. Item 3 of the memorandum is as follows:

Current plans are to submit the SR NDA with bio-availability data only although tolerance and efficacy studies including titration and switch protocols are being considered. The concern that bioequivalency is not likely was brought up in that venlafaxine does undergo extensive presystemic metabolism from administration of the conventional dosage form and that not only extent of such metabolism but also pattern of metabolism as related to levels of active metabolite (O-desmethyl venlafaxine) could likely change from administration of an SR dosage form. The comparison to the case of propranolol was mentioned. Minimization of such effects could be attained by a pulse-dose system. However, the original request for the SR dosage form excluded any bolus-type profile of release because of the concern for nausea.

99 Item 4 of the memorandum states:

The target product profile will be issued from Rouses Point based on updated PK modeling to be done by the Biopharmacy Section. The original work done by Doug Smith will be forwarded to Regulatory Affairs for their information.

100 Item 5 of the memorandum states:

Dr. Eng suggested that all efforts be made to replace the spheroid approach for the SR dosage form with one which could be manufactured at AWPI. Since it is premature to describe the commercial candidate, even for co-manufacture, and since Dr. Eng is unaware of the past efforts in developing formulae in spite of repeated efforts to inform him, I recommend no change to current efforts both internally and at Alza.

101 Item 6 of the memorandum states:

At the suggestion of Dr. Eng, Regulatory Affairs will examine the consequences of switching to a less soluble salt (or free base) of venlafaxine in an effort to revert to a hydrogel or other less sophisticated dosage form

102 Initially the film coat formulation used in the coating trials was identical to that used in an extended release formulation of propranolol hydrochloride. On 1 May 1992 a series of experiments were conducted by Messrs John C Clark and Steven A White using an aqueous Eudragit-based formulation. However, these formulations were abandoned due to the fact that they were “very inefficient (~30% coating required) and the dissolution profiles were not stable over time”.

103 From 18 May 1992, Messrs White and Clark conducted further experiments using an increased inlet temperature during spraying of the film coat. These experiments led to the production of three samples with coating levels of 3.1% (3035-077), 5.1% (3035-079) and 6% (3035-073) bearing three distinct dissolution profiles between 19 May 1992 to 1 June 1992. These coated spheroid samples were then encapsulated by Ms Sherman on 24 June 1992. The encapsulated spheroids were then sent to Chazy, New York for use in a dog bioavailability study. The study showed a lack of bioequivalent plasma levels which was determined to be caused by the nature of the dog GI tract rather than the dosage form.

104 Between 2 October 1992 and 21 October 1992, four separate batches of uncoated spheroids were prepared and coated for a human bioavailability study.

105 By November 1992 the venlafaxine project team had identified 49 studies on preclinical pharmacology, 51 studies on drug disposition, 23 studies on toxicology, and 55 clinical studies relevant to the formulation of venlafaxine SR. These studies were “on file in the Research Archives of Wyeth-Ayerst Research”, however most of the studies were not identified as having being published externally. The investigational drug brochure states that a further eight planned clinical studies with venlafaxine SR were yet to be conducted. The budget for the project was proposed in the Venlafaxine SR Global Development Plan to be $10.6 million.

106 The “Venlafaxine SR Global Development Plan” set out the various target dates of deliverables or decisions. The diagram of the major project milestones, together with the Global Development Plan, demonstrates that there were three separate points for making a “Go/No-Go” decision regarding the venlafaxine SR formulation: - (a) the first interim clinical decision was not made until after the pilot bioavailability study, based on the satisfaction of the following criteria: SRAUC must range within 80-120% IRAUC, Cmax less than that after bid dosing using IR, plasma concentration at 24 hours post dosing greater than or equal to bid dosing using IR and commercial aspects; (b) the second interim clinical decision was made after a definitive pharmacokinetic study and towards the end of safety/efficacy studies, based on whether the pharmacokinetic profile was within acceptable guideline limits; and (c) the final registration decision point was not made until after evidence of efficacy and tolerance equal to or greater than the conventional immediate release.

107 On 30 December 1992, Dr Enever circulated a memorandum to Ms Gross, among others, regarding the Alza extended release formulation of venlafaxine. The memorandum states:

The work that is proposed for the 75 mg OROS venlafaxine system is of the nature that Pharmaceutical Sciences would carry out once it had been determined that a prototype dosage form had performed successfully in a pilot bioavailability study and was suitable for scaling-up to provide Phase III clinical supplies and market product. At this time, we do not intend to carry out this type of work on any of the three Wyeth-Ayerst Research Venlafaxine SR spheroid dosage forms that are to be evaluated in the pilot bioavailability study. In my view, until data are available to judge the performance of the prototypes against the acceptance criteria, it would be a waste of resources. There is no certainty that any of the prototypes will be acceptable. Additional prototypes with different release profiles may be required or, in the worst case, a decision could be made to discontinue this development approach. Applying the same reasoning to the Alza OROS system, I do not think it is wise to spend $416,000 to continue product development prior to obtaining results from the pilot bioavailability study. There may be some merit in carrying out very limited work at much lower cost to determine the feasibility of delivering 100 and 150 mg of venlafaxine and lest their in vitro functionality.

108 On 31 December 1992, Wyeth Ayerst Laboratories submitted an Investigational New Drug Application to the USFDA regarding the development of a sustained release formulation of venlafaxine. It is stated that “initial clinical studies will evaluate five (5) different formulations involving two (2) different sustained release technologies”. The two clinical studies, identified as Protocol 600B-127-US and Protocol 600B-128-US, are “identical open-label, single-dose, randomized crossover studies in healthy male volunteers”. It noted that “[a]ll plasma and urine samples collected during each study will be analysed for venlafaxine and its active metabolite, O-desmethylvenlafaxine”.

109 In February 1993, a comparative bioavailability study of three sustained release formulations and the conventional formulation of venlafaxine was commenced (127-US Study). This was a “pilot, open-label, randomized, four-period crossover study” with “sixteen 16 healthy men enrolled”, 14 completing all four study periods. The study was completed in March 1993. The purpose of this study was “to evaluate the relative bioavailability of three 75-mg venlafaxine sustained-release (SR) formulations (0930198A; 0930198D; 0930200D [manufactured by Wyeth]) as compared with that of a 75-mg dose of the conventional formulation (0930085A) administered as 37.5 mg every 12 hours”. The report concludes that the sustained release formulations “performed as expected, prolonging the absorption of venlafaxine while maintaining the extent of venlafaxine absorption obtained with the conventional formulation”.

110 Also during February 1993, the bioavailability of the Alza or GITS formulation was the subject of a similar study (the 128 study). The report of this study concludes that the two GITS formulations studies , subject to one exception, “performed as expected, prolonging the absorption of venlafaxine while maintaining the extent of venlafaxine absorption obtained with the conventional formulation”.

111 On 5 June 1993, Dr DeNeale circulated a memorandum regarding the projected schedule for internal candidates; that is, Wyeth extended release formulations of venlafaxine. In this memorandum, Dr DeNeale notes that a choice regarding “which formulae should be further developed” will be made after the results of human pilot bioavailability studies “are complete and other factors considered”. Dr DeNeale notes that any projected schedule for the development of the formulation is based on an assumption “that definite target formulae are identified from the pilot biostudies without further adjustments in the in vitro release rates”.

112 On 26 June 1993, Dr DeNeale circulated a memorandum regarding the optimisation and scale-up of selected internal candidate formulations. The memorandum sets out the extent of work that is required in the optimisation of a formulation prior to conducting clinical trials, particularly:

Optimization will require eight weeks minimum encompassing 24 experiments at the one cubic foot scale for the manufacture of the spheroids. Overlapping would be laboratory and pilot scale optimizations of the coating formula and process using the GPCG-5 and GPCG-60 involving six weeks at each scale (ca. 11 experiments).

Approximately 120 kg venlafaxine HCl would be needed for the optimization experiments starting in August and completing in 12 weeks at the earliest.

Manufacture of NDA stability batches would start in late October at the earliest and complete in late January at the earliest. Packaged blended clinical material would be needed by mid-January for a late February study start. Released packaged dosage forms for NDA stability would be available by late March at the earliest and on stability by late April at the earliest.

113 On 10 August 1993, Dr Ginny Upton received a fax from Mr Tobias outlining the selection of the venlafaxine SR formulation by the project team after the pilot bioavailability studies. The fax notes that data from those studies “suggest[s] that all five formulations met the primary selection criteria, and all five provided a longer duration of absorption than the conventional immediate release formulation”. However, it also notes that “the superior PK profile of the OROS system may result in an equally effective product with less side effects (assuming that side effects are the result of peak fluctuations in plasma concentrations)”. Nevertheless, “[t]he consensus of the Project Team is that the best W-AR [that is, Wyeth] formulation and the best OROS [that is, Alza] formulation should be selected for parallel development to the next decision point, evidence of efficacy and clinical safety. If a choice must be made at this time between W-AR and ALZA formulations, the consensus of the project team is to develop the W-AR formulation because of the more favourable timing, costs and greater certainty of success”. The document suggests that the cost of developing both would cost $19.2 million, whereas the costs for developing the Wyeth or Alza formulations alone would cost $9.7 million or $16.5 million respectively.

114 On 9 September 1993, the venlafaxine project team met to discuss the progress of the sustained release project. A memorandum regarding the meeting was circulated by Ms Simonetti on 14 September 1993. The executive summary of the memorandum states that a “decision remains outstanding as to which sustained release (SR) formulation (W-AR or Alza OROS) will be pursued for future development”. Further, the following discussion can be found under the heading “Current Strategy”:

Three major points have been identified as follows:

1. In order to establish efficacy, placebo-controlled trials are required;

2. In order to support a better side effect profile claim in the Label, we will need to conduct two well-controlled clinical safety/efficacy trials with the SR vs. the immediate release formulation (IR) vs. the placebo;

3. Only a trial with head-to-head comparisons (W-AR vs. Alza OROS vs. IR vs. placebo) would be adequate for attempting to differentiate the incidence of side effects. Such a study (four arms) would be cumbersome, problematic, costly, and very large (400-500/arm) would be required to statistically differentiate between all the formulations.

…

The Project Team is in agreement that Rouses Point continue development of the
W-AR formulation thus ensuring initiation of our pivotal safety and efficacy trials in the US and in Europe in March 1994.

115 Under the heading “PK Only NDA for the W-AR Formulation”, the memorandum states:

CR&D and Mr. Fox will prepare an Information Package in November 1993 for review by the FDA in January 1994. The FDA will be requested to provide their opinion as to whether a PK only NDA would be acceptable.

116 On 19 October 1993 Drs Rowland and Toon from Medeval attended a meeting and a report was prepared regarding the pharmacokinetics and PK-PD relationship of venlafaxine. The report states:

The development of a slow release (SR) only requires a few questions to be addressed by specific studies, knowing that, on a regulatory point of view, Health Authorities are very sensitive to the PK aspects in that area. Clinical trials should focus on the specific claims of the new formulation. No dose-ranging study is required, but therefore there is a risk not to select the adequate dose, as entry rate or peak can affect not only side effects but also efficacy. AUC in no way is demonstrated to be linked to efficacy, and if so this would be a good reason not to develop a slow release formulation. Therefore arguments about AUC should be carefully considered.

117 The report refers to the following issue:

Potential shift of metabolism that could be increased by a slow release (this is very obvious on the data of the PK study comparing the W-AR vs normal tablet (127-US)…

118 Further, in terms of determining a clinically effective dose, the report states:

Subrogate markers can be used to analyze the PK-PD relationship and in particular the effect of dose, entry rate, AUC on brain located effects. One method could be spectral EEG using the venlafaxine factor in the SALETU factorial analysis that should expose less to ceiling effects. This is quite acceptable to check the “central bioequivalence” of 75 mg with a S.R. Possibly correcting factors could be used for the dosing of the SR tablet according to results.

119 On 21 September 1993, Drs Clementi and Rudolph sent a memorandum to Drs Essner and Levy regarding the development of the W-AR venlafaxine SR formulation. Under the heading “Product Attributes”, the memorandum describes the expected side-effect profile of the W-AR formulation:

The W-AR formulation very closely mimics both the BID pharmacokinetic profile and thus, may have a side effect profile which is less desirable than that reflected in our currently anticipated product label. This would not be acceptable for market introduction.

120 The memorandum also discusses the anticipated regulatory requirements for the approval of the product:

Preliminary contact with the FDA suggests that they would be open to our presentation of a “PK only” strategy for the approval of a once-daily form of venlafaxine…

It should be noted that this Agency position is in direct contradiction to Dr. Kessler’s public remarks regarding sustained release formulations at the recent Controlled-Release Society meeting, so we cannot be confident of success with this approach…

Independent of the dosage form selected, the “PK only” approach will be not acceptable in Europe. European development will require the submission of clinical safety and efficacy data, as well as 1 month animal safety data.

121 On 15 October 1993, Dr DeNeale circulated a memorandum to Ms Marsh, among others, regarding a draft statement on development pharmaceutics for a regulatory submission. The draft statement expresses the view that the spheroid formulation “was selected because of the ability to generate a range of in vitro dissolution profiles by varying the amount of coating over the beadlets”. It is noted that pilot bioavailability studies allowed selection of a formula “compatible with once daily oral dosing without dose dumping”.

122 In January 1994, a “comparative, open-label, relative bioavailability study of a microsphere coated sustained release formulation (W-AR ER formulation #2), a gastrointestinal therapeutic system formulation (GITS [or Alza] formulation #AA-04011) and the conventional formulation of Venlafaxine in healthy male volunteers” study was conducted (134-US Study). This study was a three-period study using eighteen healthy adult males. Subjects received 75 mg daily doses of each formulation for four days “with a 5-7 day washout period between treatments”. The following pharmacokinetic properties were investigated: AUC of venlafaxine, rate of absorption of venlafaxine and formation of O-desmethylvenlafaxine. The study was completed in February 1994.

123 On 5 May 1994, Dr Steven Troy provided Dr Rudolph with a preliminary pharmacokinetic analysis of the 134 Study. Both venlafaxine and ODV concentration time data were analysed “using the model independent pharmacokinetic method”. Further, the Wagner-Nelson deconvolution method was used to “determine the fraction of the venlafaxine dose absorbed (or fraction of the ODV metabolite formed) by each sampling time over the 24-hour dosing interval”. For both ER formulations tested in the 134 Study, Dr Troy states that based on his analysis, “the rate of venlafaxine absorption was actually slower than its rate of elimination”. In relation to the GITS [Alza] formulation, Dr Troy states “the profile of venlafaxine and ODV plasma concentrations following administration of the GITS formulation was reasonably flat… which made Tmax difficult to estimate”.

124 In May 1994, the 208-US Study commenced. This study was a 12 week, flexible dose, double-blind, placebo-controlled study of venlafaxine IR and venlafaxine ER in 300 outpatients with major depression. This study compared the antidepressant efficacy and safety of venlafaxine (75 mg to 150 mg) with placebo. It also compared the overall profile of venlafaxine ER with venlafaxine IR (75 mg to 150 mg). Venlafaxine and metabolite plasma level determinations were also investigated.

125 A study investigating the effect of the time of dose administration on the pharmacokinetics of venlafaxine extended release was conducted during June and July 1994. The 139-US study was a “randomized, multiple-dose, crossover study of the effect of AM vs PM dosing on the pharmacokinetics of venlafaxine extended release capsules” using 18 healthy adult males. In this study, venlafaxine ER 75mg was administered to subjects every 24 hours for four days following the morning or evening meal and the steady-state pharmacokinetic dissolution of venlafaxine and O-desmethyl-venlafaxine was investigated.

126 On 1 June 1994, Mr Baranello distributed minutes of a meeting between eight members of the FDA and seven members of Wyeth held on 20 May 1994. Mr Baranello noted that “the major outcome of the meeting was that FDA agreed a pk-based approach could be utilized to fulfil the efficacy criteria”. The minutes of the conference outlines the discussion between the FDA and Wyeth representatives regarding the efficacy requirements of the NDA for an ER formulation of venlafaxine:

Dr. Leber advised that the efficacy requirements for the extended-release dosage form could be fulfilled by a pharmacokinetic comparison to the approved immediate-release product demonstrating equivalent extent of absorption; rate of absorption would not be considered an important factor. In addition, the mean Cmax of the extended-release formulation could not exceed that of the approved immediate-release formulation, and the mean Cmin could not be less than that of the current approved formulation. If these criteria could be met, FDA would not require clinical efficacy data. However Dr. Leber advised that FDA would want to see clinical safety data with the new formulation for safety assurance…

Based on this discussion, it was affirmed that the ultimate NDA submission would be based on pharmacokinetic studies and safety data. Mr. Baranello noted that the planned efficacy studies would still be performed as they are needed for foreign registrations in countries where clinical efficacy data are required. Dr. Leber remarked that what Wyeth-Ayerst does for reasons related to ex-U.S. requirements is its business, but he expressed concern about the possibility that the extended-release and/or immediate-release formulations might fail to demonstrate efficacy in these studies. Such an outcome could complicate the review of the NDA for the extended-release formulation. Therefore, he suggested that if these studies are performed, Wyeth-Ayerst should consider including a positive control for assay sensitivity. Dr. Derivan remarked that based on the very strong performance of Effexor® in previous efficacy studies, it was considered highly unlikely that the product would completely fail to demonstrate efficacy in the proposed studies in which it would be compared to the extended-release dosage form.

… Dr. Baweja suggested that Wyeth-Ayerst submit drafts of the pharmacokinetic protocols for review prior to initiation of the studies. He said that he and Dr. Ibrahim would be willing to work with Wyeth-Ayerst in reviewing these draft protocols and would provide feedback on the acceptability of their design.

127 During July 1994, a “randomized, open-label, crossover study of the effect of food on the pharmacokinetics of venlafaxine extended release capsules” was conducted using 12 healthy adult males (138-US Study). This study investigated the effect of food on the bioavailability and pharmacokinetics of venlafaxine ER capsules following single oral doses of venlafaxine ER 75 mg capsules administered following a high fat breakfast or following an overnight fast. Pharmacokinetic data relating to the dissolution of both venlafaxine and O-desmethylvenlafaxine was investigated.

128 As at 26 August 1994, there remained a question regarding whether the dissolution specification of the selected formulation was appropriate. Mr Jack Lamer sought to vary the 24 hour dissolution specification to ensure that the product did not fail Stage III testing (presumably stability testing). This variation was supported by Mr Smith based on the development of an in vitro/in vivo correlation and the fact that formulations within the proposed dissolution range still fell within the range of bioequivalent dissolution profiles. Mr Smith also said that the data from the 128 study (that is, the Alza or GITS formulation) “suggest that venlafaxine is absorbed consistently throughout the gastrointestinal tract”.

129 A “relative bioavailability study of two venlafaxine extended release 75 mg formulations, one venlafaxine extended release 150 mg formulation and the conventional formulation of venlafaxine in [24] healthy adult volunteers” was carried out during September and October of 1994 (136-US Study). The purpose of this study was “to assess the relative bioavailability of three (3) microsphere encapsulated venlafaxine ER formulations manufactured in New York or Puerto Rio compared to the conventional venlafaxine formulation”. The formulations used for the purposes of this study were: venlafaxine ER 75 mg capsules encapsulated in New York, venlafaxine ER 75 mg capsules encapsulated in Puerto Rico, venlafaxine ER 150 mg capsules encapsulated in Puerto Rico and venlafaxine conventional formulation 75 mg tablets. Subjects were “titrated for 3 days with venlafaxine 37.5 mg every 12 hours and randomized to sequentially receive 75 mg daily doses of each formulation for 4 days”. The rate and extent of absorption of venlafaxine and O-desmethylvenlafaxine was investigated for each venlafaxine formulation. The study concluded that all three ER formulations were bioequivalent and that, from a pharmacokinetic point of view, patients may be switched from the conventional to the ER formulation without any expected loss of efficacy and treatment while the ER formulation may alleviate side effects related to the rapid rise in plasma concentrations of venlafaxine following administration of the conventional formulation.

130 Another study (130-FR) was commenced in September 1994 and ran until November 1994. This study was a “single-centre, randomized, double-blind, placebo-controlled, single-dose, 3-period, cross-over, 75 mg IR administered with either placebo, metoclopramide 10 mg, or domperidone 20 mg”.

131 Furthermore, in September 1994, a “multicenter, open-label, uncontrolled, long-term safety evaluation” for the use of venlafaxine ER for the treatment of depression was commenced with 121 patients (369-US Study). This study was ongoing as at the priority date.

132 From October 1994 to August 1995, a comparative study of the efficacy and safety of fixed-doses of venlafaxine ER 75 mg or 150 mg, Paroxetine 20 mg, and placebo in depressed outpatients over eight weeks was conducted (367-EU Study). This was a “multicentre, randomized, double-blind, parallel-group, placebo-controlled”, fixed dose study.

133 During November 1994, a study of the effect of food on the pharmacokinetics of venlafaxine extended release capsules in 16 healthy adults was carried out (145-US Study). This study was an “open-label, randomized, 2-period crossover” study investigating the effect of fat on the bioavailability and pharmacokinetics of venlafaxine ER following single oral doses of venlafaxine ER 150 mg capsules administered following a high fat breakfast or following an overnight fast. The study specifically investigated the effect on the absorption profile of venlafaxine and the formation of O-desmethylvenlafaxine.

134 On 11 November 1994, the formula was revised to increase the amount of film coat solution applied from 5% w/w to 7% w/w “in order to achieve the target dissolution profile”. At this stage, “refinement[s] to the dissolution specifications” were also made.

135 In November 1994, a “multicenter, open-label, uncontrolled, long-term, safety evaluation” of venlafaxine ER in depressed outpatients was commenced (365-EU Study). This study involved 250 patients with major depression and investigated the safety and efficacy of venlafaxine ER for the treatment of depression for an initial treatment period of six months.

136 A comparative eight week study of venlafaxine ER (dosage could be increased from 75 to 150 to 225 mg) and placebo in outpatients with major depression was carried out from December 1994 to August 1995 (209-US Study). This was a “multicenter, randomized, double-blind, parallel-group, placebo-controlled” study that investigated the efficacy of venlafaxine ER in the treatment of depression.

137 From May to July 1995, a relative bioavailability study of two extended release (2 x 75 mg and 1 x 150 mg) and one conventional formulation (50 mg) of venlafaxine in 24 healthy adults was conducted (143-UK Study). This was an “open label, randomized, 3-period crossover, single-dose” study that investigated the rate and extent of absorption of venlafaxine and O-desmethylvenlafaxine for each of the formulations.

138 In addition to the study described above, in May 1995, a “multicenter, randomized, double-blind, placebo-controlled, dose-finding”, eight week study of venlafaxine extended release for generalized anxiety disorder was commenced (210-US Study). This study investigated the following three dose regimes: fixed dose of 75 mg/day; 75 mg/day for one week increased to 150 mg/day for seven weeks; 75 mg/day for one week, increased to 150 mg/day for one week, increased to 225 mg/day for six weeks.

139 A controlled comparative 12 week study of venlafaxine extended release and active control was commenced in July 1995 (360-CA Study). This was a “multicenter, randomized, double-blind, parallel-group, placebo and active-controlled”, flexible dose study of 336 patients administered venlafaxine extended release and active control for treatment of depression.

140 In August 1995, a controlled, double-blind, parallel-group, 8 week flexible dose comparative study of venlafaxine extended release and active control against placebo for treatment of depression was commenced (211-US Study).

141 Also in August 1995, a study investigating the absolute bioavailability and pharmacokinetic/pharmacodynamic EEG effects of conventional formulation (50 mg), extended release formulation (75 mg), and IV 10 mg in healthy adults (144-FR Study). This “double-blind, randomized, placebo-controlled, 4-period crossover” study was completed in September 1995

142 A comparative study of ascending dose tolerance and pharmacokinetics of venlafaxine extended release (37.5 mg, 75 mg, 150 mg, 225 mg single dose) and placebo was commenced in September 1995 (101-JA-ER Study).

143 On 6 October 1995, the venlafaxine extended release project team met to discuss the “Registration Decision Point”. Minutes of the meeting were circulated by Ms Simonetti on 12 October 1995. Under the heading “Clinical Development Program” the memorandum states:

The US NDA, Canadian NDS, and EC Dossier are targeted for simultaneous submissions (April to May 1996). Data from 9 PK studies, 3 pivotal efficacy studies, and 2 long-term safety trials will be included in the submissions…

144 Under the same heading, the memorandum notes:

… Back-up safety/efficacy trials (Protocols 360-Canada & 211-US) which include f1uoxetine as the comparator, are in progress. Efficacy data from Protocol 208-US are positive; both the IR and ER treated groups showed separations from placebo and, in general, the IR and ER are considered comparable…

145 On 16 May 1996, Wyeth-Ayerst submitted a New Drug Application for Efexor-XR which included three pivotal phase III clinical studies demonstrating the efficacy of extended release venlafaxine in depressed patients.

E Incorporation by reference GENERALLY

146 At the outset it is convenient to make a general observation about the applicants’ approach to the incorporation by reference of the parent and grandparent applications in the specification. This approach to incorporation by reference informed a number of the applicants’ submissions in respect of the construction of the patent. The approach involved the following steps: - (i) before amendment the specification contained statements the same as in the grandparent application and US priority document, particularly relating to side effects (nausea and vomiting) and clinical trials showing significant improvement by use of an extended release formulation, (ii) the amendments to the specification in December 2006 included the deletion of these statements, (iii) by deleting these statements Wyeth “eschewed the deleted part of the description of the invention”, and (iv) it would be illogical to read back into the terms of the specification the statements deliberately deleted from it.

147 This argument appears to adopt a subjective approach to construction based on an inferred intention of Wyeth. If such an approach to construction is permissible the problem is that logic does not support the inference of Wyeth eschewing any part of the disclosure in the grandparent application. Logic suggests only that, insofar as the entire disclosure was incorporated by reference into the specification in any event, it was unnecessary for many statements in the grandparent to be repeated and thus they could be deleted.

148 On an orthodox objective approach to construction the applicants’ approach also cannot be sustained. Regard may be had to amendments in interpreting the specification under s 116 of the Act but it is the specification as amended which is to be construed. The specification incorporates by reference the entire disclosure in the parent and grandparent applications. This incorporation by reference cannot be disregarded merely because the amendments deleted statements in the specification copied from the parent and grandparent applications.

149 These considerations are also relevant to another thread in the applicants’ case, namely, that Wyeth’s approach to the parent and grandparent applications was impermissibly selective, involving Wyeth in picking and choosing those parts of the disclosure in the earlier documents which suited its case (that is, the broader statements relating to an invention comprising a method) and ignoring the balance (that is, narrower statements relating to an invention comprising a particular formulation).

150 One problem with this aspect of the applicants’ case is that it obscures the proper inquiry by taking the amendments themselves as the relevant starting point for resolution of questions of construction and disclosure. Section 116 of the Act does not have that effect. It permits regard to be had to the specification without amendment in interpreting the specification as amended. The task remains construing the specification as amended. Similarly the disclosure in the US priority document cannot be affected by the amendments to the specification in December 2006.

151 With these considerations in mind, the issue of the priority date may be addressed.

F THE PRIORITY DATE

152 The first issue is whether the claims of the patent are fairly based on the disclosure in the US priority document. The second issue, pressed by Alphapharm and Generic Health but not Sigma, is whether the Alza (or Edgren patent) anticipates the invention. Resolution of these issues determines the priority date of the claims.

F1 The US priority document

The issue

153 Sigma’s submissions conveniently summarise the relevant legislative provisions and their consequences in the present case. Accordingly:

23 Section 43(1) of the Act provides that each claim of a specification must have a priority date. Section 43(4) of the Act provides that the priority date of a particular claim in a specification may be different to the priority date of any other claim. Thus, individual claims may have different priority dates.

24 Section 43(2) of the Act, read in conjunction with reg 3.12 of the Patents Regulations 1991, determines the priority date for a claim. However, where a claim claims matter that was in substance disclosed only as a result of an amendment to the specification, s114 of the Act provides that the priority date must be determined under the Regulations.

25 Section 43(2) of the Act provides that the priority date of a particular claim is:

(a) the date of filing of the specification; or

(b) where the regulations provide for the determination of a different date as the priority date-the date determined under the regulations.

26 Regulation 3.12 provides so far as relevant:

(1) Subject to regulations 3.13 (“priority dates: certain persons and applications”) and 3.14 (“priority dates: certain amended claims”) and subregulation (2), the priority date of a claim of a specification is the earliest of the following dates:

(a) the date of filing of the specification;

(b) if the claim is fairly based on matter disclosed in one or more relevant applications - the date of making the relevant application in which the matter was first disclosed; ...

(2) In paragraph(1)(b), “relevant application” means:

...

(b) if the application that relates to the specification containing the claim is a Convention application, a document of any of the following kinds is a priority document:

(i) a basic application that is related to the Convention application;

(ii) a specification, or another document filed in respect of, and at the same time, as, a basic application that is related to that Convention application; or

(iii) a specification in respect of a basic application that is related to that Convention application, being a specification that was filed after the basic application was made;

27 Section 114 of the Act provides that:

“Where a claim of a complete specification claims matter that was in substance disclosed as a result of amending the specification, the priority date of the claim must be determined under the Regulations”.

28 Regulation 3.14 provides that where section 114(1) of the Act applies to a claim of a specification the priority date of the claim is:

“(a)...

(b) in any other case – the date of filing of the statement of proposed amendments that resulted in the disclosure referred to in subsection 114(1) of the Act.”

29 The combined effect of the above provisions is relevantly as follows:

(a) The priority date of the claims is 20 March 1997 (the date of filing of the Convention application) unless the regulations provide for a different date: s 43(2).

(b) If the claims are “fairly based on matter disclosed” in the priority document, the priority date is 25 March 1996 (the date of filing of the US priority document): reg. 3.12 (i)(b);

(c) If the claims claim matter disclosed first as a result of the amendment, the priority date for such claims is no earlier than 20 December 2006 (s114, reg 3.14).

154 The parties agreed that the test for “in substance disclosed” in s 114 of the Act is the same as the test for determining whether a claim is fairly based on the specification as required by s 40(3) of the Act (the “claim or claims must be clear and succinct and fairly based on the matter described in the specification”). Accordingly, the question is whether there is a “real and reasonably clear disclosure” of the claims of the patent in the US priority document (Lockwood Security Products Pty Limited v Doric Products Pty Limited (No 1) (2004) 217 CLR 274; [2004] HCA 58 (Lockwood No 1) at [69]).

155 Wyeth, however, also observed that Lockwood No 1 concerned “internal fair basis” under s 40(3) of the Act. In this case the first issue is “external fair basis”, that is, whether the claims of the patent are in substance disclosed in the US priority document. For this purpose, Wyeth submitted, the required comparison is not between the claims and the specification of the patent but between the claims of the patent and the US priority document as a whole, including the claims of the US priority document (referring, in support, to Kimberly-Clark Australia Pty Limited v Arico Trading International Pty Limited (2001) 207 CLR 1; [2001] HCA 8 at [14]-[16] (Kimberly-Clark)). Wyeth thus asserted additional principles as relevant to the resolution of this issue:

(1) First, “the claims of the [US] priority document in this case cannot effectively be disregarded in assessing priority, as the applicants would have it”.

(2) “Secondly… the comparison must be conducted as a matter of the substance of what is disclosed, and without an over-meticulous verbal analysis”.

(3) “Thirdly… a provisional or other specification relied on as a priority document may legitimately disclose more than one invention” (citing Leonardis v Sartas No 1 Pty Ltd (1996) 67 FCR 126 at 143-144).

156 The applicants took issue with these additional principles as erroneously conflating the body of the specification with the claims. According to the applicants, just as an assertion in a consistory clause alone cannot found an internal fair basis, a claim in a priority document alone cannot found external fair basis. As Sigma put it, if it were otherwise, a priority document could include a set of claims unrelated to the disclosure in that document with those claims then said to provide a fair basis for claims of a patent. Accordingly, the focus must be the invention as disclosed in the priority document. The claims in that document describe the invention (Lockwood No 1 at [53] and [87] and Kimberly-Clark at [21]).

157 According to the applicants, a comparison of the US priority document and the claims of the patent (construed having regard to the 20 December 2006 amendments) leads to the following conclusions:

(1) The original specification for the patent and the US priority document are confined to a particular formulation of venlafaxine hydrochloride and methods of treatment using that formulation (namely, an extended release encapsulated formulation or, according to Sigma, such an encapsulated formulation using hydroxypropylmethylcellulose (HPMC) or, according to Alphapharm and Generic Health, such an encapsulated formulation in the form of beads or spheroids coated with a film comprising ethyl cellulose or HPMC).

(2) Claims 9 and 10 of the US priority document, on which Wyeth relies, are themselves limited to “an encapsulated extended release formulation” which, in the context of the whole of the US priority document, must be read as a reference to the specific formulation disclosed in that document and no other formulation. Further, those claims can only assist Wyeth if their subject matter is “what the body of the specification read as a whole discloses as the invention” (Lockwood No 1 at [99]).

(3) The amended specification abandons the coated spheroid formulation of the US priority document and original specification and expands the scope of the invention to disclose not only a method of treatment using that formulation but a “generalised method for providing a therapeutic blood concentration of venlafaxine over a 24 hour period which comprises administering orally to a patient in need of venlafaxine a single daily dosing formulation of venlafaxine hydrochloride that provides a peak blood plasma level of venlafaxine in from about 4 to 8 hours after administration” (Alphapharm’s description) or “any formulation which achieves a certain profile” (Sigma’s description).

(4) There is no support in the US priority document for an invention extending to a method of treatment which is not confined to the particular formulation which overcame the problem the inventor identified in the US priority document.

158 The applicants submitted that the present case is similar to the circumstances considered in Pfizer Overseas Pharmaceuticals v Eli Lilly & Company (2006) 68 IPR 1; [2005] FCAFC 224 at [268]-[277] in which the majority held that the specification related to a defined class of drug having a certain inhibitory effect whereas the claim in issue related to any compound having that effect. Thus the claim in issue was not fairly based on the specification.

Discussion

159 In resolving this issue it is important to distinguish between the patent (which involves the specification including the claims as amended on 20 December 2006), the original specification as filed and the US priority document. The issue is whether the claims of the patent are in substance disclosed in the US priority document. For this purpose the original specification is relevant insofar as it might assist in construing the claims of the patent. But the issue of disclosure essentially involves consideration of the claims of the patent (properly construed, including in light of the amendments if they assist) and the US priority document. This is so whether or not, as in this case, the original specification, before the 20 December 2006 amendments, is largely the same as the US priority document.

160 It may be acknowledged that the US priority document is entitled “extended release formulation”. Further, that the part of the US priority document entitled “brief description” of the invention repeatedly refers to “this invention”. There is potential ambiguity in those references. Hence, the first paragraph under this heading says that in “accordance with this invention, there is provided an extended release (ER), encapsulated formulation containing venlafaxine hydrochloride as the active drug component, which provides in a single dose, a therapeutic blood serum level over a twenty four hour period”. The second paragraph says that through “administration of the venlafaxine formulation of this invention, there is provided a method for obtaining a flattened drug plasma concentration to time profile, thereby affording a tighter plasma therapeutic range control than can be obtained with multiple daily dosing. In other words, this invention provides a method for eliminating the sharp peaks and troughs (hills and valleys) in blood plasma drug levels induced by multiple daily dosing…”. The second paragraph states also that “in accordance with the use aspect of this invention, there is provided a method for moderating the plural blood plasma peaks and valleys attending the pharmacokinetic utilization of multiple daily tablet dosing with venlafaxine hydrochloride…”. The third paragraph says that the “use of the one-a-day venlafaxine hydrochloride formulations of this invention reduces by adaptation, the level of nausea and incidence of emesis that attend the administration of multiple daily dosing”.

161 Under the heading “detailed description of the invention” in the US priority document there are references to “the formulations of the present invention”, the “extended release formulations of this invention” comprising certain substances, and the “extended release spheroid formulations of this invention” comprising certain substances. This section of the document states that numerous attempts to produce extended release tablets by hydrogel technology “proved to be fruitless because the compressed tablets were either physically unstable… or dissolved too rapidly in dissolution studies”. Further, that numerous spheroid formulations were prepared, and that the addition of HPMC made “production of spheroids practical”. Before demonstrating four examples of venlafaxine hydrochloride extended release capsules, the US priority document states that:

The following examples are presented to illustrate applicant’s solution to the problem of preparation of the extended release drug containing formulations of this invention.

162 The text of the US priority document relating to the examples refers to the “capsules of this invention” concluding with the words:

163 The US priority document contains 10 claims. Claims 1 to 5 refer to a formulation comprising a capsule (claim 1) or a composition according to that claim (claims 2, 3, 4 and 5). Claim 6 refers to a particular film coating composition. Claim 7 refers to an extended release formulation which comprises spheroids and claim 8 to a formulation according to claim 7. The document also contains claims 9 and 10 as follows:

9. A method for providing a therapeutic blood plasma concentration of venlafaxine over a twenty four hour period with diminished incidences of nausea and emesis which comprises administering orally to a patient in need thereof, an encapsulated, extended release formulation that provides a peak blood plasma level of venlafaxine in from about four to about eight hours, said formulation containing venlafaxine hydrochloride as the active ingredient.

10. A method for eliminating the troughs and peaks of drug concentration in a patients blood plasma attending the therapeutic metabolism of plural daily doses of which comprises administering orally to a patient in need thereof, an encapsulated, extended release formulation that provides a peak blood plasma level of venlafaxine in from about four to about eight hours, said formulation containing venlafaxine hydrochloride as the active ingredient.

164 What then is the invention disclosed in the US priority document? Wyeth contends that two inventions are disclosed – a formulation and a method. According to Wyeth the fact that two inventions are disclosed creates no difficulty. The US priority document is not an Australian patent. It is not a complete specification subject to s 40(3) of the Patents Act (the “claim or claims must relate to one invention only”). Further, the references to “an encapsulated… formulation” in claims 9 and 10 do not alter the fact that a method is disclosed. The paragraphs under the heading “brief description of the invention”, properly construed, are said by Wyeth to support this conclusion. The references to “this invention” are to what the invention provides. The invention provides an extended release encapsulated formulation. The invention also provides a method for obtaining a flattened drug plasma concentration to time profile. This is clear from the alternative description in the second paragraph under this heading “In other words, this invention provides a method for eliminating the sharp peaks and troughs…”.

165 Wyeth’s submissions are persuasive. This is not a case where claims 9 and 10 are unrelated to the disclosure in the US priority document. The US priority document discloses two inventions. The first is an encapsulated formulation. The second is a method for obtaining a certain drug to plasma relationship over time yielding a “tighter plasma therapeutic range control” than multiple daily dosing, eliminating the sharp peaks and troughs in blood plasma levels induced by multiple daily dosing and thereby reducing the level of nausea and incidence of emesis that attend multiple daily dosing. The method involves providing in a single dose a therapeutic blood serum level of venlafaxine hydrochloride over a 24 hour period, with plasma levels rising for between about five to eight hours after administration of the formulation (optimally about six hours) and then beginning to fall through a protracted substantially linear decrease from the peak plasma level whilst maintaining a threshold therapeutic level over the entire twenty four hour period. The references to the inventor’s failed efforts to prepare a hydrogel tablet formulation and to an encapsulated formulation in claims 9 and 10 do not eliminate the disclosure in the US priority document of this method of treatment. When the US priority document is read as a whole, the method disclosed is not confined to the particular encapsulated formulations (or embodiments or examples) which are also disclosed. The claims of the patent are in substance disclosed in or fairly based on the US priority document. The amendments made in December 2006 cannot and do not alter this fact of disclosure.

F2 The Alza or Edgren patent

The issue

166 Alphapharm (and to the extent it relies on Alphapharm’s submissions, Generic Health) also contended that the Alza or Edgren patent (International Patent No WO 94/27589 published 8 December 1994) anticipates at least claims 1 to 10 and 15 to 17 of the patent. According to Alphapharm “example 2 of the Alza Patent… will inevitably match the invention as claimed” claims 1 to 10 and 15 to 17 (referring, in support, to General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1972] RPC 457 at 485-6, as referred to in Nicaro Holdings Pty Ltd v Martin Engineering Co (1990) 16 IPR 545 at 561). That is, if example 2 is followed, there inevitably or inexorably will be a therapeutic blood plasma concentration profile for venlafaxine over a 24 hour period which falls within the scope of those claims. This conclusion is said to arise by inference from the dosage form described in example 2 when compared to a study Wyeth carried out in January 1994 (the 134-US Study described above under the development process) read with a Wyeth dosage form document (clinical lot AA-04011/762393).

Discussion

167 As Wyeth submitted, however, this contention confronts a number of difficulties.

168 If it is assumed that the Wyeth dosage form document discloses the formulation referred to in the 134-US Study, the constituents in that document differ from those in example 2 of the Alza patent. Although Alphapharm submitted that the only relevant fact is that the constituents are proportionally identical (that is, the same percentage weights), as Wyeth said, that is a matter for evidence not submission. The evidence does not permit an inference that proportional identity of constituents is the only relevant factor.

169 The release rates identified in the two documents are also different. Example 2 of the Alza patent refers to a release of venlafaxine hydrochloride of 77 mg at a zero order rate over an extended duration of 16 hours. The Wyeth dosage form document refers to a release rate between 2 and 24 hours.

170 Example 2 of the Alza patent also incorporates the manufacturing procedures in example 1 of the Alza patent. These procedures are highly prescriptive. The evidence does not establish that the Wyeth dosage form document concerns a dosage form manufactured in accordance with those procedures.

171 These matters are sufficient to undermine Alphapharm’s submission that example 2 of the Alza patent “will inevitably match the invention”.

172 Other matters identified by Wyeth also support this conclusion. Hence, example 2 of the Alza patent (read with example 1) does not identify the size of the orifice allowing release of the drug. The claims of the patent require a therapeutic blood plasma concentration of venlafaxine over a 24 hour period. The evidence does not support an inference that administering the dosage form in the Wyeth dosage form document would inevitably achieve that result. At a more general level, the claims of the patent involve a peak blood plasma level in from about four to eight hours after administration. The essence of the Alza patent is a dosage form achieving a controlled release that maintains a constant drug level in the blood. Despite the applicants’ submission to the contrary, it is apparent that the profile of the GITS formulation in the 134-US Study involves a relatively flat release rate making (as Dr Troy said) an estimate of the time of peak blood plasma levels difficult.

173 These considerations undermine Alphapharm’s submissions that the Alza patent anticipates claims 1 to 10 and 15 to 17 of the patent.

174 The claims of the patent thus take the priority date of 25 March 1996.

G SECTION 40 ISSUES

175 Section 40 of the Act includes the following:

(2) 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

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

176 The applicants contended that these requirements are not satisfied.

G1 Fair basis

177 Sigma’s closing submissions conveniently summarised the grounds on which the applicants contended that the claims are not fairly based on the matter described in the specification. While the applicants’ arguments differed in some respects, the grounds are:

(a) claims 1 to 17 and 27 (when dependent on claims 1 to 17) claim as the invention a method which comprises or includes administering a sustained release formulation of venlafaxine hydrochloride other than a formulation consisting of spheroid core containing microcrystalline cellulose and HPMC together with an ethyl cellulose and HPMC coating, the claims are not fairly based;

(b) claims 1 to 17 and 27 (when dependent on claims 1 to 17) claim as the invention a method which comprises or includes administering a sustained release formulation of venlafaxine hydrochloride which is made with or involves use of hydrogel technology the claims are not fairly based;

(c) the body of the specification does not include a real and reasonably clear disclosure of the basis for limitation by reference to a relationship between a blood plasma concentration of venlafaxine and therapeutic efficacy claims 1 to 17 and 27 (when dependent on claims 1 to 17) are not fairly based;

(d) the body of the specification does not include a real and reasonably clear disclosure of the basis for limitation of the peak therapeutic blood plasma concentration of venlafaxine over a 24 hour period to no more than 150ng/ml, claims 1 to 17 and 27 (when dependent on claims 1 to 17) are not fairly based; and

(e) insofar as claims 1 to 17 and 27 (when dependent on claims 1 to 17) are not limited to a method for treatment depression the claims are not fairly based.

