FEDERAL COURT OF AUSTRALIA

Bayer Pharma Aktiengesellschaft v Generic Health Pty Ltd [2012] FCA 1510

THE COURT ORDERS THAT:

1.    Pursuant to s 105(1) of the Patents Act 1990 (Cth) (the Act), Australian Patent No. 780330 entitled “Pharmaceutical combination of ethinylestradiol and drospirenone for use as a contraceptive” be amended in the manner set out in the annexure to the interlocutory application dated 13 April 2012 (the interlocutory application).

2.    The time for filing any application for leave to appeal from the orders made by the Court today pursuant to s 105(1) of the Act be extended until the date which is 14 days after the publication of the Court’s reasons for judgment on the interlocutory application.

3.    The orders made by the Court today pursuant to s 105(1) of the Act be stayed pending the date which is 14 days after the publication of the Court’s reasons for judgment on the interlocutory application.

Note:    Settlement and entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1        This is an application to amend Australian Patent No. 780330 (the Australian patent). The application is brought within an existing proceeding in the Court, pursuant to s 105 of the Patents Act 1990 (Cth) (the Act).

2        Section 105 provides as follows:

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

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

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

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

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

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

3        The Australian patent is for an invention entitled “Pharmaceutical combination of ethinylestradiol and drospirenone for use as a contraceptive”. The first applicant in the principal proceeding, Bayer Pharma Aktiengesellschaft (Bayer Pharma), is the patentee. The application for the Australian patent was made by Schering Aktiengesellschaft (Schering AG). In 2006, Schering AG was merged into the Bayer group of companies. The ultimate holding company in the Bayer group of companies is Bayer Aktiengesellschaft. The first applicant is the merged entity. On 29 December 2006, the first applicant’s name was changed to Bayer Schering Pharma Aktiengesellschaft. On 1 July 2011, the first applicant’s name was then changed to its present corporate name. Bayer Pharma, as patentee, is the applicant for the amendments now sought to the Australian patent. For ease of exposition it is convenient to refer to the first applicant by its current corporate name – Bayer Pharma – when dealing with the prosecution history of the application for the Australian patent and other applications for patents corresponding to the Australian patent.

4        The second applicant in the principal proceeding, Bayer Australia Limited (Bayer Australia), is a wholly-owned subsidiary of Bayer Global Investments BV which, in turn, is a wholly-owned subsidiary of Bayer Aktiengesellschaft. In the principal proceeding, Bayer Australia claims to be the exclusive licensee of the Australian patent. Bayer Australia supplies an oral contraceptive product in Australia under the brand name “Yasmin” that is said to be a drospirenone/ethinylestradiol formulation within the claims of the Australian patent.

5        The respondents in the principal proceeding are Generic Health Pty Ltd (Generic Health) and Lupin Australia Pty Limited (Lupin). Lupin is the sponsor under the Therapeutic Goods Act 1989 (Cth) of a number of registrations on the Australian Register of Therapeutic Goods (ARTG) for generic formulations of drospirenone and ethinylestradiol tablets, each of which was registered on 20 January 2012 for use as an oral contraceptive. One of these formulations is marketed under the name “Isabelle”. Generic Health has, since January 2012, imported and supplied the Isabelle product. It is not in dispute that Lupin has authorised that conduct. Generic Health and Lupin share a common director. In these reasons it is convenient to refer to Generic Health and Lupin, collectively, as “the respondents”.

6        In the principal proceeding, Bayer Pharma and Bayer Australia claim that, by the conduct referred to above, the respondents have infringed claims 3, 4, 8, 11 and 24 of the Australian patent, and the respondents claim, amongst other things, that those claims are invalid on a number of grounds. The respondents oppose the amendments to the Australian patent that have been sought by Bayer Pharma.

7        Eremad Pty Limited (Eremad) also opposes the amendments.

THE AUSTRALIAN PATENT

8        The application for the Australian patent was based on International Patent Application No. PCT/1B00/01213 filed on 31 August 2000 (the PCT application). The Australian patent claims a priority date of 31 August 1999 based on the filing of European Patent Application No. 99202826.6 and US Patent Application No. 09/386,274. The Australian patent was sealed on 30 June 2005.

9        The specification of the Australian patent describes the claimed invention as relating to a pharmaceutical composition comprising drospirenone and ethinylestradiol, a method of providing dissolution of drospirenone, methods of inhibiting ovulation by administration of drospirenone, and the use of drospirenone and ethinylestradiol for inhibiting ovulation. Drospirenone is a synthetic progestogen.

10        In discussing the background to the invention, the specification states:

Oral contraceptives containing a combination of a gestagen and an estrogen component have been used since the 1960’s. The earliest contraceptive preparations consisted of 21 tablets containing the combination of active agents and 7 tablets containing no active agent, and the amount of each active agent was the same in each tablet (the so-called one-phase preparations). Subsequently, preparations were developed that consisted of tablets containing different amounts and ratios of the active agents over the cycle of administration (the so-called multiple-phase preparations).

Contraceptive reliability is mainly provided by the gestagen component. The daily dosage should be at least the minimum of what is needed for the gestagen in question to inhibit ovulation effectively. The estrogen component acts to increase the ovulation inhibitory effect of gestagen and to ensure cycle stability. Since the introduction of oral contraceptives, the daily dosage of gestagen has been reduced through the development of new and more efficient gestagens than were present in the earlier contraceptive preparations. It has also been possible to reduce the daily dosage of estrogen.

11        In summarising the invention, the specification states:

In the course of research leading to the present invention, it has surprisingly been found that a hitherto undisclosed minimum dosage level of drospirenone is required for reliable contraceptive activity. Similarly, a preferred maximum dosage has been identified at which unpleasant side effects, in particular excessive diuresis, may substantially be avoided.

12        The specification then describes a number of aspects of the invention, as follows:

Accordingly, in a first aspect, the present invention relates to a pharmaceutical composition comprising, as a first active agent, 6β,7β;15β,16β-dimethylene-3-oxo-17α-pregn-4-ene-21,17-carbolactone (drospirenone) in an amount corresponding to a daily dosage, on administration of the composition, of from about 2 mg to about 4 mg, and, as a second active agent. 17α-ethinylestradiol (ethinylestradiol) in an amount corresponding to a daily dosage of from about 0.01 mg to about 0.05 mg, together with one or more pharmaceutically acceptable carriers or excipients.

Apart form [sic] the active substances themselves, it is envisaged that an ester or prodrug of drospirenone may be employed in the present composition, e.g. an oxyiminopregnane carbolactone as disclosed in WO 98/24801. Likewise, it is envisaged that esters or ethers of ethinylestradiol may be included in the composition.

In a further aspect, the invention relates to a method of inhibiting ovulation in a mammal, in particular a human, comprising administering, to said mammal, drospirenone in an amount in the range of from about 2 mg to about 4 mg of per day, together with ethinylestradiol in an amount of from about 0.01 mg to about 0.05 mg per day, said amounts being effective to inhibit ovulation in said mammal.

In a still further aspect, the invention relates to the use of drospirenone combined with ethinylestradiol for preparing a pharmaceutical preparation for the inhibition of ovulation in a mammal, in particular a human, the composition comprising an amount of drospirenone corresponding to a daily dosage, on administration of the composition, of from about 2 mg to about 4 mg, and comprising an amount of ethinylestradiol corresponding to a daily dosage, on administration of the composition, of from about 0.01 to about 0.05 mg.

13        The matter of present significance is that, in each described aspect, the amount of drospirenone is stated to be “from about 2 mg to about 4 mg” per day.

14        Later, the specification states (on page 4, lines 4-24):

Drospirenone, which may be prepared substantially as described in, e.g., US 4,129,564 or WO 98/06738, is a sparingly soluble substance in water and aqueous buffers at various pH values. Furthermore, drospirenone is rearranged to an inactive isomer under acid conditions and hydrolysed under alkaline conditions. To ensure good bioavailability of the compound, it is therefore advantageously provided in a form that promotes rapid dissolution thereof.

It has surprisingly been found that when drospirenone is provided in micronized form (so that particles of the active substance have a surface area of more than 10,000 cm2/g, and the following particle size distribution as determined under the microscope: not more than 2 particles in a given batch with a diameter of more than 30 µm, and preferably < 20 particles with a diameter of > 10 µm and < 30 µm) in a pharmaceutical composition, rapid dissolution of the active compound from the composition occurs in vitro (“rapid dissolution” is defined as the dissolution of at least 70% over about 30 minutes, in particular at least 80% over about 20 minutes, of drospirenone from a tablet preparation containing 3 mg of drospirenone in 900 ml of water at 37°C determined by the USP XXIII Paddle Method using a USP dissolution test apparatus 2 at 50 rpm). Instead of providing the drospirenone in micronized form, it is possible to dissolve it in a suitable solvent, e.g. methanol or ethyl acetate, and spray it onto the surface of inert carrier particles followed by incorporation of the particles containing drospirenone on their surface in the composition.

[Emphasis added]

15        As will become apparent, the dissolution test, as stated in the emphasised part of the above quotation, has particular significance for the present amendment application.

16        The specification describes a number of embodiments of the invention as, for example, a “composition” or “preparation”. Some embodiments are described as including drospirenone in an amount of “from about 2 mg to about 4 mg” per day. The specification states:

The composition of the invention may be formulated in any manner known in the pharmaceutical art. In particular, as indicated above, the composition may be formulated by a method comprising providing drospirenone and, if desired, ethinylestradiol in micronized form in said unit dosage form, or sprayed from a solution onto particles of an inert carrier in admixture with one or more pharmaceutically acceptable excipients that promote dissolution of the drospirenone and ethinylestradiol so as to promote rapid dissolution of drospirenone and preferably ethinylestradiol on oral administration.

17        Exemplified dosage forms include tablets, pills or capsules, liquid forms (for example, a solution, suspension or emulsion) and parenteral formulations (such as a subcutaneous implant or transdermal formulation).

18        A number of examples are provided in the specification. Example 1 relates to the preparation of tablets containing drospirenone and ethinylestradiol. Example 2 concerns the dissolution of drospirenone from tablets. In that connection the specification states:

The rate of dissolution of drospirenone from the tablets prepared in Example 1 was determined by the USP XXIII Paddle Method using a USP Dissolution Test Apparatus 2 including 6 covered glass vessels and 6 paddles. Tablets were placed in 900 ml water at a temperature of 37°C (+ 0.5°C) and stirred at 50 rpm.

19        Example 5 concerns the contraceptive efficacy of formulations containing drospirenone and ethinylestradiol. In this connection the specification refers to the following clinical trial:

An open-label, randomized trial with 52 female volunteers aged 20-35 years whose informed consent had been obtained included 1 pre-treatment cycle, 3 treatment cycles with two different tablet containing 2 mg and 3 mg drospirenone, respectively, but otherwise corresponding to the tablets prepared in Example 1, and a follow-up phase. A wash-out phase of 1 month preceded the treatment.

20        In reporting on the results of the trial, the specification states:

The results confirmed the results of earlier studies that the 2 mg drospirenone preparation was in the threshold region of ovulation inhibition, whereas the 3 mg drospirenone preparation had a demonstrable ovulation-inhibiting effect in all cases examined.

21        The specification ends with 45 claims. It is convenient to refer to claim 3 as a representative claim for the purposes of the present discussion. Claim 3, in its present form, includes a dissolution test. The claim states:

A pharmaceutical composition in oral dosage form comprising;

from 2 mg to 4 mg of drospirenone and 0.01 mg to 0.05 mg of ethinylestradiol, together with one or more pharmaceutically acceptable carriers or excipients,

wherein at least 70% of said drospirenone is dissolved from said composition within 30 minutes, as determined by USP XXIII Paddle Method II using water at 37°C as the dissolution media and 50 rpm as the stirring rate.

[Emphasis added]

22        Claims 11, 27 and 32 also include a dissolution test in substantially the same terms. I will refer to claims 3, 11, 27 and 32 and similar claims which incorporate a dissolution test as “dissolution test claims”, whether in the Australian patent or other corresponding patents or patent applications in other jurisdictions.

THE AMENDMENTS SOUGHT BY BAYER PHARMA

23        The amendments sought by Bayer Pharma are identified in an annexure to its statement of claim filed on 15 February 2012. The amendments are also particularised in its interlocutory application filed on 13 April 2012.

24        The amendments, as they relate to claims 3, 11, 27 and 32:

(a)    limit the dosage of drospirenone to 3 mg (the 3 mg feature);

(b)    confine the composition or preparation to a tablet form (the tablet feature); and

(c)    specify that the stated dissolution test is performed in 900 ml of water (the 900 ml feature).

25        It is convenient to refer to these features, collectively, as “the three features”. If made, the effect of these amendments would be to further confine the scope of each of independent claims 3, 11, 27 and 32 of the Australian patent and, it follows, the corresponding scope of each of their respective dependent claims.

26        The unchallenged evidence is that Bayer Pharma has sought these amendments to forestall any argument, particularly in the principal proceeding, that the dissolution test claims of the Australian patent are not fairly based on the matter described in the specification: s 40(3) of the Act; see also s 138(3)(f). There is no evidence to suggest that these amendments have been sought by Bayer Pharma to overcome any prior art or, indeed, to address any other asserted, apparent or possible ground of invalidity, although the respondents and Eremad contend that the effect of these amendments, if made, would be to strengthen Bayer Pharma’s and Bayer Australia’s defence of an allegation that the invention, as presently claimed in the relevant claims, lacks an inventive step. I will return to that contention.

27        In applying for these amendments, Bayer Pharma has made clear its position that it does not concede that, without them, the dissolution test claims would not be fairly based on the matter described in the specification.

28        Without seeking to decide that question in the present application, I should record what can be no more than a provisional view that there is support for Bayer Pharma’s position in this regard. As I have recounted, the specification refers, in a number of places, to dosages of drospirenone “from about 2 mg to about 4 mg” and to the fact that the composition of the invention can be formulated in a number of dosage forms, including as a tablet. The dissolution test in each of the relevant claims, although not stated in precisely the same terms as those used on page 4 of the body of the specification, nevertheless has an apparent close connection with the dissolution test so stated. In deciding whether the relevant claims, in their present form, are fairly based on the matter described in the specification, one issue to be determined (there may well be others) would be how those claims should be construed through the eyes of the person skilled in the art and whether the dissolution test stated in, for example, claim 3 would, as a matter of substance, be read and understood by such a person materially differently from the test stated on page 4 of the specification.

