FEDERAL COURT OF AUSTRALIA

Sandoz AG v Bayer Intellectual Property GmbH [2023] FCA 1321

ORDERS

THE COURT DECLARES THAT:

1.    The Cross-Respondent has threatened to infringe claims 3 and 4 of Australian Patent AU2006208613 entitled “Prevention and treatment of thromboembolic disorders” (the 613 Patent).

THE COURT ORDERS THAT:

1.    The First and Second Applicants’ application be dismissed.

2.    The First and Second Cross-Claimants’ cross-claim be allowed in-part.

3.    The Cross-Respondent, whether by itself, its directors, officers, servants, agents, Related Bodies Corporate (as defined in the Corporations Act 2001 (Cth)), Associated Entities (as defined in the Corporations Act) or howsoever otherwise (together, Sandoz), during the term of the 613 Patent be restrained from infringing claims 3 and 4 of the 613 Patent, including (without limitation) by engaging in the following acts within the patent area (as that term is defined in the Patents Act 1990 (Cth)), without the licence or authority of the Cross-Claimant:

(a)    importing, selling, supplying or otherwise disposing of the Sandoz Rivaroxaban Products;

(b)    offering to sell, supply or otherwise dispose of the Sandoz Rivaroxaban Products;

(c)    authorising other persons to use the Sandoz Rivaroxaban Products or engage in any of the acts described in subpara (a) and (b) above;

(d)    procuring or inducing, whether by instructions or otherwise, any of the acts described in subpara (a) and (b) above; or

(e)    otherwise infringing the 613 Patent.

4.    The 613 Patent be amended in the manner described in the Annexure hereto.

5.    The First Applicant and Second Applicant/Cross-Respondent pay the Respondent/Cross-Claimants’ costs of the application and the cross-claim with a 15% reduction for the Applicants succeeding on the meaning of “in hydrophilized form” issue. Such costs are to be taxed if not agreed.

6.    The Cross-Claimants pay the costs of the amendment application.

7.    If any party seeks a variation of the costs orders in paragraphs 5 and 6 above, it may, within seven days, file and serve a written submission (of no more than two pages) and any affidavit in support. In that event, the other party may file and serve a responding written submission (of no more than two pages) and any affidavit in support within a further seven days, and the issue of costs will be determined on the papers.

THE COURT CERTIFIES THAT:

8.    Pursuant to s 19 of the Patents Act, the validity of each of the claims of the Australian Patent AU2004305226 entitled “Method for the production of a solid, orally applicable pharmaceutical composition” and the 613 Patent were questioned in this proceeding and found to be valid.

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

ANNEXURE

Insert the number “7” immediately after the incomplete PCT number PCT/04/01289 and insert

the country code "EP" before the application date code of "04" on page 10, line 13 of the 613 Patent, as shown below.

REASONS FOR JUDGMENT

ROFE J:

1.    INTRODUCTION

1    Bayer Intellectual Property GmbH is the patentee of the two patents in suit:

(a)    Australian Patent No. 2004305226 entitled “Method for the production of a solid, orally applicable pharmaceutical composition” (the 226 Patent); and

(b)    Australian Patent No. 2006208613 entitled “Prevention and treatment of thromboembolic disorders” (the 613 Patent).

2    Bayer Australia Ltd is, and has been since 14 February 2023, the exclusive licensee of the 226 Patent and the 613 Patent in Australia. Bayer Australia markets and sells Pharmaceutical Benefits Scheme listed products comprising rivaroxaban in Australia under the trade name XARELTO.

3    Sandoz AG and Sandoz Pty Ltd (Sandoz Australia) (together, Sandoz) seek to revoke the 226 and 613 Patents. It contends that the claims of each patent are invalid on several bases.

4    By way of cross-claim, Bayer seeks permanent injunctive relief against Sandoz Australia for threatened infringement of claims 8 to 22 of the 226 Patent and claims 3 and 4 of the 613 Patent (asserted claims).

5    Subject to the validity of the 613 Patent, Sandoz Australia admits infringement of the claims asserted against it. One issue remains for determination on the infringement of the 226 Patent: the construction of the term “in hydrophilized form”.

6    By an interlocutory application dated 27 June 2022, Bayer seeks to amend the 613 Patent to correct what it terms “a mistake”. The reference to “PCT/04/01289” on page 10, line 12, of the specification should read “PCT/EP04/012897” (the mistake). No amendments are sought to the claims. Sandoz opposes the amendment on a number of grounds.

7    In summary, and for the reasons that I explain in more detail below, I find that both the 226 Patent and the 613 Patent are valid. However, on my construction of “in hydrophilized form”, I do not consider that the Sandoz rivaroxaban products infringe the 226 Patent. Therefore, I only find that Sandoz has threatened to infringe claims 3 and 4 of the 613 Patent. I will also exercise my discretion to grant Bayer’s amendment to the 613 Patent.

2.    RELEVANT PRODUCTS

8    The 226 Patent relevantly relates to orally administrable pharmaceutical compositions comprising rivaroxaban “in hydrophilized form” and the use of those pharmaceutical compositions for the prophylaxis and/or treatment of a thromboembolic disease.

9    The 613 Patent relates to a method of treatment of thromboembolic disorders by once daily administration of a rapid-release tablet comprising rivaroxaban.