Ground (a) – the spheroid core formulation

178 As to ground (a) (the spheroid core formulation), Sigma submitted that the specification identifies a formulation problem (finding “a formulation which would provide a suitable granulation mix which could be extruded properly” and converting “the extruded cylinders into spheroids”) and a solution to that problem (the addition of HPMC to the venlafaxine hydrochloride microcrystalline mix which made production of spheroids practical for a single daily dosing formulation useful in the methods of the invention). When read with the statements in the specification that the inventor had tried and failed to produce an extended release formulation by other methods (namely, the failed attempt to produce a tablet using hydrogel tablet technology) and the examples which are all of spheroid formulations, Sigma submitted that “there is no real and reasonably clear disclosure for a claim to an extended release formulation not limited to spheroids incorporating HPMC in the core”. Sigma said that this conclusion was supported by the fact that tables 2 and 3 in the specification, showing blood plasma levels over time, are the results of the administration of the spheroid formulations in subjects. According to Sigma, Professor Charman conceded that his understanding of the plasma profile in claims 1 to 4 was based on table 2 and that the type of formulation will impact on the release rate of the drug and thus the resulting plasma profile. Without in vivo testing the resulting plasma profile cannot be predicted. Thus there is no disclosure other than that of the spheroid formulations. Sigma submitted that Wyeth cannot rely on the more expansive consistory statements in the specification to support any other disclosure. As explained in Lockwood No 1 at [87]-[100] mere assertion in a consistory clause is insufficient. Section 40(3) of the Act is satisfied only if the specification as a whole corresponds with the consistory clause. In this case, the specification as a whole does not support the consistory style statements. The amendments made in December 2006 confirm this conclusion. By the amendments, a narrowly defined invention of a specific formulation was impermissibly expanded to a broadly described method of treatment.

179 Alphapharm submitted that Wyeth’s reliance on Lockwood No 1 to support its contention that the specification discloses a method involving the administration of a single daily dosing formulation, not any particular formulation, is misplaced. In Lockwood No 1 the claim related to a product not a method. In the present case, as Professor Charman’s evidence disclosed, the physiological result achieved in the human body depends on the precise characteristics of the formulation administered. Because the shape of the blood plasma concentration time profile is formulation dependent, the specification does not disclose that any other formulation could be substituted for the formulation disclosed in the patent and achieve the same physiological effect in terms of blood plasma concentrations. The results in tables 2 and 3 of the patent relate to administration of the spheroid formulations of the invention. Further, nothing in the patent discloses that a different formulation will achieve the claimed therapeutic effect. Nor could that be known or disclosed in the patent given that it would depend on administration of a different formulation to a patient. In other words, the patent teaches only that if the coated spheroids are used then the therapeutic blood plasma concentrations in tables 2 and 3 will be achieved. This is in contrast to Lockwood No 1, particularly at [11]-[13] (in which parts of the specification, disclosing that the invention was not limited to any particular form, are described).

180 Wyeth responded that the applicants’ approach to fair basis tended to obscure the proper inquiry. Section 40(3) of the Act calls for consideration of the claims and the specification. The US priority document is not relevant for that purpose. The amendments to the specification might assist in construction of the specification but otherwise they too are immaterial. The focus is the claims and the specification as amended. The issue is the “narrow one” which the High Court approved in Lockwood No 1 at [57], namely, whether the claim “travels beyond” the matter disclosed in the specification. This inquiry is separate from that relating to inventive step or the merit of the invention.

181 According to Wyeth, once the correct inquiry is identified, it is apparent that the claims of the patent do not travel beyond the disclosure in the specification. The specification contains consistory style clauses which reflect the embodiments of the invention described and claimed. The invention described in these statements and later claimed is a method involving the administration of a single daily dosing formulation of venlafaxine hydrochloride and is not limited to any particular formulation. The spheroid core formulations are examples of this method but the method is not confined to the examples. The circumstances cannot be distinguished from those in Lockwood No 1.

182 Wyeth also took issue with the applicants’ use of Professor Charman’s evidence in respect of the meaning of “therapeutic blood plasma concentration”. Wyeth said the fact that Professor Charman considered that tables 2 and 3 in the patent provided information about therapeutic blood plasma concentrations cannot, for the purpose of the law of fair basis, mean that the method disclosed in the specification must be taken to be limited to the profiles in the tables achieved by the administration of the particular spheroid formulations. While the patent is not to be construed in the abstract but in the light of the common general knowledge at the priority date and through the eyes of a non-inventive skilled worker in the relevant filed (Kimberly Clark at [24]), the fair basis inquiry remains a narrow one (Lockwood No 1 at [57]).

183 Wyeth submitted further that the applicants’ arguments on fair basis were misconceived for a number of reasons.

184 First, the focus must be the plain words of the specification. The consistory-style statements in the specification support the claims. The specification, in terms, states:

185 This is a clear statement of a method not confined to any particular formulation or particular blood plasma profile.

186 Second, the applicants’ arguments impermissibly attempt to confine the description to the preferred or exemplified embodiments. The effect of the applicants’ arguments is to say that only the embodiments the subject of tables 2 and 3 may be claimed, but this is contrary to the principle that material that is part of the description of the invention need not be included as an integer of each claim (Lockwood No 1 at [69]). Further, only one embodiment within each claim need be embodied for sufficiency purposes (Lockwood No 1 at [60] and [103]).

187 Third, Professor Charman’s evidence was not to the effect that “therapeutic blood plasma concentration” meant the particular blood plasma profiles achieved in tables 2 and 3. Professor Charman, in cross-examination, reiterated his view that the words meant “the blood plasma concentration-time profile of venlafaxine arising from the administration of a single daily dosing formulation of venlafaxine hydrochloride that has been shown to be therapeutically effective when studied in a population of depressed patients”. He used tables 2 and 3 to illustrate, not limit, his understanding of this meaning.

188 For the reasons that follow, Wyeth’s submissions should be accepted.

189 Dealing first with the expert evidence on which the applicants relied, it is apparent that Professor Charman considered “therapeutic blood plasma concentration” meant the blood concentration of venlafaxine providing therapy over a 24 hour period. In his opinion, in the context of the pharmacology of venlafaxine at least, there is no “magic one particular level”. Professor Charman described tables 2 and 3 as the plasma profiles of venlafaxine “that would result in the efficacy that is described in the divisional applications” (that is, the parent and grandparent applications, the disclosure of which is incorporated by reference in the patent). In his words, the “whole profile from zero to 24, the shape of that profile of venlafaxine is what I describe as the therapeutic blood concentration profile of venlafaxine”. When confined to the words of the patent itself (referred to as the document in this part of the cross-examination and excluding any incorporated disclosure in the parent and grandparent applications) the following exchange occurred with Professor Charman:

That pharmacology is not discussed in this document, is it? What I have just described, no, the words are the words.

The words are the words. There is no discussion in this document saying that there is no specific blood plasma concentration which can be related directly to therapeutic effect? Are you talking about the document?

Yes? The document, I absolutely relate the shape of the plasma concentrations of venlafaxine that are described in the specification there to the therapeutic efficacy that arises from the administration of the extended release dose form, because the shape of that profile is providing the effect.

So if we look at page 8, you’re saying that the profile that provides therapeutic effect is the profile disclosed in table 2? We have got table 2 and table 3 together. Of course, there’s two different aspects to that, isn’t there? The first table is where there was a pre existing level of venlafaxine.

190 The material fact underlying this exchange, however, is that the patent does incorporate by reference the disclosure in the parent and grandparent applications. Professor Charman was entitled to take that disclosure into account.

191 Professor Charman also made a number of points about pharmacokinetics, including the following:

Every subject, every patient, has a different pharmacokinetic profile following the administration of a medicine. Even the repeated administration of the same formulation to the same subject from day one to day two will be a little different. So this is just how pharmacokinetics works.

192 Knowledge of these basic facts about pharmacokinetics must be imputed to the skilled addressee at the priority date. The patent is thus to be construed in light of these facts.

193 When asked about that part of his affidavit in which he concluded that the “Patent teaches that a unique plasma profile of venlafaxine leads to the reported beneficial clinical profile (including improvement in side effects)”, Professor Charman responded:

So the unique plasma profile is the shape of the venlafaxine profile and those shapes are described in tables 2 and 3, and the claims fit in in the context of putting a value around those Tmax values that are associated with the achievement of a therapeutic blood concentration therapeutic blood concentration profile, I should say.

194 When dealing with the shape of curves resulting from different formulations, Professor Charman gave the following evidence:

You could have a Tmax at the same time of curves of quite different shape, could you not, depending upon the formulation used, the drug form used? So same Tmax on a graph, different shapes?

Yes, with different formulations? Theoretically, yes.

You would expect, for example, that a coated spheroid might give you one shaped curve, an OROS formulation you understand what an OROS formulation is? Yes, I do.

The one developed by the Alza corporation? Yes, I know the technology.

Or a hydrogel tablet might give you quite different shaped curves, might they not? The first part of your proposition about single Tmax different shapes, I can accept that they can be different. To accept different plasma profiles from different types of formulations is a whole another situation because it requires different releases, where is it released, what is the rate of release, so it is a lot more complicated. So the first part, the theoretical, absolutely. The second part, in terms of predictability of different dose forms, I am not comfortable as to how one would make those predictions.

195 When this evidence is considered as a whole it cannot be accepted that Professor Charman’s evidence assists the applicants on their fair basis argument in this respect. The essence of Professor Charman’s evidence is that it is the whole shape of the plasma concentrations of venlafaxine resulting from administration of a single daily dose, with the peak between four to eight hours, which is said to have therapeutic effect. On Professor Charman’s, evidence the particular shape of that curve will vary in an individual patient from day to day. But the whole shape of the curve over the 24 hour period is the critical matter. Tables 2 and 3 are mere descriptions of that curve shape resulting from the administration of the particular spheroid formulations. Given the basic facts about how pharmacokinetics works, tables 2 and 3 could not be more. But Professor Charman’s evidence is not to the effect that the patent teaches only that if the coated spheroids are used then the therapeutic blood plasma concentrations in tables 2 and 3 will be achieved. It teaches the method of the invention. Hence, and contrary to Alphapharm’s submission, it cannot be said that “the specification does not disclose that other formulations may also be used to achieve the therapeutic blood plasma concentrations in the claims”.

196 Wyeth relied on “consistory-style statements” in the specification as supporting the “embodiments of the invention described and claimed”. Wyeth particularly relied on pages 2 to 4 of the patent, which include the following paragraphs:

…

In a further embodiment, there is provided a method for treating depression in a patient in need of such treatment, said method including the steps of administering orally to said patient a single daily dosing formulation of venlafaxine hydrochloride that provides a therapeutic blood plasma concentration of venlafaxine over a 24 hour period with a peak blood plasma level of no more than 150 ng/ml.

197 Whether the statements on which Wyeth relied are mere assertions or are supported by the specification as a whole is a matter of construction. As such, the December 2006 amendments are relevant only insofar as they assist in construing the specification as a whole in its amended form. It is that specification which is to be construed, not the amendments themselves. Once this is acknowledged it is apparent that the consistory style statements on which Wyeth relied cannot be dismissed as mere assertions unsupported by the specification as a whole. The specification discloses a method of treatment involving providing a therapeutic blood plasma concentration of venlafaxine over a 24 hour period by administering to a patient in need of venlafaxine a single daily dose that provides a peak blood plasma level of venlafaxine in from about 4 to 8 hours after administration. This method is not limited to any particular formulation. Other embodiments and examples of these embodiments are provided. But the other embodiments and examples do not confine the method disclosed. Nor do the statements relating to the failed attempts to prepare tablets using hydrogel tablet technology. Nor, for that matter, do the problems encountered and solution found to preparing the spheroids for use in the methods of the invention.

198 For these reasons it is not the case that the specification discloses only an invention comprising a particular spheroid formulation so that, insofar as any of the claims claim more than that particular formulation, the claims are not fairly based on the matter described in the specification. Ground (a) should not be accepted.

Ground (b) – hydrogel technology

199 As to ground (b) (hydrogel technology), the patent contains a number of relevant references. In the “background of the invention” section it is stated that:

Extended release drug formulations are conventionally produced as compressed tablets by hydrogel tablet technology.

200 Further, that where this is not feasible, “it is conventional in the drug industry to prepare encapsulated drug formulations which provide extended or sustained release properties”.

201 In the “brief description of the invention” section, it is said that:

202 After the examples in that section, the following statement appears:

203 Sigma’s submissions about this issue capture the essence of its point:

174 It is axiomatic that an inventor cannot claim a monopoly for that which the inventor was unable to produce. To hold otherwise would be to make a mockery of patent law. It would fundamentally undermine the contract inherent in the grant of a patent between the inventor and society namely that the inventor makes a disclosure to society in return for a monopoly limited as provided by the statute.

175 Where an inventor says I cannot use hydrogel technology in order to create an extended release formulation of a hydrogel tablet of venlafaxine hydrochloride that inventor cannot logically then claim a monopoly to that product or a method utilising it.

176 Given the absence of any limitation in the claims to exclude an extended release formulation of venlafaxine hydrochloride deploying hydrogel technology (and the positive contrary assertion by Wyeth) claims 1 to 17 and claim 27 (when dependent on these claims) are not fairly based and fail to comply with section 40(3) of the Act.

204 Alphapharm makes the same point. In addition, according to Alphapharm:

110 That is, not only has the patentee not disclosed that there is any method of achieving the therapeutic blood plasma concentrations in the claims using formulations other than the spheroid formulations, it has expressly indicated that the blood plasma concentrations set out in the claims could not be achieved through the use of hydrogel tablet technology.

111 Accordingly, and contrary to the facts of Lockwood No 1, there is no disclosure in the specification that any hydrogel formulation would also achieve the therapeutic blood plasma concentrations - there is an express statement that hydrogel will not achieve the desired in vitro dissolution profiles, and hence will not achieve the desired blood plasma levels.

205 Alphapharm also submitted that, as in the case of Atlantis Corporation Pty Ltd v Schindler (1997) 39 IPR 29, the claims (being pure method claims) travel beyond the matter described as the invention in the specification.

206 In response, Wyeth reiterated that nothing in the body of the specification suggests that the description of the invention found in the consistory statements is narrower than the invention claimed. Wyeth observed that the expert evidence supported this conclusion. According to Professor Charman “any formulation using or incorporating hydrogel tablet technology that achieves the plasma profile would be useful in the Method of the Patent”. According to Wyeth, the principle restated in Lockwood No 1 at [59] (from Shave v HV McKay Massey Harris Pty Ltd (1935) 52 CLR 701 at 709 per Rich, Dixon, Evatt and McTiernan JJ) applies:

When a combination claim states an invention which gives an old result by a new means, the monopoly is limited, at any rate prima facie, to the new means. But when by a new application of principle the inventor has obtained a new result or thing, even when it be done by a combination, he may claim all the alternative means by which the thing or result may be achieved.

207 Wyeth also rejected Sigma’s characterisation of the facts as making a mockery of patent law. Wyeth said that it has not claimed a monopoly over something it could not produce. This characterisation depends on the invention being impermissibly limited to a formulation. The invention is a method. The inventor produced the method. The inventor enabled one way of carrying out the invention by providing the example formulation. That is sufficient. Consistent with principle, Wyeth was entitled to claim all alternative means by which the invention, the method, may be achieved.

208 Again, Wyeth’s submissions should be accepted. The patent discloses a method for the treatment of a patient in need of venlafaxine by administering orally a single daily dosing formulation of venlafaxine hydrochloride that provides a peak blood plasma concentration of venlafaxine within a defined period or at a defined level (see Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth (2009) 81 IPR 339; [2009] FCA 595 at [41]). Once this characterisation of the invention is accepted, the applicants’ lack of fair basis contention in respect of hydrogel tablet technology fails.

209 The result in Atlantis Corporation followed from the fact that the invention in the specification was in truth an apparatus limited to a particular use and the claims for an apparatus not limited to that use. In the present case the claims accord with the specification. The specification discloses a method not limited to a particular formulation and the claims involve a method not limited to a particular formulation. There is no limitation in the specification or the claims of a formulation using hydrogel tablet technology. There are statements that the inventor’s attempts to prepare a formulation using hydrogel tablet technology as described were unsuccessful. Ground (b) thus cannot be sustained.

Ground (c) – therapeutic blood plasma concentration

210 The applicants observed that each of the claims of the patent refers to a relationship between blood plasma concentration of venlafaxine and therapeutic efficacy. According to the applicants (see Sigma’s ground (c)), however, there is no basis established or capable of being established in the body of the specification for the existence of such a concentration.

211 The applicants pointed out that it was common ground between the experts that there is no point to point relationship between a specific blood plasma concentration of venlafaxine hydrochloride and therapeutic efficacy. Consistent with the submissions above, the applicants said Professor Charman identified tables 2 and 3 in the patent as the unique plasma profile associated with therapeutic efficacy, although the tables did not describe such efficacy. Sigma described Professor Charman as “strangely reluctant” to agree that there would be a large number of different plasma profiles with peaks between 4 to 8 hours, although ultimately admitting that there would be different profiles even within the same patient. Sigma also submitted that Professor Charman acknowledged that nothing in the patent showed a plasma profile with a peak at 4 or 8 hours and instead attempted to rely on incorporated material in the grandparent application dealing with clinical trials. According to Sigma, this was impermissible as these statements had been deleted from the specification by the amendments in December 2006. The applicants submitted that these trials, in any event, did not concern therapeutic efficacy but reduction of side effects (nausea and vomiting).

212 Alphapharm made submissions to the same general effect. Alphapharm also emphasised that the consequence of accepting Wyeth’s construction of the claims is that the claims are not fairly based on the specification. On Wyeth’s construction, said Alphapharm, the claims cover any plasma profile that can be drawn in accordance with the claimed numerical parameters and which are found to be therapeutically effective; yet according to Professor Charman the only therapeutic blood plasma profiles disclosed in the specification are in tables 2 and 3 which do not, in any event, deal with therapeutic effect. Nor can the claims be read down to mean only tables 2 and 3. Further, Wyeth’s approach of describing therapeutic blood plasma concentration as meaning any concentration having therapeutic effect is simply circular.

213 In answer, Wyeth repeated its responses in respect of Professor Charman’s evidence. Wyeth also submitted that s 40(3) of the Act requires a real and reasonably clear disclosure in the specification of what is claimed, not a demonstration of the justification as to why particular parameters are used to define the invention. The claims of the patent define the invention in the same way as the body of the specification. According to Wyeth, once it is accepted that the only basis required in this context is “fair basis” as specified in s 40(3) then:

…it is not possible to dress up a complaint about the patentee’s choice of parameters for defining the invention as a complaint of fair basis in circumstances where those same parameters are used consistently throughout the description and claims. The submissions made by Sigma and Alphapharm in relation to these contentions in truth do not relate to any ground of fair basis.

214 The main points which the applicants made about Professor Charman’s evidence have been dealt with (and dismissed) above. Insofar as any new issue is raised, the evidence to which the applicants referred does not disclose reluctance on Professor Charman’s part to agree that a large number of plasma profiles might have peaks between 4 to 8 hours. The important point is that this did not alter the fact that Professor Charman considered the whole shape of the curve over the 24 hour period to be the critical matter, with the Tmax between 4 to 8 hours, on his evidence, defining an “important part of the shape”. Nor can the fact that the patent does not show a plasma profile with a peak at 4 or 8 hours be material once the effect of Professor Charman’s evidence about the importance of the overall shape, with a peak between about 4 to 8 hours, is taken into account.

215 Professor Charman accepted that table 2 shows pharmacokinetic properties rather than therapeutic efficacy but, as he tried to explain, the patent incorporates the disclosure in the parent and grandparent applications which refer to clinical trials showing reduced nausea and vomiting with therapeutic effect. The incorporation of this disclosure by reference remains in the amended specification. In the face of this continued express incorporation, the applicants cannot rely on the deletion of incorporated text itself from the specification in December 2006 as a matter of any significance.

216 The acknowledged lack of any point to point relationship between plasma levels of venlafaxine hydrochloride and therapeutic efficacy (accepted by all the relevant experts) is in fact inconsistent with the applicants’ case on ground (c). This common ground between the experts confirms rather than undermines Professor Charman’s evidence that the patent discloses a method of treatment or, in his words:

I absolutely relate the shape of the plasma concentrations of venlafaxine that are described in the specification there to the therapeutic efficacy that arises from the administration of the extended-release dose form, because the shape of that profile is providing the effect.

217 This is consistent with Professor Charman’s affidavit evidence that he understood “therapeutic blood plasma concentration” to mean “the blood plasma concentration-time profile of venlafaxine arising from the administration of a single daily dosing formulation of venlafaxine hydrochloride that has been shown to be therapeutically effective when studied in a population of depressed patients”.

218 Further, it is not circular for the meaning of a phrase to be determined by result, in this case the result being therapeutic effectiveness.

219 In the face of this evidence and the common ground between the experts that there is no relevant point to point relationship, the applicants’ assertion that the phrase “therapeutic blood plasma concentration” requires a particular (yet undisclosed) level, with the consequence that the claims travel beyond the disclosure in the specification, is unsustainable as a matter of construction. As the common position of the experts disclosed, that is not how the skilled addressee would interpret the specification. This also answers Alphapharm’s related submission that the disclosure is insufficient because the specification does not describe the invention fully (that is, to the extent that it involves the integer “therapeutic blood plasma concentration”).

220 Against this background, the references to “sub-therapeutic plasma levels” and to “threshold therapeutic level of the drug” cannot be construed as identifying a direct relationship between a specific plasma concentration and therapeutic effect. As the applicants’ submissions acknowledged, the skilled addressee at the priority date would have known that there was no such direct relationship. The effect of this is not, as the applicants submitted, that “therapeutic blood plasma concentration” has no known meaning with the consequence that patent does not teach anything. Rather, it is that “therapeutic blood plasma concentration” takes the meaning which Professor Charman gave to that phrase.

221 Accordingly, the applicants’ submissions about lack of fair basis by reason of the specification failing to disclose the nature of the relationship between blood plasma concentration of venlafaxine and therapeutic efficacy cannot be accepted in the face of the text of the patent and Professor Charman’s evidence. Ground (c) thus must also be rejected.

Ground (d) – 150 ng/ml

222 Claims 5 to 10 and 15 to 17 (and 27 insofar as dependent on these claims) are for a method of treatment that involves “a single daily dosing formulation of venlafaxine hydrochloride that provides a therapeutic blood plasma concentration of venlafaxine over a 24 hour period with a peak blood plasma level of no more than 150 ng/ml”. According to the applicants there is no basis in the specification for this limitation. The words, said the applicants, convey an absolute maximum limitation. The specification, however, describes table 2 as showing only that the “peak level of venlafaxine from (ER), somewhat below 150 ng/ml, is reached in about six hours, plus or minus two hours…”. This is some type of average, not an absolute maximum limitation. According to the applicants the figure is arbitrary, as it is taken from the mean values in table 2 the patent does not disclose to a skilled addressee how to prepare a formulation which ensures that any particular patient to whom the formulation is administered will experience peak blood plasma levels below 150 ng/ml. Further, the applicants submitted that the patent does not disclose the consequence of exceeding this limitation or its relevance.

223 However, and as Wyeth submitted, s 40(3) of the Act requires only that the claims be fairly based on the matter described in the specification. The specification, in terms, provides a fair basis for the claims which include a limitation of a peak blood plasma level of no more than 150 ng/ml. This is sufficient to lead to the rejection of ground (d).

Ground (e) – depression

224 Claims 1 to 3, 5 to 7, 9 to 13, 15 to 17 and 27 (insofar as dependent on these claims) are not expressly limited to a method for treating depression. Yet, the applicants submitted (see Sigma’s ground (e)), the entire specification is confined to the use of an extended release formulation of venlafaxine hydrochloride for the treatment of depression. No other possible use is disclosed. Thus, the applicants said, there is no fair basis for the unlimited character of these claims.

225 According to Wyeth these submissions amount to another impermissible attempt to limit the description in the specification to one aspect of what is disclosed as a preferred embodiment, inconsistent with the principles in Lockwood No 1 referred to above.

226 Consistent with the reasoning above, Wyeth’s submissions should be accepted. The specification discloses a method of treatment limited by certain parameters, one embodiment of which is the treatment of depression. The invention is the method of treatment and thus the claims are fairly based on that disclosure. Contrary to Sigma’s submissions, this does not result in a monopoly for the treatment of any ailment by venlafaxine. The claims are limited by other integers including the single daily dosing formulation, the peak blood plasma level range, and the result of a therapeutic blood plasma concentration over a 24 hour period. Ground (e) is thus also not accepted.

G2 Sufficiency

227 Section 40(2)(a) of the Act provides that a complete specification must “describe the invention fully, including the best method known to the applicant of performing the invention”.

228 The applicants acknowledged that the test for sufficiency involves the following question (Kimberly-Clark at [25]):

The question is, will the disclosure enable the addressee of the specification to produce something within each claim without new inventions or additions or prolonged study of matters presenting initial difficulty?

229 The applicants also acknowledged that in Lockwood No 1 the High Court held that for the purpose of s 40(2)(a) it is not necessary for the inventor to disclose all alternative means of performing the invention. It is enough if there is disclosed matter which enables the addressee to produce something within each claim “without new inventions or additions or prolonged study of matters presenting additional difficulty” (at [60]).

230 The applicants submitted, however, that properly understood these principles should be confined to product claims.

231 Further, according to the applicants, to the extent that the patent claims a method for the administration of venlafaxine hydrochloride which is made with or involves the use of hydrogel tablet technology, the specification makes plain that the inventor does not know how to perform the invention. The issue is the invention in fact identified (that is, the embodiments described and around which the claims are drawn – Kimberly-Clark at [19]-[21] approving the meaning adopted by McTiernan J in AMP Inc v Utilux Pty Ltd (1971) 45 ALJR 123 at 127). Where the inventor has described a particular means of performing the invention as impossible the position, submitted the applicants, must be different from that in Kimberly-Clark and Lockwood No 1. The patents in suit in those cases did not contain a statement that something sought to be included in the claims was impossible. It follows, on this submission, that the inventor had to disclose a means to achieve the “impossible” for that to be claimed within the scope of the invention. Alternatively, to adopt Alphapharm’s words:

…where the invention as understood by reference to the specification identifies a form or embodiment that is not part of the patentee’s work (and was impossible to achieve) there cannot be a sufficient disclosure of that embodiment.

232 As Wyeth submitted, however, these arguments confront a number of difficulties.

233 First, the arguments depend on distinguishing Kimberly-Clark and Lockwood No 1 on a basis which is not supported by the principles expressed in those decisions. If, as the High Court held, enablement of a single embodiment is sufficient then there is no rational basis for the applicants’ exclusion to operate – a statement of impossibility of one embodiment is immaterial. Nothing in Kimberly-Clark or Lockwood No 1, moreover, suggests that the relevant principles are to be limited to product claims as the applicants contended.

234 Secondly, underlying the arguments is a tacit assumption that the invention is not the claimed method but a particular formulation. If it is accepted that the invention is a method then the inconsistency with established principle of the applicants’ arguments becomes apparent.

235 Thirdly, the arguments are not reconcilable with the expert evidence. All of the experts agreed that, at the priority date, it would not have been impossible to produce an extended release formulation of venlafaxine hydrochloride using hydrogel tablet technology. Given that the specification is addressed to the skilled addressee, Alphapharm’s submission as follows cannot be accepted:

… the statement of impossibility in the context of the Patent serves as notice to persons skilled in the art reading the Patent at the expiry of its term that such technology is to be cordoned off as unavailable for achieving the desired therapeutic effect for ER venlafaxine hydrochloride.

236 As Wyeth said:

Sufficiency is not about the scope of the monopoly, but rather whether a skilled person is able to produce something within the claim. The submission effectively asks the Court [to] assume that skilled persons would not be able to implement the claimed method using a particular kind of formulation, when the uncontradicted evidence of the experts called by both sides is to the opposite effect.

237 The other contention in respect of sufficiency again relates to the references to “therapeutic blood plasma concentration”. This argument is to the same general effect as that in respect of fair basis dismissed above. According to the applicants, the specification does not provide sufficient information to enable the skilled addressee to know what constitutes a “therapeutic blood plasma concentration” of venlafaxine. The argument depends on accepting the proposition that, although all of the experts agreed that the skilled addressee at the priority date would have known that there was no point to point relationship between therapeutic efficacy and blood plasma levels, the text of the specification should be construed as suggesting that a “specific blood plasma concentration is relevant, though unidentified”. Again, the applicants are critical of Professor Charman’s evidence about this issue, describing the reasoning involved as circular.

238 For the reasons already given, the underlying assumption of the argument about the construction of the specification should not be accepted. Further, and as Wyeth submitted, the specification provides an example (the 150ng/ml) which falls within the scope of the claims. For the purpose of sufficiency, no more is required, as the skilled addressee would be able to produce an embodiment within the claims based on the description in the specification.

G3 Lack of clarity

239 Section 40(3) of the Act requires the claims to be clear. The applicants contended that the claims are not clear insofar as they refer to “therapeutic blood plasma concentration” because: - (i) to a person skilled in the art there is no known meaning to that phrase, (ii) the patent does not identify what that concentration is, and (iii) the patent does not provide a workable standard enabling the skilled addressee to identify that level. As Alphapharm put it, the circularity of Wyeth’s approach to this term means:

…one could only know whether a particular blood plasma concentration curve which peaked between 4 to 8 hours was therapeutic by doing clinical testing. But if after clinical testing, it was shown that the particular blood plasma concentration was therapeutic, then the Patent would have been infringed by carrying out the clinical test. Thus, the only way it could be determined whether the Patent had been infringed was by infringing it. Further, the test of clinical efficacy, namely whether any particular patient experienced better-than-placebo relief from clinical depression, is a measure which would vary widely from individual patient to individual patient.

240 The problem with these submissions is that they too depend on construing the patent inconsistently with the meaning appropriate to the context (that is, the meaning that would be apparent to the skilled addressee at the priority date). In the face of unanimous expert evidence that the skilled addressee at the priority date would have known that there is no point to point relationship between levels of venlafaxine in the blood and therapeutic effect the phrase “therapeutic blood plasma concentration” cannot be construed as meaning a specific level of venlafaxine in the blood. As Wyeth said, it is part of a composite phrase involving a single daily dosing achieving a blood plasma concentration over a 24 hour period which is therapeutic.

241 As noted, it is not circular to define a claim by reference to a result (in this case therapeutic effect). Otherwise, and as Wyeth submitted:

… the skilled addressee would know that the use of a method incorporating all of the other integers of the claims (administration of a single daily dosing formulation, the Tmax, the Cmax, etc) will infringe the Patent so long as the blood plasma concentration provided is therapeutic in the sense described above. Only if the concentration is such that no therapeutic effect is provided will infringement be avoided. It is axiomatic that no person would aim for such a result. Thus there is no territory left outside the claim by reason of the incorporation of this integer which the skilled addressee would wish to exploit. It is not a case of the skilled addressee being unable to draw a line between infringement and non-infringement in any practical sense.

H Inventive step

242 Section 18(1) of the Act provides that:

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

(a) is a manner of manufacture within the meaning of section 6 of the Statute of Monopolies; and

(b) when compared with the prior art base as it existed before the priority date of that claim:

(i) is novel; and

(ii) involves an inventive step; and

(d) …

243 Section 7 of the Act is as follows:

(2) For the purposes of this Act, an invention is to be taken to involve an inventive step when compared with the prior art base unless the invention would have been obvious to a person skilled in the relevant art in the light of the common general knowledge as it existed in the patent area before the priority date of the relevant claim, whether that knowledge is considered separately or together with the information mentioned in subsection (3).

(3) The information for the purposes of subsection (2) is:

(a) any single piece of prior art information; or

(b) a combination of any 2 or more pieces of prior art information;

being information that the skilled person mentioned in subsection (2) could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood, regarded as relevant and, in the case of information mentioned in paragraph (b), combined as mentioned in that paragraph.

244 Alphapharm’s and Sigma’s challenge to the validity of the patent did not extend to manner of manufacture (except to the extent that submissions made under that heading were relied upon to support the lack of any inventive step argument) or utility. Generic Health’s challenge included utility, as well as the other grounds.

H1 General principles

245 There was little dispute between the parties as to the applicable principles, a summary of which is set out below based on the submissions.

246 The High Court explained the meaning of “common general knowledge” in Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (No 2) (2007) 235 CLR 173; [2007] HCA 21 (Lockwood No 2) at [55] in these terms:

“Common general knowledge” was well understood as being “part of the mental equipment of those concerned in the art under consideration”, and Minnesota Mining had confirmed that what was “known or used” in Australia was confined to common general knowledge, which was explained as:

the background knowledge and experience which is available to all in the trade in considering the making of new products, or the making of improvements in old.

The effect of Minnesota Mining and Wellcome Foundation was that for the purpose of determining inventiveness prior disclosures which were publicly available information, but which were not part of common general knowledge, were excluded from consideration. In the case of Minnesota Mining, a number of prior specifications available for public inspection in Australia before the priority date which were not part of common general knowledge were excluded from consideration.

247 The effect of s 7(3) of the Act must also be taken into account as it expands the prior art base against which inventive step is determined.

248 The High Court also explained the role of the prior art once identified in Lockwood No 2 at [127]:

...the idea remains that the prior disclosures to be taken into account, even as enlarged by s 7(3), are being considered for a particular purpose. That purpose is the purpose of looking forward from the prior art base to see what a person skilled in the relevant art is likely to have done when faced with a similar problem which the patentee claims to have solved with the invention.

249 As put in Sigma’s closing submissions:

240 That is, once the relevant prior art has been ascertained, whether it be common general knowledge or that information plus the additional information permitted under s 7(3), the alleged invention claimed must be shown to be obvious. This is a question of fact.

241 Resolving the question of fact, however, involves an objective inquiry. It is not a question of what is or would have been obvious to the Court or to the inventor. Rather, it is a question of what would have been obvious to the notional skilled addressee having regard to the relevant information - common general knowledge, or that information combined with any relevant s 7(3) information.

250 This approach is to be applied recognising that “obvious” has its ordinary meaning of “very plain” (Lockwood (No 2) at [51]). As explained in The Wellcome Foundation Limited v VR Laboratories (Aust.) Proprietary Limited (1981) 148 CLR 262 at 286:

The test is whether the hypothetical addressee faced with the same problem would have taken as a matter of routine whatever steps might have led from the prior art to the invention, whether they be the steps of the inventor or not.

251 In Aktiebolaget Hässle v Alphapharm Pty Limited (2002) 212 CLR 411; [2002] HCA 59 at [51]-[53] the High Court said that:

[51] What Aickin J had in mind as “routine” appears from an earlier passage in his judgment in which he was discussing the question whether evidence of the steps taken by the patentee was relevant and therefore admissible in a revocation action. His Honour said:

“Evidence of what he did by way of experiment may be another matter. It might show that the experiments devised for the purpose were part of an inventive step. Alternatively it might show that the experiments were of a routine character which the uninventive worker in the field would try as a matter of course. The latter could be relevant though not decisive in every case. It may be that the perception of the true nature of the problem was the inventive step which, once taken, revealed that straightforward experiments will provide the solution. It will always be necessary to distinguish between experiments leading to an invention and subsequent experiments for checking and testing the product or process the subject of the invention. The latter would not be material to obviousness but might be material to the question of utility.” (Emphasis added.)

[52] There are distinct strands of thought in this passage which may now be considered in terms applicable to the issues in this litigation. First, the working trials of which Dr Cederberg gave evidence may be (it is not necessary to determine the point) an example of the “subsequent experiments for checking and testing”, to which Aickin J referred at the end of the above passage. Secondly, the invention claimed in the Patent lay not in perceiving “the true nature of the problem” to which “straightforward experiments” then would provide the solution; the invention was in the interaction between the integers of the compound, to answer the known problem. Thirdly, in a case such as the present, the relevant question was that posed in the first part of the passage. Were the experiments “part of” that inventive step claimed in the Patent or were they “of a routine character” to be tried “as a matter of course”? If the latter be attributable to the hypothetical addressee of the Patent, such a finding would support a holding of obviousness.

[53] That way of approaching the matter has an affinity with the reformulation of the “Cripps question” by Graham J in Olin Mathieson Chemical Corporation v Biorex Laboratories Ltd. This Court had been referred to Olin in the argument in Wellcome Foundation. Graham J had posed the question:

“Would the notional research group at the relevant date, in all the circumstances, which include a knowledge of all the relevant prior art and of the facts of the nature and success of chlorpromazine, directly be led as a matter of course to try the -CF₃ substitution in the ‘2’ position in place of the -C1 atom in chlorpromazine or in any other body which, apart from the -CF₃ substitution, has the other characteristics of the formula of claim 1, in the expectation that it might well produce a useful alternative to or better drug than chlorpromazine or a body useful for any other purpose?” (Emphasis added)

That approach should be accepted.

252 The reference to “expectation” in the above passage means a reasonable expectation of success. Lindgren J observed in Alphapharm Pty Ltd v H Lundbeck A/S (2008) 76 IPR 618; [2008] FCA 559 at [180] that the High Court has “insisted on the two elements: (1) being led as a matter of routine to the desired result; and (2) having a reasonable expectation of achieving that result”.

253 The inventive element needed to sustain a patent may be quite small; it is said that a mere “scintilla” of inventiveness will be sufficient (Lockwood No 2 at [52]). It is also necessary to guard against the use of hindsight in assessing obviousness (Aktiebolaget Hässle at [21]).

254 Where the invention is a combination of features, the question is whether the combination, not each integer, is obvious; “the selection of the integers out of ‘perhaps many possibilities’… must be shown… to be obvious, bearing in mind that the selection of the integers in which the invention lies can be expected to be a process necessarily involving rejection of other possible integers” (Aktiebolaget Hässle at [41]).

255 It is wrong to characterise the variation of all parameters or the trying of all choices until one proves successful as being obvious, where the prior art did not point to it (Alphapharm v Lundbeck at [183]).

256 Material found in a literature search does not for that reason alone form part of the common general knowledge. The common general knowledge is knowledge actually known to those in the field. In Aktiebolaget Hässle at [57], the majority said:

There was no finding that what was disclosed by those documents had entered the common general knowledge of those in Australia experienced in the practical work of formulating drugs for therapeutic use. Rather, reliance was placed upon the notion, illegitimate after Minnesota Mining, of a “routine literature search”.

257 An invention may be non-obvious although it was conceived without effort by the inventor, for example being “stumbled upon by accident” or “remembered from a dream” (Wellcome Foundation at 286), and the inventor may be motivated by information, objectives or finances which are not shared by the hypothetical skilled addressee.

H2 Overview of the applicants’ case

258 The applicants identified a series of documents which they contended the person skilled in the art would have ascertained, understood and regarded as relevant and to have combined at the priority date (10 documents were pleaded in the case of Sigma and 20 in the case of Alphapharm).

259 Sigma’s submissions conveniently identified the matters which are said by the applicants to have been known by the person skilled in the art at the priority date, based on the identification and combination of information from the relevant documents:

(i) methods of treating depression

(a) persons suffering depression could be treated orally with a therapeutic effective treatment for depression. (Charman Txxn 768 lines 21-35);

(b) the dose of drugs being administered to treat depression had to achieve the clinical outcome of being therapeutically effective (Charman Txxn 768 lines 37-40);

(d) antidepressants only acquire therapeutic efficacy after a number of doses (Charman Txxn 784 lines 34-36);

(e) it was desirable (from at least a patient compliance point of view) to have once a day dosing for the treatment of depression McLachlan Txxn 580 lines 14-26, Charman Txxn 770 lines 40-43);

(f) there were ER forms of antidepressants available in the market [TB NN page 8, TB 8].

(ii) Venlafaxine hydrochloride

(a) Venlafaxine hydrochloride was an oral immediate release treatment for depression (Charman Txxn 710 lines 10-11, McLachlan Txxn 581 lines 5-6, Rowe Txxn 416 lines 16 to 35);

(b) venlafaxine hydrochloride was highly water soluble (Charman Txxn 690 lines 36-37);

(d) the IR form of Venlafaxine hydrochloride was well absorbed in the upper small intestine (Charman Txxn 739 lines 29-33).

(iii) plasma profile

(a) the typical characteristics of a plasma profile arising from administration of an ER dose (Charman Txxn 711 lines 11-14);

(b) it was expected that an extended or controlled release formulation would reach peak plasma levels in the human body in about 4 hours or somewhere around 6 hours;

(c) the desirable period over which an extended release formulation would release an active ingredient was known to be 6 to 18 hours.

(iv) extended release dose forms

(a) techniques existed to slow down the release of highly soluble compounds (Charman Txxn 708 lines 39-40);

(b) usually the rate limiting step is the release from the dosage form (Charman Txxn 718 lines 18-19), Robinson p84 (WNC-15) [CB 9-307]);

(c) technologies were available to slow down release of compounds to get them near to the large intestine (Charman Txxn 709 lines 20-23 and 39-41).

· Spheroids (Txxn 709 line 27)

· Microspheroids (Txxn 709 line 25)

· Coated spheroids (Txxn 709 line 33)

· Encapsulated coated spheroids (Txxn 709 lines 43-44)

· Hydrogel technology (#2 Charman para 22 (CB 5-127))

(d) ER forms were desirable as they might result in:

· improved patient compliance;

· possible reduction in side effects;

· possible reduction in total amount of drug administered .

(e) extended release polymers including HPMC and other cellulose derivatives were known and commercially available.

(f) control of release rate was a matter of routine variation of the parameters of the delivery systems, such as:

· Viscosity grade of the polymers used;

· Concentrations; and

· The thickness of the coating membrane.

(v) trials

(a) how to conduct bioavailability trials (Charman Txxn 772 line 46)

(b) how to conduct clinical trials (Charman Txxn 772 line 44).

260 Further, that:

In switching from an IR to an ER form, the person skilled in the art in March 1996 expected:

(a) a flattened plasma profile from that of the IR form (Charman Txxn 711 lines 7-9);

(b) that the peak plasma concentration would move “to the east” of that of the IR form (Charman Txxn 712 lines 1 and 2);

261 The applicants also submitted that the patent itself disclosed matters of common general knowledge at the priority date including (as summarised by Sigma):

(a) Extended release drug formulations are conventionally produced as compressed tablets by hydrogel tablet technology (page 1a lines 10-11).

(b) To produce these sustained release tablet drug dosage forms, the active ingredient is conventionally compounded with cellulose ethers such as methyl cellulose, ethyl cellulose or HPMC with or without other excipients and the resulting mixture is pressed into tablets (page 1a lines 11-15).

(c) Where the production of tablets is not feasible, it is conventional in the drug industry to prepare encapsulated drug formulations which provide extended or sustained release properties (page 1a lines 24-26).

(d) In this situation, the extended release capsule dosage forms may be formulated by mixing the drug with one or more binding agents to form a uniform mixture which is then moistened with water or a solvent such as ethanol to form an extrudable plastic mass from which small diameter, typically 1mm, cylinders of drug/matrix are extruded, chopped into appropriate lengths and transformed into spheroids using standard spheronization equipment (page 1a line 26 – page 1b line 3).

(e) The spheroids, after drying, may then be film-coated to retard dissolution. Gelatin capsules are filled with the film-coated spheroids in the quantity needed to obtain the desired therapeutic effect. Spheroids releasing the drug at different rates may be combined in a gelatine capsule to obtain desired release rates and blood levels (page 1b lines 3-7).

(f) Venlafaxine, 1-[2-(dimethylamino)-1-(4-methoxyphenyl)ethyl] cyclohexanol, is an important drug in the neuropharmacological arsenal used for treatment of depression. Venlafaxine and the acid addition salts thereof are disclosed in US patent 4,535,186 (page 1b lines 12-15).

(g) Venlafaxine hydrochloride is presently administered to adults in compressed tablet form in doses ranging from 75 to 350 mg/day, in divided doses two or three times a day (page 1b lines 15-17).

(h) With the plural daily dosing regimen of venlafaxine hydrochloride, the most common side effect is nausea, experienced by about 46% of patients under treatment and vomiting in about 17% of patients (page 2 lines 6-9).