29        I should also point out that the examination of an Australian patent application required by s 45 of the Act specifically provides that the requirements of s 40 must be considered by the examiner. When the prosecution history of the application for the Australian patent is considered (a matter to which I shall return), it will be seen that no objection was made that the dissolution test claims were not fairly based because they were not limited by the three features, although other s 40(3) objections were made. I will return to that matter when discussing the prosecution of the Australian patent application.

30        Moreover, the conduct of the principal proceeding shows that the respondents did not consider, at least initially, that the dissolution test claims were not fairly based because they were not limited by the three features. When the respondents filed their particulars of invalidity on 13 April 2012 in support of their cross-claim for revocation, their allegation about lack of fair basis was directed to claims 3, 4, 8, 11 and 24. As then pleaded – even with knowledge of Bayer Pharma’s amendment application – their allegations were that claims 3 and 11 were not fairly based because they were not limited to a pharmaceutical preparation manufactured by micronizing or spraying drospirenone from a solution onto particles of an inert carrier, and that claims 3, 4, 8, 11 and 24 were not fairly based because they were not limited to a formulation using micronized drospirenone or spraying a solution of drospirenone onto particles of an inert carrier. On 18 June 2012, during the hearing of the present amendment application, the respondents sought leave to file amended particulars of invalidity which raised three additional grounds on which it was alleged that the claims lacked fair basis. In their proffered amended particulars of invalidity, the respondents sought to plead that claims 3 and 11 travelled beyond the matter described in the specification because, first, the claims are not limited to a pharmaceutical preparation in the form of a tablet; secondly, because the claims are not limited to a pharmaceutical preparation comprising a dosage of 3 mg of drospirenone; and thirdly, because the claims are not limited to conducting the USP XXIII Paddle Method II with 900 ml of water.

31        I raise these matters now to make clear that I accept that Bayer Pharma’s stated position is one that is genuinely held by it on grounds which appear to be capable of being argued objectively and reasonably. I stress, however, that, in the present application, I have not been called upon to determine whether the dissolution test claims, in their present form, are fairly based on the matter described in the specification of the Australian patent. I expressly refrain from expressing any view on that question beyond the limited observations I have made above in order to deal with the present application for amendment, which has been made in advance of the hearing dealing with the questions of claim infringement and validity: Les Laboratoires Servier v Apotex Pty Ltd (2010) 273 ALR 630 at [99]; Wimmera Industrial Minerals Pty Ltd v RGC Mineral Sands Limited (No 2) (1997) 74 FCR 306 at 309-310; CSL Ltd v Novo Nordisk Pharmaceuticals Pty Ltd (No 2) (2010) 190 FCR 522 at [57]; Federal Court Rules 2011 (Cth) r 34.41(6)(c).

32        The other amendments sought by Bayer Pharma can be summarised as follows:

(a)    Amendments proposed to claims 8, 24 and 28 that are merely consequential upon the amendments that have been sought to claims 3, 11, 27 and 32.

(b)    A proposed amendment to claim 45 to correct a typographical error in the spelling of drospirenone.

33        If the amendments in (a) are made consequentially, there will be no additional change in the meaning of claims 8, 24 and 28. No claim will be deleted but, where integers in a dependent claim (for example, claim 8) are incorporated by the amendments to an independent claim (for example, claim 3), the then redundant reference will be removed from the dependent claim. Plainly, the amendment in (b) will not affect the scope of claim 45.

34        No objection has been raised by the respondents or Eremad that the amendments, as sought, do not satisfy the legal requirements of s 102 of the Act. The only issue is whether the discretion to allow the amendments under s 105 of the Act should be exercised favourably to Bayer Pharma as patentee.

THE EVIDENCE

35        The evidence in support of Bayer Pharma’s application to amend was given principally by Andreas Broesamle. Dr Broesamle is employed within the Bayer group of companies as Senior Patent Counsel. In that role he manages the filing and prosecution of a number of patents within Bayer Pharma’s worldwide patent portfolio. Since 2000 his involvement in patents covering drospirenone has been the substantial part of his work, which also includes the enforcement and defence of patents within Bayer Pharma’s patent portfolio. Dr Broesamle’s evidence in chief was given in the form of a substantial affidavit which included a large number of documents detailing the prosecution history of the application for the Australian patent and other corresponding patent applications. Dr Broesamle was cross-examined on his affidavit by the respondents and by Eremad.

36        The evidence in support of Bayer Pharma’s application also included affidavits given by John Sopp and Anthony Zelano. Mr Sopp and Mr Zelano are United States patent attorneys. Mr Zelano is a partner in the firm of Millen, White, Zelano & Branigan, P.C. (MWZB). Mr Sopp is employed by MWZB. Mr Sopp was responsible for handling the prosecution of US Patent Application No. 09/654,227 (the US application) – to which I make further reference below – together with Mr Zelano. Neither Mr Sopp nor Mr Zelano were required for cross-examination.

37        Finally, Bayer Pharma adduced affidavit evidence from its solicitor, Ian Pascarl. Mr Pascarl is a partner in the firm of Davies Collison Cave (DCC). Mr Pascarl was not required for cross-examination.

38        The respondents adduced evidence from Joseph Schieber. Mr Schieber is a principal in the firm of Watermark Patent and Trade Mark Attorneys. He is a registered Australian patent attorney as well as a qualified German patent attorney and a qualified European patent attorney. Mr Schieber’s evidence in chief was given in the form of an affidavit which commented on a number of aspects of Dr Broesamle’s affidavit. Mr Schieber was cross-examined on his affidavit.

39        Eremad adduced affidavit evidence from Andrew Rankine, a solicitor employed by Ashurst Australia. This affidavit exhibited a number of documents on which Eremad has placed reliance. Mr Rankine was not required for cross-examination.

PATENT PROSECUTION HISTORY: CORRESPONDING PATENTS AND APPLICATIONS

The PCT application

40        As I have noted, the PCT application was filed on 31 August 2000. Claims 7 to 9 incorporated dissolution tests, in the following form:

7.    A composition according to any of the preceding claims wherein the pharmaceutically acceptable carrier or excipient is selected so as to promote rapid dissolution of the first and second active agents.

8.    A composition according to any of the preceding claims wherein at least 70% of the first and second active substance are released within 30 minutes of administration thereof.

9.    A composition according to claim 8, wherein at least 80% of the first and second active agents are released within 20 minutes of administration thereof.

41        When the International Search Report issued in respect of the PCT application it was noted that it was not possible to carry out a meaningful search in respect of those claims because of their scope and what the report noted as their lack of support and also lack of clarity.

42        On 6 August 2001, the International Preliminary Examining Authority issued a Written Opinion on the PCT application. The Written Opinion did not express any opinion on the validity of claims 7 to 9 for the simple reason that the International Search Report did not cover them, for the reasons I have noted.

43        On 6 November 2001, Bayer Pharma’s external intellectual property consultants, Plougmann & Vingtoft (P&V), who are based in Copenhagen, responded to the Written Opinion on behalf of Bayer Pharma and, in so doing, filed an amended claim set, with claims 1 to 40. In the amended claim set, claim 8 was deleted and claims 7 and 9 became new claims 6 and 7, in the following form:

67.    A composition according to any of the preceding claims, wherein the one or more pharmaceutically acceptable carrier or excipient is selected so as to promote rapid dissolution of the first and second active agents, the dissolution being determined by applying dissolution testing method according to the USP paddle method, dissolution media being water at 37°C and stirring rate being 50 rpm, and wherein the rapid dissolution is such that at least 70% of the first and second active substance are dissolved within 30 minutes.

79.    A composition according to claim 68, wherein at least 80% of the first and second active agents are dissolved released within 20 minutes of administration thereof.

44        The International Preliminary Examination Report for the PCT application which subsequently issued on 29 November 2001 expressed the view that claims 6 and 7 were not clearly defined. The reason given for this was that the feature of promoting rapid dissolution was identified without the chemical nature of the carriers/excipients being defined. The report said that the carriers/excipients necessary for achieving the claimed rapid dissolution should be added. The examiner raised no objection on the basis that the dissolution test in claims 6 and 7 did not incorporate the three features.

45        In around February 2002, P&V sent written instructions to a number of foreign patent attorneys to institute the national/regional phase of the PCT application in various jurisdictions, including Australia. The claim set for filing in respect of this phase was different to the claim set filed in respect of the PCT application. The only claim in the new claim set which incorporated a dissolution test was claim 6, which was in all material respects the same as claim 6 as filed in the PCT application on 6 November 2001: see [43] above.

46        Applications for patents corresponding to the PCT application were also filed on or by 31 August 2000 in a number of non-PCT jurisdictions. In some jurisdictions (including PCT and non-PCT jurisdictions) a separate divisional application directed to the dissolution test claims was filed from the parent application.

47        As events have transpired, dissolution test claims in substantially the same form as claim 3 (in its present form) of the Australian patent have been amended to introduce the 3 mg feature, the tablet feature and/or the 900 ml feature in corresponding patent applications and patents in Europe, the United Kingdom, Poland, the Czech Republic, Norway, Slovakia, the United Arab Emirates, Bulgaria, Estonia, Brazil and Argentina. Similar amendments have not been made, however, to all existing corresponding patent applications and patents.

48        It is necessary to consider two broad areas of activity in relation to the prosecution of corresponding patent applications in other jurisdictions. The first relates to the prosecution of the US application. The second relates to the prosecution of the European phase of the PCT application. These broad areas of activity provide the background against which the prosecution of the Australian patent application and the application for the present amendments should be considered.

The US application

49        The evidence ranges over a number of matters that arose in relation to the prosecution of the US application. In the account which follows I have not attempted to summarise all of the evidence. Rather, I have sought to focus only on those matters that might be seen as having some bearing on the present amendment application.

50        The US application was filed on 31 August 2000 claiming priority from US Provisional Application No. 60/240,953 filed on 31 August 1999. In this connection it should be noted that US Patent Application No. 09/386,274 (from which the Australian patent claims priority and to which I have earlier referred) was converted to a provisional application before the end of the priority term.

51        Claims 7 to 9 of the US application were dissolution test claims in materially the same form as claims 7 to 9 of the PCT application as filed: see [40] above.

52        On 6 September 2001, the United States Patent and Trademark Office (USPTO) issued an Office Action. In that Office Action the only objection to claim 7 was a novelty objection. The only objection to claims 8 and 9 was an obviousness objection. To be clear, the examiner did not raise any objections on the basis that claims 7 to 9 did not include all, or one or more, of the three features. P&V made certain recommendations to Bayer Pharma, which included the filing of an amended claim set. However, no amendments were recommended or proposed to claims 7 to 9 in that regard. One recommendation was to delete claim 2. This brought about a renumbering of the claims. For ease of exposition, it is convenient to continue to refer to the claims by their original claim numbers.

53        Bayer Pharma accepted P&V’s recommendations and gave instructions to file the amended claim set. However, when P&V’s American associates, MWZB, responded to the Office Action, claim 7 was provided in the following form:

A composition according to claim 1, wherein the pharmaceutically acceptable carrier or excipient is selected so as to promote rapid dissolution of the first and second active agents, the dissolution being determined by applying dissolution testing method according to the USP paddle method, dissolution media being water at 37°C and stirring rate being 50 rpm, and wherein the rapid dissolution is such that at least 70% of the first and second active substance are dissolved within 30 minutes.

[Emphasis added]

54        It can be seen that, in that form, claim 7 had been amended by the addition of the words I have emphasised in the above quotation. Dr Broesamle’s evidence was that he did not give instructions to amend claim 7 in that way. It is apparent, however, that that particular amendment reflected the dissolution test inserted in claim 6 of the amended claim set filed in the PCT application on 6 November 2001: see [43] above. Dr Broesamle’s evidence was that, although he does not know for certain, he believes that P&V gave instructions to MWZB to amend claim 7 of the US application to bring it into line with the then claim 6 of the PCT application. Once again, this claim was not limited by the three features. Claim 8 was deleted but claim 9 remained in its form as filed, save for renumbering (including internal renumbering).

55        On 7 May 2002, the USPTO issued a further Office Action (the examiner’s report was dated 29 April 2002). No objection was raised to amended claims 7 and 9 on the basis of form (including that they were not limited by reference to the three features), but these claims (as well as others) were rejected by the USPTO on obviousness grounds.

56        On 7 January 2003, MWZB filed a response to the Office Action, which included a request for amendment accompanied by an amended claim set. The amended claim set included new claims 41 to 43 (not dissolution test claims). A further amendment was also sought to claim 7, but not in relation to the three features. The amendment proposed to claim 7 was as follows:

7.    A composition according to claim 1 wherein the pharmaceutically acceptable carrier or excipient is selected so as to promote promotes rapid dissolution of the first and second active agents drospirenone and 17α-ethinylestradiol, the dissolution being determined by applying the USP paddle method, the dissolution media being water at 37°C and the stirring rate being 50 rpm, and wherein rapid dissolution means that at least 70% of each of drospirenone and 17α-ethinylestradiol the first and second active substances are dissolved within 30 minutes.

57        On 4 February 2003, P&V wrote to MWZB informing them of developments in relation to the prosecution of its then European patent application. This correspondence, which was by email, attached claims that had been allowed in relation to the European Parent Application, to which further reference is made below: see [83]. P&V raised the prospect of amending the claims in the US application accordingly. Relevant in this regard is claim 3 of the European Parent Application, which was then in the following form:

3.    A pharmaceutical composition comprising, as a first active agent drospirenone in an amount corresponding to a daily dosage, on administration of the composition, of from about 2 mg to 4 mg, and as a second active agent, ethinylestradiol in an amount corresponding to a daily dosage of from about 0.01 mg to 0.05 mg, together with one or more pharmaceutically acceptable carriers or excipients, wherein at least 70% of said drospirenone is dissolved from said composition within 30 minutes, as determined by USP XXIII Paddle Method II using water at 37°C as the dissolution media and 50 rpm as the stirring rate.

58        Once again, it is to be noted that this claim was not limited by reference to the three features. Claims 12, 25, 26 and 36 in that claim set were also dissolution test claims which did not include the three features.

59        On 10 March 2003, MWZB filed a supplementary response with the USPTO. This response included a request to add new claims 44 to 56 to the US application. New claim 45 was a dissolution test claim in following form:

45.    A pharmaceutical composition comprising:

from about 2 mg to about 4 mg of drospirenone, wherein the drospirenone is in a form having a dissolution such that at least 70% of said drospirenone is dissolved from a tablet containing 3 mg of drospirenone in 900 ml of water at 37°C (±5°C) within 30 minutes, as determined by USP XXIII Paddle Method using a USP dissolution test apparatus 2 at 50 rpm, including 6 covered glass vessels and 6 paddles,

about 0.01 mg to about 0.05 mg of 17α-ethinylestradiol, and

one or more pharmaceutically acceptable carriers,

the composition being in an orally administrable form.

60        New claims 47 and 49 were also dissolution test claims which contained a dissolution test in materially the same terms. Thus, at this stage of the prosecution of the US application, amended claims 7 and 9, and new claims 45, 47 and 49, were the only dissolution test claims.

61        New claims 45, 47 and 49 can be distinguished from amended claims 7 and 9 in at least the following respects. New claims 45, 47 and 49 included the 900 ml feature in the dissolution test and also required the dissolution test to be performed on a 3 mg tablet. However, the amount of drospirenone in the formulation was “from about 2 mg to about 4 mg” and, in each case, the claim was not limited to a tablet formulation. The claims also included other features referred to in Example 2 of the Australian patent specification (and corresponding patent specifications) in relation to the conduct of the dissolution test.

62        Significantly, the claims which had been allowed by the EPO and which had been raised by P&V with MWZB in the email of 4 February 2003 did not include the 3 mg, tablet or 900 ml features, or the other features taken from Example 2 of the Australian patent specification and corresponding specifications.

63        The evidence does not conclusively disclose how claims 45, 47 and 49 were prepared and filed by MWZB in the form shown above. Dr Broesamle’s evidence was that he did not recollect giving any instructions in relation to the new claims 45, 47 and 49. He was unable to find any records relating to the claim set other than those which had been adduced in evidence on this application. Those records do not cast light on that question.

64        Mr Sopp’s evidence was that he had no independent recollection of why claim 45 was added to the US application. He said that there were no documents on the MWZB file which would provide an explanation. He nevertheless proffered the following explanation:

It is usual for me, and Mr Zelano and my other attorney colleagues at MWZB, to conduct a further detailed review of a specification, including the examples, before deciding to amend a pending claim or to add a new claim to a specification. It is also consistent with our usual practice to add one or more independent claims at the end of the claim set following such a prosecution review where we deem that the addition of new independent claims would provide the client with more comprehensive patent coverage and possible fall back positions. Based on our usual practice, and after carefully reviewing the MWZB file for the [US application], I believe the likely explanation for why new claim 45 included the additional features in the dissolution method that were not present in claim 3 of the European claims or in claim 7 of the [US application], is that Mr Zelano or I reviewed the [US application] and decided it would be prudent as a matter of practice to include a new independent claim where the USP paddle method was recited with as much detail as possible based on the disclosure on page 4 and in Example 2 of the specification. Some features of the dissolution method recited in claim 45, in particular the use of 6 covered glass vessels and 6 paddles, are only disclosed in Example 2 of the specification.

65        He continued:

It would not have been unusual for me (or Mr Zelano) to have added claim 45 (and claims 46 to 56) to the [US application] in the exercise of our discretion, without Schering AG or [P&V] specifically approving the form of those new claims. As I mentioned above, MWZB has a very strong attorney-client relationship with Schering AG, now Bayer, which was well established at the time of the prosecution of the [US application]. My experience generally in prosecuting patent applications for Schering AG was, and for Bayer continues to be, that the client entrusts the prosecution of patent applications to me and my colleagues at MWZB, and we are instructed to exercise our professional skill and take the steps that we consider are in the client’s best interests, consistent with the particular instructions received from Schering AG, now Bayer, for the given case. The addition of claim 45 (and claims 46 to 56) was consistent with the suggestion by Ms Bakka [from P&V] that we review the [US application] and include claims directed to the separate “inventive features” disclosed in the specification.

66        In his evidence, Mr Zelano referred to Mr Sopp’s affidavit and said that the contents of Mr Sopp’s affidavit were “true and correct” in relation to statements made in relation to him (Mr Zelano).

67        No objection was made to Mr Sopp’s or Mr Zelano’s affidavits and, as I have noted, they were not cross-examined. In these circumstances, I accept the explanation proffered by Mr Sopp as being the most likely explanation for the addition of claims 45 to 56 to the US application. In my view it is plausible. Furthermore, the action that was suggested as having been taken by MWZB is in keeping with the close professional relationship between MWZB, Bayer Pharma and P&V, as revealed by the tenor of other correspondence in evidence.

68        On 10 March 2003, Bayer Pharma also sought to address the USPTO’s objection to the US application on obviousness grounds (which was still being maintained) by the filing of evidence.

69        On 4 June 2003, the USPTO issued a further Office Action (the examiner’s report was dated 30 May 2003). This Office Action included an objection to the dissolution test claims (namely, claims 7, 9, 45, 47 and 49, and their respective dependent claims) on the ground that they were indefinite. In this connection the examiner stated:

Claims 7, 9, 45, 47-56 are rejected under 35 U.S.C. 112, second paragraph, as being indefinite for failing to particularly point out and distinctly claim the subject matter which applicant regards as the invention. These claims recite a particular method, “USP Paddle method” as well as “USP XXIII Paddle method”. It is not clear what these methods designate. What are the method steps involved? How do the two methods differ from one another?

Objections

The attempt to incorporate subject matter into this application by reference to “USP Paddle method” as well as “USP XXIII Paddle method” is improper because the applicant seems to be incorporating this “method” which is considered essential material herein by reference to a source other than a US patent or patent application. Note that this is an improper incorporation by reference of “essential material”.

70        In his affidavit, Mr Sopp said that he understood that, by these statements, the examiner had raised an objection to claims 7 and 45 and their dependent claims on the grounds that the claims were inconsistent because they used different terminology and the examiner did not understand whether they were referring to the same method or different methods; that the examiner did not understand what the method was and what steps it involved; and that the examiner was concerned that the method was an essential feature and Bayer Pharma was improperly attempting to incorporate an essential feature by referring to another source, instead of describing the features of that method specifically in the claim.

71        MWZB prepared a draft reply to this objection which included amendments to the dissolution test claims. MWZB proposed an amendment to claim 7, where the statement of the dissolution test was brought into line with the wording of the test in claim 45 and was referenced to a tablet containing 3 mg of drospirenone. This proposed response was the subject of discussion between Bayer Pharma, P&V and MWZB. Dr Broesamle’s evidence was that it was his preference that the dissolution test in claim 7 not be limited to a tablet form. Dr Broesamle raised this matter with MWZB but, in the end, instructed MWZB to use the most appropriate wording under US patent practice.

72        On 25 November 2003, MWZB circulated a further draft response to the USPTO. This further draft incorporated a suggestion that had been made by P&V. However, claim 7 remained in the form of the first draft of the reply, save for an apparent minor grammatical change.

73        The further draft response elicited a number of comments and suggestions from P&V on 3 December 2003 in relation to claim 45. One suggestion was to amend claim 45 so that the dissolution test was not defined by reference to a tablet containing 3 mg of drospirenone. This suggestion accorded with the views expressed by Dr Broesamle in respect of the first draft response: see [71] above. It is clear from this correspondence that P&V were of the opinion that the wording suggested by MWZB implied that the claim was limited to a 3 mg tablet, whereas the intention was to cover any oral dosage form where at least 70% of the drospirenone dissolves within 30 minutes during dissolution. P&V also expressed the opinion that limiting the dissolution test to a 3 mg tablet was “needless” because the dissolution rate of drospirenone from a 10 mg tablet would be substantially similar. P&V asked MWZB to consider the wording of an alternative formulation of claim 45 proffered by them (P&V).

74        On 4 December 2003, MWZB filed a response to the Office Action issued on 4 June 2003. The response included an amended claim set. The new claim set contained claim 7 in the following form:

7.    A composition according to claim 1, wherein the pharmaceutically acceptable carrier promotes rapid dissolution of the drospirenone and 17α-ethinylestradiol, the dissolution being determined by applying the USP XXIII Paddle Method using a USP dissolution test apparatus 2 at a stirring rate of 50 rpm, including 6 covered glass vessels and 6 paddles paddle method, the dissolution media being 900 ml of water at 37°C (±5°C) and the stirring rate being 50 rpm, and wherein rapid dissolution means that at least 70% of each of the drospirenone and 17α-ethinylestradiol are, when provided as a tablet containing 3 mg of drospirenone, is dissolved within 30 minutes.

75        In the remarks filed with the amended claim set on 4 December 2003, MWZB stated:

Claims 7, 9, 45, 47 and 49 are amended to be complete in describing the USP XXIII paddle method consistent with disclosure at page 4, lines 16-24, and Example 2, page 12.

76        Mr Sopp gave the following evidence in his affidavit:

Based on my usual practice … and my knowledge of Mr Zelano’s usual practice, and after carefully reviewing the MWZB file for the [US application], including the Office Action dated 30 May 2003 [sic], I believe the likely explanation for the amendments to claim 7 to add the other features in the dissolution method that were present in claim 45, is that Mr Zelano or I decided that the examiner’s objections would more likely be overcome by amending claim 7 to define the USP paddle method as specifically as possible, using the language in claim 45. Such an amendment could be made within our discretion in prosecuting the examination, without first obtaining specific instructions.

77        Once again, I accept this evidence. There was no objection to it and Mr Sopp was not cross-examined. The evidence is plausible. It is consistent with Dr Broesamle’s overriding instruction to MWZB in relation to this particular objection to use the most appropriate wording under US patent practice. I find that it is the most likely explanation for making the amendments in that form.

78        It is convenient to note at this point Dr Broesamle’s evidence that the requirements of United States patent law are different in material respects from that of other jurisdictions, including Australia and Europe. He said that Bayer Pharma had not adopted a practice of automatically amending or considering whether to amend equivalent patent claims in other jurisdictions to reflect amendments made in the course of US patent prosecutions.

79        Mr Schieber agreed, in substance, with Dr Broesamle’s evidence in this regard. His evidence was that he would not consider automatically amending patent applications merely to reflect amendments made in the course of a US patent prosecution. He said, however, that the issues addressed in respect of the US application should have led to some further consideration of the content of the specification and the congruity between the specification and the claims in corresponding applications outside the United States. I will return to this contention.

80        On 23 March 2004, the USPTO issued a further Office Action. The details of this, and Bayer Pharma’s response thereto, are not relevant to the issues arising on this application.

81        On 2 July 2004, the USPTO issued a Notice of Allowance and, on 7 September 2004, a patent was granted as US 6,787,531 (the US patent).

82        On 29 April 2005, Bayer Pharma commenced proceedings on the US patent against Barr Laboratories to restrain it from marketing and selling a generic version of the Yasmin product. Barr Laboratories contended that the US patent was invalid on the grounds of obviousness, prior public use and inequitable conduct. On 3 March 2008, judgment was given in the proceeding. The patent was revoked on the basis that the invention as claimed was obvious. The other grounds raised by Barr Laboratories were dismissed.

The European applications

The European Parent Application

83        The PCT application entered the European phase as European Patent Application No. 00953387.8 (the European Parent Application). On 27 January 2003, the European Patent Office (EPO) issued a communication stating that it intended to grant a European patent on the basis of this application. The European Parent Application contained 42 claims. Bayer Pharma decided to divide these claims into a parent and divisional applications. An amended claim set for the European Parent Application was prepared and filed. The independent claims in the amended claim set were limited to micronized drospirenone.

84        The EPO granted the European Parent Application as European Patent No. 1 214 076 (EP ‘076).

The European Dissolution Divisional

85        On 4 August 2003, European Patent Application No. 03017743.0 (the European Dissolution Divisional) was filed in the EPO as a divisional of the European Parent Application. It was thus based on the PCT application. The European Dissolution Divisional had a claim set comprising 23 claims.

86         Claim 2 of the European Dissolution Divisional was a dissolution test claim in the following form:

A pharmaceutical composition comprising, as a first active agent drospirenone in an amount corresponding to a daily dosage, on administration of the composition, of from about 2 mg to 4 mg, and as a second active agent, ethinylestradiol in an amount corresponding to a daily dosage of from about 0.01 mg to 0.05 mg, together with one or more pharmaceutically acceptable carriers or excipients, wherein at least 70% of said drospirenone is dissolved from said composition within 30 minutes, as determined by USP XXIII Paddle Method II using water at 37°C as the dissolution media and 50 rpm as the stirring rate.

87        Claims 7, 17 and 21 of the European Dissolution Divisional were also dissolution test claims which included a dissolution test in materially the same form as the test in claim 2. None of the dissolution test claims included a reference to any of the three features.

88        On 1 June 2004, P&V filed an amended claim set with 22 claims. No relevant amendments were made to the dissolution test claims.

89        On 1 September 2005, the EPO issued a first Office Action for the European Dissolution Divisional. The examiner rejected certain claims on the basis that those claims claimed subject-matter identical to certain claims in the European Parent Application. On 10 October 2005, P&V responded to the Office Action by filing an amended claim set with 18 claims. No relevant amendments were made to the dissolution test claims.

90        On 8 February 2007, the EPO issued a second Office Action for the European Dissolution Divisional. On 23 November 2007, P&V responded to the second Office Action and filed an amended claim set with 23 claims. No relevant amendments were made to the dissolution test claims.

91        On 5 February 2008, the EPO issued a third Office Action for the European Dissolution Divisional. In the Office Action, the EPO confirmed that the application met the requirements of the European Patent Convention (EPC) and requested that the description in the body of the specification be brought into conformity with the claims. Dr Broesamle’s evidence was that this type of request is a peculiarity of European patent law. On 2 September 2008, P&V responded by filing amended pages of the specification. The amendments to the specification included amendments to [0017] containing the dissolution test. The effect of these amendments was to delete reference to the 3 mg feature, the tablet feature and the 900 ml feature that had formerly appeared in [0017]. As amended, [0017] read as follows:

It has surprisingly been found that when drospirenone is provided in a pharmaceutical composition allowing for rapid dissolution of drospirenone a high oral bioavailability of drospirenone is obtained (“rapid dissolution” is defined as the dissolution of at least 70% within 30 minutes, in particular at least 80% within 20 minutes, of drospirenone from the composition as determined by the USP XXIII Paddle Method using a USP dissolution test apparatus 2 at 50 rpm and using water at 37°C as the dissolution media). This may be achieved by providing drospirenone in micronized form, or by dissolving it in a suitable solvent, e.g., methanol or ethyl acetate, and spray it onto the surface of inert carrier particles followed by incorporation of the particles containing drospirenone on their surface in the composition.

92        On 18 December 2008, the EPO issued its decision to grant the European Dissolution Divisional as European Patent No. 1 380 301 (EP ‘301). During examination of the European Dissolution Divisional, the EPO did not raise any objection relevant to the present application for amendment. In particular, the EPO did not raise any objection that the 3 mg feature, the tablet feature and the 900 ml feature were absent from the dissolution test claims. However, the EPO requested Bayer Pharma to bring the body of the specification into line with the claims, and thereby permitted it to delete reference to these features in the body of the specification.