262 From this basis, the applicants’ case was that the evidence supports the conclusion that the invention was not in perceiving “the true nature of the problem” nor in the “interaction between the integers of the compound, to answer the known problem”. Rather, according to the applicants, the problem was finding “the formulation that provided an extended release form of venlafaxine hydrochloride to provide single daily dosing over the multi day dosing provided by the conventional immediate release form then on the market”. Having done so using coated spheroids, the applicants said that that the patentee “simply identified the time at which a peak blood plasma concentration was achieved with that particular dosage form utilising a 150 mg dose and including that as a centre point of a time range in each of the claims. The subsequent bio-availability and clinical efficacy studies were merely to verify that the formulation was effective”.

263 The applicants supported their “problem-solution” approach by reference to the reasoning in Apotex Pty Ltd v Sanofi-Aventis (2009) 82 IPR 416; [2009] FCAFC 134 at [160]-[163]. They rejected Wyeth’s attempts to distinguish Apotex, particularly on the basis of changes between the 1952 Act (s 100(e)) and the present Act (s 18). Having regard to the terms of the specification (discussed above), the applicants submitted that the problem was clearly one of formulation and nothing else. From this characterisation of the invention, the applicants’ case was that the development of an extended release formulation of venlafaxine hydrochloride using coated spheroids was obvious having regard to the prior art and thus lacked any inventive step.

H3 The essence of the debate

264 Although the evidence and submissions about the issue of obviousness ranged widely, the principal matters requiring resolution are as follows:

(1) Issues relating to hindsight, including:

(a) The attempts by the experts not to be affected by hindsight.

(b) The starting point of the inquiry (that is, the proposition that an extended release formulation of venlafaxine hydrochloride should be attempted).

(2) Whether the problem-solution approach is appropriate to be applied to the question of inventive step, as the applicants contended.

(3) The significance, if any, that should be given to the issues that Professor Charman identified as facing the skilled addressee at the priority date (March 1996), particularly absorption, metabolism, side effects, and therapeutic efficacy.

(4) The consequences of this assessment of significance on the approaches to inventive step apparent in the evidence of the experts the applicants called.

(5) The weight, if any, that should be placed on Wyeth’s development work in determining inventive step.

(6) The role of any inference that can be drawn in respect of a draft affidavit of Professor McLachlan which is protected by legal professional privilege.

(7) The role of any inferences that can be drawn about the reliability and weight of the experts’ evidence based on the cogency, consistency and logic of their evidence overall (described in the submissions as going to credit, but better characterised as an aspect of the persuasiveness of their evidence as expert evidence).

H4 Issues relating to hindsight

265 The applicants maintained that the evidence given by the experts they retained (Drs Marshall, Reece and Rowe) was unaffected by hindsight as they had not seen the patent at the time their principal evidence was prepared. This submission was intended to support the conclusion that their evidence should be taken to be a reliable indicator of the position of the person skilled in the art at the priority date of 25 March 1996.

266 As the discussion of the evidence below discloses, despite the best efforts of the experts called by the applicants to avoid hindsight, much of their evidence (particularly that of Drs Marshall and Rowe) was affected by a number of circumstances material to their conclusions that would not have existed at the priority date.

Dr Marshall

267 In his affidavit of 30 July 2009 Dr Marshall said that he had been asked by the solicitors for Alphapharm to outline his knowledge and understanding of the state of knowledge of those working in the field of drug formulation as at 25 March 1996 and that he had tried to put himself back in the position he was in as at that date for this purpose. According to Dr Marshall the field of drug formulation was “well developed” in Australia by this date. In response to the general instruction identified, Dr Marshall said that in “order to propose a considered formulation there are a number of standard steps, with which I was very familiar as a formulator prior to 25 March 1996”.

268 The “very first step” Dr Marshall identified was to conduct a search of the available literature and other information on the drug. The next steps would be to review the material, investigate development pharmaceutics, review any applicable patents, conduct pre-formulation studies and prepare a proposal of prototype formulations and processes. Dr Marshall then identified a series of factors that a formulator must consider in “formulating a commercial pharmaceutical dosage form”.

269 Dr Marshall was also asked by the solicitors for Alphapharm to outline his knowledge and understanding of “the state of knowledge of ER formulation among those working in the field of drug formulation in Australia as at 25 March 1996 including the motivation for developing an ER formulation of a particular compound as at 25 March 1996”. Having identified those matters and the “general underlying rationale and principles used in the more common ER (solid dose) diffusion and dissolution controlled systems”, Dr Marshall concluded that in March 1996 he:

… would have considered that in the absence of any information to the contrary, ER formulations of any drug using well known formulation techniques and excipients… would be potentially feasible.

270 In his affidavit of 10 August 2009 Dr Marshall said that he had been instructed that the proceeding related to a product developed by Alphapharm known as Enlafax which contains the active ingredient venlafaxine hydrochloride. Further, that on 7 May 2009 (that is, before preparing his affidavit of 30 July 2009) Alphapharm’s solicitors had provided him with a copy of the formulation details for three different strengths of Enlafax, as well as a description of hydrogel tablet technology (in fact, the description from the patent itself which refers to extended release drug formulations being conventionally produced as drug formulations as compressed tablets by hydrogel tablet technology). Dr Marshall was asked to consider whether the Enlafax formulations fell within the description. Thereafter, on 8 August 2009, Dr Marshall was provided with a copy of the patent. However, before being provided with the patent Dr Marshall said in an affidavit of 24 December 2009 that he had provided a report (exhibit PAM-11), being his principal evidence in the proceeding.

271 According to this report, Dr Marshall was asked to explain the steps he would have taken in 1996 “to formulate an ER venlafaxine hydrochloride pharmaceutical” and that he had done so in the report. Dr Marshall said that during his employment at Faulding he was often given a brief which identified a drug of interest and directed research and development investigations which were “usually focussed on reformulation of the drug of interest, eg as an ER formulation or as an alternative IR formulation” so that, consequently, he was involved in “many reformulation projects during [his] time at Faulding as a formulator”. As disclosed in paragraph 32 of the report Dr Marshall was instructed to state:

…having regard only to the information contained in the Martindale Monograph, the Morton Article and the [First Troy] Article… what steps I would have taken before March 1996 to develop an ER formulation of venlafaxine hydrochloride.

272 In the report Dr Marshall then said that he would “as a matter of course” have referred to the Martindale Monograph as “it is a standard reference book that I have kept close to hand – usually in my office – throughout my career as a formulator”. Both the Morton and Troy articles are referred to in the Martindale Monograph.

273 Having reviewed this information Dr Marshall said he would have a “high degree of confidence that [he] would succeed in creating an ER formulation of venlafaxine hydrochloride”.

274 In the affidavit of 24 December 2009 Dr Marshall also said he had now been asked what steps he would have taken before 25 March 1996 to develop an ER formulation of venlafaxine hydrochloride “if the Martindale Monograph was not available... before 25 March 1996”. Dr Marshall’s affidavit does not explain why he was being asked to undertake this exercise. According to Dr Marshall, by the “extensive literature search” that he would have undertaken in any event, he would have found other articles available as at 25 March 1996 that would have provided him with the same information which he extracted from the Martindale Monograph, namely:

(a) that venlafaxine hydrochloride has a number of adverse events, or side effects, and that it is reported that the most frequently reported adverse events are nausea, headache, insomnia, somnolence, dry mouth, dizziness, constipation, asthenia, sweating and nervousness;

(b) other extreme adverse events reported included convulsions;

(c) that venlafaxine should be used with caution in patients with hepatic or renal impairment and those with a history of myocardial infarction or unstable heart disease;

(d) that venlafaxine should reportedly not be used concomitantly with monoamine oxidase inhibitors (MAOIs);

(e) the absorption, distribution, metabolism and excretion properties of venlafaxine hydrochloride;

(f) that venlafaxine is well absorbed from the gastro-intestinal tract and undergoes extensive first pass metabolism in the liver, mainly to its active metabolite O-desmethyl venlafaxine (“ODV”);

(g) venlafaxine’s major metabolite ODV is active;

(h) protein binding of venlafaxine and O-desmethyl venlafaxine is low;

(i) that steady-state plasma concentrations are reached within about 3 days;

(j) the climination half life reported for venlafaxine is 5 hours and for O-desmethyl venlafaxine is 11 hours;

(k) that venlafaxine hydrochloride is excreted through the kidneys;

(l) that venlafaxine is given orally in an initial daily dose of 75 mg that is given in two to three divided doses with food and which may be increased to 150 mg daily if necessary to a maximum daily dose of 375 mg;

(m) that patients with renal or hepatic failure are to be given reduced doses, with the suggested dose in these circumstances being half of the usual dose and only administered once daily; and

(n) that the dose may also be increased to 150 mg in patients who do not have renal or hepatic failure.

275 In Dr Marshall’s words:

38 I have identified all of the above information in one or more of the articles listed in paragraph 27 above. In addition, I note that other information useful to me as a formulator, obtained from the articles discussed above, includes:

(a) that the metabolite ODV contributes to the overall antidepressant effect of venlafaxine. This teaches me that first pass metabolism is not necessarily a problem.

(b) that the venlafaxine and ODV molecules have an asymmetric carbon atom and it appears that both enantiomers of venlafaxine and ODV are biologically active.

39 Consequently, I would have had the same information available to me regardless of whether I had access to the Martindale Monograph or not. The information I would have needed is, and was prior to 25 March 1996, readily available by conducting a routine literature search.

276 By the hearing it was common ground that, in the editions available at 25 March 1996, neither the Martindale Monograph nor the Merck Index would have contained any information about venlafaxine hydrochloride. The unavailability of information from the Martindale Monograph is the reason why Dr Marshall was instructed to identify the steps he would have taken to develop an ER formulation of venlafaxine hydrochloride “if the Martindale Monograph was not available...before 25 March 1996”. Dr Marshall knew that the Martindale Monograph was not available by the time he prepared the affidavit of 24 December 2009 but, as apparent from his reference to the Merck Index discussed below, did not then know that the Merck Index also was unavailable.

277 Other matters emerged during cross-examination.

278 First, although not tendered as part of his affidavit of 24 December 2009, Dr Marshall in fact said that if the Martindale Monograph was not available at 25 March 1996 he would have referred to the Merck Index as discussed in paragraphs 5 to 7 of his report. These paragraphs also were not tendered as part of the report but were the subject of cross-examination. According to these paragraphs, if the Martindale Monograph was not available, the first thing Dr Marshall would have done “when asked to develop an ER formulation of venlafaxine is to go to a reference such as the Merck Index”. Dr Marshall attached to his report an extract about venlafaxine from the 12^th (1996) edition of the Merck Index saying:

This is a text that I had on the shelves in my office and is a standard point of reference for chemists generally.

279 The following exchange occurred during cross-examination:

That sentence:

This is a text that I had on the shelves of my office and is a standard point of reference for chemists generally.

was language employed by you with the intention of conveying graphically. You would have consulted that very work on your shelves as the first point of reference, do you agree? It was a it is a very good text, it is a very good point of reference. So if the information is there, then it is a good place to start.

But the language you employed was intended to convey graphically that, in effect, you’d swivel around in your chair and reach for the Merck Index in this case, that

was the intention you had in including that sentence, wasn’t it? Well, I would have accessed that article, that document, if I’d had it.

You know, don’t you, that if you’d swivelled around in your chair on or prior to 25 March 1996 and reached for the Merck 1996 publication there would have been a blank space? I actually don’t know that because the beginning of the Merck Index says 1996.

Is this the position: aren’t you aware of the fact that the Merck Index wasn’t published for 1996 as at 25 March 1996? Not at the time I wrote that report.

Well, you know that now, don’t you? As of yesterday.

280 In other words, Dr Marshall’s evidence, properly understood, is that had he been asked to develop an ER formulation of venlafaxine hydrochloride the first thing he would have done is refer to the Martindale Monograph and the Merck Index. He in fact reviewed those texts and found out information about venlafaxine hydrochloride as well as references to other articles, such as the Morton and First Troy articles, which he also reviewed. Having collated that information into a series of convenient propositions, Dr Marshall then undertook a literature search and found articles supporting those propositions.

281 However, had he in fact been undertaking the exercise as at 25 March 1996, Dr Marshall would not have found any information about venlafaxine hydrochloride in either the Martindale Monograph or the Merck Index. He would not have had the references to other articles provided by those texts. He would not have had the series of propositions he collated from those texts as a foundation for his other literature searches.

282 Second, Dr Marshall was asked about his experience at Faulding (about which he gave evidence in his affidavits identified above). The following evidence emerged:

You have a recollection, don’t you, a clear recollection, in doing your formulation activities at Faulding of relying on Merck? Yes.

… Did any of that work include reformulating an existing immediate release product for extended release? Yes, it did.

Is that a number of occasions which you can count on one hand or identify? Well, there were a vast well, not a vast, but there was a quite a number of drugs that

were worked on and some reached fruition, some didn’t.

I’m just trying to can we just concentrate on it being on or prior to 25 March 1996 firstly, secondly during your time at Faulding and, thirdly, work which you were personally engaged in, okay? Mm.

How many occasions, are you able to say, did you get involved in work which involved reformulating an existing immediate release drug into either a possible or potential extended release formulation? If we expand the consideration to controlled release, which includes delayed release, then it would be probably 20 to 25 of that number. If we’re just talking about extended release, then it would probably be three to five, something like that.

To be clear, that distinction, by delayed release, you are referring to formulation by example of using enteric coding? As an example, yes.

…

Did I understand you correctly to say that of the three to five extended release which you were looking at, that, what, not all of them came to fruition? No, for different reasons, commercial reasons. I remember one, it stopped and started several times.

So commercial reasons was one reason for some of them. You said for different reasons? Others the other projects took priority. At any one time you could be working on a number of different drugs and the priorities could change.

So where priorities change, do I understand you to be indicating that the work just never got completed? Yes.

And at the date at which the priority changed, the work which caused attention to be directed away from that project had not, obviously, been successfully completed? I’m not quite sure I understand your question.

All right. Perhaps I will start again. Of the three to five which you referred to, can you identify any of them, and if so which, which resulted in a drug which came to market? I can’t remember because many of them were still in progress when I left R&D.

Of the three to five? Yes. When I left R&D, I don’t think any of those three to five had reached market.

And you don’t know whether any of them did; is that right? Not since, no. I left Faulding in 1990 and I haven’t kept track.

Is this the position: confining ourselves to simply extended release formulations, none of the ones you were involved in actually reached market? I can’t say one way or the other, whether they reached market or not, but they didn’t reach market while I was on the project.

I’m sorry. Yes, thank you. Prior to Faulding, am I right in thinking that you weren’t involved in extended release formulation work? No, I was not.

And between leaving Faulding in 1991 and 25 March 1996, were you involved in extended release formulation work? On an advisory capacity.

But not in an actual formulating capacity? In an advisory capacity for formulation but not hands on.

How many extended release formulations did you give advice on in that 91 to 25 March ‘96 time period? I think it would be about the same number, maybe two or three, perhaps.

Can you identify the names of those products? No, I can’t.

Is that because you don’t remember them or there is a confidential concern? Confidentiality.

But you remember them? No, either way.

Well, there is not going to be a confidentiality concern if you don’t remember them, is there. You don’t remember them, that is the position, is it? Not exactly, no.

283 Dr Marshall agreed that:

Do you agree with me that you haven’t set out anywhere in your affidavits, eight of them, the fact that, to the best of your recollection, you have only ever been involved in formulating somewhere between three and five extended release formulations from immediate release to extended release, none of which you can say were successful and none of which you can say were for single daily dosage, do you agree you have not said that anywhere in your eight affidavits? I haven’t said that specifically, no.

284 Third, as to the significance of the Merck Index and Martindale Monograph to his experience in working on ER formulations Dr Marshall gave the following evidence:

Is it fair to say, accepting the difficulties of memory, to which you have directed the court’s attention, that you don’t have a recollection of ever doing any work on an extended release formulation without having reference to the Merck Index; correct? I wouldn’t draw that analogy. The Merck Index was one of others.

I’m not asking. I’m just asking you whether you have a recollection, I am not having an argument with you. You’re the witness, okay. You have got a recollection or you don’t? Well, I can seem to recall using the Merck Index on many occasions.

All right. But I am asking I put this question to you: do you agree with me that you can’t recall a single occasion at Faulding in which you undertook work on an extended release formulation without the benefit of the Merck Index, that is, information about the drug in the Merck Index, can you? I guess if you put it specifically like that, then no.

I suggest to you all the searches which you say you would have undertaken back on 25 March 1996 in relation to consideration of an extended release formulation are all searches which you say is based on your prior experience; is that right? Yes.

But your prior experience, as far as you can recall it, doesn’t extend to a situation where you didn’t have as a starting point the Merck Index, do you agree? Well, I worked on quite a number of different formulations and very frequently I would call upon the Merck Index. I worked on quite a number of different formulations besides extended release.

…

In other words, to the extent Faulding got involved in this formulation exercise, it was in relation and to the extent you were involved, it was in relation to drugs which had been on the were known on the market as being quite successful; correct? Well, they were known on the market. They were approved chemical entities, they weren’t new chemical entities.

None of them involved drugs which had yet to be sold on the Australian market, did they, to the best of your recollection? To this, my recollection, most, if not all, would have already been on the market somewhere, perhaps not necessarily Australia, but somewhere.

But your knowledge of them was derived in each case from knowledge that they were on the market? Well, the knowledge would have been drawn from a variety of sources.

What I want to suggest to you: in each case in which you did work in relation to reformulation of one of these drugs in relation to extended release, to the best of your recollection, you had access not only to Merck but to Martindale for information and it contained information about the particular drug; do you agree? Usually. Not always but usually.

Again, you don’t recall an instance when you were working on a drug which didn’t have information in Martindale, do you? Well, I can’t recall every single time I looked up the Merck Index or every time I looked up Martindale, but what I can say is they were both reference texts to which I and my colleagues often referred to.

What I want to suggest to you, Dr Marshall, is to the extent you have talked about searches you would have done back in 1996, if you removed from your available information Merck and Martindale, I would suggest to you this is a whole new world which you had never experienced? No, that is not the case.

The idea of doing searches without the benefit of Merck and Martindale and saying what you would have done, you’re talking about a hypothetical situation which you actually never experienced; that is right, isn’t it? No, that is not correct.

You can’t identify a single extended release formulation where you undertook

searches without the benefit of the starting point of Merck and Martindale, can you? I didn’t do every search based you know, using Merck or Martindale as a starting point.

…

Do you disagree with the proposition that in this report you were intending to indicate that you would have relied on the information you identified in Martindale? Well, I would have used the information from Martindale as a starting point. But it is a similar situation with the Merck Index. If you haven’t got it or if that particular drug is not in there, then you have to get that information from somewhere else.

…

I’ll put this proposition to you again: would you agree with me that you’re intending to indicate in this report that you would have relied on the information which you say you would have found in Martindale 1996? Yes, if the monograph was available in the Martindale, I would have used it not only for the information that it provided but also it provides leading references and also source references, because remember it is the summary document.

And nowhere in those paragraphs, or anywhere else in that report, do you add the qualifier “if it was available”, do you? The assumption is it would have been available, that is true.

Nowhere in those paragraphs do you indicate the qualification “if it was available”, do you? Not within those specific paragraphs, no.

You were positively intending to indicate to any reader of the report that in fact it was available, weren’t you? Well, the report was written on the assumption the monograph was available and it was an acceptable source of information at that time.

285 Dr Marshall agreed that he had not disclosed in his affidavit of 24 December 2009 that he was by then aware that the Martindale Monograph was not an available source of information about venlafaxine hydrochloride as at 25 March 1996.

286 When asked about the process he undertook in terms of literature searches, Dr Marshall gave this evidence:

Would you agree that you found Martindale to neatly encapsulate a number of pieces of information which you identify in paragraphs 8 and following? Yes, it provides a nice summary in addition to the source references.

When you, in a later affidavit, said you have managed to find each of those references in other material, of course that is not the process you would have undertaken back on 25 March 1996 if Martindale had not been there? Well, yes, it would have been. If I didn’t have Martindale, I would have done a literature search by another means.

The process which you reported in this report was to identify some pieces of information encapsulated firstly in Merck, and then secondly in Martindale, and then later, having encapsulated and digested those propositions, you went looking over a series of disparate and different publications for those individual pieces of information. Isn’t that the process that you actually undertook? I got some leading references from Martindale and from Merck which I obtained. I was then advised what would I do if I didn’t have Martindale, and I undertook a more extensive literature search using standard databases which I would have done in any case because you don’t always get everything you want out of two texts.

What I’m suggesting is the process you undertook was to firstly identify these propositions out of Merck and Martindale and then subsequently went looking for the same propositions which had been neatly encapsulated in those two texts amongst a raft of other literature? Or, as I said, the standard approach is to get as much information as I can.

Subject to that you agree? Though Martindale was a good starting point.

So you agree with me? Well, I I’m just restating what I did.

But you agree that as it turned out, the way you did it, was to list the pieces of information which you found from Merck and Martindale and then thereafter go and look for them in the literature separately? Well, thereafter I looked for additional information because Martindale and Merck weren’t exhaustive.

…

What I suggest to you is you report that you went and found the information which you had previously distilled in other disparate publications, do you agree with that? Yes, I found the same documents independently.

287 Fourth, Dr Marshall did not have a record of all communications from his instructing solicitors or others regarding the proceeding. Dr Marshall agreed that from the time he was engaged by the solicitors for Alphapharm sometime in May 2009 (that is before he prepared his principal evidence), he appreciated that the case related to a patent owned by Wyeth and he also assumed that Alphapharm was “seeking to market a similar compound and that Wyeth had the drug out in the market”. From his affidavit of 10 August 2009 Dr Marshall knew that he was retained on behalf of Alphapharm relating to its Enlafax product – being an ER formulation of venlafaxine hydrochloride. Further, as his affidavit of 10 August 2009 also disclosed, he was aware that the matter related to a patent dispute. He was also aware that the priority date (a term the significance of which he understood) was 25 March 1996. From this it must be inferred that Dr Marshall was aware that, as at 25 March 1996, an extended release formulation of venlafaxine hydrochloride had been developed.

288 In other words, when expressing his primary opinion that as at the priority date he believed he could successfully produce a once-a-day formulation of venlafaxine hydrochloride, Dr Marshall had information available causing him to assume that at least two successful ER formulations of that compound had been achieved, one in 1996 and Alphapharm’s product more recently. The following extracts from the transcript confirm this to be so:

The circumstances in which you express your report of 8 September 8 August 2009, which is PAM 11, and opine as to whether or not you thought you could successfully produce a once a day formulation, extended release of venlafaxine hydrochloride,

the first time you express that opinion and as to what you would do, is after, is it not, you have studied what you assume to be a formulation, namely Enlafax, which identified a particular way of doing it and which you assumed was successful; correct? Yes.

And in circumstances where you assumed that Wyeth had also produced a successful once a day formulation. That is right, isn’t it? Well, of course, I had no idea what the Wyeth formulation was.

So having those two propositions firmly in your head, you then purport to express an opinion as to what you say you would have done and that you think you could have done successfully; correct? That is the chronology, isn’t it? I’m not sure it is. I thought I provided the report before I saw the patent. So I’m confused.

Whether you provide the report before you saw the patent you’d certainly seen the Enlafax formulation? Perhaps I am confused. I’d seen the Enlafax formulation.

And formed the view that somebody had successfully made a once a day formulation of venlafaxine hydrochloride. That is right, isn’t it? Again I come back to the question that was asked of me how would I do it, and I would do it by using spheronisation.

You were asked the question whether you think you’d be likely to be able to do it, that was effectively the question you were asked? Yes.

Yes. And you answered that after you’d studied and formed the view that somebody had already done it twice, possibly two different ways; is that right? Possibly.

…

How do you suggest you could put yourself in the position you were in on 25 March 1996, having never dealt with venlafaxine hydrochloride and having never actually seen to completion any once a day formulation of any compound, how do you suggest you could give a sensible unfiltered opinion of the likelihood of success in circumstances where you’d already studied this Enlafax formulation or what you assumed to be? You can’t, can you? I can only do to the best of my ability of putting myself in that position.

Was there any reason why, in your report, if you look back at 7 91, why it is that you didn’t say in the report, listen, I should disclose this: I have studied an Enlafax formulation or what I have been told it is and I have drawn the assumption they have successively made it in the way they did and it is therapeuticically effective, and I have made the further assumption that Wyeth has done the same thing. Why didn’t you say that, that would have been a relevant thing to put out in this report, wouldn’t

it? Perhaps I should have.

Should have. Is that what you answer, you should have? I can’t really explain.

289 Other parts of Dr Marshall’s evidence show the extent of his awareness that by the priority date venlafaxine hydrochloride had been successfully developed in an ER formulation. In respect of the material he received in May 2009, Dr Marshall gave this evidence:

In other words, you understood, on receipt of these documents, that you’re being asked to comment on a formulation which had been approved by the TGA, or at least an application had been put in by the TGA? Yes, I did.

By Alphapharm? Well, Alphapharm is noted as the sponsor.

And you understood from that that this was being represented to the TGA as a single daily dosage form of venlafaxine hydrochloride for treatment in depression? Well, I assumed that from the contents on this page.

And that it had been successfully formulated; correct? Well, I wasn’t sure of the status of approval. A note had been submitted, but I wasn’t sure whether it had actually been approved by TGA.

But your assumption was it had been successfully formulated? The assumption was if it had been submitted, then it would have been successfully formulated, otherwise you wouldn’t submit.

Exactly. Your assumption also was that there was support for its therapeutic effectiveness? That depends on the nature of the submission.

You knew Alphapharm to be a generic manufacturer so described? Yes, I know Alphapharm are a generic manufacturer.

And at the time you saw this material, you knew Wyeth was the other party to the proceedings? I think so.

And you know that Wyeth is known by the it falls within the category of innovator company? Yes.

And you knew that the proceedings involved a patent for that Wyeth held in Wyeth’s name? Well, I understood that there was a dispute between Wyeth and Alphapharm.

And you understood from your general experience that generics such as Alphapharm will often seek approval for the same drug relying on, indirectly, the approval for the innovator drug? That depends on the nature of the submission.

But that is often the case, isn’t it? It’s certainly the case for immediate release, which are relatively straightforward, but not necessarily for others. Not necessarily for all dosage forms either.

But you assumed, didn’t you, that Wyeth had its own XR drug? I think I assumed that, yes.

In other words, another single daily dosage formulation of venlafaxine hydrochloride, that was your assumption? That is my assumption.

If you can then go back to again, your assumption was that had been successfully formulated by Wyeth? Well, again, because if that had been on the marketplace, it had been approved by the appropriate agency, therefore one assumes it is successful.

290 Fifth, when asked about clinical efficacy, Dr Marshall said that was not relevant as at 25 March 1996 “from a formulator’s perspective”. When asked about the way he approached his report in light of this answer the following exchange occurred:

Do you deal with this on the basis that somebody has told you to do it, not whether you should consider whether you should do it or not? Is that the way you approached your report? Pretty much.

So decisions as to whether or not it would work or wouldn’t work, or whether it was a good idea or a bad idea, that had been made higher up the line so far as you were concerned? Essentially.

And to the extent any statement by you in all your affidavits might be read otherwise, they should be understood in the light of the last answer you just gave; correct? They should be understood in the light of how would you go about formulating an ER of this particular drug.

Once told you should do it? Yes, once told it was worthy of or, not even it was worthy, but

You were told to do it? Yes.

That is right, isn’t it? That is how you have approached ? The instructions were: how would you go about formulating under different circumstances?

But the approach you have fundamentally taken, notwithstanding there may be references to some other considerations in your reports, is you approached it on the basis it wasn’t your decision as to whether to do it or not, you were just being told as a formulator to do it and you were just responding to the proposition, well, do you think I could I have done it? Yes, how would I do it.

Is that right? Yes.

And hence, just to complete this, if one looks at [the Morton article], and there is a heading Controversial Issues perhaps I won’t ask you to read it but to the extent there are words in there which might suggest the jury is still out as to whether venlafaxine actually offers any benefit over any other drug, that is not a matter which you were concerned to be considering for the purposes of the work you did in this

report? No, whether it was superior to another drug or not wouldn’t have been my concern.

291 In other words, Dr Marshall’s starting point was that he had been instructed to prepare an ER formulation of venlafaxine hydrochloride irrespective of whether such a formulation would be “worthy” or offered any benefit over any other drug.

Dr Rowe

292 Dr Rowe, at the request of the solicitors for Sigma, provided a report on 21 March 2009 (JSR-3) setting out the background information in relation to the area of formulation of pharmaceutical compounds and extended release dosage forms. In this report, Dr Rowe outlined the rationale for any sustained release formulation as being improved patient compliance, reduction in side effects and reduction in the total amount of drug administered. He referred to side effects often being associated with high peak plasma levels and that reducing those high peak plasma levels is desirable in order to reduce side effects. Dr Rowe said that “at March 1997 a formulation chemist would have been able to produce a sustained release oral formulation using any of the techniques illustrated in the standard text books”. Dr Rowe provided a supplementary report on 25 March 2009 confirming that the matters discussed in his first report applied equally as at 25 March 1996.

293 In his affidavit of 8 May 2009, Dr Rowe set out the steps he would have taken as at 25 March 1996 to develop an extended release formulation of venlafaxine hydrochloride. Dr Rowe said that he would undertake a literature search to identify the information available in relation to venlafaxine hydrochloride, particularly the physicochemical properties of the compound, its pharmacokinetics and known side effect profile. He would also have identified any formulations of the compound already known in the literature and any known extended release formulations of the compound. According to Dr Rowe, the starting point for this literature search would be the MIMS Annual, the Merck Index and the Martindale Monograph. Dr Rowe said he was provided with these documents on 26 March 2009, including the MIMS Annual (1997 MIMS Annual – Australian Edition (MIMS Australia, 1997) at 3-280 to 3-282) despite Dr Rowe acknowledging in his affidavit that venlafaxine hydrochloride was not included in the MIMS Annual until the 1997 edition. Dr Rowe provided a second report (exhibit JSR-8) on 27 March 2009 setting out how he would attempt to develop an extended release formulation of venlafaxine hydrochloride. In this report, Dr Rowe said:

I see a sustained release formulation of minimal therapeutic benefit given that the immediate release formulation [could] be given on a twice daily basis… However it may well be that a sustained release formulation may have a role if this results in a reduction in side effects or improves patient compliance by having a single daily dose. Clinically it may well be that a single daily dose of the immediate release formulation would be as effective as a twice daily or a controlled release formulation.

…

The final choice of matrix, spheroids, microencapsulated systems will depend on the release rates and toxicity considerations associated with any burst effect. In light of the high water solubility of the product I suspect that a granule coated or spheroid system would be most suitable. The ultimate aim would be to produce a system which had a dependable “in vitro” dissolution rate which can be correlated with the desired plasma level to enable a single daily dosing.

294 When he prepared this second report Dr Rowe said he had not been provided with the patent.

295 On 31 March 2009, Dr Rowe was asked what literature searches he would have performed, at the priority date. On 9 April 2009, after being provided with search results obtained using his search parameters, Dr Rowe requested copies of the Second Troy, Morton and DeVane articles, as well as the Alza patent. Dr Rowe said these articles told him that: - (i) venlafaxine hydrochloride immediate release formulation causes adverse effects which may be dose related, (ii) it is desirable to prepare a sustained release formulation in order to lower the peak plasma levels, (iii) venlafaxine is a suitable candidate for formulation into a sustained release product, and (iv) there is no reason to expect that venlafaxine hydrochloride would behave other than as expected.

296 Dr Rowe was provided with a copy of the patent on 9 April 2009.

297 Having reviewed the patent, Dr Rowe concluded in his affidavit of 3 December 2009 that:

10 A once daily dosage form of venlafaxine hydrochloride would be warranted in view of a desire to increase patient compliance and decrease side effects. If I had been asked, as at the Priority Date… to produce a once daily dose or sustained release venlafaxine product there are a number of ways in which I could have done so…

11 Based on information available on venlafaxine at the Priority Date, I would have expected venlafaxine to be a suitable candidate for a sustained release formulation…

12 Provided materials were available, I expect that I could formulate a venlafaxine sustained release preparation by a variety of means with a variety of dissolution rates within 1 week… Therefore, based on my experience, there is no reason to expect that venlafaxine hydrochloride would not perform as expected within the sort of parameters which I describe above.

13 I would also ensure that the total amount of drug absorbed from the sustained release formulation is about the same as an equivalent daily dose of the drug given in divided doses… A suitable formulation would then be selected based on showing a reduction in early blood level peaking associated with dose dumping (and therefore side effects)… I would expect that although the total dose is the same, because the release rate is delayed, the peak level in the sustained release formulation would be lower, despite the area under the curve (ie total amount absorbed) being the same as for the immediate release formulation.

298 Other matters emerged during the hearing.

299 In evidence in chief Dr Rowe performed a similar exercise to that of Dr Marshall having regard to the fact that, contrary to his affidavits and reports, the Merck Index, Martindale Monograph and the MIMS Annual would not have provided him with any information about venlafaxine hydrochloride as at 25 March 1996. Dr Rowe said:

Since preparing that report, have you considered the substance of that report in the context of the papers [that is the Second Troy, Morton and DeVane articles and the Alza Patent] to which you have referred in paragraph 34 and 35 of your first affidavit? Yes, I have.

Can you tell her Honour whether, subject to some changes to the report, you have found the substance of the report in some of those papers? I have found the substance of the report.

In which of the papers? Particularly in Martindale and Merck.

But in the papers that you have referred to in paragraphs 34 and 35 of your affidavit, did you consider whether, if you had not had access to Martindale and Merck, you would otherwise have found the substance of the report? I would have found the substance of the report in articles by Morton and also in the Alza patent.

300 It is also apparent that, before preparing his principal evidence Dr Rowe, like Dr Marshall, knew that the matter related to a patent dispute and the priority date, as well as the significance of the priority date. In common with Dr Marshall, therefore, it must be inferred that Dr Rowe was aware before preparing his evidence that venlafaxine hydrochloride had been successfully prepared as an ER formulation by 25 March 1996 at least once and possibly twice (that is, by the patent holder and by his client).

301 Dr Rowe said in his affidavit of 8 May 2009 (at paragraph 64) that “it was well-known to me (and to the Skilled Person) before the Priority Date that venlafaxine hydrochloride was used to treat depression”. Dr Rowe was cross-examined about this statement as follows:

Would you agree with me it would be an overstatement to say that:

It was well known to me before the priority date that venlafaxine hydrochloride was used to treat depression.

? That was what it was being trialled for, I understand, at the time. That is my recollection.

Being trialled in relation to the treatment of depression? There were various trials going on. I can’t remember where the trials were conducted, but that is my recollection.

…

Do you agree with me that is an over statement? I don't think it is, no, because I believe that venlafaxine was known as a treatment of depression at the priority date.

Is your evidence now that it was well known to you, before the priority date, that venlafaxine hydrochloride was used to treat depression? Yes, it was well known that it was used to treat depression.

I suggest to you, Doctor, that is an overstatement on your part, having regard to your recollection as to what you actually knew about it at the time? I knew very little about it, except its proposed indication.

But it wasn’t actually being used to treat depression at that time, that was your recollection, wasn’t it? Perhaps not in the marketplace, no.

Weren’t you trying to create the impression with this paragraph 64 that element 4, as you describe it, of the patent was well known to you before the priority date that venlafaxine hydrochloride was used, in fact, to treat depression? Was used in terms of marketing I am not sure. I was not aware that it was available for marketing in Australia. All I’m saying is that, at that particular time, my recollection is that I knew of the drug and that it was used to treat depression. Whether it was marketed in Australia at that time I can’t be sure of, I don’t know.

Would you agree that such extent of awareness, as you did have, didn't cause you to consider one way or another whether or not there should be an extended release formulation of the drug? As at the priority date?

Yes? No, I never considered it then.

Or something that entered your head? No.

302 Dr Rowe was also asked about his statement at paragraph 54 of the same affidavit where he said that “[t]here was a desire to obtain an extended-release formulation of venlafaxine hydrochloride, as explained above”. The transcript discloses the following exchange:

What were you intending to indicate by that sentence? Simply if one looks at if I was a company that were marketing venlafaxine, and having the data that you had, I would have considered that there was a place for an extended release formulation.

Can I just remind you of the words you used. You said:

There was a desire to obtain an extended release formulation of venlafaxine hydrochloride.

Do you stand by those words? Well, yes, I do.

Can you explain what you mean by the reference:

There was a desire to obtain.

What were you referring to? I was referring to perhaps a marketing need which would have been evident at the time.

Of which you were not in fact aware? Of which I was not involved in, no.

Or aware? I was not aware at 1994. I wouldn’t have considered it at 1994 myself because I was not involved with venlafaxine personally, that drug substance.

Would you agree that the first sentence of paragraph 54 represents an overstatement on your part? I don’t believe so.

303 As to the patent itself, Dr Rowe gave the following evidence:

Can I direct your attention to page 6 414 [that is Dr Rowe’s second supplementary report – JSR-9]? Yes.

In the last paragraph on that page you say:

As discussed, I have not seen the patent. I would imagine there is nothing special about the release rate specified in the patent.

What were you referring to when you referred to the “release rate specified in the patent”? I refer to the plot of the amount of drug released versus time using the BP or USP test for dissolution.

Is that a specific release rate you’re referring to? No, no.

When you say:

I have not seen the patent, but I would imagine there is nothing special about the release rate specified in the patent.

is the position you hadn’t seen the patent at that time? No, I hadn’t seen the patent.

Were you told by somebody that it had a release rate specified in the patent? No, I was not.

You’re speculating there was one? I’m speculating. I said I would imagine that there is nothing special about the release rate.

So you’re speculating that there was one in there, and you were prepared to proffer the opinion without even seeing what it was, that there was nothing special about it; is that right? That would be my thoughts, yes.

In other words, your view is, whatever’s there, you’re prepared to say nothing special? Unless someone could tell me to the contrary, sir.

304 Dr Rowe was also asked about the information provided by the Alza patent on which he had relied to describe decreased side effects:

Do you think that in seeking to draw the court’s attention in paragraph 36 under the heading:

I note the following from these articles,

under Alza patent, the statement (e)

the controlled release formulation of venlafaxine decreases gastrointestinal side effects.

was a fair way to describe what was being indicated in the Alza patent? No, it doesn’t mention GI side effects in the patent specifically.

Do you think the language you used was a fair way to indicate to the court what you said came from the Alza patent? No, perhaps, in hindsight, I would agree with you.

It is an overstatement, isn’t it? I agree it does not say gastrointestinal, that I can see, in the patent itself.

305 Dr Rowe was asked about the approach he usually would have taken to literature searches and this exchange occurred:

You have given some evidence about the sort of publications that you would consider in dealing with the task which was set for you for the purposes of giving your reports in this case, do you agree with that? Yes.

Is the approach you took to considering material or finding, material which you say you would have taken in ‘96, an approach which was new for you in 1996, or was it similar to an approach you’d taken in the years before 1996? Certainly before and also today.

…

Just to be clear, you have given some evidence to say my first port of call would have been Merck, and Martindale and MIMS, I think, correct? You have also said you would have undertaken searches and read things? Yes.

That approach of what you have described in your evidence as to what you would have done as to what materials you would have looked at, or searched for and read, is this an approach which you say you had in 1996 which was similar to the approach you had in the years before that? Yes, it would have been, that is my understanding.

Essentially, does that involve, first, referring to standard reference books? Yes.

Would it be true to say you would not normally consult patent specifications to provide assistance? No, that is not the case, that certainly wasn’t the case at Abbott at all. I would have looked at patent literature as part of the overall scheme of things.

Does this sound like something you have said before:

If I’d been asked before 10 May 1993 to provide a controlled release coating formulation of, for example, tramadol, my methodology would be to first refer to the standard reference books, including those that I have identified in my previous declaration. I would usually expect to be able to produce an acceptable formulation to meet the criteria required of the project. I would not normally consult patent specifications to provide assistance.

? No.

That is not you, that doesn’t describe your methodology? It does. I would not normally do it unless there was I’d been told by someone in the company to look at patents in terms of infringement or things of that nature. But purely to develop a sustained release formulation, one could do it without patents, yes.

So to the extent in your evidence here you have indicated that if set this task of considering an extended release formulation of venlafaxine hydrochloride, to the extent in your evidence you have suggested you would have read the Alza patent, is the true position you wouldn’t have read the Alza patent because that wasn’t part of your practice to consult patent specifications? Well, it certainly came up in the literature search. And if it was specifically related to a drug I was interested in, I perhaps would have looked at it.

If you did look at it, it would not have been in accordance with your normal practice, would it? No, I wouldn’t agree with that. I think each case must stand on its own merits. If this was specifically in relation to venlafaxine

Could I direct your attention to this document which I hand to you. Could I direct your attention to the first page you can look at the other pages if you want and the last page. Is it correct to say that you made a number of statutory declarations in support of an attack on the or, in opposition to another patent, in this case

Euro Celtique S.A.? Yes.

…

Do you remember preparing the declaration? Obviously, yes, I did. Yes.

If you feel a need to look at any other part of the document, please, don’t feel inhibited in so doing. I want to direct your attention to paragraph 33, where you say:

I will now consider the prior past publications. I note that the publications are all patent specifications. If I had been asked before 10 May 1993 to provide controlled release coating formulation of, for example, tramadol, my methodology would be to, first, refer to the standard reference books including those that I have identified in my previous declaration. I would usually expect to be able to produce an acceptable formulation to meet the required criteria of the project. I would not normally consult patent specifications to provide assistance, but if I did need the further information, I would undertake an online search which would and normally did include patent specifications.

Do you see that? I do.

Was that correct? Yes, it is. As I say, each case I would do on its own merits in terms of the drug and what was available, there is no hard and what I am trying to tell the court is that there is no hard an fast rule to say, yes, I’ll look at that and not at this. It very much depends on the drug itself, whether it is a generic, whether it is what information is available in the normal literature.

But in this part of this declaration, you’re referring to your normal practice, weren’t you? Yes.

Did it accurately describe your normal practice in ‘93 and, as you have indicated, in ‘96? Yes, I think the qualification there, Mr Bannon, is that sorry, this is what I would normally do.

You can’t say to her Honour whether or not, indeed, in this particular case, you would ever have looked at the Alza patent, can you? It came up on the search and I did look at it.

But your normal practice, according to this, was not to look at patent specifications? Not normally, no.

Of course, the exercise you’re engaged in was to try and indicate to the court as fairly as you could, recognising the difficulty of the task, to indicate what you believe you would have done back in 1996, is that right, for this case? That is what you were trying to do, correct? That’s correct.

May we take it that the likelihood is that in 1996 you would have followed the practice you normally followed? I would follow the practice I normally followed? In this case it was specifically related to venlafaxine. Had I been charged with the task of producing that particular drug in an extended release formulation, I probably would look at because it is specific for that drug because Alza I know Alza extremely well, I wouldn’t have had to look at patent, I know the OROS system intimately well.

…

In this particular case, you only looked at Alza after first looking at Merck, MIMS and Martindale, in fact what you believed had been available in 1996 in those forms? Well, they are the easiest on the standard ones that are off the shelf.

I suggest to you, Doctor, being fair about it, you can’t say to the court it is likely that you would have looked at the Alza patent at all having regard to your usual practice. Do you agree with me or not? No, I don’t agree with you there.

I see. And the reasons you don’t is the ones you have attempted to explain in the last few minutes; is that right? Yes.

306 Dr Rowe was asked about his starting point and gave this evidence:

Is your position, when you’re giving your evidence in this case, your starting point is you are, in fact, told to develop an extended release formulation of venlafaxine hydrochloride? I think I say if I have been asked to develop it, yes.

To the extent you deal with considerations as to what might bear on whether you would even try and develop or not is the evidence you have given really from the standpoint of a formulator having been instructed to develop an extended release formulation and then to indicate what you think you would have done; is that right? Yes, that is normally the way that it works in the industry.

307 In other words, the starting point of Dr Rowe’s evidence was the same as that of Dr Marshall.

Dr Reece

308 Dr Reece said he was contacted by the solicitors for Alphapharm on 25 May 2009 and asked to act as an expert witness in anticipated proceedings relating to a patent dispute between Alphapharm and Wyeth. He was not told the subject matter of the patent, but was aware that the proceedings related to venlafaxine. Prior to the solicitors for Alphapharm contacting him, he was aware that venlafaxine is an antidepressant, but had no detailed knowledge of the pharmacokinetics of venlafaxine or the formulation(s) in which it is available.