The European Carrier Divisional

93        On 24 August 2005, European Patent Application No. 05076943.9 (the European Carrier Divisional) was filed in the EPO as another divisional of the European Parent Application. Once again, it was based on the PCT application.

94        The claims of the European Carrier Divisional were directed to drospirenone on the surface of inert carrier particles. Claim 6 of the European Carrier Divisional was the only dissolution test claim. It was in the following form:

6.    The composition according to any of the preceding claim, wherein at least 70% said drospirenone is dissolved from said composition within 30 minutes, as determined by USP XXIII Paddle Method II using water at 37°C as the dissolution media and 50 rpm as the stirring rate.

95        On 26 March 2009, the EPO issued its decision to grant the European Carrier Divisional as European Patent No. 1 598 069 (EP ‘069).

The 2010 European Dissolution Divisional

96        On 1 October 2010, European Patent Application No. 10185672.2 (the 2010 European Dissolution Divisional) was filed in the EPO as another divisional of the European Parent Application. Once again, it was based on the PCT application.

97        Claim 1 of the 2010 European Dissolution Divisional, as filed, was as follows:

1.    A pharmaceutical composition comprising, as a first active agent drospirenone in an amount corresponding to a daily dosage, on administration of the composition, of from about 2 mg to 4 mg, and as a second active agent, ethinylestradiol in an amount corresponding to a daily dosage of from about 0.01 mg to 0.05 mg, together with one or more pharmaceutically acceptable carriers or excipients, wherein at least 70% of said drospirenone is dissolved from said composition within 30 minutes, as determined by USP XXIII Paddle Method II using 900 ml of water at 37°C as the dissolution media and 50 rpm as the stirring rate.

98        Claim 12 of the 2010 European Dissolution Divisional was also a dissolution test claim which included a dissolution test in materially the same terms as claim 1.

99        On 6 January 2012, P&V filed an amended claim set for the 2010 European Dissolution Divisional. These amendments included the introduction of the 3 mg feature and the tablet feature to claim 1, which then became the only dissolution test claim in the 2010 European Dissolution Divisional.

European patent oppositions generally

100        Article 100 of the EPC sets out the grounds on which an opposition to a European patent can be filed. Article 100(c) provides that the opposition may be filed on the ground that the subject-matter of the European patent extends beyond the content of the application as filed or, if the patent was granted on a divisional application or on a new application filed under Art 61, beyond the content of the earlier application as filed.

101        Article 123 of the EPC deals with amendments to European patent applications and patents. Article 123(2) provides that a European patent application or patent may not be amended so that it contains subject-matter that extends beyond the content of the application as filed. Article 123(3) of the EPC provides that a European patent may not be amended so as to extend the protection it confers.

102        Article 76(1) of the EPC applies to European divisional applications. It provides that a divisional application may be filed only in respect of subject-matter that does not extend beyond the content of the earlier application as filed.

103        Articles 100(c), 123(2) and 76(1) deal with what is called “added subject-matter”. The uncontradicted evidence before me is that these provisions require a comparison between the subject-matter disclosed in a patent or application and the subject-matter that was disclosed in the application as filed (or, in the case of the divisional, the parent application as filed) to determine whether any subject-matter has been “added”.

104        Dr Broesamle’s evidence was that, generally speaking, a very strict literal approach is taken in the various EPC jurisdictions in which these provisions (or slightly differently worded provisions under the relevant local law) are applied. He said that this means that any differences between the subject-matter disclosed in the patent or application, and the subject-matter that was disclosed in the application as filed, can be said to be “added subject-matter”, even where the differences are such that the subject-matter has been limited or reduced in scope.

105        Mr Schieber agreed that a strict literal approach is taken to the application of the added subject-matter objection. He said, however, that this approach was taken, primarily, by examiners during European patent examinations when assessing matters to be determined under Arts 76(1), 84 (dealing with the requirements for claims), and 123(2) of the EPC. He said that Art 100(c) only applied post-grant in opposition proceedings that are conducted in front of the Opposition Division of the EPO, not the Examining Division. He gave the following evidence:

In my experience … the members of the Opposition Division who make determinations in an opposition are not driven by an insistence on an exacting and strict literal disclosure approach when determining matters under Art 123(2) and Art 100(c) EPC as examiners do when assessing claims and proposed amendments under Articles 83, 84 and 123(2) EPC. Rather, a more holistic approach is taken, albeit strict too in that an assessment will be made contextually as to what subject matter is disclosed in the application as originally filed, ie the description, claims and any drawings, or in the parent application when dealing with oppositions to divisional applications, and then assess whether any amendment made to the claims during examination (or sought to be made in opposition proceedings) lead to a disconformity being present between such clamed subject matter and the original disclosure and which would lead to a finding of contravention of Article 123(2) EPC.

106        Mr Schieber said that, whilst there is case law which provides guidance on how the added subject-matter objection will be applied by the Opposition Division, a case by case analysis is always required and that one must carefully evaluate the disclosure of the original patent specification to see whether the subject-matter in an amended claim can be derived in an unambiguous manner from the original contents of the patent specification.

107        Mr Schieber also gave the following evidence:

As noted by Mr Broesamle … the concept (and wording) of the prohibition against ‘added subject matter’ arising from an amendment to the specification is present in the various national patents legislations of the countries that are signatory to the EPC; the national laws are ‘harmonised’ in respect of substantive, material patent law provisions. I agree that whilst the law is the same, courts in different European countries tend to vary in their application of the law to the same set of facts. This is often the case in particular when evidentiary issues are dealt with differently in different jurisdictions, also because the law of procedure/process is not harmonised across Europe and notably different origins of certain aspect of procedural law, eg Common Law approach as used in the UK courts and Statutory Law approaches used in courts in most if not all continental European countries. Yet, the concept is the same, despite different outcomes when the same concept is applied in different jurisdictions.

[As in original]

108        I do not consider that it is necessary for me to resolve any differences between the opinions expressed by Dr Broesamle and Mr Schieber as to how the added subject-matter prohibition is applied in the various EPC jurisdictions. Such differences as might exist between their respective opinions appear to me to be principally matters of perception and degree. One thing that does emerge from this body of evidence is that it appears to be common ground that differences in approach to interpreting and applying the added subject-matter prohibition do arise within the EPO, and between the various EPC jurisdictions, although the same underlying principles are in play. The evidence also shows that an opponent may raise a particular added subject-matter ground in opposition or revocation proceedings in one EPC jurisdiction but not (at least initially) in other opposition or revocation proceedings commenced by the same opponent in another EPC jurisdiction dealing with a corresponding patent. In short, the evidence supports the view that there is no necessary consistency in relation to the forensic decisions made by opponents, or in decision-making by administrative or judicial bodies across EPC jurisdictions, on the question of added subject-matter when dealing with the effect of amendments in relation to what is essentially the same patent.

Oppositions to EP ‘301

109        On 13 and 14 October 2009, oppositions to EP ‘301 were filed by five parties, including Teva Pharmaceutical Industries Ltd (Teva) and Laboratorios Leon Farma, SA (Leon Farma). The oppositions filed by Teva and Leon Farma are the only oppositions that are relevant to the present application. Both raised added subject-matter objections to claims 1, 12 and 21, which were the independent dissolution test claims of EP ‘301. Teva objected to claims 1, 12 and 21 on the basis that the dissolution test disclosed in the PCT application required dissolution in 900 ml of water and that that feature was absent from the claims. Leon Farma objected to claims 1, 12 and 21 on the basis that the dissolution test disclosed in the PCT application required the drospirenone to be dissolved from a tablet preparation containing 3 mg of drospirenone in 900 ml of water, and that those features were absent from the claims.

110        I should note that Teva and Leon Farma also raised other grounds of invalidity, including other added subject-matter grounds. It is not necessary for me to consider these additional grounds.

111        In oppositions, the patentee can file successive amended claim sets. The Main Request is the patentee’s first preference for the form in which the patent should be upheld. The patentee is also able to file Auxiliary Requests, with alternative claim sets in order of preference. If the Main Request is refused, the EPO will then consider the claims of the first Auxiliary Request and succeeding Auxiliary Requests if the first Auxiliary Request is also refused.

112        On 28 May 2010, P&V filed a reply to the oppositions which included four amended claim set requests. These claim sets comprised a Main Request and first, second and third Auxiliary Requests. In the course of the oppositions, Bayer Pharma maintained only its Main Request and its third Auxiliary Request. On 7 December 2010, Bayer Pharma deleted its first and second Auxiliary Requests.

113        The Main Request was a claim set with 18 claims with two independent dissolution test claims which specified that the dissolution test was conducted in 900 ml water. The third Auxiliary Request contained a claim set with 10 claims in which the independent dissolution test claims specified that the dissolution test was one conducted in 900 ml water, the dissolution test was performed on a tablet containing 3 mg of drospirenone, and the composition was in the form of a tablet comprising 3 mg of drospirenone and 0.015-0.030 mg of ethinylestradiol.

114        On 17 May 2011, the EPO issued a Preliminary Opinion on the oppositions. Such an opinion is a provisional, preliminary and non-binding opinion of the EPO of the case before it. Relevantly, the EPO’s Preliminary Opinion on this occasion was that, since rapid dissolution was defined by the dissolution test stated in the body of the specification of the parent application as originally filed, all the technical parameters of that dissolution test must be included in the independent claims of the opposed patent. In this connection the EPO stated:

… it seems that the amendment of claim 1 of the contested patent does not have a basis in the parent application as originally filed, unless all technical parameters of the dissolution test of page 4 are included in the independent claims.

115        Thereafter, on 30 September 2011, Bayer Pharma filed new claim requests comprising a Main Request and first, second and third Auxiliary Requests.

116        An oral hearing was conducted on 1 December 2011 before the Opposition Division of the EPO. On 30 January 2012, the Opposition Division issued its decision to revoke EP ‘301. Dr Broesamle gave evidence of the substance of the decision in the following terms, to which no objection was taken:

(a)    The subject-matter of claim 1 of the Main Request and first Auxiliary Request amounted to added subject-matter because “the dissolution method does not include all the technical features as originally disclosed, namely that it was performed with a tablet preparation containing 3 mg of drospirenone”.

(b)    Claim 1 of the second and third Auxiliary Requests included all the technical features of the dissolution test as originally disclosed, namely that it was performed with a tablet preparation containing 3 mg of drospirenone.

(c)    However, claim 1 of the second and third Auxiliary Requests was nonetheless invalid because the parent application as filed disclosed the dissolution test only in combination with a “specific micronisation form of drospirenone” and the subject-matter of claim 1 extends beyond the content of the parent application as filed.

117        Bayer Pharma has filed an appeal from the decision of the Opposition Division to the Technical Board of Appeal of the EPO.

Application to revoke EP ‘301 in the United Kingdom

118        On 23 October 2009, Gedeon Richter plc (Gedeon Richter) commenced proceedings in the Patents Court of the Chancery Division in the High Court of Justice to revoke European Patent (UK) No. 1 380 301 (the UK patent). One ground of invalidity relied upon comprised a number of added subject-matter objections, specifically that the matter disclosed in the UK patent extended beyond that which was disclosed in its parent patent (European Patent (UK) No. 1 214 076). One of the particulars provided (para 2(12)(c) of the Re-Amended Grounds of Invalidity) was as follows:

… the Parent Patent provided that the USP XXIII rapid dissolution determination is to be carried out on a 3 mg tablet of drospirenone dissolved in 900 ml of water whereas EP ‘301 does not provide any such limitation.

119        In the course of those proceedings, Bayer Pharma filed a request to amend the UK patent. It submitted, as it was entitled to do, two sets of amendments, the first comprising unconditional amendments and the second comprising conditional amendments that were sought only in the event that Gedeon Richter’s added subject-matter objection, as particularised in para 2(12)(c) of the Re-Amended Grounds of Invalidity, was successful. The unconditional amendments included the insertion of the 900 ml feature into claims 1 and 12, and into certain paragraphs (including [0017]) in the body of the specification. The conditional amendments included limiting claims 1 and 12 to a tablet containing 3 mg of drospirenone and replacing [0017] of the specification with the passage appearing at lines 11-24 of page 4 of the PCT application (corresponding to the second paragraph of the passage quoted at [14] above). The unconditional and conditional amendments filed by Bayer Pharma were consistent with the Main Request and third Auxiliary Request that it had filed in the oppositions to EP ‘301 on 28 May 2010: see [112]-[113] above.

120        Judgment was given in the proceeding on 17 March 2011: Gedeon Richter plc v Bayer Schering Pharma AG [2011] EWHC 583 (Pat). The particular added subject-matter objection that is relevant to the present application was summarised by Floyd J at [72] as follows:

… The definition of "rapid dissolution" has been altered so as to exclude the requirement that the test should be done on a tablet preparation containing 3 mg of drospirenone in 900 ml of water.

121        At [78] his Lordship held that the unconditional and conditional amendments were both necessary, for the following reasons:

Insofar as this point relies on the 900 ml of water used in the dissolution test, it is met by the unconditional amendments, and falls away. The 3 mg point remains live (although it would be met by the conditional amendment application). Professor Buckton's evidence was, as one would expect, that the choice of a 3 mg tablet would yield a different dissolution rate to the choice of a 2 mg or 4 mg tablet. By deleting the reference to the loading of the tablet in the granted patent, Schering have changed the technical disclosure of the paragraph which became [17] in the granted patent. The original paragraph only contained a test for a 3 mg tablet. The test in the granted patent is not specific to any tablet, and suggests for the first time that any tablet loading which passes the test will do. That is additional matter relevant to the invention. The relevant conditional amendment will have to be made.

Opposition to EP ‘076

122        On 18 August 2004, a Notice of Opposition to EP ‘076 was filed by Hexal (no corporate designation was given for the company in evidence). This opposition was dismissed by the Opposition Division of the EPO on 17 November 2006.

123        On 16 March 2007, Hexal filed Grounds of Appeal. Bayer Pharma’s Main Request in the appeal was for the appeal to be dismissed and that the claims of EP ’076 be maintained as granted. Nevertheless, on 31 July 2007, Bayer Pharma filed first and second Auxiliary Requests. Those requests do not relate to the present application.