309 The solicitors for Alphapharm asked Dr Reece to outline his knowledge and understanding of the state of knowledge amongst those working in the field in pharmacokinetics and drug development as it existed at 25 March 1996. Dr Reece said he “tried to put myself back in the position I was in at 25 March 1996, excluding any knowledge acquired since that date”.

310 In his affidavit of 8 January 2010, Dr Reece said that he was “aware that the development of ER formulations was a well developed field prior to 25 March 1996. It was often considered important to develop an ER formulation for a drug, particularly if it had a short half-life.” He said that both at the priority date and now, it is normally the case that “an IR formulation of a drug will be developed prior to an ER formulation”. He said the main reasons, both now and at 25 March 1996, for developing extended release formulations of existing product lines are to ameliorate known issues of patient compliance associated with high frequency dosing and to reduce side effects associate with high peak concentrations of the drug.

311 Dr Reece said he was asked to describe the process by which, in March 1996, an extended release formulation of an existing immediate release formulation could have been developed, including the personnel who would have been involved in the process (and their role), the information which would have been required in order to undertake the task and the way in which the task would have been approached. In doing so, he was asked to make the following assumptions:

· there was a drug which was included in the Australian Register of Therapeutic Goods;

· an immediate release version of the drug is on the market and being prescribed to patients;

· there have been a number of reports of side effects from taking the drug (e.g. nausea, and in some cases vomiting), especially in the first 14 days after a patient begins taking the drug;

· the nausea and vomiting is, at least to some extent, caused by the drug in the body;

· patients received multiple doses of the drug each day;

· there were issues relating to compliance by patients in receiving multiple doses of the drug each day; and

· he works for a drug manufacturer who has decided to attempt development of an extended release version of the drug.

312 Dr Reece was then asked to describe what he would have done if, in March 1996, he had been asked to develop an extended release formulation of venlafaxine hydrochloride, taking into account the assumptions above (that is, in substance, the same starting point as Drs Marshall and Rowe, having regard to the last dot point above). Dr Reece stated that he would first start by gathering as much information about venlafaxine hydrochloride as possible, including consulting his “personal copy of the Merck Index to ascertain some basic physico-chemical and pharmacological properties of venlafaxine”, the MIMS Annual and the Physician’s Desk Reference. He would also conduct a “Medline search” (a literature database), look through the latest issues of relevant journals, consult conference abstracts and the product information for the immediate release product.

313 After reviewing articles provided by the solicitors for Alphapharm, Dr Reece was asked whether there was a single article providing all the information about the pharmacokinetics of venlafaxine sufficient to generate a target in vivo plasma profile and a target in vitro dissolution profile. Dr Reece identified the Klamerus article as providing this information. Using the information only in Klamerus and his general knowledge of pharmacokinetics, Dr Reece was asked to generate a target in vivo plasma concentration-time profile for a proposed extended release formulation of venlafaxine hydrochloride. From this, Dr Reece settled on a suitable target plasma concentration wave, determined the fraction of drug absorbed over time, at various points, and from this information calculated a target in vitro dissolution profile for the proposed extended release formulation. Dr Reece said that he would then provide this information to a formulator who would develop an extended release formulation with a dissolution profile matching the target profile and that he did not consider this “to be an unusual or difficult request for a formulator”. After conducting these exercises, the solicitors for Alphapharm provided Dr Reece with a copy of the patent. Dr Reece stated that he did not “rely on or use [the patent] in preparing the descriptions and analyses” set out in his affidavit of 8 January 2010.

314 Other matters emerged during cross-examination. In relation to Dr Reece’s literature search, the following exchange occurred:

Did you or did you not read the footnoted references to this work for the purposes of this case, I’m not saying generally or did you feel constrained not to do so because of the instructions you got? The procedure that was followed was that I was provided with the output from a search result, MEDLINE search result, using the term “venlafaxine” and other associated terms. I then went to the references within these publications, including this publication, to seek references that hadn’t identified from that first search and then I asked for those and most of those were provided. I was focusing primarily on quests to find a publication which would allow me to do the task of modelling the pharmacokinetics of venlafaxine and generating a dissolution profile, so I may not have read all of these articles in any detail in the reference list.

I will come back to Klamerus. Could I just divert your attention to look at that first footnoted reference well, perhaps just looking at footnotes 1 6, can you just observe that the most recent of the 1 6 which is said to support the clinical thoughts, or at least the thoughts as to antidepressant effect, would appear to be the first one, footnote 1, namely, 1991? There’s actually several ..... articles and just as a comment, I actually didn’t request that article in the second round of requests, I missed it, so I didn’t actually read that article at the time of my first affidavit.

But you’d accept, looking at footnotes 1 6 now, that the first one would appear, on its face, to be the most recent publication, namely 1991, referred to in this Klamerus article? Is it the most recent? In the context of the publication date, it would have to be close to, yes. These aren’t in order of publication date, but I don’t see any others of more recent nature, from a scant review there.

If I can just invite you I will come back to Klamerus in detail but I want to direct your attention to volume 7 at page 2159? This is volume 7A.

Keep Klamerus, if you would, at hand? The page number again.

7 2159? This is the article by Muth, yes.

That is the article footnoted as footnote 1 in the Klamerus paper? Yes.

Am I right in understanding you did not read this article for the purposes of this case? No, I missed this, this was an oversight, I missed this article in my review of the articles.

315 Dr Reece was cross-examined about his reliance on statements in the Klamerus article to demonstrate that the biological profile of venlafaxine to ODV is essentially the same.

If you go over to the next page, 7 265, in the middle paragraph there is a reference to the fact that neurochemical data indicate that ODV is 0.2 to 3.33 times as active as venlafaxine. Do you see that? Yes.

And you have seen, have you not, Professor Charman’s summary of the information from material published at that time as to the differential operation of ODV and reported at least, differential operation on different receptors at ODV ? Yes, I have. Can I just refresh my memory on that, please?

…

You agree with all those statements there? The interpretation is a in terms of the ratios, is derived from the table 4. And the different what I don’t agree with is the concluding sentence in paragraph 111 well, let me reread it again, the last two sentences of the paragraph. Excuse me just a moment. My conclusion is a little different from Dr Charman’s in that just to take one example that he refers to here, 0.21 and 0.18, he says, you know he is implying that that is different because it is different as in the preceding sentence. He says:

It is different at each of the receptors.

I don’t for a moment think that 0.21 and 0.28 are statistically different in a system of this type, namely, where one is looking at the activity of these compounds in binding experiments. There will be a large range around each of those values and I don’t think those values are different. I also doubt, although I don’t have the ranges of the values or any standard deviations, that the values 0.64 and 1.16 are different. I believe that the differences for the dopamine receptor of 2.8 and 13.4 are more likely to be different, but I note that the dopamine uptake inhibition of dopamine uptake by venlafaxine and ODV is the least important of the mechanisms for its activity. It is the serotonin uptake and the norepinephrine uptake that I understood to be the primary mechanism. So the conclusion I drew from this, together with the more detailed description, which is in the paper that you referred me to, as publication 1 of Klamerus, was that it is hard to conclude that venlafaxine and ODV are really different in their activity, significantly different.

Of course, these aren’t views you reported in any affidavit in response to this material? Am I right in thinking that? Sorry?

These aren’t views the views you’ve just reported now, aren’t views you reported in any affidavit material in response? No. What I was asked to focus on Klamerus, where these views are summarised in very simple sentences to say that ODV and V

were equally potent, and I delved into this abstract but I didn’t delve into the as I told you, I missed the first Muth paper of that list of references.

Just going back to the Klamerus paper, when it says:

Neurochemical data indicates that ODV is 0.2 to 3.33 as active as venlafaxine.

? Yes.

Can I suggest to you that you wouldn’t have had a basis for safely concluding, even notwithstanding the remarks you’ve just made, that the difference in the nature of the activity of ODV and venlafaxine was not material? That is a range which will have a mean. And I don’t know what the data actually looks like. I am also basing my judgment on other examples, some of which are mentioned just as drug names but without the details in my affidavit.

Would you agree that, looking at the area under the curve and the amount of ODV which is generated back on table 2, there is a significant quantity of ODV generated? Yes.

And such impact as it may or may not have I withdraw that. You accept, of course, that any antidepressant activity it does have in terms of effect on receptors is likely to be a consequence of the combined effect of venlafaxine and ODV? Yes.

And you would not regard yourself as sufficiently qualified to form a concluded view as to whether or not, based on the material you had read or, say you were likely to have read in March 1996, as to whether alterations to that mix would or would not have a material impact on clinical outcomes; that is true, isn’t it? No, I

You’d be guessing, wouldn’t you? No, I would not be guessing because one of the things we had to do in interpreting whether we would proceed to clinical studies with a new drug in clinical pharmacology at Parke Davis was to interpret pharmacology and toxicology data for the drug. We had to look at the preclinical information of this type and draw a conclusion as to how important or otherwise it was in going forward. These assays I have conducted very early in my career, but I have not conducted more recently. They have a high variability associated with them and need to be interpreted not purely on a number by number basis but understanding the variability in the assays. I am not alarmed by a figure of 0.2 to 3.3 without knowing more information about whether they are outliers......2.48.44, whether most of the data is tight and we have a standard deviation associated which would reflect the probability around that. I would need to see more information to be alarmed about it. And I had to draw some comfort from the comments early in the paper that these two compounds had equivalent activity.

As you say, Dr Reece, you’d need more information before you could safely come to a view, one way or another, as to whether or not a change in the mix of ODV and

venlafaxine would or would not have a material impact in patients; that is right, isn’t it? I’d like to be satisfied with more information, yes, but I could you still have to in drug development have to make some assumptions in going forward.

And that is what it would be, an assumption; correct? An educated one, yes, I hope.

316 Dr Reece was also cross-examined about why he changed the dosing regimen specified in the Klamerus article when performing his modelling exercise:

What you refer to there is the fact, amongst other things, that you perhaps I’ll take it back a step. Just to summarise what it is you did for the purposes of this modelling exercise is you took the Klamerus model and adjusted some of the parameters for the purpose of devising, in effect, an extended release version of the model? I really only adjusted one parameter.

What is that, T_abs? Yes.

T_abs relates to an assessment as to time for absorption. T_abs is a function of absorption rate constant and lag time. It is equal to one over the rate constant minus the lag time sorry, plus the lag time.

Then in paragraph A19, you describe the reason why you chose a 150 milligram single daily dose for your testing purposes rather than the 225 milligram single daily dose? Yes.

When you say rather than a 225 milligram single daily dose, which is considered in Klamerus do you see those words in brackets? Klamerus didn’t consider a single daily dose of 225 milligrams, did it? No, they didn’t. That is a

Is that meant to refer to Klamerus considered a three times 75 milligram dose? Yes. The maximum dose given, as a single dose, was 150.

Yes. Then you said:

I found that I could not vary the T_abs in a way which gave a Cmax for 225 ER formulation which was less than the Cmax for the three times daily administered formulation.

? That’s right.

Just explain what you’re referring to there. It is this, is it not: you looked at the Cmax, namely, the maximum concentration, which was derived by your model using a 225 milligram dose? Yes.

And you compared that with the Cmax figure which arose in a comparison with the

Cmax of what? Of a 225 milligram extended release dose.

Yes, but that was your derived Cmax using the model? Yes.

And you said that that was you couldn’t vary the Tabs in a way which gave a Cmax for that which was less than the Cmax for the three times daily administered 75 milligram IR formulation? That’s correct.

And that Cmax for the three times daily administered 75 milligram IR formulation, was that a Cmax calculated using the model as well, but with the T_abs used by Klamerus? Yes, yes.

…

Just to make it clear, having got the model, you did a first and very important thing you had to do, would you agree, was to test whether the model seemed to be producing the right results? That is right, in case I had made a mistake.

Right. And the way you tested that was to take a three times 75 mil daily venlafaxine dosage? That’s right.

Plug it into the model using the same parameters that Klamerus had, including the T_abs? Yes.

And seeing what figures resulted? Yes. Well, what the curve looked like.

And compared that curve, which you depict in figure A1 on page 3 262 ? Yes.

And compare that with actual results reported in the Klamerus paper? Correct.

And by the comparison with the actual results that gave you a degree of confidence that the model was okay? That’s correct.

…

To get the language clear, I’ll call it the IR model or the immediate release model when I am referring to the model, as reported by Klamerus, including all the same paramaters sorry, with all the same parameters, including the T_abs parameter. Okay? Right.

And I will call the extended release model your posited version of the same model in which you varied the T_abs? Right.

Okay. The object of the exercise you did in relation to the 225 was to see whether the Cmax you got in your extended release version, of single daily dose 225, produced the outcome you say you were look looking for, namely, a Cmax which was less than the Cmax if 225 if 225 was plugged in on a three times 75 dosage in the immediate release model; correct? Yes.

Also, you wanted to make sure that the outcome of that plugging in on the immediate release model of a Cmin was lower than the Cmin you got on your extended release model using the 225; that is right? Cmin had to be always be higher for the extended release.

Had to be higher and Cmax Cmax of the extended release outcome had to be lower than the Cmax of the immediate release outcome? Yes, yes.

And Cmin of the extended release outcome had to be higher than the Cmin of the immediate release outcome? Right. That’s right.

And the areas under the curve of each had to be comparable? That’s correct.

When you calculated the area under the curve of each, on the extended release outcome, obviously the area under the curve of a single daily dosage was calculated by reference just to that dosage, firstly; is that right? Just repeat that.

The comparison of the areas under the curve on the extended release outcome, obviously there was just one curve to add up? Yes, and you’re comparing it with two or three for the other.

That is what I was going to say. And you compare that area under the curve with a combination of areas under the whatever number of curves per which was it which was produced under the immediate release model which depended on the number of doses? Right.

That was three doses, then you added up the areas under three curves and compared that with the area under one big curve or bigger curve? Yes, yes. I did very little work with the three times daily

I understand that. But using, just to make it clear, a 225 milligram dose, the model just didn’t work; correct? My recollection was that is correct, yes.

So if that is the only dosage you’re able to proceed with, that would have been the end of the section for you, correct, at least using this model? Yes.

So what you did then was, as you describe, to switch to a 150 milligram single daily dose and you plugged that into the model in your extended release version? Yes.

And you also, for comparison purposes, you plugged in, in the immediate release version of the model, two 75 milligram doses; correct? Yes.

And having done that exercise, you tested whether or not the area under the two curves, under the immediate release outcome was roughly comparable to that of the area under the curve of the single daily dose under the extended release model; correct? Yes.

…

But now, of course, the position you face, however, was that Klamerus had generated the model on data which did not include data relating to a two times dose of 75 milligram; that is right, isn’t it? That’s correct.

So there was no data into that Klamerus model which was informed by subject outcomes using two times 75 milligram dosage; correct? That’s correct.

So when you generated your two times immediate release version of the two times 75 milligram dosages you had no actual subject results to compare it against to see whether they were ? I only had the single doses and the three times daily doses, exactly.

But unlike the exercise which you did, which was reported in A9, you had no actual data to see whether the model was being true or is reliable? I had could not there was nothing there on 75 milligrams twice daily; correct.

…

And if the model was working accurately, in an ideal world, you would have been able to check that 120 against actual results achieved by Klamerus observations achieved by Klamerus? Yes.

But you didn’t have those observations? No, I did not.

Of course, just going back to the test you did do on Klamerus, you checked the model against actual results? Yes.

If that had shown a lack of correlation, that would have been cause for you to abandon the model; correct? No, I would have realised that I’d done something wrong in writing the equations for the model and I would have gone back and tried to correct it because I assumed that I would be able to get to the right model if I’d corrected whatever error I’d made.

But if you couldn’t have corrected it you would have had to abandon the model? I thought that would be a very low probability.

I’m not suggesting as a matter of probability. But if you couldn’t correct it, that would have been the end of the model; correct? If I had tried everything and couldn’t, then I’d have to abandon it.

317 Dr Reece was then taken to a printout of his model generating a target plasma profile. The following exchange occurred:

And if one compares that to, going back to the Troy figures, a Cmax of 189 compared to 120, a Cmin of 56 compared to 25, an area under the curve of 1673 compared to 2677, there is no correlation at all, is there? There is quite a difference, which would probably reflect the fact that these are small studies, but the model data is really just a restatement of what is in Klamerus. So the area under curve we really want to discuss the core data we need to compare the area under curve in Klamerus with that in Troy and this is where these figures come from. What it is telling me is, in a relatively small number of subjects there is 18 subjects in Klamerus and I can’t recall the number of subjects in Troy, but it is 12 to 18, it’s probably a relatively small number again the variability that you pointed me to, which is reflective of venlafaxine, if you recruit that number of subjects in half a

dozen studies, they are samples from a population, and the results will vary from one study to the next and I don’t see this as actually, given the three to fourfold variability in the kinetics for area under curve half life, that that would be an unexpected result.

Dr Reece, you have regarded it as critically important to the model to test the model which you created in terms of its immediate release version against the actual observations reported by Klamerus, didn’t you? I did.

That is a critical step? I did.

You wouldn’t have put this model before the court unless you had satisfied that step; correct? Correct.

The reason it was critical was because it suggested, at least in your eyes, a reliability of the accuracy of the model; correct? Correct.

And you inputted a 225 milligram single daily dose figure into the model? Yes.

And compared that against the three times immediate release version of that, 75 mils each dose; correct? Yes.

And, of course, Klamerus reported observations on three times 75 mil? Yes.

So you were comparing apples with apples, weren’t you? Yes.

And the test you’d done on the reliable of the model against Klamerus’s actual observations was important while you were using the Klamerus model in relation to information on which the Klamerus model was based; correct? Yes.

And as you agreed earlier, the Klamerus model was based was not based on information generated from two times dosing 75 milligrams a day? That’s correct.

And as you agreed, the model, on a best fit basis, is best fitted to the data which underlies it, the actual observational data? Correct.

And yet here, once your model doesn’t work for 225 milligrams, you flip to something else to try and make it work, to 150 milligrams, you produce immediate release figures which can be tested against some actual observations which you’re aware of and when you do that test it shows the model is a nonsense; that is the sum of it, isn’t it? I don’t agree.

Because what your immediate release version of two times 75 milligrams a day is designed to do is to predict the outcome in subjects who are taking 75 milligrams a day; that is right, isn’t it? The

Isn’t that right? Yes, 75 milligrams.

And you’ve got some actual observations to test that in Troy, you choose to ignore those actual observations because if you do take account of them, it shows your model is a nonsense when you apply it to 75 mils a day; that is right, isn’t it? No, the reason being that the model is describing accurately the data that Klamerus reports and the model is internally consistent through the test that I conducted. What the model can’t do is predict what the concentration might be in subjects from another study, and therefore it wasn’t valid to suggest that I could compare the data from the model generated numbers of 75 twice daily from Klamerus with another study. I could compare possibly the main variation will be on the Y axis. The profile is likely to change somewhat with half life, but let’s say half life is four to five hours. What might happen is that there is a different volume of distribution or a different F value which is affecting the position of the mean curves from Troy’s 75 milligrams per day and that derived for the 75 milligrams per day from Klamerus. So I believe the model is sound based on the tests that I conducted with it, but it cannot predict the results from another study in another small group of subjects. If, on the other hand, a scenario had been that the study was conducted in a population of, let’s say, several hundred subjects, and this study had been conducted in a population of several hundred subjects, I would have been very surprised if there wouldn’t have been an alignment of the two sets of data because of the numbers, the means were now weighted by the number of subjects. But comparing these two studies is not a valid scientific thing to do. If I can add just one more piece of explanation, really: the study that Klamerus reported, and I believe Troy the way the study is conducted is that subjects ares crossed over, so each subject sees the same dose and the same dosage regimen. So, really, you’re comparing within a subject. Because although you might have variation between subjects, within a subject the variation is normally much less. So when we talk about a three to fourfold variability, what we’re talking about is between subject variability. Within subjects, the variability is likely to be much less.

And the model provided no information because it wasn’t based on any observed data as to outcomes on twice a day dosing, did it? No, it did not.

It could not provide any sensible information in relation to two times a day dosing in those circumstances? That is where I disagree.

It is wildly speculative to ? No, it is not wildly speculative.

Wildly speculative. If a model, I suggest to you, depends for its existence on the moulding of an equation, or the parameters of an equation, to actual data, using a regressional analysis, and all of that data is related to either single daily dosing or three times a day dosing, to apply it to a two times a day dosing situation is, I suggest to you, invalid? I don’t agree, provided the model is predictive within the dose range at which I am operating; in other words, the model has linear pharmacokinetics. The whole purpose of a model is really to allow you to explore those other dosage regimens. If, however, there’d been non linearity in the pharmacokinetics between 25 milligrams three days a day and 75 milligrams three times a day, I would have had to have used and if there had been an R factor, which clearly Klamerus refers to in trying to adjust for the doses of high doses, it might still have been possible to make some predictions, but it would be more difficult. But I see no nothing untoward or at all unsound in applying the model to other scenarios of which the 75 milligrams twice daily was one.

Discussion

318 The summary of evidence above discloses that the evidence of Drs Marshall and Rowe in particular, but also Dr Reece, presents a number of problems.

319 The applicants’ submissions that the evidence of Drs Marshall, Rowe and Reece should be given substantial weight as it was unaffected by knowledge of the patent cannot be sustained. Each of these experts, when giving their opinions, knew that the matter related to a disputed patent and thus would have been aware that at least one person had successfully prepared an extended release formulation of venlafaxine hydrochloride at the priority date. In other words, the experts were each approaching their task with assumed knowledge that an extended release formulation could be prepared. This is knowledge available only with hindsight despite the efforts of the experts to place themselves in the position they would have been as at 25 March 1996.

320 The first steps of Dr Marshall and Dr Rowe would have been to review information that, in fact, would not have been available to them at the priority date. Although both attempted to cure this once they became aware of the problem by relying on information that would have been available to them, there are some inescapable facts. First, having regard to their evidence as a whole there cannot be much doubt that they considered the Merck Index and the Martindale Monograph to be the best sources of the information necessary to comply with their instructions to prepare an ER formulation of venlafaxine hydrochloride (that decision having been made by someone else based on criteria of no particular significance to them as formulators). But neither the Merck Index nor the Martindale Monograph would have been available in the relevant form. Second, having obtained a series of useful propositions about venlafaxine hydrochloride from the Merck Index and the Martindale Monograph, the cure did not involve them in attempting to disregard those propositions, in order to start the process again as best they could untainted by the knowledge from those texts. Instead, Drs Marshall and Rowe each found other texts, available at the priority date, to support the propositions which they had obtained from the Merck Index and the Martindale Monograph. This process bears no resemblance to the reality that would have confronted them had they in fact been issued their instructions as at the priority date. They would not have had access to the propositions they digested from the Merck Index and the Martindale Monograph at all. Their search would not have been one to substantiate those propositions. The propositions are central to the conclusions reached. These circumstances cast significant doubt on the reliability of the conclusions of Drs Marshall and Rowe.

321 As Wyeth acknowledged, s 7(3) of the Act expands the available prior art base by referring to:

(a) any single piece of prior art information; or

(b) a combination of any 2 or more pieces of prior art information;

322 Nevertheless, the requirement in s 7(3)(b) is that the information be such as the skilled person would be reasonably expected to have “ascertained, understood, regarded as relevant” and combined. Confronted by the significant role played by the Merck Index and the Martindale Monograph in the evidence of Drs Marshall and Rowe and the way in which the problem of that information being unavailable at the priority date was attempted to be cured, it cannot be accepted that they would be reasonably expected to have ascertained, understood, regarded as relevant and combined the information on which they relied. It must be inferred that they found and combined that information because they were looking for texts that substantiated a series of preconceived propositions that they had obtained from the Merck Index and the Martindale Monograph (and, in Dr Rowe’s case, the MIMS Annual).

323 Other matters support the conclusion that the conclusions of Dr Marshall and Dr Rowe should be treated with caution. Dr Marshall had never formulated an extended release product that had reached the market and, in total, had been involved in only three to five projects involving extended release formulations, none of which were significant enough for him to be able to identify. Dr Rowe in fact knew very little about venlafaxine hydrochloride at the priority date despite his evidence that it was “well known” to him at that time as a treatment for depression. He also relied on the Alza patent as source of substitute information about venlafaxine hydrochloride when, considered as a whole, his evidence suggests that it was not his normal practice to review patents as part of his literature searches. Moreover, the Alza patent did not provide Dr Rowe with all of the information which he assumed (assumed, that is, by reference to material not available at the priority date).

324 In EI Du Pont de Nemours and Company v ICI Chemicals & Polymers Ltd (2005) 66 IPR 462; [2005] FCA 892 at [130] Emmett J said:

[130] Ultimately, it is a matter for the Court as to whether a proposed line of enquiry was obvious to the relevant persons. Where the evidence of a relevant person constitutes no more than speculation as to what that person might have done in circumstances that had never arisen, are unlikely to arise and were unlike any circumstances that had in fact arisen for that person, the evidence will have little weight and, often, even if it were strictly admissible, should often be excluded pursuant to s 135 of the Evidence Act. The probative value of such evidence would be substantially outweighed by the danger it might cause or the possibility [that] it would result in undue waste of time.

325 Although the evidence of Drs Marshall and Rowe was admitted, the problems created by their reliance on the Merck Index and Martindale Monograph, when weighed with the other elements of hindsight identified above, should not be underestimated. This is because these problems are central to their ultimate conclusions that they would have approached the preparation of an extended release formulation of venlafaxine hydrochloride with a high degree of confidence of success at the priority date. The problems are such that that their evidence, in substance if not in form, approaches mere speculation about what they might have done in circumstances unlikely to arise and that had in fact never arisen for them.

326 The following observation from Fresenius Medical Care Australia Pty Ltd v Gambro Pty Ltd (2005) 224 ALR 168; [2005] FCAFC 220 at [175] is also apt:

[175] In coming to his conclusion on obviousness, his Honour was mindful of the restraint imposed by the artificial exercise engaged in by Dr Davies and of the alternative problem of a witness attempting to give evidence of the obviousness of the idea when he or she already knew the answer. This is particularly acute where the inventive step involved an idea which, once appreciated, was implemented by the application of well-known principles. That is not to say that such evidence should be disregarded but it makes it more difficult to allow for “the insidious effects” or “misuse” of hindsight. This problem has long been recognised in patent cases. It is but one matter for the judge to take into account in weighing the evidence of the witnesses, as was the inventiveness of the witnesses (at [401]), the passage of time since the priority date (at [402]) and the provision of prior art which was not part of common general knowledge (at [403] and [404]–[406]). Other factors were the level of advocacy engaged in by the witnesses and the relative levels of skill each possessed. None of these matters is determinative; each is relevant to the assessment by the judge of the competing evidence on obviousness in the circumstances of this case.

327 The evidence of Drs Marshall and Rowe is not to be disregarded. Nevertheless, in weighing that evidence the matters to which reference has been made are important. So too are the following four observations.

328 First, and as Wyeth emphasised, the test for inventive step is whether the invention as claimed in any claim is obvious when compared to the prior art base (ss 18(1) and 7(2) of the Act). The focus of attention is the claims as made. In this case the claims involve a method of treating depression by oral administration of a single daily dosing of venlafaxine hydrochloride which provides a therapeutic blood plasma concentration of venlafaxine over 24 hours with a peak plasma concentration in from about 4 to 8 hours. The evidence of the experts called by the applicants does not focus on the method of the invention but the preparation of a formulation.

329 Second, between them, the experts retained by the applicants identified some 70 or so texts, articles and papers available at the priority date containing information relevant in some way or other to their instructions. However, and as Wyeth said, despite the fact that a number of those publications identified the side effects associated with the multiple daily dosing regime of the immediate release formulation (nausea and vomiting in particular), none of the publications identified that an extended release formulation either at all or so as to enable a single daily dosing of venlafaxine hydrochloride which provides a therapeutic blood plasma concentration of venlafaxine over 24 hours with a peak plasma concentration in from about 4 to 8 hours was the obvious response. In other words, materials created by experts who were in fact dealing with venlafaxine before and at the priority date (unlike the experts in this case) contained no suggestion that there was a problem (be it side effects or patient compliance) with an obvious solution (either an ER formulation itself or the method of the invention).

330 Third, Drs Marshall and Rowe were instructed that they should assume they had been instructed to prepare an extended release formulation of venlafaxine hydrochloride. Dr Reece also was asked to describe the process by which an extended release formulation of venlafaxine hydrochloride could have been developed at the priority date. As submitted by Wyeth “the applicants’ evidence assumes, incorrectly, that the inquiry should start with the proposition that an extended release formulation of venlafaxine hydrochloride is to be attempted. There is no warrant for this. It assumes away part of the invention”.

331 Fourth, insofar as the experts retained by the applicants relied on the Alza patent, the Alza patent addressed the topic of the multiple daily dosing regime of the immediate release formulation but did so without identifying the method the subject of the patent. In other words, a patent addressing the same compound, venlafaxine hydrochloride, not long before the priority date, discloses no suggestion that the invention as claimed in the patent is an obvious solution to well-known problems with the conventional (IR) formulation including patient compliance and side effects.

332 The latter three matters referred to above, as Wyeth submitted, constitute objective contemporaneous evidence of the true circumstances at the priority date, unaffected by hindsight or the exigencies of these proceedings.

H5 Problem-solution approach

333 As noted, the applicants relied on Apotex in support of their “problem-solution” approach, namely, that the starting point for consideration of whether there is an “invention” must be the problem disclosed in the specification. The applicants submitted that the problem disclosed in the specification is one of formulation only and the solution to that problem of coated spheroids obvious.

334 Consistent with Wyeth’s submissions, however, there are features in the present case that indicate the limits on the application of the problem-solution approach.

335 First, in Apotex itself the Full Court’s observation in [159] went no further than saying that the High Court in Lockwood No 2 had not rejected the problem-solution approach “where appropriate” but added that it “may not be appropriate or sufficient where, for example, no skilled person in the art had thought of a general idea or general method of solving a known difficulty with respect to a known product or where the appreciation that there was a problem with a known product was itself part of the inventive concept”. The words used in Lockwood No 2 itself at [65] are worth repeating:

However, it is worth repeating that the “problem and solution” approach may be particularly unfair to an inventor of a combination, or to an inventor of a simple solution, especially as a small amount of ingenuity can sustain a patent in Australia. Ingenuity may lie in an idea for overcoming a practical difficulty in circumstances where a difficulty with a product consisting of a known set of integers is common general knowledge. This is a narrow but critical point if, as here, the circumstances are that no skilled person in the art called to give evidence had thought of a general idea or general method of solving a known difficulty with respect to a known product, as at the priority date.

336 Second, the patent disavows any admission that that it was part of the common general knowledge in Australia at the priority date that the multiple daily dosing regime of venlafaxine hydrochloride involves rapid dissolution, rapidly increasing blood plasma levels and side effects such as nausea and vomiting. For the reasons given, the evidence of Dr Marshall and Dr Rowe cannot be relied upon to infer that these matters were part of the common general knowledge at the priority date. Dr Reece was not familiar with the compound at all before receiving his instructions. Professor Charman said that due to the inconsistent information in the literature at the priority date as to the mechanisms underlying the nausea and vomiting experienced, “the unexpected finding of this patent is that the described plasma profile is efficacious and unexpectedly reduces the level of nausea and incidence of vomiting while surprisingly maintaining efficacy”. This is different from the circumstance in Apotex where the patent assumed that the skilled person would have been in possession of the relevant compound.

337 Third, the invention claimed in this case is a method.

338 Fourth, Wyeth contended that the problem-solution approach is not appropriate having regard to the observations in Lockwood No 2. Wyeth did not concede that the approach had any application to the facts of this case.

339 Accordingly, the question is whether the method claimed in the patent was obvious when compared to the prior art base. The problem-solution approach is not sufficient, of itself, to answer this question, having regard to the circumstances of the present case.

H6 Issues facing the skilled addressee – Professor Charman’s evidence

General

340 Professor Charman explained some basic pharmaceutical principles that he described as well known in the field of formulation chemistry in March 1996.

341 Drugs exert therapeutic effect by interacting with targets in the body, some of which are referred to as receptors.

342 A clinically effective drug typically exhibits a “therapeutic window” which describes the differences in concentration range of drug within the blood between those concentrations that produced the desired clinical effect and those which will lead to adverse or side effects.

343 An immediate release oral dose formulation of a drug (IR) is one in which after ingestion the drug is completely and immediately released from the dose form (there are no formulation-related factors which impede the complete and immediate release of the drug). As extended release oral dose formulation (ER) is one in which after ingestion, the formulation prevents the complete and immediate release of the drug. The time over which the drug is released is thus extended compared to an immediate release form.

344 The plasma profile of a drug (the concentration of the drug in the plasma over time) is characterised by the shape of the curve determined from plotting the plasma concentration of drug as a function of time.

345 Different parameters are used to describe plasma profiles.

· Cmax: the maximum plasma concentration of the drug.

· Tmax: the time at which the maximum plasma concentration of the drug occurs.

· AUC: the area under the curve or under the plasma profile.

346 Pharmacokinetics is the study of the concentration-time course profile of the drug within the systemic blood, which is a composite of the processes of drug release from the formulation, and subsequent absorption, distribution, metabolism, and elimination, all of which may be occurring simultaneously after oral administration of the drug.

Absorption

347 After ingestion, the dosage form must release the drug. Drug dissolution is important as only dissolved drug (in solution) in the gastrointestinal tract (GI tract) is available for absorption.

348 Absorption is the process by which the dissolved drug moves from the lumen of the GI tract across the biological membranes where it gains access to the portal blood stream which transports the drug to the liver. After passage through the liver (where the drug may be metabolised) the drug ultimately reaches the systemic circulation (or bloodstream).

349 The GI tract comprises distinct regions – the stomach, small intestine, large intestine, and the colon. These regions differ in terms of structure and functionality.

350 The stomach typically plays a minor role in drug absorption due to the limited residence time of drug within the stomach and the acidic environment.

351 The small intestine is a highly aqueous environment of near neutral pH comprising many different digestive enzymes and fluids. Its surface is highly evolved so as to present a large absorptive surface area to facilitate absorption. These factors make the small intestine the major region of the GI tract responsible for drug absorption.

352 Drugs can be absorbed passively across the membrane of the small intestine (that is, from a region of high to low concentration by a non-energy dependent process influenced by the intrinsic properties of the drug). Drugs can also be transported by carrier-mediated transport mechanisms which involve specialised transporters or proteins that bind to drug molecules and increase the transport of drugs across the membrane. There are also anti-transport or efflux transporters that pump drug back into the lumen after it has been absorbed which has the net effect of decreasing drug absorption.

353 In addition to the above evidence about the importance of absorption, in cross-examination Professor Charman explained the relationship between absorption and the release rate of a drug as follows:

But what you don't say in those affidavits is the proposition with which you have frankly and readily or properly accepted, and that is actually the rate limiting step in drug delivery is usually release from the dosage form and thus absorption is very much a secondary issue in most cases, isn't it? No, it's not.

Even though the rate limiting issue is not absorption but release? The context of the rate limiting step, there is an inherent assumption behind that that the drug will be absorbed. So if there is an assumption that the drug is absorbed and that process is faster than release, release is rate limiting. But the description that I have provided here with regard to absorption is the background, it is the basis and the means by which drugs are absorbed.

Metabolism

354 Metabolism is the process by which a drug is chemically altered, most commonly by enzymatic processes to form what is referred to as a metabolite. Single drugs often produce many metabolites. A drug metabolite may be pharmacologically active or inactive and may have a different adverse effect profile from the parent drug. It may contribute to observed efficacy (that is, be an active metabolite) or may contribute to adverse or side effects. If a metabolite is active it is highly likely that its activity profile, and the concentration-dependence of that profile, will be different from the parent drug. The absorptive cells of the small intestine can metabolise drugs as they are transported to the portal blood thereby limiting the amount of drug reaching the bloodstream.

355 Once absorbed the drug passes into the bloodstream that takes it to the liver. Metabolism of a drug before it reaches systemic circulation is called first pass metabolism (the metabolism that arises on the first pass of drug from the GI tract to systemic blood). First pass metabolism is a complex process and a major factor in determining the bioavailability of a drug.

356 Active transport, efflux and metabolic processes are subject to saturation which complicates the linearity and predictability of drug absorption. A saturable process is one where there is no longer a linear relationship between concentration of drug and either the capacity-limited transport or metabolic event. The number and capacity of transporter proteins can be overwhelmed by a high concentration of drugs such that their capacity to perform their function is exceeded. This has special significance for such drugs when the rate of drug release from the formulation is changed.

Bioavailability

357 Bioavailability is the fraction of the orally administered drug that reaches the systemic circulation intact. A reduction in oral bioavailability is due to a combination of factors including incomplete drug release from the formulation, incomplete absorption, degradation within the gastrointestinal tract and first pass metabolism.

Distribution

358 Once the drug reaches the systemic blood it is distributed to the tissues and organs of the body and its therapeutic target. A prerequisite for any drug whose site of action is the brain is permeation through the blood brain barrier. This barrier exhibits passive and active transport and efflux processes like the small intestine but is a more restrictive barrier for a drug to traverse.

Elimination

359 Elimination arises from the excretion of either drug or metabolites through urine or faeces. An important pharmacokinetic parameter is its elimination half-life which is the time taken for the concentration of the drug in the blood to fall to one half of its previous concentration. The half life of a drug is a major determinant of dosing frequency.

Pharmacodynamics

360 Pharmacodynamics is the study of the biological response-time profile of drugs after administration to a patient. Ideally there would be a direct relationship between the concentration of the drug in the plasma (the pharmacokinetic profile of the drug or PK) and the desired biological response (the pharmacodynamic profile or PD). For drugs with a complex mechanism of action and/or whose target is the brain, direct PK/PD relationships are often not evident.

361 A PK/PD relationship can be established only by undertaking studies in patients and relating the observed therapeutic effect (and/or adverse effect) to the plasma profile of the drug resulting from the administration of a particular formulation. However, the PK/PD relationship will be affected by the formulation in which the drug is administered as different formulations will produce unique plasma profiles of both the drug and its metabolites. The shape of the plasma profile cannot be predicted from the composition of the formulation. The actual shape of the plasma profile can be associated with the efficacy of the drug.

Professor Charman’s conclusions

362 According to Professor Charman it followed from the above matters that changing from an IR to an ER formulation of a drug will likely result in the drug exhibiting different efficacy or adverse effect profiles. As such, any new ER formulation needs to be evaluated clinically in patients to determine the resulting efficacy and adverse event profile of the changed formulation. This, said Professor Charman, was also well known in the field as at March 1996.

363 Professor Charman identified the factors that, in 1996, he would have considered relevant to the administration of a single daily dose of venlafaxine for the treatment of depression which will lead to a reduction in the incidence of nausea and vomiting. Professor Charman said that the design and development of a clinically effective extended release form of any drug, in 1996 and today, involves four inter-related aspects of research, each of which have their own complexity, namely:

(a) formulating the drug, at a to-be-defined dose, to produce a form suitable for administration (Aspect 1);

(b) the in vitro release rate of the drug from the extended release formulation (as measured in dissolution studies) (Aspect 2);

(c) the bioavailability and plasma profile of drug (and metabolites) that results from the administration of the drug in the extended release formulation (Aspect 3);

(d) the clinical outcome achieved by the extended release formulation, which includes both therapeutic and adverse effects of the drug (Aspect 4).

364 Professor Charman noted that the complexity of the PK/PD relationship of a drug is significantly compounded if the drug has active metabolites. He said that in the case of an extended release formulation of venlafaxine the release rate of the drug would be altered compared to the immediate release formulation, so that the overall PK profile of the drug and active metabolites will also be altered. Any change to the concentration-effect profile of drug and active metabolite at the three receptors (serotonin, noradrenalin and dopamine) that is different from the immediate release product leaves one “in the dark” as to the likely resulting clinical profile. According to Professor Charman:

In these circumstances the formulation chemist simply could not know whether it would be possible to develop a clinically effective extended release formulation, that is, one does not know whether the formulation will produce the desirable pharmacological effect.

365 Further, that:

The only way that one can establish whether changing the formulation of the drug from an IR to an ER will impact on the efficacy and tolerability of the drug is to administer the formulation in clinical trials and study the resulting PK and PD endpoints. These are expensive clinical trials, firstly in human volunteers and secondly in human patients of interest. These are complex studies, they take many months, and are likely to cost many millions of dollars.

366 Professor Charman said that, in addition, the information available at the priority date informed him that one would also need to consider the ratio of parent and metabolite achieved by an ER formulation and how this influences the efficacy profile of the drug. In light of the polypharmacology of drug and active metabolite, the apparent saturable metabolism of parent to metabolite may be impacted by slowing the release rate so the ratio of metabolite to parent may be increased. It is also likely that the overall bioavailability of the parent drug will be changed when administered in an IR formulation.

367 Professor Charman also considered that a prerequisite to producing an ER dosage form is that the drug must be absorbed over an extended period of time from the regions throughout the GI tract where the drug is released, that is, including the more distal and lower portions of the GI tract. According to Professor Charman the information available at the priority date (which, as noted, did not include the Wyeth internal documents evidencing its own development process):

… provide no information as to whether venlafaxine would be adequately absorbed throughout these more distal regions of the GI tract.

368 There was also:

… no information as to whether venlafaxine is absorbed passively or by way of transporter processes. Given this, one cannot predict whether a change in the release profile of the drug resulting from the change in formulation would result in a therapeutically relevant profile.

369 Further, as the available information does not:

… identify whether it is the drug, active metabolite, the inactive metabolites or a combination of these which is responsible for the adverse effects, one does not know whether changing the release rate will positively or negatively influence the adverse effects profile.

370 Professor Charman said these uncertainties “are in addition to all the unknowns as to the practicality and pharmaceutical challenges of preparing an extended release dosage form”. Given this, Professor Charman concluded that without certain information he would not have attempted in 1996 or today to develop an extended release formulation of venlafaxine as “none of the essential parameters necessary to guide the process were available”. While one could develop a number of prototype dose forms that could release venlafaxine in a controlled and prolonged manner in an in vitro setting (to delay or modify release) “one would not have known the pharmacokinetics and pharmacodynamics that would result from the administration of such a dose form”. He described the required information as including:

(a) the regional absorption profile of the drug i.e. the regions of the GI Tract in which the drug would be released from the ER formulation and the extent to which it is absorbed;

(b) whether the drug is subject to dose-dependent (i.e. saturable) absorption;

(d) the half-life of the drug;

(e) PK/PD relationship of the drug;

(f) therapeutic window;

(g) clinical experience with repeated dosing;

(h) physicochemical properties and stability of the drug;

(i) total required daily dose and whether it can be accommodated in a single formulation;

(j) the pharmacological profile and adverse effects profile of major metabolites; and

(k) changes in dose administration and effect.

371 While Professor Charman agreed that not all of these issues would need to be resolved, he said information about the factors would be needed to make a considered judgment as to their relative importance.

372 Each of the other experts responded to Professor Charman’s evidence about absorption, metabolism, side effects, and therapeutic efficacy. Their evidence is discussed below.

H7 Absorption

Dr Marshall

373 In his first affidavit of 30 July 2009 Dr Marshall said that in formulating a commercial pharmaceutical dosage form the formulator must consider in combination a number of key factors including the “mode of absorption and identification of site of absorption along [the] gastrointestinal tract”. When explaining absorption Dr Marshall said that it “is necessary to know both the rate and the extent to which the active substance is absorbed in the blood stream”. He continued:

There are a number of barriers to drug delivery… For example, the characteristics of absorption of a drug can affect its suitability as an ER product and hence the strategy to alter the release rate.

374 In his report of 8 August 209 (PAM 11), when asked to explain the steps he would have taken in 1996 to formulate an ER venlafaxine hydrochloride pharmaceutical, Dr Marshall’s consideration of absorption along the GI tract was limited to a cross-reference (at paragraph 33) to his first affidavit before concluding in paragraph 34 that it seemed clear “that venlafaxine would be a suitable candidate for an ER formulation and would be beneficial as it is possible that it could overcome some of the adverse effects experienced by patients repeatedly taking the IR formulation”.

375 In his third affidavit of 24 December 2009 Dr Marshall identified an article (Ellingrod VL et al, “Venlafaxine: A Heterocyclic Antidepressant” (1994) 51 American Journal of Hospital Pharmacy 3033-3046) as indicating that venlafaxine is rapidly absorbed and metabolised to its active metabolite, O-desmethyl venlafaxine (or ODV).

376 In cross-examination, when asked to identify where he dealt with the site of absorption in the GI tract in the report PAM 11, Dr Marshall said the issue was implicitly dealt with in para 33 (that is, by the cross-reference to the issue having been identified as one that must be considered in his first affidavit). When asked about the Ellingrod article Dr Marshall gave this evidence:

If I could direct your attention to your third affidavit, which is at page 3 127. There is a reference there in 30(c) to venlafaxine rapidly absorbed and metabolised. Do you see that? Which paragraph?

It is paragraph 30, in reference to the Ellingrod article? Yes.

Reference to rapid absorption. That doesn’t tell you anything about absorption along that doesn’t refer in any way to absorption in the large intestine, does it? We might have to look at the whole article because that is just a sentence taken out of the article.

Well, it is the sentence you took out of the article which you thought it was pertinent for the court to consider, is it not? The pertinent point I thought was that the venlafaxine is rapidly absorbed.

Yes. And you know that the article doesn’t suggest that the rapid absorption is a rapid absorption in the large intestine, does it? Well, it’s without revisiting the article, as I recall, the article was referring to an immediate release formulation, so the absorption would have likely to have been in the upper intestine.

What I want to suggest to you nowhere in this third affidavit do you address the topics which I have identified to you, namely, consideration, a statement of your views as to the likely site of absorption of a along the GI tract and in particular in the large intestine of venlafaxine hydrochloride extended release formulation or difficulties or issues which may or may not arise in that area.

…

Would you agree that nowhere in that affidavit did you identify in words your consideration of the likely site of absorption along the GI tract of any extended release formulation of venlafaxine hydrochloride or issues which might arise in that regard? Not in this affidavit.

377 Despite this Dr Marshall agreed that in March 1996 it was known by the skilled person that the drugs best suited for an ER formulation were capable of absorption all the way along the GI tract, including in the large intestine.

Dr Rowe

378 Similarly, in his first report (exhibit JSR 3) provided to the solicitors for Sigma on 21 March 2009, Dr Rowe set out the steps he would have taken as at 25 March 1996 if he were asked to develop an extended release formulation of a compound. He said that:

If I were satisfied that the drug was a suitable candidate for controlled release I would begin the formulation exercise. That is that the drug was well absorbed throughout the entire length of the GIT, and sustained release was warranted either because of a short half life or side effect profile and a single daily dose of an immediate release formulation was not appropriate.

379 When asked about this passage, Dr Rowe gave the following evidence:

I’m just asking you whether, Dr Rowe, you’re intending to convey there that one of the things you were required to be satisfied about the drug, before beginning the formulation exercise, was that the drug was well absorbed throughout the entire length of the GIT? Yes, it would be my expectation that it would be.

…

Do you agree that you’re intending to convey to the court that one of the things you needed to be satisfied about the drug before beginning a formulation exercise was that the drug was well absorbed throughout the entire length of the GIT? I’m not trying to convey to the court that, no.

If the words indicate that, that is something you just can’t explain; is that right? Let me explain.

Do you agree that the words indicate what I just put to you? The words indicate that, yes.

Is it your evidence to and this is a report you prepared, what, on your own, in your own computer? Did you type it up? Yes, this was done on my own computer. It is obviously a different font or size.

And there’s no involvement or, minimal involvement or communication with lawyers in relation to this, you just were .....? With this report, none whatsoever.

So these are your own thoughts, uninhibited by a consideration of whatever issues you may now appreciate arise in this case; is that a fair statement? Yes, I’m trying to can I qualify that, please? I’m trying to say here that one of the preconditions for a sustained release product is that the drug is absorbed well throughout the entire length of the GIT. Obviously, if there is evidence to say that it is not, the drug is not a suitable candidate.

I suggest to you, Dr Rowe, that your view, uninhibited by any perception of the issues in this case, is that one of the things you’re required to be satisfied about before beginning formulation exercise of a controlled release formulation was that the drug was well absorbed throughout the entire length of the GIT, do you agree with me or not? Yes.

380 In cross-examination Dr Rowe also acknowledged that in 1996 there was no evidence in the literature to indicate that venlafaxine was well absorbed in the large intestine and that “it is well-known that the large intestine has limited absorption capacities compared to the small intestine”.

381 In his affidavit of 1 April 2010 Dr Rowe said that “while the limited absorptive properties of the large intestine have been well-known for many years” that did not in his experience preclude the development of an extended release formulation of a drug. He further said:

9 There are three fundamental criteria which a drug candidate, in my experience, has to satisfy in order to be considered for development into a sustained release formulation. The criteria are:

(a) the drug has a short half life;

(b) it is well absorbed in the immediate release form;

Almost all drugs are first designed and evaluated in their immediate release form.

382 Dr Rowe was cross-examined about the change in language used in his first report (“well absorbed throughout the entire length of the GIT”) compared to his affidavit of 1 April 2010 (“well absorbed in the immediate release form”):

May we take it you notice the change in language, in relation to that aspect, which is reflected in the paragraph 9(b), the third affidavit, compared to the words you used in [your first report]? You’re referring to the immediate release form, as distinct from absorbed throughout the lengths of the GI tract?

That is exactly what I’m referring to. You notice there is a difference there, don’t you? There is a difference in wording, yes.

A deliberate difference in wording, wasn’t it? Absolutely not.

By this stage, you were aware that there was no evidence in the literature to indicate other than, as at March 1996, venlafaxine hydrochloride was simply well absorbed in immediate release form, without more? You’re aware of that by the time you prepared the third affidavit, do you agree? Yes, I agree there was only evidence to suggest it was I think it was 92 per cent absorbed in the immediate release form, from memory.

And nothing to indicate that it was well absorbed, or would be well absorbed, in, for example, the large intestine, do you agree with me? I hadn’t seen any literature, no.

I suggest to you by this stage you’d also read Professor Charman’s affidavit and understood him to be suggesting that a precondition to consideration of an extended release form of the drug was something to support the view, or satisfaction, that there was going to be absorption throughout the length of the GI tract. You understood that to be his position, don’t you? I do.

Indeed, that reflected, would you agree with me, what you had said [in your first report]; correct? I qualify that. I agree with Professor Charman that for a drug sustained release product to be effective orally, it should be absorbed throughout the length of the GI tract.

I suggest to you that notwithstanding what you’d said in [your first report], your evidence by the time of the third affidavit was that you would have proceeded anyway in the absence of evidence of absorption throughout the entire length of the GIT. Do you agree with that? Yes, I would have definitely proceeded to develop a sustained release formulation in the absence of definite evidence to state that it would have been absorbed in the lower parts of the GI tract. It would have been my expectation.

Your evidence is, is this right, am I fairly characterising it: your position is now that unless you had evidence that it wasn’t absorbed in the full length of the GIT tract, then it was a suitable candidate for an extended release development? Yes, I would have expected it to be absorbed. I would have done the experiment to quantify that, certainly.

What is the experiment? The experiment is a bio availability study.

What experiment would you have done? A bio availability study on the formulation. Yes, a bio availability study.

Just describe the parameters of that experiment? What one would have done would be to make a series of controlled release formulations, administer them to the patient and take blood samples over a 24 hour period and plot the plasma level of the drug versus time.

To see whether it truly did absorb in the large intestine, is that the purpose of this? To see whether the drug was adequately absorbed in a sustained release formulation compared with the immediate release.

In order to determine whether or not you’d proceed to formulate a sustained release formulation, as a precondition to that you would prepare a sustained release formulation and test it; is that your evidence now, is it? Well, I would obviously prepare the formulation and test the fact that it was in fact absorbed, which would have been my expectation anyway.

Do you agree with me that what you’re saying [in your first report] was you wouldn’t proceed to begin the formulation exercise unless you were satisfied about certain matters, do you agree with that? Yes.

And do you agree with me that you just told the court that the way you would have satisfied yourself in relation to the matter relating to absorption throughout the GIT tract would be to, in fact, proceed to prepare a sustained release formulation. Do you agree that that is what you just said? Yes, you would prepare a prototype certainly. It may not be the final formulation but you would prepare a prototype.

Do you see any inconsistency with the evidence you’ve just given orally on that

subject and what you’ve set out [in your first report]? I see that I think where the inference that you’re making is that I would have had to have been completely satisfied that the drug would have been absorbed through the colon or the lower parts of the GI tract before I would even start to prepare or do any formulation work, whereas what I’m trying to tell the court is that for a successful sustained release formulation it certainly must be absorbed throughout the length of the GI tract. What I’m saying was I certainly wouldn’t have gone about taking parts of the lower GI tract and seeing if the drug was absorbed in some test tube experiment, I would have simply done the bio availability study.

What I’m suggesting to you, Dr Rowe, is the effect of your evidence now is that in order to determine whether or not you would go ahead with a sustained release formulation, you would go ahead with a sustained release formulation? I’d go ahead with the prototype, yes.

Dr Reece

383 In his first affidavit of 8 January 2010, Dr Reece said that “less absorption occurs in the lower regions of the gastrointestinal (GI) tract than in the upper regions”. In cross-examination, Dr Reece agreed that his “modelling and [his] opinions as to the plasma profile, which [he] would have taken, proceeds on the necessary assumption that there wasn’t that differential absorption down the track”. In his report attached to his first affidavit Dr Reece said:

In using long absorption times, the further assumption must be made that venlafaxine can be absorbed from the lower intestine as well as the upper intestine. There are examples of drugs which fulfil this requirement.

384 Dr Reece agreed that there was no specific information available at 25 March 1996 which indicated the extent of absorption of venlafaxine hydrochloride in the large intestine. Dr Reece said he based his assumption as to the absorption profile of venlafaxine hydrochloride on his experience with “beta blockers”. In his third affidavit of 7 April 2010, Dr Reece said:

15 In my opinion, for the reasons set out in the following paragraphs, it was reasonable to assume, for the purposes of preparing a model for an ER formulation of venlafaxine hydrochloride, that the drug would be absorbed throughout the GI tract after leaving the stomach. It is never possible to be absolutely sure that colonic absorption will not pose a problem when developing a new formulation, however, in this case, I would have had a high degree of confidence that colonic absorption would not be a problem.

16 Primarily, my confidence derives from my knowledge (in 1996) of a number of drugs used for treating cardiovascular diseases. These include beta-adrenergic receptor blockers (“beta blockers”) which include metoprolol, propranolol and oxprenolol. I was aware of the fact that extended release formulations of these compounds had been successfully developed having equivalent bioavailability and efficacy as the IR formulations… Their relevance to the development of an ER formulation of venlafaxine arises because, while these drugs have a different mechanism of action (and different effect), they are similar to venlafaxine in the following significant respects:

(a) all have similar molecular weights to venlafaxine (all within the range 259D to 277D);

(b) all have the following structural similarities:

(i) all are animes (secondary in the case of the beta blockers and tertiary in the case of venlafaxine);

(ii) all contain one or more aromatic rings with an attached aliphatic side chain (which is a cyclohexane ring in the case of venlafaxine);

(iii) all possess a hydroxy group at a chiral centre;

(d) all are lipophilic (fat soluble) molecules;

(e) all undergo extensive first pass metabolism; and

(f) all have short elimination half-lives.

17 A great deal of pharmacokinetic and pharmacological work had been done in Australia and elsewhere prior to 1996 in relation to cardiovascular drugs such as beta blockers. As a result, I was aware in 1996 that the beta blockers had the general properties listed above, and, although not apprised of the full details, I was also aware in 1996 that the beta blockers were well absorbed throughout the GI tract after leaving the stomach and that the extended release formulations of these compounds had been developed.

385 During cross-examination, an article by Takahashi et al, “Decreased Absorption as a Possible Cause for the Lower Bioavailability of a Sustained-Release Propranolol” (1990) 79(3) Journal of Pharmaceutical Sciences 212 was shown to Dr Reece. The article investigated the “influence of sustained absorption on the oral availability of propranolol (P) and the metabolic disposition of P”. The article stated “several studies have already reported, the relative bioavailability of the sustained-release formulation of [propranolol] was only 58.4% that of the conventional preparation”. Dr Reece agreed he was aware of these studies “in broad terms” as at March 1996, and was aware of the lower absorption. Dr Reece was also cross-examined about his reliance on beta blockers:

In other words, the level of your familiarity, and I’m not suggesting a memory test in relation to particular studies, but the level of your familiarity, as at March 1996, of propranolol hydrochloride was that sustained release formulations were reported as exhibiting significantly lower bio availability than immediate release formulations. Would that be a fair statement? There was a range of results, for which the explanations were there, but not always clear, but some hypotheses have been put forward.

Yes. But those reports, would you agree, are a fine example of the unpredictability of absorption characteristics moving from an immediate release formulation to a sustained release formulation? They are.

…

Would you agree that, having regard to those reports, of which, at least in general terms I think you’re aware as at March 1996, as to the substantial difference in bio availability of the drug in a sustained release formulation, namely propranolol, that substantial differential, if the reports were accurate, was something which could not necessarily have been predicted before an analysis of the bio availability of the sustained release formulations had been done and is based only on immediate release information? I don’t agree entirely, for the following reason: propranolol is a particularly challenging drug insofar as the extent of absorption with increases in dose. I think it was well known very early that a very small dose administered orally may not result in a blood pressure lowering effect, whereas an equivalent IV dose would, and in increasing the dose, then the effect would be seen. So one of the characteristics of propranolol was this very saturable metabolism. So the issue of trying to make an extended release formulation of that required certain approaches which were novel because of that challenge. That, to me, suggested there were risks in actually the performance of the formulation in terms of how much it actually put into the gut and whether that would be found in the faeces. I don’t see in this paper, for example, any mention of the measurements of faecal levels of propranolol to determine how much might not have left the formulation, the formulation was excreted. So there were challenges with propranolol. So I couldn’t generalise from propranolol, was my final point, to make a statement broadly about other beta blockers or other drugs.

In other words, what you’re saying is propranolol had some very unique characteristics? It does.

And for that reason it wouldn’t necessarily be a reasonable guide for drawing conclusions about the absorptive characteristics of a drug moving from an IR form to an ER form which wasn’t propranolol, would you agree with that? Absorption characteristics as distinct from release characteristics, I wouldn’t agree because I still come back to the chemical structure, where I argue that propranolol, because it is a very lipophilic molecule, and it has particular it would be well absorbed from the gastrointestinal tract but could be subject to first pass metabolism in the gastrointestinal tract.

…

I was just saying that the use of propranolol as a comparative guide to the release characteristics of a drug moving from an immediate release formulation to an extended release formulation would be not a reasonable way to proceed having regard to the matters you have referred to? I think, in summary, yes. I could think of better model drugs.

Yes. Is that a reason why you didn’t actually mention propranolol in your first statement as a reason for your underlying assumption? No.

I think if you were going to mention propranolol as a basis for forming an assumption as to underpinning the assumption in relation to absorption and otherwise the operation of the model, as you proposed it, if you were going to refer to propranolol, it would be important to identify the sorts of issues you have been discussing now, would you not agree? I would. I think propranolol is a good example insofar as that the challenges of formulation of a drug with those particular characteristics could be overcome because there are examples where it has been successfully developed as an extended release formulation with an area under curve roughly equivalent to the immediate release formulation.

386 Dr Reece acknowledged that at March 1996 he was aware of studies or statements setting out the challenges associated with developing propranolol as an extended-release formulation. He agreed that these studies or statements were matters which should have been identified in his evidence. Dr Reece also agreed that some qualifications should be put on his use of propranolol and oxprenolol as comparators:

Would you agree, having regard to our discussion this morning, that it would be appropriate to perhaps add at least these qualifications to those three sentences: firstly in relation to oxprenolol, in fact you were aware that there was a difference in bio availability which, in your view, was probably not going to be important in the beta blocker environment but may well have been important in any other environment, do you agree with that as a qualification? Yes. Just to come back to the use of metoprolol in another environment or the use of another drug in another environment?

Oxprenolol? I beg your pardon, the use of oxprenolol.

Another drug in another environment? Yes, I agree.

In relation to propranolol, would you agree it would be appropriate to add this qualification: namely, you were aware of the fact of reports that extended release formulations were not equivalent in bio availability between IR and SR but had an impression that closer bio availability may have been reported in some other formulations, although you cannot quite now recall the date, or even the manufacturer, do you agree with that qualification? Yes.

In relation to metoprolol, you agree that an appropriate qualification to that would be that you understood that there had been reports of a difference in bio availability? No, that is not my recollection.

And the qualifications you have agreed with you didn’t agree with the last one you do accept that it would have been appropriate to include those qualifications at the time you prepared this report and presented it to the court? In ranking them, there is no doubt still in my mind about metoprolol, in terms of this statement. For oxprenolol, I would have liked to have used the words “clinically significant,” in the context of the use, but for propranolol, I agree that would be a better qualification of propranolol extended release.

Discussion

387 From this evidence, particularly the initial affidavits of Drs Marshall, Rowe and Reece, it should be inferred that before the skilled person would attempt an ER formulation of venlafaxine at the priority date they would have required information about the capacity for the drug to be absorbed sufficiently along the GI tract. The information available as part of the common general knowledge at that date was limited to absorption of the IR form occurring in the small intestine rather than along the GI tract. This lack of information explains the applicants’ reliance on alternative indicia of absorption – solubility, lipophilicity and logP (being the partition coefficient or the distribution between water and oil phases as a measure of the hydrophilicity or lipophilicity of the drug). As explained below, these alternative indicia would not have enabled the issue of absorption throughout the GI tract to be disregarded or characterised as insignificant at the priority date.

388 In respect of solubility, although Dr Marshall said that “drugs which are highly soluble make good candidates for ER because they can be presented in a uniform way along the GI tract”, he subsequently agreed that the fact that a drug is water soluble did not mean that there would be uniform absorption along the GI tract. When asked to identify where this was dealt with in his evidence, Dr Marshall referred to paragraph 33 of his report of 8 August 209 (PAM 11). This, as noted, is a mere cross-reference to his first affidavit insofar as it said the site of absorption along the GI tract must be considered.

389 In respect of lipophilicity and log P, the issue emerged particularly during Professor McLachlan’s cross-examination. Professor McLachlan acknowledged that the chemical structure of venlafaxine indicated that it had some lipophilic properties. He said he could not personally experimentally determine the log P of venlafaxine but understood that it could be done (although whether that is so in 1996 or not is unclear from the evidence). Ultimately, Professor McLachlan’s evidence on lipophilicity went no further than this:

If you were informed that the LogP value of venlafaxine was 3 and you knew that it

was a soluble drug, that would inform you of the likelihood that venlafaxine would be absorbed to some extent throughout the GI tract? I wouldn’t make that automatic assumption. I would understand it has properties that may allow it to be. But whether it is or not, I don’t think you can conclude directly from the LogP only.

I see? In my experience.

So you might not be able to conclude finally, but it would give you a reasonable indication, as a pharmacokineticist, that that is likely to be the case? As a pharmacokineticist, I believe a Log P of that value would not allow me to expect that the lipophilicity would be a barrier in the development stages.

390 This is consistent with his earlier evidence as follows:

In fact, being lipophilic would suggest that it would be well absorbed in the lower intestine? I can’t agree to the word “well absorbed,” given that that is

Absorbed? Absorbed to some extent?

Yes? I think that is a more reasonable thing I would be happy to agree to.

391 Apart from this experimental capacity to determine the log P of venlafaxine it must be inferred that its log P value was not part of the common general knowledge of the skilled person at the priority date.

392 Further, and as Professor Charman made clear during cross-examination:

In fact, having regard to these figures, there is no reason to believe that permeability was limiting its absorption in the large intestine either, is there? As we have discussed this morning, absorption is more than just a parameter based upon passive permeability. There is the capacity for absorption, all the other things that we have spoken about, efflux, metabolism and active transport. So to the extent that a LogP value can be used in part as an indicator of permeability, the bigger difference that I initially described is no longer relevant.

And there is no material available to you to suggest either that active transport or efflux is an issue with venlafaxine, is there? As we discussed prior to lunch, compounds that are amines, compounds where there are hydrophobic aspects to their structure are often subject to efflux, very much so. In terms of active transport, no. As we discussed, the reason that one, as a formulator, has an eye to these issues is

because of the differences in concentration in the intestinal tract, immediate release versus extended release, but I didn’t have any specific information, data, published material, available at that time.

… I thought you said before lunch that there was nothing available to you at March 1996 to suggest that efflux was an issue with venlafaxine? I didn’t have any data, no.

So you had no reason to believe that it was an issue? I had no data, Mr Shavin, but I just described there are molecular features of different drugs that make them potential substrates. There are some aspects to venlafaxine where it could in fact be a substrate, but I didn’t have any data confirming or indicating that efflux does occur prior to 1996 available to me.

H8 Metabolism

393 As a general proposition it was common ground between the experts that, as Professor Charman said, the ratio of drug and metabolites may alter when changing an IR to an ER formulation.

394 Further, Professor McLachlan and Dr Reece gave evidence in cross-examination, consistent with Professor Charman’s opinion, that metabolism of venlafaxine would occur in the GI tract as well as in the liver. Further, that the enzymes which trigger metabolism are not present in the same concentrations throughout the GI tract which, itself, could affect the rate of metabolism, as can the presence of different metabolic pathways as a drug proceeds down the GI tract. These matters support Professor Charman’s conclusion that the metabolic profile of a drug in the small intestine is likely to be different from that in the large intestine. Professor Charman also explained the significance of saturability of a metabolic pathway as follows:

At concentrations of drug above those that saturate the metabolic process, an increase in the concentration of drug will not lead to a proportionate increase in the formation of the metabolite. However, if the concentration of the drug (and/or its rate of appearance) is reduced such that the metabolic pathway is no longer saturated, the extent to which the drug is metabolised will increase. This will lead to a different proportional conversion of parent drug to its active or inactive metabolites.

395 This evidence provides support for Professor Charman’s conclusion that the issue of metabolism, like absorption, demonstrated the complex polypharmacology of venlafaxine. The applicants, however, relied on the Klamerus article to support their position of a non-saturable or linear relationship of venlafaxine to its active metabolite ODV.

396 The Klamerus article, however, provides little support for the applicants’ case.

397 First, as Wyeth pointed out, the Klamerus article is concerned with the administration of venlafaxine in its IR form, where it was common ground that the release would occur in the upper GI tract only.

398 Second, Professor McLachlan was cross-examined about the article and made a number of points of significance. Professor McLachlan gave the following answers to questions regarding the Klamerus article:

· But reading from what I see in Klamerus, I don’t see the effect of the parent and the metabolite as identical. I am also cautioned in my interpretation, given the information presented in Klamerus is what we might call preclinical and that focus on perhaps just the pharmacological aspects of it and how they might translate to the clinical setting isn’t immediately clear.

· What this paper [Klamerus] tells me is that venlafaxine does have an active metabolite. The paper also tells me it achieves significantly higher concentrations than the parent drug, it has a similar but not identical profile.

· One of the challenges of the model and information as presented in Klamerus is that the direct relationship between the concentration time profile of venlafaxine and of the active metabolite, while it is presented in the experimental information that is there, the model that is presented does not allow for, if you like, a description of the interrelated effect between venlafaxine and O Desmethylvenlafaxine.

· The model, as presented by Klamerus, was designed for a purpose which was to describe the concentration time data for venlafaxine and O Desmethylvenlafaxine and to generate pharmacokinetic parameters. The model was not supplied or reported as a predictive model. So the process of using that model for other purposes, such as predicting what the impact of changing the input rate might be, is one that needs to be done with caution.

· One of the aims of this publication was to develop a parameter which combined information such as the area under the curve for venlafaxine and O Desmethylvenlafaxine and corrected these values in a manner which attempted to account for their differences in pharmacological activity and then compare that to the dose regimen that was being investigated and the authors’ claim here is that that so called composite parameter that they calculated as part of this project was increased in a linear manner with respect to dose over the range that they studied in this study.

399 Third, Professor Charman also made a number of points of significance about the Klamerus article. Professor Charman gave the following evidence in cross-examination:

· The activity factor is a somewhat complex factor, as they [Klamerus et al] describe later on in the article. It is a process by which they’re attempting to provide a composite factor for both venlafaxine and ODV, and the activity factor is a complex and composite factor that is multiplied be the AUC value for the metabolite, in an attempt to linearise what otherwise was non linear.

· There is pharmacological activity associated clearly with venlafaxine and O Desmethyl, although, as we spoke yesterday, the aspects of that similarity that pharmacological activity is different between those two compounds, and then they [Klamerus et al] have generated a composite factor, which is a mathematical approach to linearise a relationship that was inherently non linear.

· The linearity is of the composite factor. The linearity of venlafaxine or ODV doesn’t change because there is a mathematical treatment, as I’m sure you would accept, so the fundamental characteristics of venlafaxine and ODV are fundamental. This is a mathematical what was the word I used treatment of the data in an attempt to linearise well, not an attempt. They [Klamerus et al] did linearise an otherwise non linear process.

400 This evidence supports Wyeth’s submission that the “potential for the extended release formulation to result in a different venlafaxine to ODV ratio was of great significance in this case given that it was apparent from the literature that… ODV was likely to have… a significant role in the therapeutic outcome achieved following administration of venlafaxine”. While Dr Reece did not accept the differences Professor Charman identified in relation to the “relative potency profile” of venlafaxine and ODV, Dr Reece acknowledged that he had not reviewed the Muth article which enabled Professor Charman to reach those conclusions. Professor Charman said:

Furthermore, the relative potency profile of venlafaxine and its metabolites across each of the individual receptors is different. For example venlafaxine is approximately 3 times more selective for serotonin compared to noradrenaline and is 13 times more selective for serotonin compared to dopamine. In contrast ODV is 6.4 times more selective for serotonin compared to noradrenaline and 74 times more selective for serotonin compared to dopamine. In my opinion, this data demonstrates that ODV has its own unique pharmacological profile. By this I mean, the data demonstrates that ODV is pharmacologically active yet possesses a different selectivity profile compared to venlafaxine.

401 The evidence of Dr Marshall and Dr Rowe does not lead to a different view. Neither had regard to the Muth article and Dr Marshall described details relating to metabolism as something he would have left to a pharmacokineticist.

402 Dr Reece accepted in cross-examination that “the enzymes which trigger metabolism are not in the same concentrations, or you can’t know that they’re in the same concentrations all the way down the gastrointestinal tract” and that this is a matter that could affect the rate of metabolism. He also accepted that “as one proceeds down the gastrointestinal tract… the enzymes can change down the gastrointestinal tract”. In his third affidavit of 7 April 2010, Dr Reece said:

Of course, it is impossible to know with 100% certainty how the formulation would be metabolised in vivo. However, because of my knowledge of beta blockers – notably that they are subject to extensive first pass metabolism but had nevertheless been successfully formulated into ER forms – I would have been confident that venlafaxine, with similar physico-chemical properties and pharmacokinetic properties, would behave similarly. This confidence was supported by what Klamerus taught me about the “probable” existence of saturable metabolism to a “modest” extent at high doses (150 mg three times daily, or 450 mg per day). In other words, my expectation was that the metabolism of a 150 mg venlafaxine ER formulation given once daily would be substantially the same as that for a 75 mg IR formulation given three times daily, and therefore would have produced the same ratio of venlafaxine to ODV as was produced by the IR form, despite its slower release rate and the fact that it would be absorbed (and metabolised) in additional parts of the GI tract.

403 During cross-examination, Dr Reece agreed that his model “proceeded on a further assumption that, in effect, the metabolism of venlafaxine hydrochloride would not have any material effect moving from immediate release to extended release formulations”.

404 Wyeth submitted that Klamerus does not provide support for Dr Reece’s contention that the biological profile of venlafaxine to ODV is essentially the same.

405 During cross-examination the Muth article, as well as Professor Charman’s conclusion regarding the Muth article, were put to Dr Reece:

It is different at each of the receptors.

Of course, these aren’t views you reported in any affidavit in response to this material? Am I right in thinking that? Sorry?

were equally potent, and I delved into this abstract but I didn’t delve into the as I told you, I missed the first Muth paper of that list of references.

Just going back to the Klamerus paper, when it says:

Neurochemical data indicates that ODV is 0.2 to 3.33 as active as venlafaxine.

? Yes.

Would you agree that, looking at the area under the curve and the amount of ODV which is generated back on table 2, there is a significant quantity of ODV generated? Yes.

As you say, Dr Reece, you’d need more information before you could safely come to a view, one way or another, as to whether or not a change in the mix of ODV and

And that is what it would be, an assumption; correct? An educated one, yes, I hope.

406 Viewed as a whole this evidence lends weight to Professor Charman’s conclusion that the ratio of parent and metabolite achieved by an ER formulation and how this influences the efficacy profile of the drug would have been relevant matters to consider in respect of any ER formulation of venlafaxine and formed no part of the common general knowledge at the priority date.

H9 Side effects

407 From the material that was available at the priority date (assuming that material to form part of the common general knowledge of the skilled person as the applicants contended) the mechanisms causing side effects of nausea and vomiting from the administration of venlafaxine were unclear. For example, the Klamerus article on which the applicants relied for their case on linearity said that vomiting was not associated with unusually high plasma concentrations of venlafaxine or ODV. In fact, the group without vomiting had a higher Cmax and AUC value than the group that vomited. Similarly, there were no statistical differences in these values between those who experienced nausea and those who did not.

408 Despite this, the experts called by the applicants said that one of the main reasons to develop an ER formulation of venlafaxine hydrochloride was to reduce side effects associated with high peak plasma concentrations of the drug. Cross-examination cast a different light on this evidence as follows:

· Would you agree with this general proposition that none of the material that you saw and examined for the purposes of giving your report, being information which you understood was available as at now understand was available as at 25 March 1996, indicated that any side effect was related to a Cmax level? I thought it was inconclusive. It may have but it may not have been. I think there wasn’t any evidence one way or the other [Dr Marshall].

· I suggest to you to the extent there is any comment on the cause of any side effects, it is referred to as dose related in all the material you saw? Speaking generally, the material you saw only indicated that side effects were dose related, at best, not plasma level? There is no explicit statements there to say that any of the side effects are related to concentration, that’s correct [Dr Reece].

· And they [Klamerus et al] don’t suggest moving to a sustained release formulation would alleviate side effects? No, they do not [Dr Rowe].

· Based on my experience with other drugs, I tend to agree that there would be a relationship between side effect and dosage, that would be my conclusion, but I accept that there is conflict in the papers that have been produced [Dr Rowe].

· The underlying information you needed for that proposition is not something you knew in relation to venlafaxine hydrochloride? You don't know the actual concentration where side effects begin to occur, no [Dr Rowe].

409 The patent incorporates by reference the entire disclosure in Australian Patent Application No 16400/97 (the grandparent application)which includes the statement that the “use of the one-a-day venlafaxine hydrochloride formulations of this invention reduces by adaptation, the level of nausea and incidence of emesis that attend the administration of multiple daily dosing”.

410 Professor Charman concluded that:

… the unexpected finding of this patent is that the described plasma profile is efficacious and unexpectedly reduces the level of nausea and incidence of vomiting while surprisingly maintaining efficacy.

411 This evidence of an “unexpected finding” must be understood in light of three matters.

412 First, Professor Charman said in his affidavit of 11 March 2010 that it was well known in 1996 that it was incorrect to assume that a reduction in Cmax of the parent drug would reduce side effects. It may be the case but side effects could be mediated locally within the GI tract or systemically by metabolites of the drug or be related to other unknown parameters. He continued that in “such cases, a reduction in the Cmax of the parent drug would not be expected to lead to a reduction in side effects”.

413 Second, the material available at the priority date contained inconsistent and inconclusive information about the cause of the side effects of nausea and vomiting. Professor Charman said that the material “does not ascribe any mechanism to nausea and vomiting seen after the administration of venlafaxine hydrochloride”.

414 Third, Professor Charman was careful to stress the drug specific nature of any expectation about side effects. When asked about the available material Professor Charman said:

I'm exploring the use of the word "unexpected". From the reading of the literature as at March 1996 that you have referred to in your affidavits, was there any material which suggested affirmatively… Indicate that there would not be a reduction of the adverse indications if a sustained release formulation is developed? So the publications that I can recall, sitting here, and that I have described in my affidavits, none of them concerned an extended release formulation. I don’t believe any of them even considered an extended release formulation. They had reported observations with regard to the adverse event profile that occurred after administration of the immediate release dose form. I don’t recall any of those publications commenting as to what would occur if the formulation was changed, and indeed the description that I have provided in my affidavit, where I have reviewed the information that I had available to me, I have highlighted different aspects with regard to the adverse event profile of venlafaxine when administered as an immediate release dose form as reported in those publications.

The position was, at March 1996, was it not, that the literature disclosed that, in some extended release formulations of drugs, there was an alleviation of adverse effects and in some there may not have been? So this is not the venlafaxine literature, this is

Generally ? The literature?

In other words, when you develop a sustained release form, you understood, did you not, in March 1996, that you may or you may not achieve a reduction in adverse events by changing the plasma profile? In a broad generality, that is a reasonable comment to make. It does need to be defined, though, in the context of the drug. Each drug is like a person, it’s got its unique characteristics, and it’s the pharmacology, it is what goes on with that drug, that dictates what does or doesn’t occur. So the general version or general comment that there may be a reduction, generally speaking that’s okay, but it is, of course, totally drug specific.

415 An acknowledgment that a sustained release formulation may or may not achieve a reduction in side effects, given the balance of Professor Charman’s evidence, does not undermine his central conclusion that the reduction in side effects achieved by the method claimed was unexpected at the priority date.

416 For these reasons the evidence of the experts retained by the applicants that a desire to reduce side effects associated with the administration of the IR formulation of venlafaxine would have prompted the preparation of an ER formulation is not persuasive. The available information would not have supported the existence of that motivation for the preparation of an ER formulation (and still less for the methods of the invention as claimed).

H10 Therapeutic efficacy

417 The applicants characterised the clinical studies necessary to establish the therapeutic efficacy of the method in the patent as merely routine and “confirmatory of an expectation which was already held”. Alphapharm submitted that:

… it is important to distinguish between the need for testing for regulatory purposes and the point at which, for the purposes of patent law, a purported invention has finished the process of alleged invention and any tests which follow are merely confirmatory.

That position is a fortiori in the present case, where the only difficulties discussed in the Patent are difficulties said to be associated with formulation. Implicit in the Patent itself is that nothing stood in the way of success once the alleged difficulty in formulation was overcome.

418 Professor Charman, in contrast, gave evidence that when moving from an IR to an ER formulation of a drug he would expect a change in the therapeutic and adverse effect profile of the drug and that clinical studies would be required to determine the effect of that change. In other words, according to Professor Charman, there was no way of knowing at the priority date whether an extended release formulation of venlafaxine hydrochloride would have been as efficacious as the immediate release formulation.

419 Despite the applicants’ submissions to the contrary, the position of the experts they called was either that efficacy was not relevant to a formulator (Drs Marshall and Rowe) or that, given the IR formulation, efficacy could be assumed for the ER formulation if the ER formulation had the same AUC, a higher Cmin and a lower Cmax than the IR formulation (Dr Reece).

420 As to the roles of Drs Marshall and Rowe as formulators, Dr Marshall described his input as that of a formulator who was not concerned with therapeutic effect, that topic being outside his expertise. Dr Rowe approached his evidence on the basis that he had been instructed to develop an ER formulation of venlafaxine hydrochloride. These approaches were clear from their evidence in cross-examination.

421 Dr Reece’s approach of assumed efficacy requires more detailed consideration. In his affidavit of 8 January 2010, Dr Reece described the process by which, in March 1996, an extended release formulation of an existing immediate release formulation could have been developed:

(1) the pharmacokineticist uses available pharmacokinetic data to construct a target plasma profile for the proposed ER formulation;

(2) from this, the pharmacokineticist derives a dissolution profile which is expected to deliver the desired plasma profile determined in (1);

(3) the formulation chemist develops a formulation which meets the target dissolution profile specified in (2);

(4) the pharmacokineticist conducts clinical studies on the formulation developed in (3) to confirm that the plasma profile which results from administration is (within acceptable variation) an acceptable ER profile.

422 Dr Reece said that “once a suitable theoretical plasma profile has been determined, the next step involves the derivation of an in vitro dissolution profile which should produce the desired plasma profile in vivo”.

423 In order to develop an extended release formulation of venlafaxine hydrochloride, at the priority date, Dr Reece explained that he would use the information in the Klamerus article to generate a target in vivo plasma concentration-time profile for a proposed extended release formulation of venlafaxine hydrochloride. This showed the Cmax for the ER formulation as being less than the Cmax for the IR formulation, and the Cmin as being greater than the Cmin of the IR formulation. From this, Dr Reece could calculate a target in vitro dissolution profile for the proposed extended release formulation. Dr Reece said he would provide this target dissolution profile to the formulator, who would then aim to develop an extended release formulation with a dissolution profile matching the target profile. He did not consider this to be “an unusual or difficult request for a formulator”.

424 During cross-examination, Dr Reece was questioned about this process:

And the outcomes generated by the model, which you undertook, formed the basis of the plasma profile which you prepared? Yes.

And a plasma profile for a drug for extended release formulation is not a mere drawing of a line or plucking it out of the air as far as you were concerned, is it? No.

Your position is it ought to be, if possible, the product of a properly and carefully designed model? Yes.

And one of those outcomes of that properly and carefully designed model is a Tmax figure? Yes.

And whether that plasma profile ultimately produced, as you have indicated, would provide benefit, if reflected in an extended release compound, was ultimately something which had to be tested in trials, clinical trials, assuming you’d formulated the compound; correct? I was aware, in undertaking the task, in some jurisdictions it is possible that a plasma concentration time profile alone could be used for approval; in other words, if you fell within the criteria of equivalency with AUC, Cmax, that it was possible to, in some cases, have approval of such a product without a clinical trial, and that was a subject of negotiation between the regulator and the company.

In that regard, are you referring to the Lesko paper [Lesko LJ, “Immediate Release-to-Extended Release: Pharmacodynamics Considerations” Formulation Optimization and Clinical Pharmacology (Capsugel Library, Tokyo, Japan, 1999) pp53-61] which you referred to ? That is a good summary of some of the issues. It is not all that I base my knowledge on but, obviously, my knowledge derives from other sources prior to that.

Is this the relevant part of Lesko which you had in mind:

When it comes to regulatory approval of these products, a PK study alone can be used as evidence of effectiveness, and there are conditions under which that can be done. First, when the systemic exposure profiles are not very different as compared to the immediate release product. Second, where there is an understanding of the PK/PD relationship that might have come from the immediate release product, or as part of the development plan for the extended release product. And, when the differences in input rate and not clinically significant in terms of the concentration/effect relationship.

Does that accord with your ? Yes. There is other passages… I was referring to another paragraph in that article on page 54, the third complete paragraph down, beginning:

The submission requirements for a NDA ... And when we talk about the submission for an extended release version of a previously approved IR product, some of the information sets don’t have to be repeated. For example, one doesn’t have to repeat preclinical pharmacology and toxicology; that profile has been established already ... Likewise, the clinical efficacy and safety has been well established, so that doesn’t have to be repeated for an ER product in many situations.

…

Were you made aware by anybody for the purposes of preparation of the case whether or not Wyeth was required to undertake further clinical trials for the purposes of approval of the extended release formulation? Nobody told me that, no.

May we take it, at least from your understanding of the regulatory position, you would have regarded that as one of the possible outcomes? It certainly was a possible outcome, yes.

And a possibility more likely to arise in circumstances where there wasn’t sufficient PK/PD information, for example? I would not be 100 per cent sure in the time frame we’re talking about, what the FDA’s position was in relation to this matter, as it changes. So depending on when that submission was to be undertaken, it could vary. And it is evolving, as I understand it, too.

…

You wouldn’t expect an extended release formulation to be approved anywhere in the world unless the regulator could be satisfied on a reasonable basis as to the therapeutic benefits or therapeutic effect of an extended release formulation, just put broadly. You’d accept that, wouldn’t you? I accept that. The only addition I’d make, safety and efficacy.

Safety and efficacy? Yes, yes.

And obviously one way of doing that would be based on clinical trials of the extended release formulation, as you would understand it? The first step would be to meet with the regulator to discuss their requirements before committing to a clinical trial program.

Perhaps I will just ask you this question again rather than overcomplicating it. Would you agree with this: a requirement to undertake further clinical trials, if imposed before approval of an extended release formulation of an existing immediate release formulation, would be consistent, in your view, with a lack of satisfaction on the part of the regulatory body that you could safely assume that the extended release formulation would enjoy the therapeutic benefits, safety and efficacy that might be predicted from the immediate release formulation? I can agree with that comment, yes.

…

Upon achievement of a workable formulation, that would require testing to see whether it was consistent with the dissolution profile? Yes.

And such tests might conceivably result in an alteration of this dissolution

profile? Yes.

And such tests could involve testing on a number of alternative formulations? Yes.

And then thereafter in vivo testing would be required to determine blood plasma levels? Yes.

And yet further testing would be required to determine therapeutic effect and side effects and efficacy? Well, I’d just go back to our earlier conversation on that where I qualified it in terms of the regulator’s requirements at the time.

You accept that drugs administered intravenously are not relevant to the oral administration sphere of debate we have been having? No, I don’t agree, for the reason that information can be obtained from intravenous administration about the absolute bio availability of the drug.

Would you agree an assertion of a desired plasma profile, without undertaking the work which you have undertaken and identified, you would have undertaken, would be nothing more than a mere assertion? Assertion of a plasma please just

An assertion of a desired plasma profile in relation to an extended release formulation of a particular drug would be nothing more than a mere assertion without undertaking the work which you have undertaken should be done to prepare such a plasma profile? Yes, yes.

In other words, such an assertion without that work would not reflect a reasonable basis for assuming any therapeutic effect or benefit from such profile, do you agree? Yes, could be too high, too little. Yes.

425 Professor Charman analysed the material available at the priority date and concluded that:

… any material change in the plasma profile of venlafaxine and its metabolites as a function of changed absorption or metabolism profiles would be expected to influence, in a non-predictable manner, the complex polypharmacology and concentration-effect relationships of venlafaxine and ODV that lead to the biological response observed after administration of venlafaxine.

426 For this reason, as the PK/PD relationship of venlafaxine was not available at the priority date (or currently), Professor Charman considered that plasma profile could not be used as a surrogate for efficacy or adverse effects. According to Professor Charman, and contrary to Dr Reece’s conclusions:

· It was not evident from the available material that side effects of administration of venlafaxine resulted from high concentrations of drug in the blood.

· The development of a single daily dosing formulation of venlafaxine hydrochloride, that is, one that has an acceptable efficacy and side effect profile, was anything but routine.

· It is not possible simply to extrapolate from the linear pharmacokinetics of a drug when administered in an IR formulation what the pharmacokinetic profile of the drug will be when it is released at a slower rate in the different metabolic environments of the proximal small intestine, the distal small intestine and the large intestine.

· The clinical utility of the target plasma profile developed by a pharmacokineticist can only ever be assessed in clinical trials by the administration and evaluation of the properties of the prototype ER formulation when administered to human patients.

· While one would seek to achieve a “stretched and flattened plasma profile” in an ER formulation in 1996 and today this would result in a family of different plasma profiles and one would not know if any of the different plasma profiles could be achieved, or whether they would be clinically effective.

· Without a known PK/PD relationship one cannot predict that a formulation having a given in vitro dissolution profile will produce a corresponding and predictable plasma profile in vivo. Further, even if correlations exist, they can only be demonstrated retrospectively once an ER formulation (or typically formulations releasing drugs at different rates) have been developed and tested in clinical studies.

427 In respect of Dr Reece’s plasma profile, Professor Charman concluded that:

…in the absence of data supporting the assumptions of Dr Reece, in 1996 (and still today) one would not know whether the predicted plasma profile for the hypothetical formulation modelled by Dr Reece could ever be achieved. Furthermore, even if it could be achieved, one could not know whether the plasma profile will be therapeutically effective and provide for a decrease in the incidence of side effects.