124        On 6 May 2011, P&V filed a third Auxiliary Request which amended claim 1 of EP ‘076 to include a dissolution test in the following form:

1.    A pharmaceutical composition tablet comprising, as a first active agent drospirenone in an amount corresponding to a daily dosage, on administration of the composition tablet, of from about 2 mg to 4 3 mg, and as a second active agent, ethinylestradiol in an amount corresponding to a daily dosage of from about 0.01 mg to 0.05 mg 0.015 mg to 0.03 mg, together with one or more pharmaceutically acceptable carriers or excipients, wherein said drospirenone is in micronized form, and wherein at least 70% of said drospirenone is dissolved from said tablet preparation containing 3 mg drospirenone within 30 minutes, as determined by the USP XXIII Paddle Method II using 900 ml water at 37°C as the dissolution media and 50 rpm as the stirring rate.

125        The third Auxiliary Request was not filed by Bayer Pharma in response to any ground of opposition that had been raised by Hexal. Dr Broesamle gave instructions for the third Auxiliary Request to be filed to avoid any argument that might be raised (but which had not then been raised) that the composition claimed in claim 1 of EP ‘076 covered non-immediate release compositions, such as entero-coated compositions.

126        In the end result, the Technical Board of Appeal decided to revoke EP ‘076 on grounds that are not relevant to the present application. The Technical Board of Appeal’s decision was published on 10 November 2011 and Bayer Pharma has filed a Petition for Review to the Enlarged Board of Appeal.

Opposition to EP ‘069

127        On 23 December 2009, a Notice of Opposition to EP ‘069 was filed by Leon Farma. In January 2010, further Notices of Opposition were filed by a number of other parties. On 30 November 2011, Bayer Pharma filed its submissions for the purpose of oral proceedings that were to be held on 31 January and 1 February 2012. Bayer Pharma’s Main Request and first Auxiliary Request included the deletion of claim 6, with the result that EP ‘069 would have no dissolution test claims. Bayer Pharma also filed second to ninth Auxiliary Requests which amended claim 1 to recite the dissolution test in the following terms:

… wherein at least 70% of said drospirenone is dissolved from said tablet within 30 minutes, as determined in 900 ml of water at 37°C by the USP XXIII Paddle Method using a USP dissolution test apparatus 2 at 50 rpm.

128        In a number of these requests claim 1 claimed a tablet with 2 to 4 mg of drospirenone. In a number of other requests claim 1 claimed a tablet with 3 mg of drospirenone.

129        On 29 March 2012, the Opposition Division of the EPO published its decision to revoke EP ‘069 on “lack of sufficiency” grounds. Those grounds are not relevant to Bayer Pharma’s present application.

Other matters

130        Dr Broesamle gave detailed evidence concerning:

(a)    the prosecution of Polish Patent Application No. 383766;

(b)    applications by Teva to revoke Czech Patent No. 300514 (the Czech patent) and Norwegian Patent No. 327588 (the Norwegian patent);

(c)    the prosecution of Slovakian Patent No. 287634;

(d)    an application by Ladee Pharma Slovakia to revoke to Slovakian Patent No. 287634;

(e)    the prosecution of United Arab Emirates Patent No. 62/2002;

(f)    an application by Medico Uno Pharma Kft to revoke Bulgarian Patent No. 65204;

(g)    an application by Ladee Pharma to revoke Estonian Patent No. 05317;

(h)    the prosecution of Canadian Patent Application No. 2382426;

(i)    the prosecution of Saudi Arabian Patent Application No. 1210644;

(j)    the prosecution of Brazilian Patent Application No. PI0014159-3; and

(k)    the prosecution of Argentinean Patent Application No. 104514.

131        With the exception of the Canadian, Saudi Arabian, Brazilian and Argentinean applications, each application or proceeding involved, in some measure, a dispute about the form of dissolution test claims and one or more of the three features. It is not necessary to descend to the detail of this evidence in order to deal with the present application, save with respect to the proceeding commenced by Teva in Norway to revoke the Norwegian patent. Eremad, in particular, relied on certain matters arising in the course of that proceeding to advance contentions that Bayer Pharma was guilty of covetous claiming.

132        The Norwegian patent was granted on 31 August 2009, based on the PCT application. It contained 23 claims corresponding to the 23 claims of EP ‘301. On 11 October 2010, P&V provided certain comments to Bayer Pharma about the revocation proceeding that had by then been commenced by Teva. P&V observed that the grounds raised by Teva in the revocation proceeding were similar to the grounds it had raised in its opposition to EP ‘301 and to its request to revoke the Czech patent. There were, however, some differences. In the Norwegian revocation proceeding, Teva had raised an added subject-matter ground based on the fact that claims 1, 12 and 21 of the Norwegian patent did not include a feature that drospirenone is released from a 3 mg tablet. This was not a ground originally relied upon by Teva in its opposition to EP ‘301. P&V attributed this ground to Teva having “picked up Leon’s [ie Leon Farma’s] argument from the opposition case” (ie Leon Farma’s opposition to EP ‘301). Moreover, P&V commented that Teva had not raised an added subject-matter ground on the basis that the claims did not include a feature that the dissolution test be performed in 900 ml of water, even though this was one of the bases of its opposition to EP ‘301 and its application to revoke the Czech patent. The evidence does show, however, that, some time later, Teva amended its proceeding to include a ground based on the absence of this particular feature.

133        In the course of that proceeding, Bayer Pharma decided to amend claims 1, 12 and 21 of the Norwegian patent to provide that the composition be in the form of a tablet with 3 mg of drospirenone, and that the dissolution test be performed on that 3 mg tablet composition using 900 ml of water. Dr Broesamle’s evidence was that he gave instructions to seek these amendments to the Norwegian patent for the following reasons. First, the Norwegian market for products covered by the patent was relatively small and it was his view that it was not worth the time and cost to defend the patent without these amendments. Secondly, Bayer Pharma’s products covered by the patent were in the form of tablets containing 3 mg of drospirenone. Dr Broesamle said that he did not believe that any third party, particularly a generic company, would develop a formulation with a drospirenone dosage of other than 3 mg in tablet form.

134        On 4 April 2011, the Norwegian Patent Office allowed the requested amendments to the Norwegian patent. Teva’s revocation proceeding was heard by the Oslo District Court. Judgment was given on 1 June 2011 upholding the Norwegian patent.

135        Eremad placed reliance on the fact that, when advising Bayer Pharma on this proceeding, P&V observed that Teva’s submission – that Bayer Pharma’s PCT application relied on a stated content involving a tablet of 3 mg of drospirenone dissolved in 900 ml of water – was “formally correct”. It also relied on the fact that, in the same correspondence, P&V advised Bayer Pharma that it was of the utmost importance that the Norwegian patent not be declared invalid “due to this (formal) point”. In that connection P&V advised Bayer Pharma to re-introduce the 900 ml feature into the claims and the description. Eremad also placed reliance on P&V’s description of this submission as being “fair” and “expected”, albeit misplaced with respect to “sufficiency” as opposed to “added subject-matter”. I will consider the significance of these observations when dealing with Eremad’s submissions. It is nevertheless important to record at this juncture that it is clear from other parts of this correspondence that P&V was not advising Bayer Pharma that the dissolution test claims of the Norwegian patent could not be defended in their present form. Rather, P&V was providing practical advice to Bayer Pharma to enable it to reach an informed view on the strengths and weaknesses of Teva’s revocation proceeding, no doubt to assist Bayer Pharma more comfortably to make strategic decisions in relation to that proceeding and the Norwegian patent more generally.

PATENT HISTORY: THE AUSTRALIAN PATENT

136        On 14 February 2002, P&V gave instructions to Bayer Pharma’s then Australian patent attorneys, FB Rice & Co, to enter the national phase in Australia based on the PCT application. On 14 March 2002, the application for the patent was filed together with a First Statement of Proposed Amendments. The First Statement of Proposed Amendments included a new claim set comprising 67 claims.

137        Claim 9 of the amended claim set was the only dissolution test claim. It mirrored claim 6 in the standard set of claims sent by P&V to overseas associates for the purpose of entering the national phase based on the PCT application. Claim 9 was as follows:

9.    The composition according to any one of the preceding claims, wherein the one or more pharmaceutically acceptable carrier or excipient is selected so as to promote rapid dissolution of the first and second active agents, the dissolution being determined by applying dissolution testing method according to the USP paddle method, dissolution media being water at 37°C and stirring rate being 50 rpm, and wherein the rapid dissolution is such that at least 70% of the first and second active substance are dissolved within 30 minutes.

138        In March 2003, Bayer Pharma engaged DCC to handle its prosecution of patent applications, generally, in Australia, including the application for the Australian patent.

139        On 1 December 2003, the Australian Patent Office (APO) issued an Official Report in respect of the patent application. No objection was raised in that report to claim 9 on the basis that one or more of the three features were not included in the claim. Objections were raised under s 40(3), but these related to other matters.

140        On 19 November 2004, P&V provided instructions to DCC in relation to the Official Report and, on 30 November 2004, DCC filed a response with the APO. The response included a Second Statement of Proposed Amendments which included a new claim set with 45 claims. Claim 3 of that amended claim set was a dissolution test claim in the following form:

3.    A pharmaceutical composition in oral dosage form comprising;

from 2 mg to 4 mg of drospirenone and 0.01 mg to 0.05 mg of ethinylestradiol, together with one or more pharmaceutically acceptable carriers or excipients,

wherein at least 70% of said drospirenone is dissolved from said composition within 30 minutes, as determined by USP XXIII Paddle Method II using water at 37°C as the dissolution media and 50 rpm as the stirring rate.

141        Claims 11, 27 and 32 in the amended claim set were also dissolution test claims which included a dissolution test in materially the same form.

142        On 20 January 2005, the APO issued a Notice of Acceptance and, on 30 June 2005, the Australian patent was sealed.

STEPS TAKEN BY BAYER PHARMA AND BAYER AUSTRALIA AGAINST THE RESPONDENTS

143        On 23 January 2012, Bayer Pharma and Bayer Australia became aware that Lupin had, on 20 January 2012, registered three oral contraceptive products on the ARTG. These products contained the same dosages of drospirenone and ethinylestradiol as Bayer Pharma’s and Bayer Australia’s Yasmin product. As I have noted, one of the registrations was for a product called Isabelle.

144        On 24 January 2012, Bayer Pharma and Bayer Australia became aware that Generic Health was offering the Isabelle product for sale.

145        On 25 January 2012, letters of demand were sent to the respondents advising them that, in the absence of a satisfactory response to the demands made in the letters, action would be commenced against them without further notice, including for interlocutory injunctive relief.

146        In the period from 26 January 2012, DCC corresponded with the respondents’ solicitors on a number of matters, including whether an interlocutory regime could be agreed upon, whereby Generic Health would not supply the Isabelle product pending the completion of a “speedy trial” to determine whether the supply of that product involved an infringement of claims 1, 3, 4, 8, 11 and 24 of the Australian patent.

147        During this time, but before 30 January 2012, Bayer Pharma and Bayer Australia considered the possible invalidity arguments that might be raised against the patent under Australian patent law. This internal review included considering the invalidity arguments that had been raised against corresponding patents in the United Kingdom, the United States and before the EPO. It also included considering, in a preliminary manner, the amendments that Bayer Pharma had voluntarily proposed, or which had been required, to the claims of corresponding patents in other jurisdictions.

148        In light of this, the view was taken that, as a matter of abundant caution, Bayer Pharma would seek the present amendments. Dr Broesamle’s evidence was that, prior to this time, Bayer Pharma had given no consideration to whether amendments should be made to the Australian patent. Until that time, due to the different treatment of the corresponding patents in other jurisdictions, it did not occur to him that other patents that had been accepted and granted should be assessed for amendment. The respondents and Eremad rely on this fact as an element of delay that should disentitle Bayer Pharma to a favourable exercise of the discretion under s 105 of the Act.

149        I am satisfied on the evidence that, by 30 January 2012, Bayer Pharma and Bayer Australia were on notice that the Australian patent should be amended and that, on legal advice, they should not seek interlocutory injunctive relief against the respondents on unamended claims which they might later seek to amend.

150        On 15 February 2012, Bayer Pharma and Bayer Australia commenced the principal proceeding. They did not claim interlocutory injunctive relief. The statement of claim filed in support of the originating application expressly declared Bayer Pharma’s intention to amend the Australian patent at the first available opportunity. As I have noted, the amendments were set out in an annexure to the statement of claim. That manner of proceeding to deal with Bayer Pharma’s desire to amend was plainly countenanced by s 105 of the Act and was appropriate in the present case.

151        Consistently with that position, Bayer Pharma gave notice to the Commissioner of Patents on 17 February 2012 of its intention to seek amendments under s 105(1) of the Act. This step was taken in accordance with r 34.41 of the Federal Court Rules 2011.

152        On 24 February 2012, IP Australia wrote to DCC advising that notice of the application for amendment would be published in the Australian Official Journal of Patents on 15 March 2012. That letter also advised that the Commissioner had reviewed the amendments that had been sought and was prima facie satisfied that they met the legal requirements of s 102 of the Act. Lastly, the letter advised that the Commissioner did not intend to appear at the hearing of the application for amendment.

153        It is necessary to refer to some additional matters in relation to the commercial action that Bayer Pharma and Bayer Australia took at about the time that the principal proceeding was commenced against the respondents. Both the respondents and Eremad rely on these matters as reasons to deny the exercise of the discretion under s 105 of the Act in Bayer Pharma’s favour.

154        On 25 January 2012, prior to the commencement of the infringement proceeding and at the time that letters of demand were sent to the respondents, Bayer Australia sent a facsimile transmission to 4,303 retail pharmacies, in the following terms:

RE: Important Yasmin information

Dear Pharmacist,

Bayer has become aware that you may have been approached by Lupin Australia, Generic Health, or some other party offering a generic version of Bayer’s oral contraceptive Yasmin (drospirenone/ethinyloestradiol) (Yasmin).

The purpose of this letter is to advise that Yasmin is the subject of patent protection in Australia and Bayer proposes to take all steps available to it at law to protect its rights.

Yours sincerely,

Emma Press,

Bayer Australia General Counsel

155        On that day, three retail pharmacies cancelled orders for the Isabelle product.

156        Subsequently, on 17 February 2012, Bayer Australia sent a facsimile transmission to 4,539 retail pharmacies advising that the infringement proceeding had been commenced. Relevantly, that communication was as follows:

Re: Bayer takes legal action in relation to its oral contraceptive

Dear Pharmacist,

Bayer Pharma AG and Bayer Australia Limited instituted Federal Court proceedings yesterday against Lupin Australia Pty Limited and Generic Health Pty Ltd alleging infringement of the Bayer Australian Patent No. 780330 (pharmaceutical combination of ethinylestradiol and drospirenone for use as a contraceptive) covering Yasmin® and Yaz®.