428 The internal Wyeth documents on which the applicants relied do not undermine the force of Professor Charman’s observations. The reference in the Smith memorandum of 29 April 1991 does not mention therapeutic efficacy – only bioequivalence with respect to AUC. The development pharmaceutics report identifies an assumption that the desired endpoint is bioavailability based on plasma profiles rather than clinical efficacy based on pharmacodynamics. The strength of thisassumption, however, is unclear. For example, by 9 September 1993 Wyeth internal documents refer to a need for placebo controlled trials in order to establish efficacy. Further, while Wyeth documents note that a request about regulatory requirements would be made (on which the applicants relied to establish that an ER form might be approved on the basis of bioequivalence to an IR form), they also record that Wyeth could not “be confident of success” about any such request. By June 1994 it was clear that regulatory requirements included clinical safety data and a concern that the ER and/or IR formulations may fail to demonstrate efficacy in clinical studies. By September 1994 Wyeth had in fact developed an in vitro/in vivo correlation based on the 127-US and 128-Us bioavailability studies (information that was not publicly available and not part of the common general knowledge at the priority date). If anything, the Wyeth development story thus in fact provides support for Professor Charman’s evidence.

429 In the light of this evidence the applicants’ reference to a document from May 1998 issued by the US Department of Health and Human Services (Guidance for Industry – Providing Clinical Evidence of Effectiveness for Human Drug and Biological Products (US Department of Health and Human Services, US, 1998)) to support an approach based on mere bioequivalence carries little weight. Even taken at its highest these guidelines (issued after the priority date) only contemplate a possibility of approval of an ER dosage form based on bioequivalence subject, moreover, to the observation that:

In some cases, modified release dosage forms may be approved on the basis of pharmacokinetic data linking the new dosage form to a previously studied immediate-release dosage form. Because the pharmacokinetic patterns of modified-release and immediate-release dosage forms are not identical, it is generally important to have some understanding of the relationship of blood concentration to response, including an understanding of the time course of that relationship, to extrapolate the immediate release data to the modified-release dosage form.

430 For these reasons the evidence of Dr Reece that at the priority date therapeutic efficacy could be assumed when moving from an IR formulation to ER formulation of venlafaxine hydrochloride is not persuasive. Further, contrary to the applicants’ submissions, establishing therapeutic efficacy of the extended release formulation of venlafaxine hydrochloride through clinical trials was not “merely confirmatory”.

H11 Approaches of experts called by applicants

431 Dr Marshall’s approach involved identifying a target dissolution profile based on a comparator (propranolol hydrochloride), producing a number of prototypes (typically about 20) with different release rates (fast, medium and slow), testing the prototypes in in vitro dissolution studies, re-formulation as necessary having regard to the results of the dissolution studies, subjecting prototypes that met the target dissolution profile to further testing for stability, as well as further animal and human studies including bioavailability and pharmacokinetic studies.

432 Dr Marshall acknowledged that not all of these steps could be described as routine. When questioned about his approach he said:

And the reason you would develop a multitude of prototypes is in the recognition that you can’t identify any particular one as necessarily going to succeed; is that right? Well, it would be an extremely fortunate person that got it right the first time.

In other words, analysing any individual prototype what you’re saying is, out of all the prototypes, you couldn’t say that is going to be the winner or compared to what other one is going to be a winner unless you are, as you say, dead lucky? Well, some of the prototypes would be made for a different reason. You would for example, if you’re looking an extended release formulation, you’d be looking for ones which release relatively rapidly and others which release relatively slowly so you could start to work in. So you’d start with the boundaries and work your way in.

But you’d agree that ? Some of those prototypes you just wouldn’t take any further. You’d do the initial evaluation and then they would give you the information you’re looking for.

But of the multitude of prototypes you might develop, you would agree, at the time

you developed them, you couldn’t pick anyone as the winner, unless you’re completely lucky? Well, you’d have a reasonable expectation. It would be lying somewhere in the middle of the boundaries you’d set out.

You’d also have a reasonable expectation that, out of the multitude of prototypes, there would be a large number which won’t succeed? Well, the number is yet to be determined.

And they may not all succeed but you can start again with another set of prototypes; correct? Well, you learn from the first set of prototypes and you learn why they weren’t successful and what was the reason for the lack of success. What the if it didn’t meet a particular dissolution profile, or it was unstable, or, you know, whatever the reason was, that would help you move forward and design the next round of prototypes. It could be you simply chose the wrong coat, for example.

So you may have a number of rounds of prototypes, you may not; correct? Yes.

To make each prototype which of the type you’re referring to, does that take 30 seconds? Does it take a day? Does it take a week? Typically, you’d start with a particular core or a spheroid and you’d apply the same coat at a number of different layers. So from the one experiment you’d get a number of prototypes. And that experiment might take a day, for example. Then to evaluate it might take a week, something like that, being dissolutions. And then, from that information, you might decide, well, I don’t want that coat, I want a different coat, and you’d repeat the process. But in applying different levels of coating, you’d get different release profiles, so you would know approximately how much coating material you needed to apply to get the kind of release profile that you were looking for.

So you might go down a number of routes, have a series of dead ends, come back, start again with another prototypes, go down those routes, you might get more dead ends or you might not or you might get to a winner eventually? Well, there are a only a finite number of coating materials that you can apply that would be suitable. So it is not an exhaustive list of prototypes that you could investigate.

The process you have in mind, as you say, is you may have more than one round of prototypes, do you agree? Yes.

And you may have innumerable dead ends in those sort of processes? I wouldn’t use the word innumerable.

You may have dead ends in any individual one? You may have dead ends. That is the same as any research project.

You’d learn from that and you’d well, you hopefully have learnt from that and then try something else? Yes, the whole objective of the exercise is to learn from what you have done.

433 This is consistent with Dr Marshall’s review of the development disclosed by the Wyeth internal documents:

Just looking at the last sentence of your paragraph 9, you say:

In my opinion, the formulations prepared and tested by Sherman were unlikely to achieve the dissolution profile described in the patent.

? Mm.

Using your scientific experience, you don’t suggest that they don’t appear to record experiments, or the various versions which failed, experiments which appear to have, on the face of it, been tried seriously? Well, they certainly tried a number of formulations and they reported that they failed.

Yes. You don’t suggest that employees of Wyeth weren’t trying to do their job in doing these experiments, do you? No, I’m not.

You’re not accusing them of being unskilled or something, are you? No, I’m not.

You’re not accusing them of making choices which a reasonable person wouldn’t make, are you? No, what I am what I suggested was that perhaps the choice of the ingredients and the ratio of the ingredients might have been investigated a little further.

You’re not suggesting that they made choices which you’re not accusing them of making choices which are unreasonable, are you? I think they probably could have done some additional experiments.

Are you accusing them of making choices which were unreasonable? No, I’m not.

The notebooks cover a period of time over a number of years? Yes.

They cover a large number of experiments, both relating to various versions of hydrogel formulations and various versions of coating of spheres? I didn’t count the number of experiments and there is a lot of pages that refer to the same experiment.

Which is a common thing? Which is a common thing, yes.

You didn’t count the experiments or count the time they took? I think I made note of the time but because they’re carried out between, as I said in paragraph 7, in Sherman in particular, between June ‘91 and July ‘95.

To the extent you administer the monograph of simple experiments in paragraph 9, you’re not suggesting that the experiments didn’t involve skill? No, I’m suggesting that in terms of the experimental design, they were a simple experiment.

But they could have involved, what, implementation, repeatability, analysis as a more complex process; is that what you’re suggesting? No, I’m suggesting that, you know, these were relatively routine experiments in terms of trying a number of different combinations of excipients.

And the same sort of process which you were talking about earlier that if a particular route doesn’t succeed, you try and learn from it, vary it and go again? Yes.

434 It is also consistent with evidence Professor Charman gave about the role of clinical trials as follows:

But in undertaking those trials, you would have been taking routine steps known to you and others who undertake clinical trials that were known in March 1996? By “routine steps”, you’re meaning?

The process of conducting a clinical trial involves a series of steps, that each step is itself a routine step to set up the trial properly, identify a proper population, have the proper protocols in place to ensure that the trial accurately identifies the data that you want it to identify. The conduct of the trial might be a skillful exercise, but the process of undertaking it was a series of routine steps, routine to those who undertake trials? I guess to the extent that a development program so there’s lots of things that are all wrapped up into a long term, expensive, multifaceted development program. The outcome at the end, you never know what that is going to be until you have got there. But if you break it down into little baby steps all the way through, everything, to that extent, is routine.

435 Although Wyeth challenged Dr Marshall’s selection of propranolol hydrochloride as a comparator on numerous grounds it is necessary to focus on two issues only – solubility and the competing evidence, including that of Dr Reece.

436 As Professor Charman explained, propranolol has one tenth the water solubility of venlafaxine. Accordingly, even if the relevant focus is simply that of formulation (disregarding clinical efficacy) Professor Charman concluded that “such a difference in solubility may require different formulation strategies to similarly modulate drug release”. If efficacy is relevant (which was an issue outside Dr Marshall’s field of expertise) then Professor Charman concluded that:

… a comparison to propranolol does not assist in addressing the specific issues of absorption, metabolism and PK/PD in relation to venlafaxine hydrochloride. Specifically, achieving the same in vitro dissolution profile is of no use whatsoever in identifying the plasma profile of venlafaxine hydrochloride that would afford clinical efficacy.

437 Dr Marshall did not record the difference in solubility in his evidence. When asked about it he said that it would not have made a difference as both were highly soluble. Professor Charman, however, described venlafaxine as extremely soluble. He continued:

The US Pharmacopoeia is a very highly regarded work, is it not? The United States Pharmacopoeia is a set of pharmacopeial standards. Yes, it is highly regarded.

That doesn’t have, by calculation, venlafaxine as extremely soluble, does it? My comment in terms of venlafaxine being extremely soluble is based on my experience. I can’t recall working with a drug that’s been so soluble. In fact, one of the interesting things with regard to the USP is that it is largely a monograph based on historical compounds. Compounds only make it into the USP after they have been available clinically and commercially for quite a long period of time. So I, sitting here, can’t think of a single drug that I know of that would be listed in the very soluble category. In fact, the only one I can think of that is freely soluble, based on this definition, is venlafaxine. So I personally have never worked with a compound that soluble.

A lot of your work has, however, been, has it not, with drugs that have low solubility? Some of my work is with that, but I have worked with many, many different compounds and 572 milligram per mil, being the solubility of venlafaxine hydrochloride, I must say when I first read these documents and saw that number, I looked twice to confirm it because, in my experience, it is that high.

438 The fact that a few other compounds were subsequently identified as having somewhat higher solubility does not change the basic premise of Professor Charman’s evidence – venlafaxine is highly soluble, ten times more soluble than propranolol. This evidence cast a real doubt on its use as a comparator for the purpose of formulation. As Professor Charman also pointed out, ER formulations may not involve single daily doses. Thus, regard must be had to the particular ER formulation before another compound might be regarded as a meaningful comparator.

439 Dr Reece’s evidence is also relevant to the use of propranolol as a comparator. Dr Reece gave this evidence:

But you certainly were aware of, is this right, studies or statements to this, sort of, effect as at March 1996? I was aware of the challenges associated with developing propranolol as an extended release formulation and I think the statements can I recall specific yes, I believe that is a fair summary, yes.

Would you agree that in reporting to the court, as you have done in this case, that a reasonable basis for assuming a similarity in absorption between an extended release form of venlafaxine hydrochloride, compared to an immediate release formulation, that a reasonable comparator was propranolol hydrochloride, you ought also have brought to the court’s attention what you have just indicated were reports of which you were generally aware at the time of the type you have just described? Yes.

And you didn’t do that, did you? Not in my first affidavit, no.

In your second affidavit you didn’t either, did you? No.

On reflection, do you agree that it would have been a better thing to do? I think I’d agree, I would have liked to have elaborated further on the beta blockers at large because I notice in here that oxprenolol is also mentioned.

The reason why you agree now that you ought to have done it is if you had done it it would make clear that it is far from a simplistic proposition to suggest that propranolol hydrochloride is a good comparator when moving from immediate release to extended release formulation having regard to the, sort of, debate in the scientific community which attended a consideration of the extended release formulation of propranolol hydrochloride, would you agree? I just would like to add one thing before answering your question that I was referring to the beta blockers as a group, and I wouldn’t single out propranolol, so I was using the structural group, all of which are fairly closely structure related, in arriving at my view that venlafaxine had structural features similar to the beta blockers. Based on propranolol, to answer your question, based on propranolol alone, that is a challenge,

but taken in context with the other beta blockers I feel more confident.

Again taking propranolol on its own, you agree that it would have been more appropriate to identify the matters which you agree you were generally aware of in relation to extended release formulation of propranolol? Yes, yes.

Would you agree? Yes, yes.

Are you indicating, namely, that your confidence in the assumption is perhaps more influenced by your general familiarity in relation to the beta blockers rather than propranolol hydrochloride in particular? Yes, and also their lipophilicity as a yes.

Would it be safer for the court to proceed now on the basis that in considering what was a reasonable assumption to make at the time, that it would be better to really put aside for consideration propranolol hydrochloride and focus on the other beta blockers? I think there is a lesson for us in keeping propranolol on board in that as a structural it is a member of the structural group with a lipophilicity not dissimilar from the other beta blockers but with its first pass extensive first pass metabolism which is higher than the other two beta blockers, so I believe it is in our interest to keep propranolol in the back of our minds as we proceed forward.

But it is far from the ideal comparator for the reasons you have ? Because of the high first pass metabolism.

And also the absorption issues .....? Which the but there is particular formulation, the release characteristics, not the absorption issues. My conclusion is very clear that this is a release problem with the formulation.

Would you agree that one of the reasons to keep propranolol hydrochloride in our purview, when considering this issue, is because it is an example of the complications and the complexity which arises in any sort of comparison exercise? The way I viewed it was when I suggested it be carried forward, was a little different. I believe because of its structural similarities to venlafaxine, its first pass metabolism, its lipophilicity, the enantiomers, the a number of features about it are salient to the question, despite the complexities that it introduces in terms of its rather unusual extensive first pass metabolism. I have to say that hydralazine is another example of not a dissimilar issue, which I could raise now, but I think I flagged in I didn’t flag in detail in my affidavit.

It is another one of your suggested comparators at some point, wasn’t it? Yes.

And that is attended by similar sorts of issues and complications? Yes, it is more complicated still.

You didn’t mention those complications when you mentioned it as a comparator, did you? No.

440 Dr Rowe considered that he would formulate prototypes with the aim of achieving a release rate of between 6 and 18 hours. He would test the prototypes in in vitro dissolution studies. In the ideal world three or four prototypes would be selected for in vivo studies. This approach to formulation would involve trial and error as the following exchange discloses:

The reference to the initial release rate from the matrix system, that is something which would only be observable after formulation of the matrix system and testing; is that correct? Yes.

Am I correct in thinking then that what you’re referring to in that first sentence commencing “multi particular systems”, on a trial and error approach, you try various versions of a matrix system and if you discovered that there was an initial release rate which was too high you’d try another formulation? That would be correct, yes.

In other words, it would be an approach of trying different things, and if they didn’t work out, trying something else? That is normally routine development that I’m involved in, yes.

441 Dr Rowe was also asked about absorption as a precondition to formulation in this evidence:

At the top of the page. Then you say:

If I were satisfied that the drug was a suitable candidate for controlled release, I would begin the formulation exercise.

? Yes.

I take it that reflected your position and reflects your position now? If I was satisfied that the drug was a suitable candidate, I would begin the formula exercise, that’s correct.

The next sentence is:

That is that the drug was well absorbed throughout the entire length of the GIT

? Yes.

…

What were you intending to convey by those words if not that, sir? What I’m trying to convey to the court is is that for any sustained release product there has to be good absorption throughout the lengths of the gastrointestinal tract. Obviously, if the drug is absorbed in one particular section, it will not be suitable. That is standard text book stuff. If it is actively absorbed, or it is only absorbed in the small intestine, it may not or, probably will not be suitable.

And perhaps if you focus on the wording of my question, do you agree that you’re intending to convey to the court that one of the things you had to be satisfied about before beginning formulation exercise was that the drug was well absorbed throughout the entire length of the GIT? I would be quite satisfied myself that that would be the likely event, yes.

…

If the words indicate that, that is something you just can’t explain; is that right? Let me explain.

Do you agree that the words indicate what I just put to you? The words indicate that, yes.

…

442 This exchange culminated in the following evidence:

I suggest to you that notwithstanding what you’d said in 6 394 [“that the drug was well absorbed throughout the entire length of the GIT”], your evidence by the time of the third affidavit was that you would have proceeded anyway in the absence of evidence of absorption throughout the entire length of the GIT. Do you agree with that? Yes, I would have definitely proceeded to develop a sustained release formulation in the absence of definite evidence to state that it would have been absorbed in the lower parts of the GI tract. It would have been my expectation.

What is the experiment? The experiment is a bio availability study.

What experiment would you have done? A bio availability study on the formulation. Yes, a bio availability study.

Do you agree with me that what you’re saying at 6 394 was you wouldn’t proceed to begin the formulation exercise unless you were satisfied about certain matters, do you agree with that? Yes.

Do you see any inconsistency with the evidence you’ve just given orally on that

subject and what you’ve set out at 3 694? I see that I think where the inference that you’re making is that I would have had to have been completely satisfied that the drug would have been absorbed through the colon or the lower parts of the GI tract before I would even start to prepare or do any formulation work, whereas what I’m trying to tell the court is that for a successful sustained release formulation it certainly must be absorbed throughout the length of the GI tract. What I’m saying was I certainly wouldn’t have gone about taking parts of the lower GI tract and seeing if the drug was absorbed in some test tube experiment, I would have simply done the bio availability study.

443 In weighing Dr Rowe’s evidence about the steps he would have taken it should be kept in mind that his written evidence does not refer to the need for a bioavailability study to identify the adequacy of absorption in a sustained release form. Dr Rowe’s evidence was that the entire formulation exercise could be completed within a week.

444 Wyeth submitted that reliance could not be placed on Dr Reece’s pharmacokinetic modelling for three reasons:

First because, by his own admission, Dr Reece was unsuccessful in modelling the dosing regimen of the Klamerus study; second because the model relies on a set of assumptions which Dr Reece had no scientific basis for expressing confidence would be realised; and third, because, at its highest, the model represents only a starting point in the development of a single daily dosing formulation of venlafaxine hydrochloride and not the invention.

445 Much of the debate between the parties concerned Dr Reece’s use of a 150 mg daily dose rather than a 225 mg daily dose as used in the Klamerus article. Wyeth said that the dose alteration proved that Dr Reece had not been successful in modelling the dosing regimen in Klamerus. Alphapharm described this as a fallacy confusing the validation of the model with its application. Leaving aside this aspect of the debate, three things are apparent from the evidence.

446 First, the change in the dosing regimen involved Dr Reece in undertaking a type of modelling exercise which, despite his depth of experience, he had never undertaken before. Dr Reece gave this evidence:

So you’ll accept that the exercise you have engaged in here, to the extent it involves testing by reference to two times a day dosage against a model informed by three times a day dosage is not something you have ever done before? I have modelled many scenarios and that one I can’t recall, but I have no qualms insofar as

..... qualms. I am just ......? the reliability.

Do you agree you have never done this before in the sense I have described? No, not in the sense you have described, no.

No. So what you have told the court is that, faced with this particular issue which was suggested to you, you would have, in March 1996, done something which you

have never done before; that is about right, isn’t it? Insofar as the particular example you have referred to with having data for three times a day, assuming twice daily and comparing that with once daily, that is correct.

447 Second, and as identified above, the points made by Professor McLachlan and Professor Charman about the Klamerus article cast significant doubt on the capacity to use the information it contains to support the modelling exercise Dr Reece undertook.

448 Third, Wyeth’s submission that “the model represents only a starting point in the development of a single daily dosing formulation of venlafaxine hydrochloride and not the invention” is persuasive given the lack of available information at the priority date supporting Dr Reece’s three critical assumptions:

(a) the fact that a once a day dosing of a 150 mg dose of venlafaxine hydrochloride is a clinically relevant dose;

(b) the fact that the assumption as to linearity will hold good for the extended release formulation;

(c) the fact that absorption will occur over substantially the entire length of the GI tract including in the lower intestine.

449 The latter assumptions about linearity and absorption have been dealt with above. As to the once a day dose of 150 mg, little information was available to support its clinical relevance other than the fact that the Klamerus and Troy studies were conducted by employees of Wyeth. This fact, however, does not have the significance which the applicants attempted to place upon it. An inference cannot be drawn that 150 mg has clinical relevance merely because Wyeth employees published material about it.

450 It is also relevant, as Wyeth submitted, that the evidence of the experts the applicants called assumes that the invention is limited to the formulation. As Wyeth put it:

… when one sifts through what the applicants’ experts say they “would have”, “might have” or “could have” done, one does not see any statement to the effect that they would proceed directly to a method characterised by the provision of a therapeutic blood plasma profile in accordance with the claims.

451 The invention as claimed is a method of providing a therapeutic plasma profile of venlafaxine hydrochloride in accordance with certain characteristics (specifically, a Tmax about 4 to 8 hours after administration) by a single daily dose. It is the invention as claimed which must be obvious. Yet, as Wyeth submitted, it is apparent that Dr Reece, Dr Rowe and Dr Marshall did not consider this Tmax criteria relevant, let alone obvious. Wyeth’s submissions highlight this point:

431. In this regard, Dr Reece said:

Just looking at paragraph 139 on 3-254, when you refer to, in the second sentence, that:

The peak plasma concentration occurs at a particular time ... would be largely irrelevant.

Do you see that?---Yes.

Your position is, even now as you sit there in the witness box, if it be the case that attaining a particular peak plasma is relevant to therapeutic benefits and side effects that is not something you would have expected; correct?---You went a little quickly for me in the middle there. Sorry, I’ll have to ask you to repeat it again.

You say the fact that the peak plasma concentration occurs at a particular time, you would not have regarded that as particularly relevant?---No, that’s right, in the context of an antidepressant, yes.

432. It is clear that Dr Reece would not have considered a particular Tmax parameter as having any significance at all. It follows from this that he had no expectation as to the provision of a plasma profile so characterised, and could not have considered the subject matter of the claims of the Patent as being obvious.

433. In his affidavit evidence, Dr Rowe provided the following comment following a request for further information from the solicitors for Sigma:

I would normally expect a controlled release formulation to reach peak plasma levels in about 4 hours and maintain a steady state for the remainder of the duration of the effect until the dosage was exhausted from the device. The important thing is to avoid peak plasma levels associated with dose dumping and side effects. It does not matter too much when the Cmax (peak level) is achieved with this preparation so long a dose absorbed is at least as good as the equivalent immediate release product. As I said, the therapeutic effect may not be related to plasma level and after several doses a steady state is achieved. What is required is a gradual release with no spiking in the plasma concentration.

434. Similarly, Dr Marshall said the following in his report:

The typical ER plasma profile is depicted in Figure 1 below. Typically an immediate release is provided to achieve the desired therapeutic effect followed by gradual and continual release of drug. The ideal blood plasma level sought would be a profile that achieved a Cmax that remained at a fairly constant level and which was within the therapeutic window, that is the difference between the dose required for therapeutic effect and that which causes undesirable side effects. … The onset time of the Cmax (that is the tmax) can be delayed as a function of the ER formulation, as illustrated in Figure 1... If a rapid drug release or burst is not required to prime the patient, then it is less critical when the Cmax is achieved provided the amount of the dose absorbed is equivalent to the IR product to achieve therapeutic effect.

435. In other words, before Dr Marshall became familiar with the particular issues in the case, he was not troubled with a particular Tmax for a desired profile.

452 These submissions, which should be accepted, undermine the applicants’ case that the invention as claimed was obvious at the priority date.

H12 Wyeth’s development work

453 The applicants’ reliance on Wyeth’s development work to support its case of obviousness of the invention when compared to the prior art confronts difficulties of both principle and fact.

454 As to principle, it is clear from the terms of s 7(2) and (3) of the Act that the question whether the invention would have been obvious to a person skilled in the art in light of the common general knowledge involves an objective test. In Wellcome Foundation at 286-287 Aickin J said:

It is still correct to say that a valid patent may be obtained for something stumbled upon by accident, remembered from a dream or imported from abroad, if it otherwise satisfies the requirements of the legislation. What is important is that the patent itself should involve an inventive step, whether or not it was consciously taken by the patentee and whether or not it appeared obvious to the patentee himself. The test is whether the hypothetical addressee faced with the same problem would have taken as a matter of routine whatever steps might have led from the prior art to the invention, whether they be the steps of the inventor or not.

…

I find it difficult to see how resort by those attacking a patent to the research and experiments of the inventor can often be helpful on the issue of obviousness. If those equipped with the common general knowledge of the relevant art are unable to see from the specification and the claims how the invention was arrived at, that would tend to show that it was not obvious.

Such a mode of attack on a patent might well prove to be an expanded form of the illegitimate use of hindsight. Courts have had continually to remind themselves and those who seek to establish invalidity of patents of the limits on the usefulness of hindsight and ex post facto analysis. It is not necessary to repeat here the many authorities which have referred to this matter.

…

If evidence of the failure of other attempts to solve a well-known problem, ie to satisfy a “long-felt want”, is admissible in support of the inventive nature of a successful solution to such a problem, as it undoubtedly is, it is difficult to see why the patentee’s own lack of success in earlier attempts would not also be admissible for the same purpose. It may well be that the use of such evidence by the patentee would involve some risk because it would no doubt be used to support an argument that the last and successful step was by then obvious, though such an argument would require careful examination to see whether or not it was an illegitimate use of hindsight.

However not all inventions are to be classified as fulfilling a long-felt want. Those which reveal an “unfelt want” are as likely, or sometimes more likely, to involve an inventive step. In such a case experiments and research in perfecting the novel product or process would not be in the same category for it would throw no light on the quality of what was claimed by the patentee to be the inventive step. Such classification of inventions does not comprise a true dichotomy and some patents may have in part each of those qualities.

In the result therefore I have concluded that evidence of research and experiments (if any) of a patentee leading up to his claimed invention is generally admissible though not always likely to be helpful.

455 As to the facts, the Wyeth development history does not support a finding of obviousness.

456 Insofar as the 29 April 1991 memorandum from Mr Smith is said to provide a “reality check”, the reality is that the memorandum involved nothing more than the preparation of a target dissolution profile assuming a formulation (hydrogel tablet technology) which ultimately proved fruitless. From the evidence it could not be inferred that Mr Smith’s target dissolution profile informed the development of the method of the invention as claimed.

457 Similarly the suggestion that Mr Sheskey’s information about the use of HPMC K3 informed the development of the method of the invention as claimed is untenable. The use of HPMC K3 assisted in the extruding process but says nothing about the method of the invention. The suggestion that the invention was completed when batch 3246-123 was completed in March 1992 also cannot be sustained. More than four more years of work remained.

458 The Wyeth development history also does not support the use made of propranolol by Drs Marshall and Reece. It is apparent that Ms Sherman used propranolol hydrochloride only for the purpose of instructing herself about the manufacture of spheroids. Other than that no use appears to have made by Ms Sherman of propranolol hydrochloride for any purpose.

459 Further, the applicants’ submission that the invention (being the formulation) was completed by 1992, with all subsequent work being merely routine confirmation cannot be sustained on a reasonable view of the evidence of Wyeth’s development work and is not supported by Professor Charman’s evidence. To the contrary, the evidence of the development work supports the thrust of Professor Charman’s evidence that achieving and establishing clinical efficacy is not a matter of mere routine – unless, that is, the process is dissected into “little baby steps all the way through”. Professor Charman, it may be inferred, did not accept this process of dissection into “little baby steps all the way through” as realistic or appropriate. Nor was it. When analysed this approach of the applicants is an example of impermissible hindsight – that is, assuming that the end (achieving a method which is clinically efficacious and has unexpected benefits) has already been achieved so that all work along the way is seen as necessarily leading to the known result. In fact, the result was unknown. The steps were part of “a long term, expensive, multifaceted development program”, to use Professor Charman’s words. And as Professor Charman said “[t]he outcome at the end, you never know what that is going to be until you have got there”. Assessed without impermissible hindsight (that is, the creation of the invention), the Wyeth development work accords generally with the view that the development of the method of the invention involved substantial work over many years with numerous dead ends and examples of trial and error.

H13 Professor McLachlan’s draft affidavit

460 Professor McLachlan gave this evidence during cross-examination:

The task that you were engaged to perform wasn’t one which was the same as Dr Reece, in that you weren’t asked to set out a hypothetical approach that you would have taken as at March 1996, were you? I was asked to do that some time ago, throughout the discussions I have had with the lawyers for Wyeth, so I did consider that task.

And did you prepare a document which sets out the ? At the time I do understand we had a draft version of an affidavit which included those steps.

…

Can I just confirm is the hypothetical task you’re referring to there that of developing a modified release dose form from knowing that an immediate release does form was available?

Yes. And you took to completion that particular document and signed it, is that your evidence? We may be at cross purposes. I understand from a moment ago you said that you gave some assistance by way of preparing a document which reflected you engaging in a task similar to that of Dr Reece. Is that right? Yes. So in my discussions with the lawyers that engaged me as part of this process as a witness of the court, I was asked to essentially address a number of questions, including that of the hypothetical scenario that, as part of that overall process, as I saw it, I was asked to address a very similar question to Dr Reece.

Your affidavit, as you have sworn and as appears in front of you, doesn’t articulate that you were asked that question, does it? I was asked a number of questions and I did not include all those questions. But to answer your question, it does not include my direct response to that question.

…

But you provided what you regarded as an answer to the question in a form that was sent to the solicitors who were instructing you, did you? Yes, I did.

Do you recall when you sent that? I cannot specifically recall when that was.

Was it in 2010 or 2009? It would have been in 2009.

Was it towards the end of 2009 or early? I cannot recall, I’m sorry.

461 Alphapharm called for the draft affidavit said to contain Professor McLachlan’s answer to the question how he would have approached the task of preparing an extended release formulation of venlafaxine hydrochloride as at 25 March 1996. Wyeth claimed privilege over the document. Alphapharm did not challenge this claim. Nevertheless Alphapharm submitted that an inference adverse to Wyeth should be drawn from its failure to produce the document.

462 No such inference can be drawn, however. Contrary to Alphapharm’s submissions it is apparent that drawing such an inference would undermine the purpose of the privilege. Further, there is no basis to infer that Professor McLachlan’s answer to the question would have been adverse to Wyeth’s case or in any way assisted Alphapharm’s case. There may be many reasons why Wyeth elected not to tender that evidence and the inference Alphapharm sought to be drawn is simply impermissible speculation. This is an important distinction from the circumstances in Commercial Union Assurance Company of Australia v Ferrcom Pty Ltd (1991) 22 NSWLR 389. So too is the fact that Professor McLachlan was an expert witness whose independence was not subject to challenge. Moreover, Professor McLachlan was available for cross-examination. Alphapharm put many propositions to Professor McLachlan but refrained from asking anything about the hypothetical steps that Professor McLachlan would have taken in 1996 to develop an extended release formulation of venlafaxine hydrochloride. Questions about this topic would have been open, the privilege claim being limited to the draft answer as recorded in a document.

463 For these reasons no inference can be drawn adverse to Wyeth or in favour of the applicants as Alphapharm proposed.

H14 Persuasiveness of experts

Professor Charman

464 Sigma submitted that Professor Charman’s evidence should not be accepted for a number of reasons.

465 Sigma described Professor Charman as not being “a day to day formulator” (which is correct). Sigma also sought, however, to characterise Professor Charman’s approach as “academic” involving a “very detailed and complicated analysis of all the theoretically possible outcomes of absorption”. Sigma contrasted this with what it described as Dr Rowe’s “make it, try it, do it” approach which it said:

… fits the real world of industry with limited time and resources far better than Professor Charman’s more academic approach.

466 The “make it, try it, do it” approach was also said to better accord with the Wyeth development history.

467 Sigma described the evidence of Professors Charman and McLachlan as seeking “excessively to complicate the issue”, with Professor Charman said to be “strangely reluctant” to agree that there would be a large number of different plasma profiles, with peaks between four to eight hours.

468 Alphapharm made similar submissions describing Professor Charman as selective in his extracts from texts, eloquent (in some problematic way), and given to raising difficulties when, on the evidence, no such difficulties were actually apparent. Alphapharm described Professor Charman, due to his detailed knowledge of the subject area, as “in some ways the perfect witness for Wyeth to convey this idea of impossible complexity” which, Alphapharm submitted, did not mean it should be accepted.

469 Insofar as these submissions suggested that Professors McLachlan and Charman were other than independent expert witnesses, they should not be accepted. It was apparent that Professors McLachlan and Charman both had detailed knowledge of the areas of expertise covered in their evidence. Despite the applicants’ attempts to use Professor Charman’s formidable knowledge as a basis for criticism, the fact is that Professor Charman was an impressive expert not only by reason of qualifications, experience and eloquence, but also because: - (i) his written evidence thoroughly exposed all reasons for the conclusions he reached and was prepared with great thought and care, (ii) his oral evidence was also measured, careful and clear, and (iii) he was willing to make appropriate acknowledgements and concessions but none, properly assessed in context, undermined his central conclusions.

470 The submission that Professor Charman was somehow divorced from the day to day reality of pharmaceutical development cannot be accepted. He is the Dean of the Faculty of Pharmacy and Pharmaceutical Sciences, Monash University, which he described as the most successful, largest and most experienced pharmaceutical sciences research program in Australia. Moreover, in his evidence, Professor Charman expressly refuted the proposition that his approach was unconnected to industry realities as follows:

If I was to suggest to you that your knowledge and experience was different because you’re a very highly skilled academic rather than the person in industry creating a formulation as part of a project on a budget, would you accept that? My reputation is irrelevant here because I’m sitting here and the comments I have made are those that I believe would be a skilled person in the art. I’m not sitting here as a grey haired, old professor who supposedly has got the sorts of things that I have described. My description here is the reality that I know that non professors, normal people I don’t mean “normal” the skilled addressees working with

I don’t quite know what a normal person is either? The standard approach that one takes within the industry, based on my experience and what I have done and based on my knowledge of my colleagues, so non professorial colleagues, the day to day stuff, is the description that I have given as to undertaking these projects is what I know to occur. So your proposition that it would be, “Make it, try it, do it,” I’m sure could be done. That’s not my experience.

471 In light of this evidence it is not necessary to deal with each and every criticism of Professor Charman. Some examples will suffice.

472 First, Professor Charman’s evidence on plasma profiles did not disclose any reluctance, strange or otherwise, on his part to engage with the topic. Second, his evidence about stomach residence times did not involve obfuscation. Third, and as the discussion above discloses, it is not accurate to characterise his evidence as admitting that he could develop an extended release formulation of venlafaxine hydrochloride at the priority date by the taking of merely routine steps. Fourth, he did not concede that the shape of the plasma profile was immaterial. That is to misunderstand his evidence which was predicated on the peak blood plasma concentration being within the range between 4 to 8 hours, which he accepted could generate a family of curves or shapes. But, as his evidence made clear, it was the shape associated with the peak within that range arising from the single daily dose that had the relevant therapeutic effect. Fifth, Professor Charman’s quotes from texts were not inappropriately selective. Sixth, Professor Charman could not be described as having made any concession as to the lack of importance of absorption throughout the GI tract for the development of an ER formulation. His evidence, written and oral, was always to the effect that there was an issue about the sufficiency of absorption along the length of the GI tract, specifically the large intestine.

473 Alphapharm’s submissions about certain aspects of Professor Charman’s evidence tending to show him as an “advocate for the Wyeth cause” also do not withstand scrutiny. The examples provided, to the contrary, tend to show the care and precision with which Professor Charman considered and answered what was put to him. His apparent desire to understand the context of what was being put, on the occasions identified, was appropriate and helpful in explaining his answers. None of his answers could properly be described as non-responsive. For example, his evidence about partition coefficients was responsive and disclosed the considerable ambiguity in texts and elsewhere about the difference between partition and distribution coefficients. His evidence about the Alza patent involving a zero order constant release was also of assistance in understanding why it was accurate to construe that patent as not producing a peak blood plasma level of between 4 to 8 hours as contained in the correspondence from Wyeth’s representative to the Commissioner.

474 The thoroughness and care with which Professor Charman prepared and gave his written and oral evidence, as well as the inherent logic of his thesis, added weight to his criticisms of the approaches of Drs Marshall, Rowe and Reece each of whom had to make concessions in cross-examination which affected the substance and thus the persuasive force of their writtenevidence.

Dr Marshall

475 Dr Marshall’s evidence was that had he been asked to develop an ER formulation of venlafaxine hydrochloride the first thing he would have done is go to the Merck Index and the Martindale Monograph. By the hearing it was common ground that neither the Merck Index nor the Martindale Monograph would have contained any information about venlafaxine hydrochloride as at 25 March 1996. During cross-examination it became clear that Dr Marshall had never developed a single once a day formulation of any drug. It also became clear that at the time of preparing his reports setting out the steps he would have taken to develop an ER formulation of venlafaxine hydrochloride, Dr Marshall was aware that at least two successful ER formulations of the compound had been achieved. Further Dr Marshall had studied the Enlafax formulation before preparing his initial report (PAM 11). It may be accepted that these are not matters that undermine Dr Marshall’s credit, but they are material to the assessment of the weight his evidence should be given. Alphapharm’s submissions failed to grapple with these matters. For example, Dr Marshall’s reliance on propranolol as a comparator was not supported by Wyeth’s development work (Wyeth’s use being limited to the task of spheroid preparation). Similarly, Dr Reece’s evidence on propranolol, ultimately, did not support Dr Marshall’s use of it as a comparator. When these matters are weighed with Professor Charman’s evidence, Wyeth’s challenge to Dr Marshall’s use of propranolol cannot be said to be “hollow”.

Dr Rowe

476 Dr Rowe gave evidence in his first affidavit and during cross-examination that a pre condition to beginning a formulation exercise of a controlled release formulation was that the drug was “well absorbed throughout the entire length of the [GI tract]”. However, in his third affidavit Dr Rowe said that he would have proceeded despite there being no evidence in the literature to indicate that venlafaxine was well absorbed in the large intestine. During cross-examination, Dr Rowe said that in order to determine whether venlafaxine hydrochloride was well-absorbed throughout the GI tract, he would perform a bioavailability study. His written evidence does not refer to a bioavailability study to identify the adequacy of absorption in a sustained release form. Dr Rowe’s statement that “provided materials were available, I expect that I could formulate a venlafaxine sustained release preparation by a variety of means with a variety of dissolution rates within 1 week”, is unrealistic in the face of his cross-examination and the evidence of the other experts. Again, it may be accepted that these matters do not undermine Dr Rowe’s credit. As with Dr Marshall, however, they affect the weight which his evidence should be given.

477 The analysis above also discloses the reasons for not accepting Sigma’s answers to nine propositions that it said Wyeth unfairly made about Dr Rowe’s evidence. These propositions (set out below) should be accepted.

(1) On a fair view of the evidence, Dr Rowe assumed that his role was that of a formulator who had been instructed to prepare an extended release formulation of venlafaxine hydrochloride.

(2) While it may be accepted that Dr Rowe’s initial reports were prepared under constraints of time, there were important areas in which his oral evidence in cross-examination substantially diverged from or added important material to the text of his reports. It was undoubtedly appropriate for Dr Rowe to make, as Sigma said, “proper concessions” and provide additional information when asked during cross-examination. The point, however, is that the substance of Dr Rowe’s answers in relation to his knowledge of venlafaxine to treat depression at the priority date and the role of absorption throughout the GI tract cannot readily be reconciled with the parts of his reports dealing with these topics.

(3) Dr Rowe’s evidence about the importance of absorption throughout the GI tract in moving to an extended release formulation was not persuasive when considered as a whole (that is, in terms of the differences between his written reports and oral evidence) and against the clear and thorough analysis of the same subject matter by Professor Charman. It is not an answer to those problems to say that the thrust of his evidence was that Dr Rowe expected the drug to be well absorbed throughout the GI tract. Although that is where his evidence ultimately ended up, it is not where it started. Moreover, Dr Rowe’s oral evidence that he would have conducted bioavailability studies may not have been inconsistent with his affidavit evidence, but it is difficult to reconcile that oral evidence with Dr Rowe’s statement that the entire exercise would take only one week’s work. Dr Rowe’s extensive experience as a formulator does not make that evidence, in the face of the additional work he proffered as being necessary, more realistic. Similarly, while the days Ms Sherman spent working on the formulation task may add up to 33 in total, the fact is that this aspect of the development alone took Ms Sherman from June 1991 until March 1992. Dr Rowe, moreover, expressly agreed with the description of his approach as involving trial and error.

(4) Insofar as Dr Rowe “would imagine there is nothing special about the release rate specified in the patent”, he agreed that he was engaged in speculation. He had not seen the patent.

(5) The Alza patent did not contain certain information (Dr Rowe’s affidavit stated “the controlled release formulation of venlafaxine decreases gastro-intestinal side effects”) that Dr Rowe attributed to the Alza patent.

(6) The method of the invention involves a time profile for a peak plasma level to be reached. In this context, it is important that Dr Rowe agreed that the literature at the priority date did not support any connection between peak plasma levels and adverse side effects. It is in this context that Dr Rowe’s evidence that there was also conflict in the literature about any dose relationship to side effects must be understood. In other words, nothing in the literature would have suggested the invention was an obvious solution to any problem that had been identified.

(7) Dr Rowe’s use of the Alza patent, on becoming aware of the unavailability of Martindale, was not consistent with his usual practice as described. The evidence in his statutory declaration relating to Tramadol is that he would not normally consult patent specifications to provide assistance but if he found the need for further information he would undertake “an online search, which would and normally did include patent specifications”.

(8) Dr Rowe’s characterisation of active transport as “very, very rare” does not alter the fact that his position on extended release formulation was that active transport would make a drug unsuitable for that purpose. In other words, on the whole of the evidence (including that of Dr Rowe) active transport would have been a relevant consideration about which there was no available information in relation to venlafaxine at the priority date.

(9) In common with Dr Marshall, Dr Rowe did use Merck and Martindale when neither was available. Also in common with Dr Marshall, he sought to correct the error not by putting the propositions from those publications out of mind, but by finding other available references which were said to contain the same propositions.

Dr Reece

478 While Dr Reece was an impressive witness (in terms of qualifications, breadth of experience and manner of giving evidence), when considered in the context of the evidence as a whole (including that of Professors Charman and McLachlan), there were difficulties with important aspects of his evidence. First, like Dr Rowe, Dr Reece proceeded on the assumption that developing an extended release formulation of venlafaxine hydrochloride should be attempted. Second, Dr Reece relied upon his knowledge of beta blockers to support his assumption that venlafaxine would be absorbed along the entire length of the GI tract. However, cross-examination showed that these assumptions were not supported by the literature published before the priority date. Dr Reece also acknowledged that at March 1996 he was aware of studies or statements setting out the challenges associated with developing propranolol as an extended-release formulation. He also accepted that in light of these matters, qualifications should be put on his use of propranolol, metoprolol and oxprenolol as comparators. Third, his reliance on and the use he made of Klamerus, considered against the background of all of the evidence, was not ultimately persuasive.

H15 Other points

479 The applicants did not press their case on manner of manufacture as an independent ground of revocation of the patent. They relied on their submissions about this issue, however, to support their arguments on the obviousness of the invention and, thereby, the lack of any inventive step.

480 The applicants’ case invoked the summary of relevant principles set out in Merck & Co Inc v Arrow Pharmaceuticals Ltd (2006) 68 IPR 511; [2006] FCAFC 91 at [63] (referring to Commissioner of Patents v Microcell Ltd (1959) 102 CLR 232, National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252 and NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd (1995) 183 CLR 655), namely:

1. The opening words of s 18(1) (“a patentable invention is an invention that”) impose a threshold requirement that the “patentable invention” be an “invention”, that is to say an “alleged” “manner of new manufacture” within s 6 of the Statute of Monopolies (Philips at CLR 663; ALR 121; IPR 453).

2. That requirement will not be met if, on the face of the specification, the subject matter:

(a) lacks the necessary quality of inventiveness under the Statute of Monopolies (Phillips at CLR 664; ALR 122; IPR 454)

(b) is not new (NRDC at CLR 262, ALR 115; IPR 65, Philips at CLR 664; ALR 122; IPR 454)

3. A new use of an old substance is not an invention if its known properties make it suitable for that use – in such a case the new purpose is “no more than analogous to the purposes for which the utility of the substance is already known” (NRDC at CLR 262; ALR 115; IPR 65)

4. But there will be an invention if the new use consists in taking advantage of a hitherto unknown or unsuspected property of the substance (NRDC at CLR 262; ALR 115; IPR 65).

481 According to the applicants, consistent with these principles, the patent “describes nothing more than the administration of a conventional sustained release formulation of a known drug for a purpose for which it was known to be effective, which produces a predictable plasma level profile in that the initial peak plasma level is avoided and occurs at a later time to that of the immediate release formulation”, the only alleged discovery being that “when the drug is administered as an extended release form (of the type described as ‘conventional’ in the specification) it can be administered once a day and the undesirable side effects, nausea and vomiting, are less than they otherwise would be, whilst the therapeutic effect remains”.

482 As Wyeth submitted, however, the cases disclose the need to focus on the invention as claimed. For this purpose it is not necessary to resolve Wyeth’s contention that this ground of challenge is limited to evidence available from the face of the specification. It is sufficient to observe that the practical utility of the claimed method is apparent from the face of the specification. As Wyeth submitted, this is implicitly accepted by the applicants (other than to the extent of the limited challenge brought by Generic Health). Further, the specification identifies the claimed method as the invention. Insofar as other evidence may be relevant, the analysis for the evidence above supports the conclusion that the claimed invention was not obvious when compared to the prior art at the priority date. It must follow that, to the extent that the applicants relied on their submissions about manner of manufacture, it does not assist their case on obviousness.

483 The applicants said that it was relevant that neither the patent nor the Wyeth development story identified any issue with the second, third and fourth aspects of the development process that Professor Charman said had to be considered (see the four aspects described by Professor Charman in section H6 above, summarising Professor Charman’s conclusions). The patent, however, incorporates the information from the grandparent application about the results of clinical trials (including side effects and therapeutic efficacy). Similarly, the Wyeth development story includes numerous clinical trials to establish efficacy, this being the objective of the second, third and fourth aspects of the development process that Professor Charman said had to be considered.

484 It is also convenient to record here the rejection of Sigma’s submission that an adverse inference should be drawn against Wyeth (on the basis of Jones v Dunkel (1958) 101 CLR 298) for its so-called failure to call the inventors to give evidence about any difficulties they encountered during the development process. That submission cannot stand in the face of the objective statutory test or the principles discussed in Wellcome Foundation.

485 Similarly, the fact that the patent is silent about the issues Professor Charman identified does not lend any real support to the applicants’ case. The invention is the invention as claimed. The Act does not require the patent to identify the entire process by which the invention was created.

H16 Conclusions on inventive step

486 The considerations set out above lead to the conclusion that the applicants’ case on lack of inventive step or obviousness should not be accepted.

487 Alphapharm, for example, submitted as follows:

Four approaches suggest that the invention as claimed is obvious:

(a) The approach of Dr Marshall alone (when without the assistance of a template dissolution profile), which was to consider a comparator example and use that as a template for a dissolution profile to formulate;

(b) The approach of Dr Reece in combination with Dr Marshall, which is to rely on pharmacokinetic data from the IR form and use that as a template to develop a dissolution profile for the preparation of a dosage form;

(d) The approach of Wyeth, which, as analysis of its discovered documents reveals, reflected the same approach as the combined Reece/Marshall approach.

488 As the above analysis demonstrates, however, none of the four approaches identified support a finding of obviousness. The analysis also shows that it would have been far from obvious to the skilled addressee that the solution to the “problem” of the immediate release formulation was a method of treatment involving the single daily dosing formulation as claimed. While it may be accepted that, as a general matter, increased patient compliance was desirable and likely to be assisted by a simpler dosing regime, the material available to the skilled person at the priority date would not have been led as a matter of routine to steps that might well produce the invention for that reason. Nor does the evidence support a conclusion that an assumed reduction of side effects would have been seen by the skilled person as a problem the routine solution to which was the invention. At the priority date, and today, the mechanisms by which the invention reduces side effects remain unclear, although it is known from the patent (incorporating by reference the grandparent application) that clinical trials proved such a reduction.

489 It is also apparent that the applicants’ submissions on inventive step largely assume that their characterisation of the invention – as an extended release formulation – is correct. As submitted by Wyeth:

… the applicants’ evidence falls significantly short of establishing lack of inventive step in this case. As a threshold matter, in preparing their evidence on this topic, the applicants did not ask the appropriate hypothetical question. The subject-matter of the questions asked by the applicants of their experts, as surrogates for the notional skilled person, ranged from making an extended release formulation; to making an extended release formulation that can be given once a day; to development of a target plasma profile which might be used to develop a dissolution profile. None of these addresses the question whether a method of treating depression by oral administration of a single daily dosing of venlafaxine hydrochloride which provides a therapeutic blood plasma concentration of venlafaxine over 24 hours with a peak plasma concentration in from about 4 to 8 hours, is obvious

490 The applicants’ submissions also appear to be at odds with the first and last of the three observations summarised in Alphapharm Pty Ltd v H Lundbeck A/S at [183] as established by Aktiebolaget Hässle , namely:

· It is erroneous to characterise as obvious, the variation of all parameters or the trying of all choices until one proves successful, where the prior art did not point to it (at [76], approving a statement to that effect by Rich J in In re O’Farrell (1988) 853 F 2d 894 at 903);

· It is erroneous to characterise as obvious, the exploration of a new technology or a promising field of experimentation, where the prior art gave no more than general guidance (at [76], again approving a statement to that effect by Rich J in In re O’Farrell (1988) 853 F 2d 894 at 903);

· It is not acceptable to start from the invention when determining whether it was obvious because this approach “succumbs immediately to the seduction of hindsight” (at [78]).

H17 Commercial success

491 The commercial success of an invention may contribute to the conclusion that it involved an inventive step. As it is a secondary consideration, and the challenge toinventive step has already been dismissed for the reasons above, it is not strictly necessary to consider commercial success in this case. Nevertheless, the issue was fully argued and it is appropriate to deal with it.

492 There was no material dispute between the parties as to the relevant principles. In Lockwood (No 2) the High Court said:

[115] … Secondary evidence, such as commercial success, satisfying a long-felt want or need, the failure of others to find a solution to the problem at hand and copying by others such as competitors, has a role to play in a case concerning inventive step…

[116] An Australian court should be slow to ignore secondary evidence or to rely on its own assumed technical expertise to reach conclusions contrary to such evidence. Australian courts have long recognised that the importance of such evidence and its weight will vary from case to case; it will not necessarily be determinative.

493 As Finkelstein J said in ITW AFC Pty Ltd v Loi & Tran Pty Ltd (2008) 76 IPR 129; [2008] FCA 552 at [31]:

To prove commercial success the patentee will call evidence of market share, growth of market share, or displacement of existing prior art devices. That patentee will also be required to show that this success was due to the merits of his invention and not to other factors, such as advertising or significant sales efforts.

494 In support of its assertion of commercial success, Wyeth relied upon the evidence of sales and the expert evidence of Professor Grabowski.

495 Wyeth submitted that Professor Grabowski’s evidence “establishes that the claimed therapeutic advantages of Efexor-XR, and not other factors such as marketing, are likely to have been the cause, or the principal cause, of its having achieved and maintained so high a level of commercial success”.

496 The applicants accepted that Efexor-XR has been a commercially successful product, so far as this means “nothing more than that Efexor-XR has earnt a significant amount of revenue for Wyeth in absolute terms”. The applicants contended, however, that Wyeth had not established that any commercial success enjoyed by Efexor-XR was a consequence of the features which are claimed in the patent as distinct from the advantages of “strong promotion, first mover advantage and the fact that Efexor-XR was the first SNRI with its success due to the benefits given by the underlying compound.” According to the applicants, Efexor-XR (being a SNRI) is in a different market from other SSRI anti-depressants.

497 The applicants’ submission that Professor Grabowski’s evidence be “treated with healthy scepticism by the Court” should not be accepted. There were three issues raised by the applicants in this regard:

(1) Professor Grabowski was cross-examined as to why he had only ever acted for innovator companies and also his views regarding US patent law. Alphapharm submitted that Professor Grabowski has “long-standing (and, it is submitted, essentially unalterable) views in relation to the importance of protecting returns on investment in research and development by pharmaceutical companies”. However, the evidence was that Professor Grabowski had acted for a generic company. Further, the evidence as a whole does not support the conclusion that Professor Grabowski’s conclusions about the commercial success of Efexor-XR were a consequence of anything other than the application of his expertise to the available factual material.

(2) The applicants said that Professor Grabowski did not have a sufficient understanding of the Australian pharmaceutical industry and market. However, it was clear that from his cross-examination, where he elaborated on his understanding of the Australian industry, Professor Grabowski’s knowledge was sufficient for the evidence he was giving. As Wyeth submitted “it was not put to him that he was unable, or had failed, to make appropriate assessments, as an expert, of the usefulness of non-Australian data in an Australian context, and it is apparent from his evidence that he did so”.

(3) Sigma implied that Professor Grabowski’s expertise in assessing industry marketing expenditures was out of date, as the study he put forward as supporting his expertise was one he had performed in relation to drugs marketed in the 1980s and published in 1994. However, when this was put to Professor Grabowski he explained that he had undertaken a similar study in relation to drugs in the 1990s, the study being published in 2003.

498 Professor Grabowski based part of his evidence on sales data provided by IMS Health (IMS) and Cegedim Strategic Data Australia Pty Ltd (Cegedim). IMS and Cegedim collate information relating to the pharmaceutical industry and then provide this information to subscribers of their respective services. IMS collects information such as products sold, volume of sales and product prices. Cegedim, among other things, collates a promotion database which collects information regarding the promotional investment of pharmaceutical companies. The applicants disputed the reliability of the IMS and Cegedim data. Despite the length and force of the applicants’ arguments against this evidence, Wyeth’s submissions on this issues are persuasive:

(a) no evidence has been adduced by the applicants to suggest that the databases are materially inaccurate;

(b) such databases are used by academics, government, and pharmaceutical companies in Australia, including both Alphapharm and Sigma;

(c) Alphapharm’s own Head of Marketing said in an affidavit that “CSD and IMS are considered in the industry to be reliable sources of information” and that both companies’ promotion monitoring reports (which are “survey” or “census” based) use “a statistically relevant population of general practitioners” and, in relation to antidepressants, psychiatrists;

(d) IMS is considered to be the “industry standard market data provider” or the “gold standard” for the provision of such data; and

(e) Messrs Stam and England explained the systems and procedures pursuant to which such data is gathered and made available, which are apt to ensure that, so far as is practicable, the data is reasonably accurate and useful.

499 Professor Grabowski’s evidence regarding the market performance of Efexor-XR was as follows.

500 First, Efexor-XR was a late entrant into a “crowded” market. Professor Grabowski defined the “overall market to be drugs classified as antidepressants and other mood stabilizers by IMS”. He considered the market to be “customers (patients) who require antidepressants” and described the drugs competing in this market as both SNRI and SSRI drugs, as well as some older drugs prescribed for depression. The applicants submitted that rather than being a late entrant to a crowded market, Efexor-XR was the first entrant to the SNRI market, and that Efexor-XR, as an SNRI, was not a competitor of and not properly comparable to SSRIs. Professor Grabowski’s was cross-examined on this point, for example:

It also suggests, doesn’t it, that within SNRIs, Efexor XR has had a first mover advantage and it starts to lose the benefit of that as there are competitors entering that class? That could be one interpretation. As I said yesterday, I think the SNRIs are generally grouped with the SSRIs, they are very close in therapeutic attributes. So many of our major managed care formularies, you get a class called SSRIs, SNRIs, there is not a separate class of SNRIs. So whether you want to treat it as a first mover, it’s true if you focus on a very specific subclass within these broader classes, it’s a first mover, but it really came into these new generation products as a later mover.

That is only, however, if one assumes that physicians didn’t in fact treat SNRIs as a new generation, particularly once the restrictions on prescription and single daily

dosing became available? You can define markets very narrowly or broader. In any case, you have to compete against established therapies and you put forward your attributes to say what your advantages are and hopefully deal with any disadvantages.

501 Professor Grabowski’s evidence was convincing. The market cannot reasonably be confined to SSRIs excluding SNRIs. The evidence suggests the products are direct substitutes. Professor Grabowski said he would ordinarily expect that in the absence of some other advantage “so late an entrant into so crowded market would struggle to make an appreciable impact on the market”.

502 Second and contrary to ordinary expectations for a late entrant into a crowded market, from its launch in 1999 to 2009 sales, market position, patient days and prescriptions of Efexor-XR grew rapidly.

503 To understand the importance of the therapeutic attributes claimed in the patent, Professor Grabowski compared the sales data of Efexor-XR versus Efexor (immediate release) because “both formulations contain the same active ingredient, venlafaxine, but only Efexor-XR embodies the specific attributes claimed in the patent – once a day dosing and corresponding reduced level of nausea and emesis”. Professor Grabowski said the IMS data disclosed that the immediate release product only ever achieved modest sales whereas:

The data disclose that in 2000, its second year in the market, Efexor® XR became the third highest-grossing antidepressant… Efexor® XR became the second largest drug in terms of sales the next year. In 2004, sales of Efexor® XR were almost equal to that of the market leader, Zoloft®. In 2005, once Zoloft® went generic, Efexor® XR became the top selling antidepressant in Australia.

504 Professor Grabowski considered the level of sales of Efexor-XR in dollar terms compared to the level of sales of its competitors was unusually high, especially considering the number of competitors in the market.

505 Using the IMS data, Professor Grabowski concluded that market share enjoyed by Efexor-XR compared to that enjoyed by its competitors was unusually high, especially considering the number of competitors that preceded it in the market.

506 Professor Grabowski also examined how the sales of Efexor-XR, measured in terms of patient days (number of daily doses), grew over time.

507 Professor Grabowski also found that prescriptions for Efexor-XR experienced rapid and consistent growth from 1999 to 2009. By comparison, the yearly number of PBS services for Efexor at its peak was less than 10% of the peak number of Efexor-XR PBS services.

508 Third, Professor Grabowski said that Efexor-XR was priced at a premium compared to other originator drugs. He said in his experience “the fact that Efexor® XR’s sales, market share and patient days increased despite the fact that it was priced at a premium is consistent with the performance of a product that exhibits some significant advantage (typically, a distinct therapeutic advancement) compared to competing products”.

509 Fourth, the extended release version of venlafaxine has diffused into over 40 countries in its first 5 years. In Professor Grabowski’s opinion, this demonstrates that it is a consensus or internationalised drug, and supports the conclusion that Efexor-XR has “some distinct advantage over its competitors”.

510 Fifth, Professor Grabowski said Efexor-XR was the seventh innovative product among SSRIs and SNRIs to enter the Australian market, “yet it has managed to earn much higher sales and market shares than its predecessors, responsible for one third of the total market at the peak of its sales”. Professor Grabowski said that, being a late entrant into a crowded market, Efexor-XR’s sales and market share have not come from any early mover advantage and it has achieved its “very significant sales and market share despite having to overcome well established early mover advantages enjoyed by several competitors”. He said this is consistent with his opinion that Efexor-XR is an innovative product offering some additional significant advantage to consumers.

511 Sixth, Professor Grabowski considered that the marketing to sales ratios of Efexor-XR between 2002 and 2008 was consistent with the marketing activities of a broad range of promoted, branded pharmaceuticals he had studied.

512 Professor Grabowski summarised that Efexor-XR has performed much better than he would have expected (in terms of its level of sales and market share), given:

(a) the number of competitor drugs already established in the market at the time of Efexor-XR’s launch;

(b) the considerable length of time several of those drugs had been established by that date;

(d) the fact that Efexor-XR had been priced at a premium to almost all of its competitors, both generic and originator.

513 Professor Grabowski identified the reasons for Efexor-XR’s unexpected high performance as follows:

[I]n absence of any other explanation for the outstanding market success of Efexor® XR (such as early mover advantage, excessive marketing spend, absence of competitors or cheap pricing) the claimed therapeutic advantages of the drug are likely to have been the cause – or the principal cause – of its having achieved and maintained so high a level of sales and market share;

[H]ad the drug not been delivering the therapeutic benefits claimed in the promotional material, it is likely that physicians would have become aware of this and that sales and market share would have dropped off within a relatively short period after Efexor® XR’s launch…

[T]he fact that rather than dropping off, sales have continued to increase and market share grow over a period of 10 years since launch indicate that the therapeutic qualities claimed for the product and detailed in the promotional materials are indeed likely both to exist and to account for the product’s sustained, above average market performance.

514 Professor Grabowski’s evidence should be accepted. Efexor-XR has been a commercially successful product primarily due to the claimed therapeutic advantages of the drug. Accordingly, this secondary evidence supports the conclusion already reached – the patent involved an inventive step.

I FALSE SUGGESTIONS OR MISREPRESENTATIONS

I1 Background

515 A patent or an amendment of a patent request or complete specification obtained by false suggestion or misrepresentation may be revoked (s 138(3)(d) or (e) of the Act).

516 The relevant principles were not in dispute between the parties. As identified in Ranbaxy Australia Pty Ltd v Warner-Lambert Co LLC (2008) 77 IPR 449; [2008] FCAFC 82 at [82], [83] and [96], they include the following:

· If a false or misleading representation materially contributed to the Commissioner’s decision to grant a patent, the ground is established.

· Materiality does not require that but for the representation the patent would not have proceeded to grant but does require that the representation be a material inducing factor to the grant. Whether the Commissioner gives evidence or not is relevant to the drawing of any inference of materiality but, irrespective of that fact, where a representation objectively likely to materially contribute to the grant has been made the court may infer it to have done so.

· Intent is not required.

· The question of what representations have been made is for the court to determine but to do so the court construes the patent through the eyes of the skilled addressee.

517 Taken together, the applicants relied on five alleged representations: - (i) a representation in the specification that it was impossible to make an extended release formulation of venlafaxine hydrochloride using hydrogel tablet technology, (ii) a representation in the specification that it was completely unexpected that a single daily dosing formulation of venlafaxine hydrochloride for use in the methods of the invention could be achieved, (iii) a representation in material provided to the Commissioner that the controlled release dosage form described in the Alza patent would not produce a peak blood plasma level of between 4 to 8 hours, (iv) a representation to the Commissioner that Ms Sherman was the sole inventor of the invention when, in fact, there were additional inventors, and (v) according to Generic Health, a representation in the specification and material provided to the Commissioner that the invention reduces the level of nausea and incidence of vomiting when compared to the immediate release form.

I2 The completely unexpected and impossible to achieve representations

Applicants’ case

518 These representations are related. The parts of the specification on which the applicants relied are the following:

…

519 The applicants submitted that the grant of a patent involves a right in rem. Because the specification is addressed to a person skilled in the art and must be objectively construed, it follows that these words convey a representation to the person skilled in the art, first, that it was completely unexpected that a single daily dosing formulation containing venlafaxine hydrochloride for use in the methods of the invention could be obtained and, second, that it is impossible to achieve the desired dissolution rate of a sustained release dosage form of venlafaxine hydrochloride with hydrogel tablet technology.

520 According to the applicants, objectively construed through the eyes of the person skilled in the art, these words cannot be construed as unexpected to or impossible for the inventor. The specification implicitly holds out the patentee as a person skilled in the art so the representations must be construed as representations of fact to that standard and not mere subjective limitations of the inventor. This is reinforced by the fact that the Commissioner of Patents (or delegate) is not a person skilled in the art.

521 The applicants’ case is that the representations, in the context of the specification as a whole, are central to the overall assertion that hydrogel tablet technology, one of the known and conventional means for preparing extended release formulations, did not work for venlafaxine hydrochloride. The representations are thus central to the identification of a problem which the patent purported to solve. But for the problem with this conventionally used technology it is likely the patent would have been rejected as an obvious application of well known technology. The representations were thus material to the grant, the circumstances being analogous to those in WM Wrigley Jr Company v Cadbury-Schweppes Pty Ltd (2005) 66 IPR 298; [2005] FCA 1035 at [133] in which Heerey J said:

[The representations were material to the grant] because they relate to what is said to be the problem experienced with substantially hygroscopic sweeteners and to the solution disclosed, the use of low moisture centres. Hygroscopicity of existing and proposed sugar substitutes was, objectively considered, something relevant to this invention and likely to be taken into account by the commissioner. Obviously the drafters of the specification thought so; why else so many references to it? The inference can therefore be drawn that this in fact happened.

522 The applicants relied on a number of factors to support the conclusion that the representations were false or misleading.

523 As to the completely unexpected representation, first, the passage containing the representation was amended in December 2006 to substitute the words “a single daily dosing” for “an extended release” and to add the words “for use in the methods of the invention”. The applicants submit that “it is plain that what the patentee initially asserted was unexpected was that it could make any extended release formulation of venlafaxine hydrochloride at all”. Second, the evidence in respect of propranolol, another soluble drug which had been prepared in an extended release form, demonstrates the falsity of the representation. Third, Professor Charman said that, at the priority date, the solubility and related issues would not have suggested to a person skilled in the art of formulation science that an extended release formulation of venlafaxine hydrochloride for use in the method (that is, the method of treatment by a single daily dosing formulation achieving the specified characteristics) could not be obtained using hydrogel tablet technology. According to the applicants the effect of this evidence is that Professor Charman’s opinion is that it was not completely unexpected that a skilled formulator could obtain an extended release formulation for use in the method of the invention.

524 As to the impossibility representation, first, the Enlafax formulation, according to Dr Marshall’s evidence, is hydrogel tablet technology which, on Wyeth’s case, is a sustained release dosage form of venlafaxine hydrochloride which infringes the patent. “Impossible” means impossible to achieve at all times and not merely when the statement is made. The existence of Enlafax thus is said to falsify the representation. Second, and in any event, if the representation is limited to the time at which the statement was made Dr Marshall and Professor Charman agreed that, as at the priority date, the skilled person would not have considered it impossible to achieve a sustained release dosage form of venlafaxine hydrochloride with hydrogel tablet technology.

525 Further, according to the applicants, Wyeth’s answer to these submissions should be seen as unpersuasive, amounting to a concession that the inventors were less skilled than the persons skilled in the art (and, thereby, it is said undermining Wyeth’s case on inventive step).

Wyeth’s response

526 Wyeth disputed the construction of the patent on which this contention depended. Wyeth stressed that the specification must be read through the eyes of the skilled person.

527 Wyeth submitted that the applicants (and Dr Marshall) read the statement as if it said that high solubility prevented the drug being formulated in an extended release dose. However, the “completely unexpected” representation is limited to an extended release formulation for use in the methods of the invention (that is, a single daily dosing formulation within the specified parameters). Professor Charman’s evidence also demonstrates that Dr Marshall’s reliance on propranolol was unsound given the differences in solubility, structure and activity between that compound and venlafaxine hydrochloride. Moreover, cases show that such a statement is unlikely to constitute a false suggestion. In Apotex Pty Ltd (formerly GenRx Pty Ltd) v Sanofi-Aventis (2008) 78 IPR 485; [2008] FCA 1194 at [127], Gyles J observed:

Viewed in an objective fashion, if the question is asked, “‘surprising’ and ‘unexpected’ to whom?”, presumably the answer would be, “to a notional person skilled in the art in Australia”. On that basis I would not conclude that the statements were false. At the priority date, it was known to those in the field in Australia that at one end of the spectrum each enantiomer would contribute equally to the activity of the racemate. At the other end of the spectrum, one would have all of the activity and the other none. Both of those results were known to be possible, but the usual result would be somewhere between the two. Prediction, without testing, was not regarded as reliable. To say that a possible result at one end of the spectrum, even if unlikely, was unexpected cannot be categorised as false. The statement that the result was “interesting” is even more difficult to falsify.

528 Further, once the proper approach to construction is adopted (that is, through the eyes of the skilled addressee) Professor Charman’s evidence, submitted Wyeth, assists its case and not that of the applicants. As at the priority date, Professor Charman considered that the skilled addressee would read the specification knowing that there are “commonly encountered pharmaceutical production difficulties that can often be addressed by formulation optimisation, and modification of process conditions, excipients and formulation optimisation”.

529 Finally, according to Wyeth, there is no basis to draw the inference of materiality. The remarks of Gyles J in Apotex at [130] should be applied, namely:

However, in the present case the Patent Office file shows no indication that the examiner was conscious of any potential problem or raised one with the patentee. That being so, the approach of the Full Court in Ranbaxy would require a negative answer to the question as to whether the false statements did materially induce the decision: see also ICI Chemicals at [92]. In any event, I would be inclined to think that by the time this application was being considered, patent officers would have regarded the description of a finding as “unexpected” or “interesting” in the field of selection patents as likely to be a patent attorney’s “puff” rather than a serious statement of fact.

530 To the same effect, on Wyeth’s approach to construction, the expert evidence of Dr Marshall and Professor Charman also does not support a conclusion of falsity in respect of the alleged impossibility representation but confirms that the specification represents that the inventor was unsuccessful in using hydrogel tablet technology and thus turned to other approaches. The word “impossible” is a reference back to the “numerous attempts” which had proved “fruitless”. If made (which is denied), the representation was not material. The Commissioner has not suggested it influenced the decision to grant the patent. If influenced, the Commissioner could be expected to have taken a position (Ranbaxy at [83]). Immateriality is also supported by the fact that the claims do not exclude hydrogel tablet technology. It is counter-intuitive that the Commissioner would have granted a patent for claims including hydrogel tablet technology on the basis of a specification asserting that such technology was objectively and permanently impossible to achieve. As to Enlafax, for this purpose, the applicants bore the onus of establishing that the formulation is hydrogel tablet technology such as to falsify the alleged representation. The onus has not been discharged.

Discussion

531 Wyeth’s submissions in answer are persuasive. The fact that the patent must be read through the eyes of the skilled addressee undermines, rather than supports, the applicants’ case. Read in context, the skilled addressee would have understood the references in question to reflect the position of the inventor and not a statement of absolute impossibility.

532 Moreover, and as Wyeth submitted, Professor Charman’s evidence supported the statement that it was unexpected that an ER formulation had been achieved for use in the methods of the invention (that is, the parameters of the method defined in the claims). The applicants’ focus on solubility alone is inappropriate given the context of the statement of unexpectedness.

533 For these reasons the applicants have not established the making of any false suggestion or misrepresentation on these grounds.

I3 Alza representation

Applicants’ case

534 This representation is said to arise from communications between the representatives of Wyeth and the Commissioner in respect of the application for the patent. On 8 January 2007 the examiner forwarded a second report to Wyeth’s patent attorneys making the following statement:

The invention defined in claims 1 to 17 and 27 is not novel (and does not involve an inventive step) when compared with... WO1994027589A [the Alza Patent].

535 Wyeth’s patent attorneys responded as follows:

[The Alza Patent] discloses a controlled release dosage form that produces a constant release rate of a compound... which results in a relatively constant concentration of drug in the blood. It would not produce a peak blood plasma level of between 4 to 8 hours (a further feature to which claims 1 to 4 of the present application are limited).

536 According to the applicants this response constituted a false suggestion or misrepresentation. The statement asserts a fact and does not relate to the construction of the Alza patent. By reason of the GITS or 134 study from January 2004 Wyeth knew that the administration of a formulation made in accordance with example 2 of the Alza patent showed a peak plasma level at 6 hours (that is, between 4 to 8 hours). Hence, at the time the statement was made Wyeth knew it to be false. Alternatively, Wyeth had no foundation for making the statement. As Professor Charman said, in order to determine in vivo plasma levels over time clinical studies would be required. If Wyeth contends that the GITS or 134 study used a dosage form other than one made in accordance with example 2 of the Alza patent then, in any event, there was no factual foundation for the statement. The representation was material. It was calculated to overcome a novelty objection and succeeded in doing so.

Wyeth’s response

537 Wyeth’s first answer to these arguments is that the context of the statement shows that it concerns the disclosure made by the Alza patent. To support this submission Wyeth referred to the response by Wyeth’s patent attorney to the Commissioner as a whole emphasising those parts relating to the disclosure by the Alza patent, including the following (underlined in accordance with Wyeth’s submissions):

There is nothing in D1 to suggest that an extended release dosage form of venlafaxine hydrochloride could be prepared that would produce therapeutic blood levels of venlafaxine in a patient that would produce therapeutic blood levels of venlafaxine in a patient in need of venlafaxine over a 24 hour period. It should be noted that each of the claims in the present application is limited to this feature.

D1 discloses a controlled form that produces a constant release rate of a compound of the structural formula provided on page 1 and page 3, which results in a relatively constant concentration of drug in the blood. It would not produce a peak blood plasma level of between 4 to 8 hours (a further feature to which claims 1 to 4 of the present application are limited), nor would it produce the claimed dissolution profile in vitro (a further feature as claimed in claims 11 to 14). D1 does not mention peak blood plasma levels of venlafaxine hydrochloride at all and it could not be deduced that it would be inherent that it would provide a peak blood plasma level of no more than 150 ng/ml (a further feature to which claims 5 to 8 are limited).

The sentence on page 13 of D1 at lines 3 to 7 does not refer to venlafaxine hydrochloride but to the generic structure of the drug 16. Each independent claim of the present application is further limited to the feature of administering venlafaxine hydrochloride. Further, the reference at page 13 of D1 does not refer only to a single dose but indicates more than one dose could be used to achieve the desired release profile over 24 hours. Also, D1 does not refer to when a peak blood plasma level should be achieved during the 24 hour period. In fact, D1 is not concerned at all with the time after administration at which the peak blood plasma level is achieved. Also, D1 does not disclose that by providing the claimed blood plasma profile over 24 hours, the level of nausea and incidence of vomiting is reduced compared to multiple dosing. In addition, the worked examples in D1 mention a zero order release profile in vitro over 15 hours, 16 hours and 20 hours but there is no general disclosure or worked example of an in vitro dissolution profile over 24 hours according to the profile provided by the present invention. Thus, D1 is concerned with controlled release forms which release the dose at a controlled rate over an extended period but not with the specific provision of a therapeutic blood plasma level of venlafaxine over 24 hours.

D1 does not teach the limitations of the Applicant’s claims and does not anticipate the claims explicitly or implicitly.

538 In this context Wyeth submitted that there is no suggestion of an assertion based on actual testing. The tenor of the text, including the use of “would not” in the key statement (rather than, for example, “does not”), indicates that the response is concerned with disclosure only. In other words, the response is a submission to the Commissioner about the construction of the Alza patent. Nothing in the GITS or 134 study or Professor Charman’s evidence, according to Wyeth, can overcome this answer to the applicants’ argument. Further, this submission as to the construction of the Alza patent, Wyeth said, is correct. The applicants abandoned their contention that Alza constituted a “paper anticipation” of the patent. It must follow that there is no false suggestion. Again, the Commissioner has not given evidence. Finally, when issues of construction of prior art arise, the ground of false suggestion or misrepresentation is confined. Thus, in ICI Chemicals & Polymers Ltd v Lubrizol Corporation Inc (1999) 45 IPR 577; [1999] FCA 345 Emmett J said at [183]:

Notwithstanding that the commissioner was notified of the proceeding, the commissioner has not participated. I do not consider that a statement to an examiner by an applicant, made in good faith, concerning the effect of the prior art, will fall within s 100(1)(k). The commissioner and his examiners will take such steps as they are advised to determine whether or not an alleged invention is novel. An applicant would be entitled, in my opinion, to make submissions to an examiner concerning the effect of the prior art. The fact that those submissions are ultimately shown to be wrong, does not mean the submissions constituted false suggestion or representation.

Discussion

539 Wyeth’s submissions on this issue should be accepted. The statement on which the applicants relied must be read in the context of the response as a whole. When read in that way it is apparent that the response is a submission about the construction of the Alza patent, specifically, whether the disclosure in the Alza patent anticipates the invention. Moreover, this accords with the issue raised by the examiner which, in terms, called for a comparison between the invention as claimed and the Alza patent. The sentence in question is part of a paragraph which itself, in terms, deals with the disclosure made by the Alza patent. The use of the word “would”, in this context, indicates that the author has formed a conclusion or expectation about plasma levels based on the disclosure of a constant release rate in the Alza patent. As Wyeth submitted, as a matter of construction of the extent of the disclosure in the Alza patent, the statement is correct. The Alza patent is concerned with a formulation yielding a relatively constant release rate and thus would not produce a peak blood plasma level of between 4 to 8 hours. The invention claimed in the patent does have that peak blood plasma level as a limiting feature in claims 1 to 4.

540 For these reasons the statement on which the applicants relied in respect of the Alza patent does not amount to a false suggestion or misrepresentation. As the statement is one concerning a comparison between the disclosure in the Alza patent and the invention as claimed, Wyeth’s internal research and Professor Charman’s evidence are immaterial. The statement is a submission to the examiner about the construction of another patent.

I4 The sole inventor representation

Applicants’ case

541 This representation relates to the request for a standard patent and notice of entitlement filed on 30 October 2003 naming Ms Sherman as the “actual inventor” and Wyeth as the “assignee of the actual inventor”.

542 The applicants submitted that, at the time this request was made, Wyeth knew it to be false. As identified in the argument on entitlement, on 27 February 1998 Wyeth had filed a request to amend Patent Application No 16400/97 to include Mr Clark as an inventor. On 20 November 2001 Ms Sherman made an affidavit on support of adding three inventors to related Canadian patent. Wyeth has not called evidence to explain these events. As such, an inference should be drawn that evidence would not have assisted Wyeth. The identification of Ms Sherman as the sole inventor was a misrepresentation about her entitlement to apply for a patent in respect of the invention. As Crennan J held in JMVB Enterprises Pty Ltd (formerly known as A’Van Campers Pty Ltd) v Camoflag Pty Ltd (2005) 67 IPR 68; [2005] FCA 1474 at [136]:

An incorrect statement to the commissioner as to the identity of the inventor of a patent application which is later granted will make the patent susceptible to revocation on the ground of false suggestion or misrepresentation: Atlantis Corp Pty Ltd v Schindler (1997) 39 IPR 29 at 54; Martin v Scribal Pty Ltd (1954) 92 CLR 17 at 67-9, 93… see also R v Cmr of Patents; Ex parte Martin (1953) 89 CLR 381; [1953] ALR 931 per Williams ACJ at CLR 398-9… (in dissent in the result, but discussing the law).

543 In the present case it may be inferred that if the true position had been disclosed – that Ms Sherman was claiming the benefit of the invention rather than that part for which she was responsible – the patent would not have issued.

Wyeth’s response

544 According to Wyeth, if its case on entitlement is accepted, this contention cannot succeed. That is, if Wyeth is entitled to the patent, a representation about its entitlement cannot rationally found a ground for revocation. Subject to this overriding observation, Wyeth made further arguments in response.

545 First, Wyeth pointed to the statutory context. Section 138(3)(a) expressly provides as a ground of revocation that “the patentee is not entitled to the patent”. The false suggestion ground under s 138(3)(d) is not directed to that issue. In University of British Columbia v Conor Medsystems Inc (2006) 155 FCR 391; [2006] FCAFC 154 Emmett J said at [23]:

It is clear that the reference in s 59(a) and in s 138(3)(a) to a person not being entitled, either to a grant of a patent or to a patent, is a reference to a prerequisite of the Act. The prerequisite can only be that contained in s 15(1) of the Act. In the context of the scheme of the Act as outlined above, the reference, in the present tense, to a patentee not being entitled to a patent, must be a reference to the notion that the patent in question ought not to have been granted to the patentee named in the Register, for a reason other than those referred to in paras (b), (d), (e) and (f) of s 138(3).

546 Second, there is no basis to infer that the identification of the inventor was material to the grant of the patent. The only material issue is whether Wyeth derives title from the true and actual inventors. For the reasons given about Wyeth’s entitlement derived from the inventors this material assertion was not false.

547 Third, Wyeth disputed the applicants’ reliance on Camoflag as authority for the proposition that failure to identify the correct inventors is of itself sufficient to establish false suggestion without demonstrating that the patentee is not entitled to the patent. Wyeth noted the decision of Emmett J in Speedy Gantry Hire Pty Ltd v Preston Erection Pty Ltd (1998) 40 IPR 543 at 560, in relation to the position under s 100(1)(k) of the Patents Act 1952 (Cth), in which his Honour said:

If the relevant statement in the declaration was false, I do not consider that such a false suggestion or representation would have contributed materially to the commissioner’s decision to grant the patent. So long as Speedy Gantry was entitled under s 34 to apply for the patent, the particular grounds upon which that entitlement arose were immaterial. It did not affect Speedy Gantry’s right to the grant: see R v Commissioner of Patents; Ex parte Martin (1953) 89 CLR 381 at 404-5 per Fullagar J.

548 On appeal, the Full Court agreed with Emmett J’s conclusion of lack of materiality (Preston Erection Pty Ltd v Speedy Gantry Hire Pty Ltd (1998) 43 IPR 74 at 82).

549 As to Camoflag itself, Wyeth said the case was not one in which the application merely failed to identify the correct inventors. In Camoflag the patentee wrongly asserted an entitlement to the invention. The observation at [136] on which the applicants rely must be read in this context. This, said Wyeth, is also demonstrated by the decisions to which Crennan J referred in support. Atlantis Corporation Pty Ltd v Schindler (1997) 39 IPR 29 also did not involve a mere failure to identify the correct inventors. It concerned a misrepresentation as to entitlement. Martin v Scribal Pty Ltd (1954) 92 CLR 17 too concerned the entitlement to the invention, not the identity of the inventor. This appears from the reference to Dixon CJ’s reasons which Crennan J quotes at [147] (namely, “however much the specification may change its shape by amendment the representation of the applicant that he was, at the date of applying, in possession of the invention therein described is continuing and operates upon it”). In any event, the Privy Council expressly indicated its disagreement with this aspect of Dixon CJ’s reasons (Martin v Scribal Pty Ltd (1956) 95 CLR 213 at 221-222). In Ex parte Martin the grant itself contained a condition “that these letters patent shall be void if it is made to appear that the said patentee is not the actual inventor of the said invention” (R v Commissioner of Patents; Ex parte Martin (1953) 89 CLR 381 at 392). Wyeth noted the lack of any equivalent condition in the present case and that the historical position which permitted grants to inventors only has now changed. As to the decision in Stack v Davies Shephard Pty Ltd (2001) 108 FCR 422; [2001] FCA 501 to which Crennan J referred in Camoflag at [143], Wyeth said that the decision stands only for the proposition that one of two co-inventors is not entitled alone to the grant of a patent for the entire invention. The decision, however, says nothing about the position where a patentee fails to identify one or more inventors from whom it actually derives rights to the invention.

550 Finally, Wyeth rejected the applicants’ criticisms of it for not calling evidence from the inventors to rebut the false suggestion case. Wyeth said in response:

That could only possibly have any substance if Wyeth sought to respond by showing that one or more of the additional person alleged by Sigma to be an inventor was not in fact an inventor. It does not; as indicated, it takes no position on that matter one way or the other. Against this, given the lack of any reasoned explanation from Sigma as to how the alleged misrepresentation could have been material to the grant of the Patent, the absence of any evidence being called by Sigma from the Commissioner of Patents is particularly significant.

Discussion

551 Some findings of fact are necessary. For the reasons set out below in section J dealing with entitlement, the evidence leads to the following factual findings: - (i) Ms Sherman is not the sole inventor of the invention claimed in the patent, (ii) Messrs John C Clark, John V Lamer and Steven A White are also inventors of that invention, (iii) however, neither Mr Paul Sheskey of Dow Chemical nor Mr Douglas Smith of Wyeth were inventors of the invention.

552 Other than to the extent of finding that Ms Sherman was not the sole inventor of the invention, Wyeth’s submissions should be accepted. The cases on which the applicants relied, including Camoflag, do not concern a factual situation analogous to the present case. In the present case, and for the reasons also set out below in the entitlement section, it is clear that each of Ms Sherman and Messrs Clark, Lamer and White were employees of Wyeth at all relevant times. In the patent application Wyeth claimed the entitlement to the invention. It did so on the basis of its relationship with the inventors as its employees who developed the invention during the course of their employment. In this factual context, the representation that Ms Sherman was the sole inventor cannot have been material to the grant of the patent. The only material representation was as to Wyeth’s entitlement, discussed below and resolved in Wyeth’s favour.

553 The facts of this case bear no resemblance to cases in which one person wrongly claims an entitlement to a patent by reason of status as an investor to the exclusion of the rightful entitlement of another. Read in context, as Wyeth submitted, Camoflag says nothing about the position where a patentee fails to identify one or more inventors from whom it actually derives rights to the invention.

554 The applicants’ descriptions of the inconsistencies in Wyeth’s patent applications in the US, Canada and Australia also do not assist its case. There are undoubtedly inconsistencies. Those inconsistencies support the factual finding that Messrs Clark, Lamer and White were co-inventors but no more. The applicants sought to draw some unspecified inference adverse to Wyeth’s answer to this claim but no such inference is apparent or available. The applicants’ case on this ground failed to explain how it could have been material to the grant that the patent application failed to nominate all Wyeth employees by reason of which Wyeth claimed its entitlement to the invention. Unless Wyeth was not in fact entitled to the invention the failure to identify every inventor simply cannot have been material to the grant of the patent.

I5 Reduction in side effects

555 Generic Health contended that Wyeth falsely represented in the specification and related correspondence with the Commissioner that the invention reduces the level of nausea and incidence of vomiting compared to the immediate release formulation. However, other than a reference to a journal article in its particulars of invalidity, Generic Health did not adduce evidence in support of this contention. By contrast Professor Charman concluded in respect of the extended release formulation that “reality has shown that there is an amelioration of the overall side effects”. Professor Charman’s evidence should be accepted. Generic Health’s contention, therefore, cannot succeed.

J ENTITLEMENT

J1 Background

556 In their particulars of invalidity the applicants contended that the patent is invalid as Wyeth is not an eligible person as required by s 15 of the Act. According to Sigma and Generic Health Ms Sherman is named as the sole inventor on the Register of Patents but Messrs Clark, Lamer and White are co-inventors of the invention described in the patent and ought to have been named as inventors. According to Alphapharm, Mr Sheskey of Dow Chemical Company and Mr Smith of Wyethalso ought to have been named as inventors. Wyeth denied these contentions.

557 As noted, under s 138(3)(a) a patent may be revoked on the ground that the patentee is not entitled to the patent. Section 15 of the Act deals with entitlement to a patent in these terms:

(1) Subject to this Act, a patent for an invention may only be granted to a person who:

(a) is the inventor; or

(b) would, on the grant of a patent for the invention, be entitled to have the patent assigned to the person; or

(d) is the legal representative of a deceased person mentioned in paragraph (a), (b) or (c).

558 Under s 63 of the Act a “patent may be granted to 2 or more nominated persons jointly”.

559 The principles relating to the identification of an inventor or inventors were not in dispute. Accordingly, and as Sigma submitted:

345 To determine whether a person is the inventor or co-inventor, it is necessary to assess the person’s contribution to the invention objectively, and in particular their contribution to the “inventive concept” or “inventive heart” of the invention.

346 There may be more than one contributor to the inventive concept and possibly more than one inventive concept.

347 The inventive concept is to be discerned from the whole of the specification including the claims, at the time of filing the application. In [Polwood Pty Ltd v Foxworth Pty Ltd (2008) 75 IPR 1; [2008] FCAFC 9], the Full Court considered the identification of the “inventive concept” and stated as follows (75 IPR 1 at 15):

“The invention or inventive concept of a patent or patent application should be discerned from the specification, the whole of the specification including the claims. The body of the specification describes the invention and should explain the inventive concepts involved. While the claims may claim less than the whole of the invention, they represent the patentee’s description of the invention sought to be protected and for which the monopoly is claimed. The claims assist in understanding the invention and the inventive concept or concepts that gave rise to it. There may be only one invention but it may be the subject of more than one inventive concept or inventive contribution. The invention may consist of a combination of elements. It may be that different persons contributed to that combination.”