Bayer has alleged infringement and sought permanent injunctions to restrain Generic Health and Lupin from importing, marketing and selling their oral contraceptive Isabelle, together with damages or an account of profits.

Bayer is determined to aggressively and expeditiously prosecute this patent infringement proceeding to its conclusion. Furthermore, Bayer is carefully monitoring the market with a view to detecting and taking action to stop any proven misinformation about, or misrepresentation of, its patent rights, its products, and its practices and procedures.

Yours sincerely,

Emma Press

General Counsel, Bayer Australia Limited

157        The evidence shows that, prior to sending that facsimile, another retail pharmacy had cancelled an order for the Isabelle product (on 27 January 2012) and that, on 17 February and 23 February 2012, two more retail pharmacies cancelled orders for the product. It is not known whether the last-mentioned two pharmacies cancelled their orders because of the statements in the facsimile communication of 17 February 2012. It is possible that each did, given the timing of that communication. It is also possible that other reasons motivated or caused those cancellations, including possibly the facsimile communication of 25 January 2012. It is also possible that one or more of the cancellations resulted from circumstances completely unrelated to the present dispute between the parties or any notification thereof to the trade. I think, however, that, on balance, it is more likely than not that all the cancellations were caused by either the statements made in the facsimile transmission of 25 January 2012 or the statements made in the facsimile transmission of 17 February 2012.

158        As I will come to explain, the respondents and Eremad rely particularly on the sending of the facsimile transmission on 17 February 2012 as constituting reprehensible conduct on the part of Bayer Pharma and Bayer Australia that would disentitle Bayer Pharma to the amendments it has sought.

GENERAL LEGAL PRINCIPLES RELATING TO THE EXERCISE OF THE DISCRETION

159        There was no dispute between the parties concerning the general principles that inform the approach that the Court should take in considering whether the discretion under s 105 of the Act should be exercised in favour of permitting the amendments that Bayer Pharma has sought.

160        The principles are discussed in a number of cases, including Smith Kline & French Laboratories Limited v Evans Medical Limited [1989] 1 FSR 561 at 566-569; Rescare Ltd v Anaesthetic Supplies Pty Ltd (unreported, Gummow J, 4 March 1993) at [15]-[19]; Wimmera Industrial Minerals Pty Ltd v RGC Mineral Sands Ltd (No 3) (1997) AIPC ¶91-366 at 39,789-39,790; ICI Chemicals & Polymers Ltd v Lubrizol Corp (1999) AIPC ¶91-521 at [37]-[39]; Novartis AG v Bausch & Lomb (Australia) Pty Ltd (2004) 62 IPR 71 at [67]-[69]; Apotex Pty Ltd v Les Laboratoires Servier (No 2) (2009) 83 IPR 42 at [86]-[88]; Les Laboratoires Servier at [56]-[61] and [75]-[78]; Bristol-Myers Squibb Co v Apotex Pty Ltd (2010) 87 IPR 516 at [52]-[54]; CSL at [53]-[74]. I do not propose to attempt to summarise all that has been said on the subject. It is appropriate, however, for me to make some observations that are pertinent to the present case.

161        The Court does not approach the exercise of its discretion under s 105 of the Act in a manner that is hostile or antipathetic to amendment. Like any other discretion to be exercised judicially, the discretion under s 105 is to be exercised in the light of all relevant factors: Wimmera (No 3) at 39,790. The discretion is a wide one: Smith Kline & French at 569; ICI at [37]. Moreover, the facility for amendment provided by s 105 is a beneficial one. Generally speaking, the approach of the Court in relation to the exercise of the discretion should be one that will achieve the evident purpose of the provision: CSL at [54]. Put simply, the power under s 105 of the Act exists for the benefit of the patentee to validate what would otherwise be an invalid or partly invalid patent: Les Laboratoires Servier at [59].

162        If the amendments are permitted under s 102 of the Act (and there is no question about that matter in the present case), the real question is whether there are any circumstances which would lead the Court to refuse the amendments: Smith Kline & French at 569; ICI at [37]; CSL at [54]. In this connection, the Court is concerned with the conduct of the patentee, not with the merit of the invention: Smith Kline & French at 569; Wimmera (No 3) at 39,789; ICI at [38]. What is essentially at issue is whether, by its conduct, the patentee has abused the monopoly that has been conferred upon it by the grant of the patent in its unamended form: Les Laboratoires Servier at [59].

163        Delay in seeking an amendment may be such a circumstance, although mere delay is unlikely to be so. If a patentee delays in seeking an amendment for an unreasonable period of time, that circumstance may be disentitling unless the delay can be reasonably explained: Smith Kline & French at 569; ICI at [38]; cf Apotex at [88] which perhaps expresses a slightly broader principle. Generally, however, delay needs to be coupled with improper conduct or resulting detriment to a particular person or the public more generally: Bristol-Myers at [58]. Thus the significance of delay must be considered in the context of all the circumstances of a given case: Les Laboratoires Servier at [92]. The assertion of unamended claims with knowledge of the need to amend is likely to be disentitling: Smith Kline & French at 569. For example, if a patentee knows of prior art fatal to the patent and deliberately refuses to apply to amend over a long period, knowing that the claims must be invalid as they stand, amendment should be refused: Les Laboratoires Servier at [58]. This is an instance of what is generally termed “covetous claiming”: Imperial Chemical Industries Ltd (Whyte’s) Patent [1978] RPC 11 at 22-23; Autoliv Development AB’s Patent [1988] RPC 425 at 439-440. Similarly, disentitling conduct may be present if a patentee knowingly persists in maintaining a patent in an unamended form after the patentee learns of, or has been warned of, objections that are available against the patent as a result of prior art: Smith Kline & French at 566-8; Les Laboratoires Servier at [58]. Thus, persistence in maintaining unamended claims with knowledge of a significant risk of invalidity (such that amendment should be sought) may be sufficient to be disentitling: Les Laboratoires Servier at [92]-[95]. These examples do not mark out the boundaries of where delay will or should be disentitling; they are merely illustrations of the application of the broader principle to which I have referred in [162] above: see, also, the discussion in CSL at [59]-[76]. There is no reason why delay, coupled with knowledge of a significant risk of invalidity – because the claims do not meet the standard of s 40(3) of the Act – could not be disentitling.

164        In seeking a favourable exercise of the discretion under s 105, the patentee should give full disclosure of all relevant matters bearing upon the exercise of the discretion: Smith Kline & French at 569; cf CSL at [56]. I am satisfied that appropriate disclosure has been made in the present case. In this connection, the evidence makes clear that there are gaps in the documentary record of some important steps that were taken in relation to the prosecution of the US application. Nevertheless, I am satisfied that these steps have been canvassed and explained in the evidence to the extent that, reasonably, they can be explained. I am satisfied that where substantiating documents exist, they have been provided appropriately and that no material has been knowingly withheld from the Court that would be relevant to the manner in which the discretion under s 105 of the Act should be exercised in the present case.

THE OPPOSITIONS

165        Before dealing with the specific grounds raised by the respondents and Eremad in their respective oppositions, it is convenient for me to discuss some further aspects of the evidence given on behalf of the respondents by Mr Schieber, and to deal with some submissions made by the respondents and Eremad concerning the significance of the amendments that have been sought.

Mr Schieber’s evidence: additional matters

166        Mr Schieber gave evidence in relation to a number of matters, including the significance of steps taken in the prosecution of the US application, and the significance of the approach taken in respect of added subject-matter objections under the EPC, to the scope of the claims in Bayer Pharma’s corresponding patents in other jurisdictions. I have already referred to this evidence: see at [79] above in relation to the US application and at [105]-[107] above in relation to added subject-matter objections under the EPC.

167        He also expressed opinions in relation to the effect that the opposition to EP ‘301, and the proceeding to revoke the UK patent, should have had in relation to Bayer Pharma considering the need to amend the Australian patent. In this connection, it is to be remembered that the decision in Gedeon Richter was given on 17 March 2011 and the Preliminary Opinion of the EPO was given on 17 May 2011, with the formal decision of the EPO Opposition Division being given on 30 January 2012 after a hearing on 1 December 2011. The latter part of this period is proximate with the time at which Bayer Pharma first became aware of the Isabelle product in Australia and the need to enforce the Australian patent.

168        Mr Schieber gave evidence that, at least at the time that the Opposition Division of the EPO had indicated that it saw added subject-matter problems with the granted (and proposed amended) claims of EP ‘301, it would have been sound professional practice to obtain an opinion from an Australian patent attorney or lawyer as to whether similar issues might arise in Australia, in particular as “similar ‘added subject matter’ prohibitions exist in Australian law”. He said that a “single instance of internal disconformity being raised by one patent office, noting a lack of congruence between claimed subject matter and subject matter otherwise disclosed in the description of a patent application, may itself not necessarily justify or require” an assessment of how that single instance might be relevant to corresponding patents and applications in other jurisdictions. However, if two respected institutions expressed similar concerns, he said he would “feel compelled to assess whether a similar problem may exist in a patent granted in other jurisdictions where a counterpart application or patent exists, and obtain a more detailed assessment from a patent law practitioner … in such other country where my level of knowledge of the patent laws in such country is less than comprehensive”.

169        He said that the amendment and validity issues faced by Bayer Pharma in relation to corresponding patents and applications in the United Kingdom, the United States of America and before the EPO should ordinarily have triggered a consideration of the need to amend the corresponding patent in Australia. He said that the desirability of considering this issue would have been “clearly apparent” by the end of 2010 at the time that amendments were being proposed in the UK proceeding, and “manifestly obvious” when the EPO Opposition Division revoked EP ‘301.

170        Mr Schieber’s views were, at least in part, premised on his statement that “similar ‘added subject matter’ prohibitions exist in Australian law”. Without intending any criticism whatsoever of him, the validity of his statement and its significance for the present case depend on the elasticity that can be given to the word “similar” in that context. In my view it is only at a high level of abstraction that one can say, for example, that Art 100(c) of the EPC and s 40(3) of the Act are “similar”.

171        When speaking of the ground of revocation provided by s 72(1)(d) of the Patents Act 1977 (UK) – which finds its counterpart in Art 100(c) of the EPC – the authors of Terrell on the Law of Patents (13th edition), in 1982, referred to it as an “entirely new” ground (see at [5.143]) and apparently saw no parallel between that provision and s 32(1)(i) of the Patents Act 1949 (UK) which contained an internal fair basing requirement similar in terms to that contained in s 40(3) of the Act (see at [5.23]). By the time of the 15th edition of the same work in 2000, the requirement for internal fair basis under the 1949 UK Act had practically disappeared from the authors’ sight and was relegated to no more than a brief and passing reference in an historical introduction to the chapter on Grounds of Revocation under the 1977 UK Act (see at [7.01]).

172        In Lockwood Security Products Pty Limited v Doric Products Pty Limited (2004) 217 CLR 274 the High Court, when dealing with the construction of s 40(3) and the irrelevance to that question of post-1977 United Kingdom cases, referred to the changes made to the United Kingdom patent legislation to give effect to the EPC. In that connection the High Court said at [66]:

… Australia is not party to the European Patent Convention. The courts of Australia are not bound by what the European Patent Office says, and do not regard it as “jurisprudence”. …

173        The High Court observed (at [67]) that current United Kingdom law provides no guide to Australian law on s 40(3). As the High Court made clear (at [69]), s 40(3) requires a real and reasonably clear disclosure in the body of the specification of the invention that is claimed. Such disclosure is not limited, for example, to disclosures of preferred embodiments.

174        The views advanced by Mr Schieber on which the respondents and Eremad place reliance – particularly in relation to the relevance of the decisions of the Opposition Division of the EPO and of the High Court of Justice in Gedeon Richter to the Australian patent – fall to be considered against this background and, in particular, the unambiguous pronouncement by the High Court on the state of this aspect of Australian law and its insulation from decisions of the EPO and the United Kingdom courts. Plainly, the prohibition against added subject-matter under the EPC (and related local laws in EPC jurisdictions) proceeds on a different legal requirement and standard to that contained in s 40(3) of the Act in relation to internal fair basis. In my view that is a matter of some significance and should not be ignored in considering the objections advanced in the present case.

175        Section 40(3) of the Act has now been amended, with effect from 15 April 2013, by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth). The effect of the amendment will be to substitute the phrase “fairly based on the matter described” (the requirement for internal fair basis) with a test of “supported by matter disclosed”.

176        The Explanatory Memorandum to the Intellectual Property Laws Amendment (Raising the Bar) Bill 2011 (Cth) explained the rationale for this change in the following terms:

Despite the underlying concept and policy between fair basis and support being similar, the different terminology has produced different substantive law in different countries.

The difference in substantive law in different countries causes unnecessary complexity and uncertainty for applicants seeking protection in Australia and other jurisdictions. As discussed above … having different standards in different countries imposes costs on global innovators, who must familiarise themselves with the varying requirements.

This item is intended to align the Australian requirement with overseas jurisdictions’ requirements (such as the UK). Overseas case law and administrative decisions in respect of the ‘support’ requirement will be available to Australian courts and administrative decision-makers to assist in interpreting the new provision.

177        The above passage recognises that this legislative change heralds a significant departure from existing Australian patent law.

The significance of the amendments that are sought

178        As I have noted (at [26] above), it is not in question that Bayer Pharma seeks to amend the Australian patent to forestall any argument that the dissolution test claims are not fairly based on the matter described in the specification. The respondents and Eremad, however, each endeavoured to place an additional significance on the amendments that have been sought. They submitted that the dissolution test claims were critical to the maintenance of subsisting patents based on the PCT application (including, it would seem, the Australian patent) because these claims would defeat an objection based on obviousness.

179        In this connection the respondents submitted, with respect to the Australian patent, that:

… [Dr Broesamle] sets out the reasons for the amendments to claims 3, 11 and 27 … and says they are sought to avoid any contention that claims 3, 11, 27 and 32 may be invalid as lacking fair basis and not to overcome any prior art or to strengthen the claims on the issue of inventive step. Despite this statement, it is clear that the amendments sought will make it more difficult for a party seeking revocation of the claims to establish a lack of inventive step.

180        The respondents did not seek to explain this submission or to develop it in any way. The only claims which the respondents seek to revoke on the ground of lack of inventive step are claims 3, 4, 8, 11 and 24. The significance of the proposed amendments to the allegation of lack of inventive step in respect of those claims is not apparent, particularly when regard is had to the respondents’ own particulars of invalidity.