348 The role of joint inventors is not necessarily equal and a person’s contribution is to be determined qualitatively, not quantitatively. It is not for the Court to assess the inventiveness of respective contributions.

349 The following considerations can be distilled from the authorities:

(a) whether the person’s contribution had a material effect on the final concept of the invention,

(b) whether the person made a substantial contribution to the invention,

(d) whether the inventive concept would have occurred without the claimant’s involvement;

(e) the relationship between the parties and whether they were in collaboration; and

(f) whether the party contributed to the conception of the solution to the problem, whether or not the person did or was able to give effect to the solution.

560 As the facts identified below disclose Wyeth’s primary defence was not that Ms Sherman was the sole inventor. Wyeth accepted that other documents prepared by it or on its behalf identified four inventors (Ms Sherman, Mr Clark, Mr Lamer and Mr White). In respect of Alphapharm’s additional contentions about Messrs Sheskey and Smith, Wyeth also noted that none of the documents identified either as being an inventor. Consistent with its position about false suggestion Wyeth contended that the only material issue is whether “Wyeth is both a person who ‘would, on the grant of a patent for the invention, be entitled to have the patent assigned’ (s 15(1)(b)), and a person who derives title from the inventor or such a person (s 15(1)(c))”.

J2 Facts

561 Patent Application No 16400/97 filed on 20 March 1997 named Ms Sherman as the inventor in the accompanying request for a standard patent and notice of entitlement. On 27 February 1998 Wyeth applied to amend the application to include Mr Clark as an inventor on the basis that he was “inadvertently omitted from the request upon filing of the application”. This request was allowed. Australian Patent No 727653 was granted on 21 December 2000. That patent contained eight claims limited to a spheroid formulation of venlafaxine hydrochloride. Claims 18 to 26 of the patent in suit include as part of the method the same spheroid formulation of venlafaxine hydrochloride. The application for the patent and the patent itself name Ms Sherman only as the inventor.

562 There are three US patents claiming priority from the US priority document each of which identifies Ms Sherman, Mr Clark, Mr Lamer and Mr White as inventors. Each of these US patents also claim matter described and claimed in the patent in suit. Wyeth’s Canadian patent (No 2199788) also claims priority from the US priority document. The application for this patent also initially named Ms Sherman as the sole inventor. The application was amended to include Messrs Clark, Lamer and White as inventors. Ms Sherman made an affidavit in support of the amendment stating that, after discussions with Wyeth’s patent attorneys, it was determined that three additional inventors (Messrs Clark, Lamer and White) “are also inventors with respect to the subject matter for which claims in the Canadian application are currently pending and were not previously named as inventors by mistake”. The Canadian patent was subsequently granted naming four inventors.

563 Arnold Milowsky, former Assistant General Counsel, Patents and Vice President, Wyeth Research, made an affidavit on 5 March 2010. This affidavit annexed various documents.

564 The documents annexed to Mr Milowsky’s affidavit prove that Ms Sherman and Messrs Clark, Lamer, White and Smith were employees of Ayerst Laboratories Inc (Ayerst) and are employees of Wyeth. A series of documents covering the period 1991 to 1998 show that Ayerst Laboratories Incorporated was a wholly owned subsidiary of American Home Products Corporation (American Home Products).

565 Between 1984 and 1989 Ms Sherman and Messrs Clark, Lamer, White and Smith each entered into a standard form invention and disclosure agreement with Ayerst. This agreement includes provisions as follows:

4.(a) AYERST and EMPLOYEE agree that all Confidential Information, including its uses and the ideas related to its advertisement and promotion, is AYERST’s sole property. Further, all of Confidential Information developed, improved, discovered, invented or conceived by EMPLOYEE, solely or in concert with others, during the term of his (or her) employment with AYERST, shall become AYERST’s sole property.

…

5. EMPLOYEE will immediately disclose and assign to AYERST his (or her) entire right and interest in and to (1) developments, improvements, discoveries and inventions related to Confidential Information; (2) any applications for patents that may be filed relating to Confidential Information, and (3) any letters patent that may issue relating to such Confidential Information. He (or she) will also promptly give all assistance possible, including signing of necessary documents, for the preparation and prosecution of any application for new, revised or reissued patents on the above, or divisional or corresponding foreign patent applications thereon, as may be requested by AYERST.

…

8. EMPLOYEE agrees that every part of this agreement applies to, inures to the benefit of, and is enforceable by any of the subsidiary, affiliate, associate, or successor companies of AYERST or its parent company, American Home Products Corporation. In addition, this Agreement shall insure to the benefit of and be binding upon EMPLOYEE, EMPLOYEE’s heirs, executors, and administrators.

566 Between 1996 and 2001 Ms Sherman and Messrs Clark, Lamer and White executed a series of assignments of patents and related rights in respect of the invention to American Home Products. The effect of these assignments is in dispute.

567 Also annexed to Mr Milowsky’s affidavit is a document entitled Certificate of Merger of Wyeth Laboratories Inc into Ayerst Laboratories Incorporated (under Section 904 of the New York Business Corporation Law). The certificate is signed and dated 8 December 1998 and is said to become effective on 31 December 1998. It states that it is certified that the board of directors of each corporation has adopted a plan of merger setting forth the terms and conditions of the merger of the corporations. Further, that the name of the surviving corporation is Ayerst Laboratories Incorporated, with the other corporation, Wyeth Laboratories Inc, being merged into the surviving corporation. The certificate also records that the merger so certified was authorised by the written unanimous consent of the holder of all outstanding shares entitled to vote on the plan of merger. According to the certificate the surviving corporation is Wyeth Ayerst Pharmaceuticals Inc. A subsequent amendment dated 17 February 1999 changed the name of this corporation to Wyeth-Ayerst Pharmaceuticals Inc. By another amendment dated 21 March 2002 the name of the corporation was changed to Wyeth Pharmaceuticals Inc.

568 Consistent with these events corporate certificates show the incorporation of Ayerst Laboratories Incorporated and subsequent changes of name of that company (as merged) to Wyeth Ayerst Pharmaceuticals Inc, then to Wyeth-Ayerst Pharmaceuticals Inc, and then to Wyeth Pharmaceuticals Inc.

569 Annual reports pursuant to United States Securities legislation (the Securities Exchange Act of 1934) for the years 2001 to 2008 show Wyeth-Ayerst Pharmaceuticals Inc and Wyeth Pharmaceuticals Inc to be a wholly owned subsidiary of Wyeth.

570 Another document, signed and said to become effective on 11 March 2002, states that American Home Products (defined as the Corporation), by resolutions of its Executive Committee and unanimous written consent of its members on 9 January 2002, has determined to “merge Wyeth Company with and into the Corporation…, with the Corporation as the surviving corporation”. Further, that the name of the surviving corporation in the merger shall be changed to Wyeth. The annexed resolutions record that whereas (amongst other things) s 253 of the Delaware General Corporation Law permit a corporation to merge a wholly owned subsidiary into itself and change its corporate name, that Wyeth Company, a direct, wholly-owned subsidiary of the Corporation (that is, American Home Products) be merged with and into the Corporation and all property, rights, privileges, immunities, powers and franchises of Wyeth shall vest in the Corporation and all debts, liabilities and duties of Wyeth shall become the debts, liabilities and duties of the Corporation. Further, that the name of the Corporation be changed to Wyeth.

571 There is another certificate of ownership and merger dated 23 December 2002 relating to Wyeth Pharmaceuticals Inc and Wyeth Subsidiary Corporation (referred to as the Corporation). The certificate records that Wyeth Pharmaceuticals Inc is a wholly owned subsidiary of Wyeth Subsidiary Corporation. The Board of Directors of Wyeth Subsidiary Corporation had resolved on 2 December 2002 to merge Wyeth Pharmaceuticals Inc into Wyeth Subsidiary Corporation. Further, that all of the estate, rights, privileges, immunities, powers and franchises of Wyeth Pharmaceuticals Inc be vested in and held and enjoyed by the Corporation and all of the debts, liabilities and duties of Wyeth Pharmaceuticals Inc become debts, liabilities and duties of the Corporation. The Corporation’s name also was changed to Wyeth Pharmaceuticals Inc.

J3 Applicants’ case

572 According to the applicants, because Wyeth asserts an entitlement, it is subject to an evidentiary onus. Further, that Wyeth’s documents do not prove its entitlement but, rather, prove that “the person most likely to be entitled to the invention claimed in the Patent is a company the corporate status of which is unclear, or in any event has not come forward in these proceedings”. The steps supporting this submission of the applicants (leaving aside a pleading point which is dealt with separately) are explained below.

573 Alphapharm made the most detailed submissions about this issue. It described Wyeth as relying on two different routes for its entitlement – the employee route (excluding Mr Smith, an employee of Wyeth and Mr Sheskey, an employee of Dow Chemical, subject to separate submissions) and the assignment route. It characterised the routes as inconsistent in that if Ayerst Laboratories Inc became entitled to the invention by the invention and disclosure agreements with the employees or under general law then any later assignment by the employees must have been ineffective as they had nothing to assign.

574 Alphapharm identified six propositions about the employee route.

(1) At the time of the creation of the invention, Ms Sherman and Messrs Clark, Lamer, White and Smith were employees of Ayerst Laboratories Inc (first proposition).

(2) Ayerst Laboratories succeeded to the rights of Ms Sherman and Messrs Clark, Lamer, White and Smith in respect of the invention in the patent (second proposition).

(3) Any rights held by Ayerst Laboratories at the time of creation of the invention were held by Wyeth as at the date of grant of the patent, 11 May 2007 (third proposition), being a proposition depending on further propositions (4) to (6).

(4) The company presently known as Wyeth Pharmaceuticals Inc succeeded to the rights which the company formerly known as Ayerst Laboratories Incorporated had in the latter’s employees’ invention (fourth proposition).

(5) The company presently known as Wyeth Pharmaceuticals Inc was a subsidiary of Wyeth as at 11 May 2007 (fifth proposition).

(6) By reason of the company presently known as Wyeth Pharmaceuticals Inc being a subsidiary of Wyeth as at 11 May 2007, Wyeth somehow held the rights of the company presently known as Wyeth Pharmaceuticals Inc as at that date (sixth proposition).

575 According to Alphapharm, because the certificate of ownership and merger dated 23 December 2002 (relating to resolutions of 2 December 2002) evidences the merger of Wyeth Pharmaceuticals Inc (formerly Ayerst Laboratories Inc) with and into Wyeth Subsidiary Corporation, the merged entity itself being renamed Wyeth Pharmaceuticals Inc “there was no continuity in the relevant employer corporate entity from the early to mid 1990s until after the grant of the Patent”. This is said to follow from the submission that “whether or not on 2 December 2002 the company then renamed Wyeth Pharmaceuticals Inc succeeded to the rights of the company previously named Wyeth Pharmaceuticals Inc depends upon the legal incidents of the American legal doctrine of merging one company into another”. In support Alphapharm referred to s 7(3)(a) of the Foreign Corporations (Applications of Laws Act) 1989 (Cth) and the observations in Microsoft Corporation v PC Club Australia Pty Ltd (2005) 148 FCR 310; [2005] FCA 1522 at [64] in which it was said:

Although Australian corporations law does not recognise the concept of “merger” of corporations, it was submitted by the applicants that s 7(3) of the Foreign Corporations (Applications of Laws Act) 1989 (Cth) recognises the merger as having the effect in Australia that it has under Washington and Nevada law. I observe in that regard that s 7(3)(a) provides that any question of the status of a foreign corporation (including its identity as a legal entity) is to be determined by reference to the law applied by the people in the place in which the foreign corporation was incorporated, which place is presumably the State of Washington, United States, that being the domicile of Microsoft.

576 Alphapharm submitted that Wyeth had not adduced any evidence as to the applicable foreign laws (in contrast to Microsoft Corporation v PC Club at [63]) and had not pleaded the foreign law as required (see Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491; [2002] HCA 10 at [68]). This lack of pleading and proof must, said Alphapharm, be to the disadvantage of Wyeth (citing BP Exploration Co (Libya) Ltd v Hunt [1980] 1 NSWLR 496at 503) with the consequence that the Court must either:

(a) apply Australian company law as the default or presumptive law (e.g. Pickering v Stephenson (1872) LR 14 Eq 322); or

(b) if the Court is not content to apply Australian company law, simply say that it has insufficient evidence to make the relevant finding in favour of the party who has failed to prove the foreign law upon which the finding depends, namely Wyeth (see Damberg v Damberg (2001) 52 NSWLR 492 at 522-523, [162]-[164]; Elders IXL Ltd v Lindgren Pty Ltd (1987) 79 ALR 411 at 415).

577 If Australian company law is applied there is no doctrine enabling merger of one company into another and associated transmission of assets. If the evidence of foreign law is insufficient, Wyeth cannot have the benefit of a finding in its favour in respect of its positive case of entitlement.

578 As to the assignment route, Alphapharm identified other problems. Alphapharm characterised the assignment route as inconsistent with the employee route (referred to above). On this basis Alphapharm submitted that cl 4(a) of the standard invention and disclosure agreement effected an assignment by its own force. Clause 8 thus cannot assist Wyeth because Wyeth is not a party to the contract and would not be entitled to specific performance of its terms, there being no relevant exception to the doctrine of privity of contract on these facts and because the obligation is to assign to Ayerst not Wyeth. Further, Alphapharm observed that the documents do not include a joint assignment of the invention by Ms Sherman and Messrs Clark, Lamer and White but mutually inconsistent individual assignments of the inventors’ individual interests.

579 Alphapharm identified two other problems for Wyeth. One was the lack of any assignment by the additional persons it said were inventors, Mr Smith (a Wyeth employee) and Mr Sheskey (an employee of Dow Chemical Company). This issue is dealt with separately as it depends on other factual findings. The other was that Wyeth claims priority from the US priority document (dated 25 March 1996) in circumstances where it had not, as at that date, obtained the assignments from Ms Sherman and Messrs Clark, Lamer or White.

J4 Wyeth’s response

580 Wyeth characterised the applicants’ case on entitlement as one of form not substance. Section 15(1) of the Act does not impose any formal requirements for an assignment. Assignment may be effected orally or implied from conduct and thus does not require Wyeth to establish a chain of title by strict proof of written assignments and other agreements addressing foreign corporate laws (citing Speedy Gantry at 549-559 and University of British Columbia v Conor Medsystems, Inc (2006) 155 FCR 391; [2006] FCAFC 154 at [37]-[40]). In Conor Medsystems Emmett J said:

[39] … Patents are the creature of statute, and rights in relation to patents, and inchoate rights in relation to inventions that might be the subject of a patent, must depend upon the statute under which their existence is recognised. If the statute treats an invention, or the right to apply for a patent in respect of the invention, as something that is capable of assignment, alienation or disposition, it is necessary to recognise any juridical act or conduct that might give effect to such an assignment, disposition or alienation.

[40] It may not take very much to constitute an act or conduct that constitutes such an assignment, disposition or alienation or that gives rise, by implication, to such an assignment, alienation or disposition.

581 Wyeth rejected the proposition that it was subject to an onus, evidentiary or otherwise. According to Wyeth it was a matter for the applicants alone to prove that Wyeth was not entitled to the patent. Hence, the relevant question is not whether the material in Mr Milowsky’s affidavit and related thereto proves Wyeth’s entitlement to the patent. It is whether, in light of that material, the applicants can discharge their onus of proving that Wyeth is not entitled to the patent.

582 Wyeth contended that the evidence establishes five propositions.

(1) Wyeth was formerly American Home Products. The certificate of ownership and merger of 11 March 2002 shows that American Home Products merged with another company, the merged entity being named Wyeth from that date.

(2) When the invention claimed in the patent was made, Ayerst Laboratories Incorporated was a subsidiary of American Home Products and remained a subsidiary until 2008. This is demonstrated by the corporate certificates relating to Ayerst Laboratories Incorporated (subsequently, as merged, being Wyeth Ayerst Pharmaceuticals Inc, then Wyeth-Ayerst Pharmaceuticals Inc, and then Wyeth Pharmaceuticals Inc) and the annual reports relating to American Home Products and Wyeth from 1991 to 1998, as well as the terms of cl 8 of the standard invention and disclosure agreement.

(3) Ms Sherman and Messrs Clark, Lamer and White (as well as Mr Smith) were employees of Ayerst Laboratories Incorporated at all relevant times, as confirmed by their employee records and the invention and disclosure agreements.

(4) By the invention and disclosure agreements (cll 5 and 8 in particular) Ms Sherman and Messrs Clark, Lamer and White (as well as Mr Smith) agreed to assign rights to inventions made by them in the course of their employment, and that agreement was for the benefit of their employer Ayerst Laboratories Incorporated and its parent company American Home Products.

(5) Ms Sherman and Messrs Clark, Lamer and White also executed specific assignments of rights in the invention in favour of American Home Products.

583 Wyeth also made submissions answering specific aspects of the applicants’ case against it.

584 Wyeth rejected the suggestion that the invention did not fall within the definition of “confidential information” in the invention and disclosure agreements. Wyeth pointed to the breadth of that definition in cl 2 (so as to include “methods, process, techniques … compounds, compositions … research data, clinical and pharmacological data … and all other know how and trade secrets which belong to or pertain to AYERST, or any of its subsidiaries or affiliated companies, and which have not been published or disclosed to the general public”). According to Wyeth, the invention falls within the introductory words of the definition and belongs or pertains to Ayerst. Further, there is no evidence that the invention was disclosed to the public and available documents suggest to the contrary. In these circumstances the applicants have not proved that the invention is not confidential information as defined in the invention and disclosure agreements.

585 Wyeth disputed the applicants’ approach to cl 8 of the invention and disclosure agreements. Wyeth submitted that cl 8 “expresses a clear intention on the part of the subsidiary and its employees that the earlier clauses of the agreements including the agreement to assign rights pursuant to clause 5 are to apply to, be for the benefit of and be enforceable by the parent company”. Wyeth also took issue with the applicants’ reliance on Trident General Insurance Co Limited v McNiece Bros Proprietary Ltd (1988) 165 CLR 107 to support the proposition that “a third party obligation for the express benefit of the parent, said to be enforceable by the parent, is not enforceable at the suit of the parent or does not create an equitable interest in the parent in the benefit of the invention”. According to Wyeth the suit might have to include the subsidiary and the parent, but that is a matter of procedure only.

586 Wyeth characterised the applicants’ criticisms about the scope of the individual assignments as misconceived. Wyeth said that it did not rely on the documents as assignments of patent applications, but rights in inventions defined by reference to the applications. As such, Wyeth submitted that it is irrelevant that, for some of the individuals, the assignments refer to later filed applications than the original divisional application, as they cover the same invention. Wyeth also described the assignments as confirmatory only of the rights transferred by the invention and disclosure agreements.

J5 Conclusions on entitlement

587 As Wyeth submitted about the applicants’ case on entitlement:

… some perspective is necessary here. The essence of the case now sought to be made by Alphapharm is that the Court should revoke Wyeth’s Patent because there is insufficient proof that Wyeth derives title to the invention from inventors who were employed by its own subsidiary, and who had executed agreements with that subsidiary for the transfer of such rights which were expressly stated to be for the benefit of Wyeth. It is not suggested that there is any third party external to the Wyeth organisation who claims rights in respect of the invention or whose rights are affected. It is not a case of substance.

588 The documents in evidence, on their face, establish that Wyeth Pharmaceuticals Inc merged with another company called Wyeth Subsidiary Corporation, and that the merged entity was called Wyeth Pharmaceuticals Inc. Further, that Wyeth Pharmaceuticals Inc is the same company that was originally incorporated as Ayerst Laboratories Incorporated. On their face, moreover, the documents record that the merger was on the basis that “… all of the estate, property, rights, privileges, immunities, powers and franchises of [Wyeth Pharmaceuticals Inc] be vested in and held and enjoyed by [the merged entity] as fully and entirely and without change or diminution as the same were before held and enjoyed by [Wyeth Pharmaceuticals Inc] in its name …”. As Wyeth submitted, to the extent that proof of foreign law is in issue, the documents (which expressly record the sources of power for their validity and effect under foreign law) are sufficient for that purpose. More to the point, the fact that Wyeth tendered evidence, including documents recording foreign transactions, does not mean that it became subject to any onus of proof. The applicants bore the onus of proving lack of entitlement. In the face of the evidence of assignment of all rights in connection with the invention to Wyeth that onus has not been discharged.

589 Alphapharm’s inconsistency point is also immaterial. There is no inconsistency in a case, such as Wyeth’s, which maintains an assignment by reason of the invention and disclosure agreement and, for good measure, a subsequent assignment to the extent that any rights may not have been assigned by that agreement. Contrary to the applicants’ submissions, they also bore the onus of establishing lack of entitlement arising from the invention and disclosure agreement. The terms of the invention and disclosure agreement are themselves sufficient to establish Wyeth’s entitlement to the invention. There is no internal inconsistency between cll 4, 5 and 8. Read together and in context, as they must be, the clauses provide a workable scheme for the identification and vesting of all rights as identified in Wyeth’s subsidiary (such being the case at all times between 1991 and 2008), in circumstances where Wyeth was the sole shareholder.

590 As Wyeth also submitted (referring to Re Compaction Systems Pty Ltd and the Companies Act [1976] 2 NSWLR 477 at 484 per Bowen CJ in Eq, as applied by Emmett J in Speedy Gantry at 558) that:

If all of the shareholders of a company are present together and signify their assent to a transaction which is within the powers of the company, their decision will be effective as if a resolution to that effect had been passed at a properly constituted meeting. In the present case, the only shareholder in the subsidiary was Wyeth,… By accepting the specific assignments and applying for the Patent in its own name, Wyeth signified its assent to that transaction both on its behalf and on behalf of its subsidiary. In the circumstances, so far as the subsidiary is concerned, that assent was as effective as if a resolution to that effect had been passed at a properly constituted meeting of the company. Moreover, that asset was consistent with clause 8 of the Invention and Disclosure Agreement which had earlier been executed by the subsidiary. Thus the result reflects both principle and common sense.

Against this background, no resort to the question whether Wyeth could maintain an action for specific performance of clause 8 of the Invention and Disclosure Agreements is necessary.

J6 The pleading point

591 Wyeth submitted that the case the applicants sought to make on entitlement and false suggestion (to the extent that Wyeth’s answer to the latter case depended on immateriality by reason of its entitlement) at the hearing was outside the scope of the case as particularised and thus not able to be put. Insofar as the applicants’ pleadings identified the claimed lack of entitlement, the lack was said to flow from the fact that Ms Sherman was named as the sole inventor and was not the sole inventor, there being other inventors (in Sigma’s case, all being Wyeth employees like Ms Sherman and, in Alphapharm’s case, including also Mr Sheskey of Dow Chemical Company). Nothing in the case as particularised indicated a challenge to Wyeth’s entitlement based on its corporate history or the effectiveness (or otherwise) of any transaction. Yet most of the applicants’ case on lack of entitlement concerned those matters.

592 The applicants responded to this circumstance by pointing to the fact that Wyeth had simply denied the lack of entitlement allegation and filed no evidence in support until the second last day of the hearing, thereby seeking to mount a previously undisclosed affirmative defence. Wyeth had not, in accordance with the directions, served copies of the documents it sought to tender before the hearing. When Wyeth ultimately tendered the evidence to prove its entitlement the applicants were entitled to review the evidence and make a contrary case that the evidence did not have the effect for which Wyeth contended.

593 The applicants’ submissions on this point are persuasive. Wyeth’s evidence rebutting its alleged lack of entitlement was disclosed late. The evidence having been admitted, the applicants were entitled to mount a challenge to the sufficiency of that evidence as proof of “any juridical act or conduct that might give effect to… an assignment, disposition or alienation” (Conor Medsystems at [39]). The essential problem for the applicants, as noted above, is that the tendering of evidence by Wyeth did not subject it to any onus of proof. The applicants had to prove lack of entitlement in the face of evidence which, on its face, indicates to the contrary.

J7 Mr Smith and Mr Sheskey

Mr Smith

594 Alphapharm’s case in respect of Mr Smith (a Wyeth employee) depends on the internal memorandum dated 29 April 1991. This memorandum, as noted, describes the results of an exercise which Mr Smith undertook to simulate a dissolution profile and the plasma levels expected from a 75 mg and 375 mg sustained release hydrogel formulation of venlafaxine hydrochloride, with three figures showing the profiles generated. Alphapharm noted that one of these profiles (figure 1) shows a peak blood plasma level for the 75 mg dose at just before eight hours (that is, within the peak blood plasma levels prescribed in the claims of the patent).

595 As discussed, another memorandum, however, is also relevant to Mr Smith’s role. On 15 April 1992 Dr DeNeale issued a memorandum regarding the Venlafaxine SR Project Team. Item 4 of that memorandum states:

596 Wyeth submitted that there was no evidence that Mr Smith’s profile was used as anything other than a way to recognise unsuccessful formulations without going to the expense of a bioavailability study. Further, that there is no indication of the member of the biopharmacy section that generated the subsequent dissolution profile for the coated spheroid work or the assumptions relied on to develop that profile. Alphapharm pointed out that Mr Smith’s profile continued to be used until at least April 1992 and, given the lack of evidence of another profile, no assumption should be drawn that one was prepared.

597 Wyeth’s submissions should be accepted. The work done by Mr Smith did not contribute to the invention as claimed. At its highest, it was used at one point and then abandoned, remaining relevant for “information” purposes only. This does not establish involvement by Mr Smith in the inventive concept, being the “formation in the mind of the inventor of a definite and permanent idea of the complete and operative invention as it is hereafter to be applied in practice” (University of Western Australia v Gray (No 20) (2008) 76 IPR 222; [2008] FCA 498 at [1426], approved on appeal in University of Western Australia v Gray (2009) 179 FCR 346 at [256]).

Mr Sheskey

598 Alphapharm’s case in respect of Mr Sheskey (an employee of Dow Chemical Company) arises from the fact that by January 1992 Ms Sherman was focused on the making of a sustained release formulation using coated spheroids. As noted, Ms Sherman reported problems with the coated spheroids approach. Ms Sherman recorded a telephone conversation with Mr Sheskey of Dow Chemical Company. Ms Sherman’s note states that “they suggested using the K chemistry HPMC’s low viscosity… should use K grades at levels of 0.5-1.0%”. On 5 February 1992 Mr Sheskey sent a letter to Ms Sherman suggesting the use of low viscosity K chemistry HPMC (hydroxypropylmethylcellulose 2208). On 10 February 1992 Ms Sherman recorded a major breakthrough with respect to the difficulties encountered stating that when a change was made to the order in which the excipients, drug and water are added the spheroids appear clumpy but not wet. On 13 February 1992 Ms Sherman reported another breakthrough with the use of HPMC K3 resulting in a formulation which “goes through the extruder very well”. Alphapharm’s case is that as Mr Sheskey suggested the use of HPMC K3 his contribution directly led to the production of workable spheroids. Alphapharm noted that the patent itself says:

Addition of hydroxypropylmethylcellulose 2208 to the venlafaxine hydrochloride-microcrystalline cellulose mix made production of spheroids practical which proved to be practical for a single daily dosing formulation useful in the methods of the invention

599 According to Alphapharm this is the solution to the problem which the patent identified and no other problems or solutions are described as resolved.

600 This argument, however, depends on acceptance of the applicants’ narrow conception of the invention as limited to a particular formulation being accepted. When the invention as claimed is recognised, it is clear that Mr Sheskey cannot be considered to have had any involvement in the inventive concept. Even on the applicants’ narrow approach to the invention, this aspect of Alphapharm’s case is untenable. Mr Sheskey simply responded to a customer’s inquiry about available products. There is no suggestion from the evidence that Mr Sheskey knew any details of the research Wyeth was undertaking. Mr Sheskey has never suggested he was an inventor of the invention. If, on the evidence, he could make that claim then, as Wyeth submitted, “commercial suppliers of excipients and other ingredients would have claims in relation to many pharmaceutical patents”.

K UTILITY

601 Generic Health (but not Sigma or Alphapharm) contended that the invention as claimed in claims 3, 7 and 13 (and dependent claims) is not useful as referred to in s 18(c) of the Act. The contention is that a method within the claims will not, of itself, meet the objective of reducing the level of nausea and the incidence of emesis (referring to an article by Cunningham L, “Once daily venlafaxine extended release (XR) and venlafaxine immediate release (IR) in outpatients with major depression” (1997) 9(3) Annals of Clinical Psychiatry 157.

602 As Wyeth noted, Generic Health did not call evidence or make submissions in support of this contention. To the extent it is pressed, the contention should be rejected. The claims are limited by result, the result being reducing the level of nausea and the incidence of emesis. By definition a method within the claims will have that result. That suffices to dispose of this issue.

L REVOCATION OF THE PATENT

603 The applicants have not established any ground under s 138(3) of the Act to justify revocation of the patent in whole or part.

604 Accordingly Wyeth’s case for infringement must be considered.

M INFRINGEMENT

M1 The dispute

605 Wyeth alleged that the applicants’ threatened activities will infringe claims 1, 4, 5, 8, 9, 10, 15, 16 and 27 of the patent.

606 Sigma acknowledged in opening that its defence to infringement was invalidity. In its written submissions Sigma also said, however, that Wyeth has not established infringement of claims 5, 8, 9 and 10 of the patent each of which includes the 150 ng/ml integer. This is the integer that the single daily dosing formulation provides a therapeutic blood plasma concentration of venlafaxine over the 24 hour period with a peak blood plasma level of no more than 150 ng/ml. This, said Sigma, related to the Cmax in an individual patient and not a mean.

607 Sigma’s product information for its product, Evelexa XR, contains the following statement:

After administration of modified release venlafaxine (150 mg daily), the peak plasma concentrations (C max) of venlafaxine (150 ng/ml) and ODV (260 ng/ml) are attained within 6.0 ± 1.5 and 8.8 ± 2.2 hours, respectively.

608 However, according to Sigma, because the peak plasma levels contained in the product information for Evelexa XR are mean figures and not figures for a particular patient, there will be a range of values higher and lower than that mean (consistent with Professor Charman’s evidence). Further, the evidence does not cover the peak plasma levels for patients taking Evelexa XR who have existing plasma levels in excess of 55 ng/ml or who take a 225 mg dose which is also contemplated by Sigma’s product information. Hence, submitted Sigma, Wyeth has not established that: - (i) every patient taking a single daily dose of 150 mg or more of Evelexa XR will infringe claims 5, 8, 9 and 10, (ii) there will be such an infringement by a patient taking a single daily dose of 150 mg or more of Evelexa XR who has an existing plasma level in excess of 55 ng/ml at the time of dosing, or (iii) there will be such an infringement by a patient taking a single daily dose of in excess of 150 mg per day.

609 Alphapharm made submissions to the same effect as Sigma about the peak blood plasma level having regard to the Enlafax-XR product information which contains the following statement:

After administration of venlafaxine 75mg at steady state, the peak plasma concentrations (Cmax) of venlafaxine... were attained within 5.38 ± 1.37 hours... After the administration of venlafaxine (150mg) under the fasting conditions, the peak plasma concentration (Cmax) of venlafaxine.... were attained within 5.32 ± 1.48 hours... After the administration of venlafaxine (150mg) under the fed condition, the peak plasma concentration (Cmax) of venlafaxine (103.0 ± 49.2 ng/ml)... were attained within 6.11± 1.66 hours respectively

610 Professor Charman reviewed the Enlafax-XR product information and said that:

I note that based on the Product Information Extract, the mean plasma concentrations of venlafaxine for the doses and conditions mentioned are well below the peak blood plasma level of 150ng/ml, provided by claim 9 of the Patent. Assuming a typical distribution of individual patient Cmax values around the mean plasma concentration values reported for the doses-mentioned in the Product Information Extract, I would expect a significant proportion of the individual patients to have a Cmax value of less than 150ng/ml. On this basis (and on the basis set out in paragraphs 42 to 54 of My July 28 Affidavit), it is my opinion that administration of Enlafax XR products to those patients achieves the method of claim 9 of the Patent.

611 According to Alphapharm, this opinion lacks an underlying factual basis in a number of respects. First, as the Enlafax-XR product information does not specify whether the 150 mg dose was administered to patients at steady state, there is no evidence capable of founding a conclusion as to what proportion of individual patients to whom the 150 mg dose of Enlafax-XR is administered on a chronic basis (i.e. at steady state) will be above 150 ng/ml. Second, the Enlafax-XR product information does not specify what the Cmax is for doses other than 75 mg or 150 mg forms, in circumstances where the Enlafax-XR product information allows for dosing up to 225 mg.

612 Otherwise, and insofar as its submissions on infringement can be separated from those on invalidity discussed and rejected above, Alphapharm submitted that if (contrary to Alphapharm’s arguments and its version of Professor Charman’s oral evidence, discussed and rejected above) “therapeutic blood plasma concentration” means any single daily dosing formulation of venlafaxine hydrochloride which has therapeutic effect then “there is no evidence as to the range of plasma concentrations over a 24 hour period achieved by individual patients to whom Enlafax-XR is administered, and no evidence even as to the therapeutic window of venlafaxine in the general sense, [so that] infringement is not proved on this definition”.

613 Alphapharm’s primary defence, however, was that the words “a single daily dosing formulation of venlafaxine hydrochloride” should be construed as meaning “a single daily dosing formulation (not utilising hydrogel tablet technology)”. Further, that any technology using a mechanism of diffusion of drug through a hydrated gel matrix as the method of delaying release of the drug is hydrogel tablet technology within the meaning of the patent.

614 Finally, Alphapharm submitted that because the specification discloses only that venlafaxine is used in the treatment of depression, Wyeth cannot obtain an injunction for infringement in respect of the use of Enlafax-XR to treat social anxiety disorder. Alphapharm thus seeks to make further submissions on the form of any order in relation to the sale of Enlafax-XR to treat social anxiety disorder.

615 Generic Health relied on Alphapharm’s submissions and the evidence of its own product information about which Professor Charman had said the composition was the same as Alphapharm’s product.

616 Wyeth agreed that, in the claims in the patent, the references to a Cmax of 150 ng/ml involve the level in an individual patient and not a mean value. According to Wyeth that is immaterial – unless the level will not be present at all on administration the injunction would be granted.

617 Wyeth otherwise relied on Professor Charman’s evidence based on reviews of the product information for the applicants’ products. This evidence establishes that:

… for each of the Evelexa-XR, Enlafax-XR and Generic Health XR products:

(a) the active ingredient of the product is venlafaxine hydrochloride;

(b) the product is a capsule;

(d) the product is indicated for the treatment of (at least) depression;

(e) the product is to be administered chronically and orally in a single daily dose;

(f) the product has been shown to be effective in treating depression;

(g) after administration of the product, the mean peak plasma concentration of venlafaxine is attained within the range of 4 to 8 hours (and, more particularly, within the range of 5 to 8 hours); and

(h) the mean peak plasma concentration of venlafaxine following administration is no more than 150ng/ml, or the peak plasma concentration will be below that level for at least a significant proportion of patients.

618 While it is true that, as Alphapharm noted, Professor Charman did not use the words “at least” to describe the proportion of patients who would have a peak plasma concentration below 150 ng/ml, his evidence did identify his expectation that “a significant proportion of the individual patients [administered the applicants’ products] to have a Cmax of less than 150 ng/ml”.

619 According to Wyeth this evidence (subject to the hydrogel argument) is sufficient to establish infringement of claims 1, 4, 5, 8, 9, 10, 15, 16 and 27 of the patent in that:

Such infringement arises:

(a) pursuant to s 117 of the Act, on the basis that the products are capable of only one reasonable use (s 117(2)(a)); there is reason to believe that the products, not being staple commercial products, will be used in the manner referred to (s 117(2)(b)); and because such use will be use in accordance with instructions or inducements given for the use of the products (s 117(2)(c));

(b) by authorisation pursuant to s 13(1) of the Act; and

M2 Conclusions on infringement

620 Insofar as the applicants relied on arguments essentially of construction (150 ng/ml and therapeutic blood plasma concentration) Wyeth’s submissions must be accepted. It is clear from Professor Charman’s evidence read with the applicants’ product information that the use of the applicants’ products would infringe the claims of the patent on which Wyeth relies. The evidence supports an inference that the applicants themselves have reason to believe that a significant proportion of patients will have a Cmax of less than 150 ng/ml after administration of their product and that a therapeutic (that is, clinically effective) blood plasma concentration of venlafaxine will be achieved.

621 In other words, and consistent with Wyeth’s case, the only defence of substance is the hydrogel argument. The difficulty for Alphapharm and Generic Health is that, assuming their products to use hydrogel tablet technology within the meaning of the patent, there is no sound basis to construe the words “a single daily dosing formulation of venlafaxine hydrochloride” as meaning “a single daily dosing formulation (not utilising hydrogel tablet technology)”. Those words of limitation cannot be read into the claims by reference to the specification. The reference in the claims to “a single daily dosing formulation of venlafaxine hydrochloride” is not unclear. The scope of those words cannot be read down by reference to the specification (Welch Perrin and Company Proprietary Limited v Worrel (1961) 106 CLR 588 at 610).

622 In contrast to the observation in H Lundbeck A/S v Alphapharm Pty Ltd (2009) 177 FCR 151; [2009] FCAFC 70 at [120] on which Alphapharm and Generic Health relied, this is not a case where the words in question have no positive meaning thereby enabling recourse to the text of the specification to ascertain the nature of the invention. If such recourse may be had, the specification construed as a whole also does not support the construction for which Alphapharm and Generic Health contend. The specification discloses that the invention is the method. The particular formulation is one embodiment of the method of the invention which, in contrast to the inventor’s attempts to use hydrogel tablet technology, proved practical for use in the method of the invention. In this context, the words “a single daily dosing formulation of venlafaxine hydrochloride” cannot be construed to mean “a single daily dosing formulation (not utilising hydrogel tablet technology)”.

623 The parts of the specification called in aid by Alphapharm and Generic Health do not provide a sufficient basis for a contrary construction. The words “extended release or tablets by hydrogel technology” on p 4C of the patent must be read in context. In context, they mean only that the inventors attempt to achieve the method by a formulation using hydrogel technology failed for the reasons given. Otherwise the impossibility representations have been discussed above. These conclusions on construction are sufficient to dispose of the case in defence to infringement put forward by Alphapharm and Generic Health.

624 As noted, Wyeth also claimed that, if the construction of Alphapharm and Generic Health were accepted, the evidence established that the relevant formulations were not within the scope of the exclusion of hydrogel tablet technology. In this regard, Alphapharm relied upon the evidence of Dr Marshall to show that “each of the Enlafax Formulations… are hydrogel technology and fall within the description of hydrogel technology in the Hydrogel Passage”, (the “Hydrogel Passage” being the description in the “Background of the Invention” section of the patent which refers to extended release drug formulations being conventionally produced as drug formulations by hydrogel tablet technology). Dr Marshall’s evidence in this regard was as follows:

It is clear to me from the manufacturing process and process controls that the Enlafax Formulations are tablet(s) contained in a hard gelatin capsule shell…

The excipients in the Enlafax Formulations are predominantly hypromellose (Methocel K100M which is a particular grade of HPMC) i.e. a cellulose ether. This component performs the primary ‘hydrogel’ function described in the Hydrogel Passage. That is to say, it is the water soluble polymer that swells to form a matrix through which water must diffuse… The function of the other excipients is… to modify the rate of release of the drug. ################################### #######################################################.

Further, although each of the tablets within the capsule of the Enlafax Formulations are coated tablets, this does not impact on the characterisation of the formulations as hydrogel tablets. The particular coating agent used (Eudragit E100) is a well known material, used for film coating purposes only, and does not affect the release rate.

Aside from the active ingredient and the coating, there are three other excipients in the Enlafax Formulations: ammonio methacrylate copolymer, sodium lauryl sulphate and magnesium stearate. Sodium lauryl sulphate and magnesium stearate are common tablet excipients, ########################################### ################################################################################################################################################################################################################.

I do not consider that the presence of any or all of these three additional excipients changes the characterisation of the Enlafax Formulations as hydrogel table technology, or takes those formulations outside the description of hydrogel tablets in the Hydrogel Passage… [T]he Hydrogel Passage anticipates the presence of other excipients in addition to the cellulose ether, as is the case with the Enlafax Formulations. The cellulose ether (hypromellose) will still, when exposed to moisture in the digestive system, swell upon hydration to form a gel, limiting exposure of the venlafaxine hydrochloride to moisture; water will progressively penetrate the gel matrix and the venlafaxine hydrochloride will dissolve and diffuse out through the gel, becoming available for absorption in the body. ############## ############################################################################################################################################################################################################################################################.

The coating of the Enlafax Formulations does not materially contribute to the mechanism of release of the formulation and therefore does not, in this instance, influence the characterisation of the Enlafax Formulations as hydrogel tablet technology.

For the detailed reasons outlined above, and for the key reason that the principal and predominant mechanism of drug release is provided by limitations imposed by the matrix system, in my opinion, each of the Enlafax Formulations as shown to me are hydrogel tablet technology and fall within the description of hydrogel technology in the Hydrogel Passage.

625 Although it is not necessary to deal with this argument, my conclusions are as follows.

626 First, and contrary to Wyeth’s submissions (and consistent with the position above on onus), Alphapharm carried no onus to prove that the Enlafax-XR formulation is within the scope of the assumed exclusion.

627 Second, it is true that the references to “hydrogel tablet technology” and “hydrogel technology” in the specification are to be construed in the context of the specification as a whole including the passage under the heading “background of the invention” referring to the way in which hydrogel tablets are conventionally produced. That is, if the applicants’ approach to construction is permissible then the words of exclusion “(not utilising hydrogel tablet technology)” also have to be construed in light of the specification as a whole. Read in context, they mean the attempts to produce sustained release tablets using the conventional technology described under the heading “background of the invention”. Thus, if “a single daily dosing formulation of venlafaxine hydrochloride” should be construed as to mean “a single daily dosing formulation (not utilising hydrogel tablet technology)”, hydrogel tablet technology must itself mean sustained release tablets using the conventional technology described under the heading “background of the invention”.

628 Third, the evidence discloses that, whatever else it might be, the Enlafax-XR formulation is not a sustained release tablet using the conventional technology described under the heading “background of the invention”. The Enlafax-XR formulation is a gelatine capsule containing two or three film coated tablets. ######################### ###############################################################################################################################################################################################################################################################################################################################################################################################. This evidence is sufficient to enable the conclusion that Wyeth has proved that the Enlafax-XR formulation is not a sustained release tablet using the conventional technology described under the heading “background of the invention”.

629 The Enlafax-XR formulation, as Professor Charman concluded, does not involve a tablet in which the cellulose ethers swell upon hydration and gradually leach away by moisture with the active ingredient slowly dissolving and diffusing through the gel. It involves a gelatine capsule in which there are a number of film coated tablets. While one aspect of the formulation involves the swelling of cellulose ethers the other aspects are different from and outside the scope of hydrogel tablet technology as used in the specification. ############################################################# ##############################################################################################################################################################################################################################################################################################################################################################################################################################################################################################################################################################################################################################################################################################. This too is different from and outside the scope of the description of hydrogel tablet technology in the specification given the limits therein on the mechanism to delay the release rate (that is, the swelling of the cellulose ethers).

630 For these reasons it is unnecessary to consider Wyeth’s additional submission that the Enlafax-XR formulation is itself protected by European Patent No 1502587B which, in any event, does not add to the force of the submissions already noted. If Alphapharm’s approach to construction is permissible then the approach must be applied not only to the meaning of “a single daily dosing formulation of venlafaxine hydrochloride” but also “hydrogel tablet technology” in the purported exclusion. Once that is done it is apparent from the evidence that the Enlafax-XR formulation is not “hydrogel tablet technology” in the sense that term is used in the specification. The same conclusion must apply to the Generic Health formulation given Generic Health’s position that its formulation is the same as the Enlafax-XR formulation.

631 It follows that the limited bases on which the applicants defended Wyeth’s infringement claims have not been sustained.

N CONCLUSIONs

632 For the reasons given above the applications for revocation of the patent under s 138(3) of the Act must be dismissed. Wyeth’s cross-claims for relief against infringement under s 122 should be granted, subject to any further submissions on the extent and form of the appropriate injunctions. Directions need to be made to this end.

I certify that the preceding six hundred and thirty two (632) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot.

Associate:

Dated: 8 November 2010

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