181        In the course of cross-examining Dr Broesamle, senior counsel for Eremad laid the basis for a more limited contention, namely that Bayer Pharma’s third Auxiliary Request in the opposition to EP ‘076 (see [124]-[125] above) was filed to avoid an argument on obviousness that had not then been raised as a ground of revocation in the opposition. Dr Broesamle agreed with that proposition. This was consistent with his affidavit evidence. In its written submissions, Eremad referred to that evidence and then used it to advance the following submission about delay:

It follows that these claims are of central significance. There is no excuse for the failure to amend earlier.

182        That submission is, with respect, a conflation. It may well be – it is not for this Court to decide – that the introduction of a dissolution test to claim 1 of EP ‘076 is important to maintaining the validity of that patent. However, claims 3, 11, 27 and 32 of the Australian patent – the claims to which the amendments are primarily directed – are dissolution test claims. Eremad’s submission appears to confuse the significance of the need to introduce a dissolution test into a claim of a patent where no such test exists with the discretionary allowance of an amendment to dissolution test claims that already exist in the Australian patent.

183        In the end, I am not persuaded that the significance of the amendments that are sought by Bayer Pharma with respect to claims 3, 11, 27 and 32 of the Australian patent extends beyond forestalling an argument about the internal fair basis of those claims.

The grounds of opposition: overview

184        Although the respondents and Eremad have filed respective statements of grounds in support of their oppositions, I propose to deal with their oppositions on the bases they advanced in final submissions.

185        The respondents do not oppose the amendments sought to claims 8, 24, 28 and 45 of the Australian patent. They do oppose, however, the amendments to claims 3, 11, 27 and 32. They submitted that, while the amendments sought to those claims were allowable in accordance with s 102 of the Act, the Court should exercise its discretion under s 105 of the Act to refuse Bayer Pharma’s application in that regard, on the following grounds:

(a)    The unreasonable delay in the application to amend the Australian patent.

(b)    Covetous claiming by Bayer Pharma electing to maintain invalid claims in other Australian patents or patent applications.

(c)    The unfair advantage obtained by Bayer Pharma in relying on the unamended claims of the Australian patent.

186        Eremad also opposes the amendments sought to claims 3, 11, 27 and 32. In its written submissions it noted that the amendments sought to claims 8, 24 and 28 are consequential on the amendments to claims 3, 11, 27 and 32 being made. As I understand its position, it raises no independent objection to claims 8, 24 and 28 being amended. It raises no objection to claim 45 being amended to correct the typographical error therein.

187        Eremad relies on the same grounds raised by the respondents, with an additional ground that, in making its amendment application, Bayer Pharma has failed to give full disclosure in relation to its prosecution of the US application. For the reasons I have already given – see particularly [67], [77] and [164] above – I reject that ground of opposition, at least insofar as Eremad contends that the amendments should be refused because of deficiencies in the evidence before the Court.

188        There is considerable overlap between the respondents’ submissions and Eremad’s submissions. Moreover, the respondents relied on Eremad’s submissions in relation to covetous claiming and Eremad relied on the respondents’ submissions in relation to unfair advantage, although it also made some additional submissions in that regard.

Delay

189        The cornerstone of the respondents’ and Eremad’s submissions on the question of delay is that Australian law in relation to the requirement for internal fair basis under s 40(3) of the Act is sufficiently analogous to the prohibition on added subject-matter under the EPC (as it arose in the various oppositions and revocation actions which I have summarised above) and also sufficiently analogous to the objections raised by the USPTO in relation to the prosecution of the US application, that Bayer Pharma was on notice as early as 2003 that it should amend the Australian patent. They submitted that, in light of these overseas events, Bayer Pharma should have been prompted to consider amending the dissolution test claims of the Australian patent (as it now seeks to do) and that, by not moving significantly earlier than it has, Bayer Pharma has been guilty of excessive (and therefore unreasonable) delay.

190        It is of course clear from Dr Broesamle’s evidence that, after the grant of the Australian patent until the time that infringement proceedings against the respondents were actively under consideration in January 2012, Bayer Pharma gave no consideration to whether the Australian patent should be amended. This is not a case, therefore, where the patentee has deliberately delayed in seeking amendments after having determined that they should be made.

191        The respondents’ and Eremad’s submissions focussed, firstly, on the prosecution of the US patent application, commencing with the introduction of claims 45, 47 and 49 by the amendments filed on 10 March 2003. As I have recounted, these claims were dissolution test claims which contained a dissolution test in more confined terms than the dissolution test in claims 7 and 9. I have accepted Mr Sopp’s explanation for introducing claims 45, 47 and 49 in a narrower form, namely that it was prudent as a matter of practice (which, in context, must mean United States patent practice) to include claims where the USP Paddle Method was recited with as much detail as possible based on the disclosure on page 4 and in Example 2 of the US specification. This is not to accept, however, that claims 7 and 9, in their then wider form, were impermissibly wide under United States law. Nevertheless, as events transpired, claims 7 and 9 (together with claims 45, 47 and 49) came to be further amended in December 2003 in response to the Office Action issued on 4 June 2003. The respondents and Eremad saw this as a matter of particular significance. They submitted that this revealed to Bayer Pharma the need to bring the dissolution test claims into line with the terms of the dissolution test stated in the body of the US patent specification, and thus constituted an exemplar for the position in Australia.

192        In considering this submission it is important to bear in mind why these particular amendments were made to the US application. They were made to meet a particular objection raised under the second paragraph of 35 U.S.C. § 112, which states:

The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention.

193        As the evidence makes clear, the specific objection raised by the examiner in this regard was essentially a clarity objection, not an objection that was akin to a fair basis objection under s 40(3) of the Act. The evidence shows that this is precisely how MWZB interpreted the objection and dealt with it on behalf of Bayer Pharma. By making these amendments, I am satisfied that Bayer Pharma was only seeking to overcome a particular clarity requirement of US patent law as interpreted and applied by the USPTO in the instant case.

194        Should the making of these amendments have prompted Bayer Pharma to review the scope of the claims in its then pending Australian patent application? In my view the answer to that question is plainly “no”. I am not persuaded on the evidence that the making of those particular amendments in those particular circumstances had any real relevance at the time to other jurisdictions and, in particular, to Australia. Indeed, at about the same time, on 1 December 2003, an examination report issued with respect to the Australian patent application. As I have noted, objections were raised under s 40(3) of the Act, but these related to other matters. No objection was raised that claim 9 (then the only dissolution test claim) did not include one or more of the three features. There is no reason why Bayer Pharma should have translated into the Australian sphere its experience with the USPTO in the context of addressing the requirements of United States patent law when the Australian examining authority apparently saw no similar clarity problem with claim 9 under Australian law. It is also to be remembered that the present claims 3, 11, 27 and 32 of the Australian patent were introduced on 30 November 2004 during prosecution of the application. On examination, no objection was raised to the form of these claims at that time or, indeed, at any other time until the filing of the respondents’ cross-claim in the principal proceeding. Of course, Bayer Pharma has sought its amendments pre-emptively and not in response to that cross-claim.

195        It follows that I am not persuaded by Mr Schieber’s evidence that the issues addressed in respect of the US application should have led to some further consideration of the content of the specification and “the congruity” between the specification and the claims in corresponding applications outside the United States. It seems to me that this evidence speaks more as a counsel of perfection – perhaps the product of analysis by hindsight of the now known facts of the present case – rather than as a statement of the real-world position facing Bayer Pharma and its advisers at the time.

196        In its submissions, Eremad sought to make much of the fact that, during the course of discussions between Bayer Pharma, P&V and MWZB in relation to the Office Action that issued on 4 June 2003, Bayer Pharma did not want to, or at least preferred not to, limit the dissolution test in the claims of the US application to a tablet containing 3 mg of drospirenone. In my view no criticism can be levelled at Bayer Pharma for simply wishing to keep its claims in as broad a form as legally possible. In any event, it is to be remembered in this regard that, ultimately, Dr Broesamle instructed MWZB to use the most appropriate wording for the claims under United States patent practice. Mr Sopp’s evidence, which I accept, was that the likely explanation for the choice of the final wording of the dissolution test claims proposed by MWZB was that the examiner’s objections were more likely to be overcome by amending the relevant claims to define the USP Paddle Method as specifically as possible. This approach is understandable and plainly includes an element of expediency directed specifically to overcoming a particular objection to ensure the successful prosecution of the US application.

197        Eremad also sought to rely on the fact that, in the course of considering the draft response prepared by MWZB to the Office Action, P&V had commented (on 12 August 2003) that a statement in the specification about micronizing drospirenone to provide rapid dissolution “is only correct” if the dissolution test in the specification is “simultaneously mentioned”. This comment, however, was not directed to the permissible width of the claims. I am not prepared to read it as an acknowledgement of some awareness by P&V, let alone some concession by Bayer Pharma, that the invention could only properly and permissibly be defined by strict adherence to the terms of the dissolution test stated in the body of the specification. Indeed, as I have recorded above, as late as 3 December 2003, P&V were contending for a claim that provided for any oral dosage form of drospirenone in which at least 70% of the drospirenone dissolves within 30 minutes during dissolution testing: see [73] above. I am satisfied, therefore, that this comment was made by P&V as a “minor comment” (their words at the time) that was directed, and intended to be directed, only to the text of MWZB’s draft response to the USPTO. It is apparent that P&V considered the draft, in that form, to be an incomplete statement about the dissolution of micronized drospirenone in vitro unless the dissolution test was also mentioned.

198        With respect to the Official Report issued by the APO on 1 December 2003, Eremad drew attention to the fact that P&V’s instructions to DCC on 19 November 2004 also included a reference to the dissolution test stated on page 4 of the Australian specification. This was done in the context of P&V quoting part of their response to the EPO in the course of prosecuting the European patent applications. In that response, P&V were arguing for the allowance of more than one independent claim to cover the different physical forms in which the invention might be present. In that quotation, P&V stated:

… Moreover, since the small particle size may be expressed by its functionality so as to achieve a rapid dissolution, we are of the steadfast opinion that the essential feature of providing drospirenone in a small particle size may be expressed in terms of “at least 70% of said drospirenone is dissolved from said composition within 30 minutes, as determined by USP XXIII Paddle Method 2 using water at 37°C as the dissolution media and 50 rpm as the stirring rate”.

199        This is a critical part of the quotation, which was not referred to by Eremad. It was the foundation for Bayer Pharma’s submission to the EPO that the inventive feature of the invention could be defined in alternative ways, including by reference to the dissolution test stated in the above quoted terms, which does not include any reference to the three features.

200        When responding to the Official Report on 30 November 2004, and providing the revised claim set containing claims 3, 11, 27 and 32 in their present form, DCC referred to the dissolution test on page 4 of the Australian specification, but went on to say:

Thus, as should be understood, the small particle size of drospirenone may be defined in terms of the surface area of drospirenone. Furthermore, it may be expressed in terms of the means to achieve a smaller particle size (ie. to dissolve drospirenone in a suitable solvent and spray it onto the surface of [an] inert carrier). Moreover, since the small particle size may be expressed by its functionality so as to achieve a rapid dissolution, [Bayer Pharma] submits that the essential feature of providing drospirenone in a small particle size may be expressed in terms of “at least 70% of said drospirenone is dissolved from said composition within 30 minutes, as determined by USP XXIII Paddle Method 2 using water at 37°C as the dissolution media and 50 rpm as the stirring rate”.

Hence, [Bayer Pharma] respectfully contends that the inventive feature of the particle size of the present invention may be defined in alternative manners, such as the drospirenone having a surface area of more than 10,000 cm²/g, the drospirenone in micronized form, the drospirenone sprayed from a solution onto an inert carrier or the drospirenone being dissolved from a composition corresponding to at least 70% within 30 minutes as determined by USP XXIII Paddle Method 2 using water at 37°C as the dissolution media and 50 rpm as the stirring rate.

In summary, [Bayer Pharma] submits that independently defining the invention in terms of the surface area of the drospirenone, micronized form of drospirenone or functionally in terms of the in vitro dissolution of drospirenone, are appropriate definitions for the dosage forms of drospirenone according to the present invention.

201        Once again, on further examination, no objection was raised to the form of the amended claims then lodged.

202        The gravamen of Eremad’s submission is that Bayer Pharma prosecuted the Australian patent application only on the basis of the statement of the dissolution test on page 4 of the Australian specification. This is not correct. As the quotation above shows, the statement of the dissolution test on which Bayer Pharma prosecuted its Australian patent application was, specifically, the test now stated in claims 3, 11, 27 and 32 in their present form, not some arguably narrower form.

203        After dealing with the prosecution of the US application, the respondents and Eremad advanced submissions that were based on the much later developments that had taken place in relation to the prosecution of the PCT applications in Europe.

204        Eremad pointed to the fact that Bayer Pharma had submitted amendments to the European Dissolution Divisional in September 2008 to bring the description in the body of the specification into conformity with the claims (which did not contain the three features). In this connection it submitted that, as a result of this development, Bayer Pharma was on notice that there was a “disconformity” between, on the one hand, dissolution test claims that omitted the three features and, on the other, the statement of the dissolution test in the specification as originally filed in respect of that application, which did incorporate the three features.

205        In my view no real significance can be placed on that particular development so far as other patent applications are concerned. It can only be said that, at the time, Bayer Pharma was responding positively and appropriately to a specific request of the EPO to amend the body of the specification in relation to a specific patent application, and nothing more. No question was raised, at that time, about claim definition or claim width that should have prompted Bayer Pharma to consider, more generally, the scope of the claims in patents it had then applied for in other jurisdictions.

206        More importantly, the respondents and Eremad pointed to the fact that, by October 2009, Bayer Pharma was on notice of the added subject-matter objections that had been raised separately and differently by Teva and Leon Farma in the oppositions to EP ‘301. They pointed to the fact that, by May 2010, Bayer Pharma had proposed amendments to introduce some or all of the three features to the dissolution test claims of EP ‘301 in order to address the objections that had been made.

207        It is undoubtedly correct that, by May 2010, Bayer Pharma had formed the view that the added subject-matter objections raised by Teva and Leon Farma could be addressed by the amendments it then proposed. It does not follow, of course, that Bayer Pharma held the view that, in the absence of the three features, the dissolution test claims extended beyond the disclosures of the specification of the European Parent Application as filed. That was the very matter that was in contention before the EPO and determined by the Opposition Division in December 2011. Bayer Pharma’s written submissions in that opposition show that it was urging on the EPO that a literal comparison was insufficient and that the added subject-matter objections should be dealt with as a matter of substance.

208        The respondents and Eremad also pointed to the judgment given in Gedeon Richter in March 2011 and the EPO’s Preliminary Opinion issued in May 2011. The respondents submitted that, by that time, Bayer Pharma was on notice of two decisions from important bodies in different jurisdictions to the effect that the dissolution test claims needed to conform with the disclosure on page 4 of the specification. They submitted that Bayer Pharma should have then assessed whether similar problems existed in other jurisdictions and whether the claims conformed with the specifications in the way required by the laws in those jurisdictions. They submitted that, although there may be differences in the way that patent laws in different countries deal with the issue of “support” or “fair basis” for claims in the specification, the laws of Europe, the United Kingdom and Australia all include a common concept or principle which should have at least prompted Bayer Pharma to consider the possibility that amendments to the Australian patent might be necessary.

209        A similar submission was advanced by Eremad. In the context of the United Kingdom revocation proceeding, Eremad submitted that Gedeon Richter’s added subject-matter objection rested on the proposition that, by reason of the deletion of the three features, the statement of the dissolution test in the specification of the UK patent was broader than the test stated in its parent (which included those features). It submitted that, similarly, the present amendment application is brought to overcome the risk that, by reason of the omission of the three features in the dissolution test claims, those claims are broader than the statement of the dissolution test on page 4 of the specification (which includes the three features).

210        These submissions must be treated with some caution. Expressed in that form, they do not give appropriate recognition to what are undoubtedly two different legal requirements – one dealing with added subject-matter as applied in EPC jurisdictions, and the other dealing with internal fair basis as understood and applied under Australian law. As I have endeavoured to explain above when dealing with Mr Shieber’s evidence on this issue, this distinction is a matter of some significance and should not be ignored in considering the objections advanced in the present case.

211        It can certainly be said that, from October 2009, Bayer Pharma was on notice that there was an added subject-matter problem with respect to EP ‘301 and its equivalents in EPC jurisdictions. I would accept that Bayer Pharma’s knowledge of that problem should have required it to consider, from that time, the possibility that amendments to those equivalents might be necessary. Indeed, throughout 2010 and 2011 Bayer Pharma proposed a number of amendments to patent applications in a number of jurisdictions, most notably (but not exclusively) EPC jurisdictions, including some in which, apparently, no opposition had been raised on added subject-matter grounds. I am not persuaded, however, that the existence of that problem, which was essentially a “European issue”, was one that should have required Bayer Pharma to consider the possibility that patents in jurisdictions operating under quite different legal requirements, in relation to the drafting of specifications and their claims, might also require amendment. This is particularly so in the Australian context where Bayer Pharma had in fact successfully dealt with particular objections under s 40(3) of the Act that had been made by the appropriate examining authority during the examination phase.

212        In coming to this view, I do not leave out of consideration Dr Broesamle’s evidence that, when Bayer Pharma came to consider the commencement of the principal proceeding, it conducted an internal review of the Australian patent, which included considering the invalidity arguments that had been raised against corresponding patents in the United Kingdom, the United States and before the EPO. It also included considering, in a preliminary manner, the amendments that Bayer Pharma had voluntarily proposed or which had been required to the claims of corresponding patents in other jurisdictions. Bayer Pharma obviously considered these matters to have some relevance to its review of the Australian patent. There is, however, in my mind a clear distinction between, on the one hand, circumstances which, objectively, should have catalysed a particular course of conduct (here, reviewing the claims of the Australian patent), and, on the other, appreciating, when independently engaging in that conduct, that those circumstances might assist in making decisions. The present case is of the latter kind.

213        In any event, even if the added subject-matter problem with respect to EP ‘301 and its equivalents in EPC jurisdictions should have catalysed a review of the scope of the dissolution test claims of the Australian patent, a patentee in the position of Bayer Pharma would at least have been entitled, in those circumstances, to the benefit of some authoritative decision on the added subject-matter objection before proceeding to amend. Both the respondents’ and Eremad’s submissions appear to acknowledge this possibility. The earliest such decision was given in Gedeon Richter in March 2011, which was followed by the decision of the Opposition Division of the EPO in May 2011. I am not persuaded that the period of time that elapsed from the giving of those decisions until Bayer Pharma gave notice in the principal proceeding of its intention to amend (February 2012) is one that represents delay of a kind that would disentitle Bayer Pharma to a favourable exercise of the discretion under s 105 of the Act, in the absence of other circumstances that would be disentitling.

214        For the avoidance of doubt, I would add that I do not consider the added subject-matter problem with respect to EP ‘301 and its equivalents to have any greater significance in relation to the Australian patent simply because of the earlier objection raised by the USPTO in the Office Action issued on 4 June 2003. The objection raised by the USPTO on that occasion was a fundamentally different one, as I have already explained.

Covetous claiming

215        In the context of amendment applications, the notion of “covetous claiming” is properly understood as the deliberate obtaining or maintenance of patent claims where the patentee knows that those claims are of unjustified width: Whyte’s Patent at 22-23; Autoliv’s Patent at 439-440.

216        Eremad submitted that, notwithstanding the essentially uniform views recorded in the advice provided by P&V in relation to the Norwegian revocation proceeding (see [135] above), the judgment given in Gedeon Richter (see [121] above), and the Preliminary Opinion given by the Opposition Division of the EPO (see [114] above), there is no evidence that Bayer Pharma has “moved proactively” to amend the dissolution test claims of its granted patents in any jurisdiction. It submitted that some documents disclosed in the present amendment application evidenced a policy that dissolution test claims omitting the three features are maintained by Bayer Pharma unless and until relevant objections are raised in opposition or revocation proceedings.

217        In this connection Eremad pointed, in particular, to an acceptance by Dr Broesamle in cross-examination by senior counsel for the respondents that, when required to do so in the context of meeting an added subject-matter objection (for example, in the case of the Norwegian revocation proceeding), Bayer Pharma added a relevant feature. It also pointed to Dr Broesamle’s evidence in cross-examination to the effect that Bayer Pharma hoped to maintain claims that were not limited by the three features. To be clear, Dr Broesamle said that Bayer Pharma hoped to maintain claims in this broader form where “we are convinced of the fact that it was our right to fight for it”, unless it was “more pragmatic and more economical if we do not fight for the full scope” in countries that “are not so important”. Eremad also submitted that there is correspondence in evidence which shows that Bayer Pharma has used divisional applications to pursue claims in the broadest form possible for as long as possible.

218        I do not find it to be exceptionable that a patentee or patent applicant would seek to keep the scope of its patent claims as broad as possible in order to fully protect its invention as it perceives it to be. Similarly, I do not find it to be exceptionable that, for pragmatic reasons, a patentee or patent applicant might be prepared to compromise on, and resile from, its desired position and not seek to vindicate to the fullest its patent rights or entitlements, as it perceives them to be. The question is whether, in so doing, the patentee or patent applicant, improperly, has sought to prosecute or maintain claims of unjustified width. Contrary to the implication in Eremad’s submissions in this vein, I do not regard Bayer Pharma’s conduct, as revealed by the evidence, to involve it seeking to prosecute or maintain claims which it knows to be either impermissibly or indefensibly wide. In my view, none of the material relied upon by Eremad in this regard shows any untoward or inappropriate conduct on the part of Bayer Pharma which, on the present state of the evidence, would warrant criticism of Bayer Pharma by the Court.

219        In any event, the true focus of the present application is not so much the legitimacy of the strategic decisions that Bayer Pharma has made in prosecuting or defending its overseas patents corresponding to the Australian patent, but, more directly, its conduct in relation to the Australian patent itself. Even in the Australian context, Eremad’s submissions strayed from the Australian patent. It referred to Australian Patent No. 2005202046, Australian Patent Application No. 2009200247 and Australian Patent Application No. 2010226924, which relate to the Australian patent and include dissolution test claims which omit the three features. It relied on the fact that Bayer Pharma has not sought to amend the claims of these other Australian filings.

220        The particular significance of Eremad’s reference to Australian Patent Application No. 2009200247 is that it has lodged a statement of grounds of opposition under s 59 of the Act to that application on grounds which include that the claims are not fairly based because (amongst other things) they are not limited to pharmaceutical compositions, preparations and methods wherein drospirenone is provided and/or present in the form referred to on page 4 of the specification (in a passage corresponding to that quoted at [14] above).

221        In my view, Eremad’s reliance on these other Australian filings, if they be relevant (which may be open to debate), does not materially advance either its or the respondents’ respective oppositions to the present application. Eremad’s opposition to Australian Patent Application No. 2009200247 has not been heard or determined. Further, as I have noted above, Bayer Pharma does not concede that, without amendment, the dissolution test claims of the Australian patent would not be fairly based on the matter described in the specification. Without deciding that question, I have accepted that Bayer Pharma’s stated position in that regard is one that is genuinely held by it on grounds that appear to be capable of being argued objectively and reasonably. I have no reason to doubt that the same position should apply in relation to the corresponding claims of the other Australian filings.

222        Accordingly, I am not persuaded that any of these matters, considered individually or cumulatively, amount to “covetous claiming” as that expression is understood in patent amendment proceedings, or would otherwise disentitle Bayer Pharma to the amendments that it has sought.

223        I should add for completeness that neither the respondents nor Eremad relied upon Eremad’s lodgement of its statement of grounds of opposition dated 4 January 2011 in its opposition to Australian Patent Application No. 2009200247 as an event that should have required Bayer Pharma to review the scope of its dissolution test claims in the Australian patent. Had they done so, then, conformably with the view I have expressed above (see [213]), I would not have been persuaded that Bayer Pharma has been guilty of delay of a kind that would disentitle it to a favourable exercise of the discretion under s 105 of the Act, simply because of the time that has elapsed.

Disentitling conduct: alleged unfair advantage by relying on unamended claims

224        Both the respondents and Eremad pointed to the timing of the commencement of the principal proceeding on 15 February 2012 viewed in light of Bayer Pharma’s knowledge, at least as at 30 January 2012, that (a) the Australian patent might need to be amended, and that (b) on legal advice, it could not seek interlocutory injunctive relief on unamended claims and later seek to amend those claims.

225        The respondents and Eremad then pointed to the facsimile transmission that was sent on 17 February 2012 by Bayer Australia to a large number of retail pharmacies.

226        In relation to that communication, the respondents submitted as follows:

No mention was made that the Applicants believe that the Patent in its current form is maintainable and that they sought to amend the very claims of the Patent on which they were suing and delete two of them altogether – that, in effect, they believed that those claims were invalid.

227        That submission requires comment. First, none of the amendments that Bayer Pharma has sought involves the deletion of claims. Secondly, there is no evidence that, when the facsimile transmission of 17 February 2012 was sent, or at any other time, either Bayer Pharma or Bayer Australia believed that the dissolution test claims, or any other claims, of the Australian patent were invalid. Indeed, I have effectively held to the contrary.

228        Eremad made a submission in slightly different terms. It submitted that, at the time that the facsimile transmission was sent on 17 February 2012, Bayer Pharma and Bayer Australia ought to have appreciated that there was a material risk that (a) some or all of the dissolution test claims could be held to be invalid unless amended, and that (b) the amendment application may be refused on discretionary grounds. Thus, it submitted, this conduct, taken in conjunction with the other matters on which it relied, strongly weighed against an exercise of the Court’s discretion to allow the proposed amendments.

229        It cannot be the case that, simply by commencing an infringement proceeding in which amendment of the relevant claims is also sought, a patentee is guilty of disentitling conduct that should lead to a refusal of the amendments. Plainly such an approach would defeat the beneficial purpose which s 105 of the Act is intended to achieve.

230        Does the fact that, in the present case, Bayer Australia also sent the facsimile transmission of 17 February 2012 make a difference? In my view, it does not. Bayer Pharma and Bayer Australia were entitled to inform pharmacists of their joint position that the supply of the Isabelle product was an infringement of the Australian patent and that they had commenced a proceeding to vindicate their asserted rights. If the respondents were infringing the Australian patent by supplying the Isabelle product, then so too were the pharmacists who were re-supplying that product. Apart from acting to protect their respective commercial interests in seeking the continued sale by pharmacists of the Yasmin product, Bayer Pharma and Bayer Australia were also entitled to act to protect their respective legal interests, including in relation to obtaining pecuniary relief arising from any infringement of the Australian patent that might be found. To this end it was legitimate for Bayer Pharma and Bayer Australia to give direct notice to pharmacists of the assertion of their rights in the principal proceeding: see ss 122(1), 122(1A)(c) and 123 of the Act. This was done by both the facsimile of 25 January 2012 and the facsimile of 17 February 2012. Having regard to the nature and form of the particular amendments sought in the present application, it was not incumbent on either Bayer Pharma or Bayer Australia to also inform pharmacists of the fact that Bayer Pharma would be seeking those amendments in the principal proceeding. Furthermore, there is no evidence to suggest that Bayer Pharma or Bayer Australia would not continue to pursue their causes of action for infringement in the principal proceeding, even if the amendments which Bayer Pharma has sought are not granted.

CONCLUSION

231        I am satisfied that it is appropriate in all the circumstances that the discretion under s 105 of the Act be exercised in favour of granting the amendments that are sought.

232        On the question of costs, this Court has proceeded on an acceptance of the proposition that an opponent is entitled to its costs, even if the amendments are allowed over the opposition: Wimmera Industrial Minerals Pty Ltd v RGC Mineral Sands Ltd (unreported, Sundberg J, 12 November 1997); Gambro Pty Ltd v Fresenius Medical Care South East Asia Pty Ltd [2000] FCA 407; Apotex Pty Ltd v Les Laboratoires Servier (No 3) [2009] FCA 1069 at [5]; CSL Limited v Novo Nordisk Pharmaceuticals Pty Ltd (No 3) [2010] FCA 1279 at [4]. In the present case the respondents and Eremad each placed reliance on that proposition. Eremad, in particular, developed a number of submissions that address the question of costs. Bayer Pharma also accepted that costs would ordinarily be paid by the patentee. In the course of oral submissions, however, it suggested (without development) that there may be other features in this case that would warrant a different approach. It submitted that costs should be dealt with after the making of substantive orders in the application. Those orders were made on 14 December 2012. At the time of making the orders, I said that I would deal with the question of costs when publishing these reasons.

233        As I see it, the only question is whether, in the circumstances of this case, I should depart from the general proposition followed in the cases to which I have referred. Since making the orders on 14 December 2012, no particular or additional feature of the case has been brought to my attention to support a different approach being taken. In the circumstances, I propose to order that Bayer Pharma pay the respondents’ and Eremad’s costs. However, out of an abundance of caution, I will make that order conditional, such that Bayer Pharma may seek to vary it, provided it files an interlocutory application to do so by no later than 4.00 pm on 25 January 2013.

Associate:

Dated:    18 January 2013