10    Rivaroxaban itself had, as one of a class of factor Xa inhibitors, been disclosed and claimed in an earlier Bayer patent application, International Patent Publication No. WO 01/47919 (WO 919), which is a key piece of prior art in relation to each Patent. The validity of the Australian patent resulting from that application, Australian Patent No. 775126 (the Compound Patent), is not challenged by Sandoz in this proceeding. The Compound Patent, as extended, is due to expire on 24 November 2023.

11    Sandoz Australia is the sponsor on the Australian Register of Therapeutic Goods of the following pharmaceutical compositions, each comprising rivaroxaban (the Sandoz products):

(a)    ARTG ID 335415: Rivaroxaban Sandoz rivaroxaban 10 mg film-coated tablet blister pack.

(b)    ARTG ID 335420: Rivaroxaban Sandoz rivaroxaban 15 mg film-coated tablet blister pack.

(c)    ARTG ID 335496: Rivaroxaban Sandoz rivaroxaban 20 mg film-coated tablet blister pack.

12    Sandoz Australia intends, without Bayer’s authorisation, to exploit the Sandoz products in Australia after 24 November 2023.

3.    GLOSSARY

13    The parties filed an agreed glossary and technical primer prior to the commencement of the trial. This section includes extracts from the glossary of the agreed technical primer.

14    Absorption refers to the process by which an API (defined below) moves from the site of administration into a site in the body, usually the bloodstream. Absorption may be defined in terms of its rate and extent. For an orally administered API, the administration site is the gastrointestinal (GI) tract. In the case of a solid oral dosage form, the total extent of absorption may be determined by a number of factors, including the extent of release, solubility, permeability, local and pre-systemic metabolism, stability characteristics of the API in the GI tract and GI tract transit times. In the case of a solid oral dosage form, the rate of absorption may be determined by factors including the rate of release (including disintegration), dissolution rate, solubility, permeability, local and pre-systemic metabolism, rate of degradation (if any) of the API in the GI tract and the presence of food in the GI tract.

15    Absorption half-life is the time it takes for the absorption of 50% of the dose that was absorbed (eg that moved from the administration site into the blood stream) when absorption is a first-order process.

16    Absorption profile of an API refers to both its rate and extent of absorption.

17    Activated Partial Thromboplastin Time (APTT or aPPT) is an assay used to monitor heparin treatment and is also known as PTT or Partial Thromboplastin Time. APPT is sensitive to the heparin-induced inhibition of factors IIa, IXa, Xa and XIa. It is performed on citrated plasma, which has been processed to remove the platelets, using an APTT reagent and a recalcification step.

18    Anticoagulants are a class of antithrombotic drugs that inhibit the formation and/or propagation of coagulation, and/or the formation of fibrin, and are used in the treatment of thromboembolic disorders. By inhibiting the formation or growth of a clot, the anticoagulant allows the body time to break down the clot. Anticoagulants are also used prophylactically and chronically to decrease the risk of a new clot forming.

19    API means active pharmaceutical ingredient. The words “API” and “drug” can be used interchangeably.

20    Atrial fibrillation is a disease in which the heart beats irregularly. The irregular heart beat can cause clots in the heart or arterial system because the blood flow is not smooth, and thus is subject to turbulence, which results in blood clotting in areas of slow flow (most frequently the left atrial appendage).

21    Arterial thromboembolism occurs where a blood clot forms in the arterial system. Generally, the most common pathologies are atrial fibrillation, peripheral vascular disease or coronary artery thrombosis. Clots formed due to atrial fibrillation and peripheral vascular disease can result in a stroke, whereas clots formed due to coronary artery thrombosis can result in heart attacks.

22    AUC, or area under the curve, refers to the area under the concentration versus time curve. The “concentration” refers to the concentration of a drug, biomarker or clotting factor. When measuring the concentration of a drug in plasma, AUC is a measure of the extent of absorption of a drug. AUC may be defined according to a particular time period.

23    Bioavailability refers to the extent and rate of absorption of the API from a dosage form into a body site. Bioavailability is determined by, among other things:

(a)    the absorption profile of the API;

(b)    the dosage form within which it is administered to the patient; and

(c)    its first pass extraction (by metabolism or excretion).

The fraction of API absorbed from a dosage form is usually estimated by comparing AUC of the test dosage form or dosage amount, and a reference dosage form.

24    Clearance (CL) refers to a measure of the efficiency with which an API is eliminated from blood or plasma, and encompasses the API’s metabolism and excretion. Clearance is defined as the "volume of blood or plasma cleared of drug per unit time", and is thus expressed in units of volume per time (eg L/hr).

25    Clot or thrombus consists of a mesh of fibrin that embeds activated platelets and red and white blood cells.

26    Cmax is the peak concentration of the API, biomarker or a clotting factor(s) in a biological matrix after a treatment. In the case of an API, Cmax is the peak plasma concentration achieved following administration of a single dose of the API or during repeated dosing.

27    Cmin is the minimum concentration of the API, biomarker or a clotting factor(s) in a biological matrix after multiple treatments. In the case of an API, Cmin is the minimum plasma concentration achieved during the time interval between administration of two doses of an API during repeated dosing.

28    Coagulation cascade refers to a series of activation steps of various enzymes (factors) involved in coagulation. Under normal physiological conditions, it is only upon an injury that the coagulation system should rapidly and locally respond at an injured blood vessel wall to generate a clot.

29    Coronary artery thrombosis can occur where a clot is formed in a blood vessel in the heart.

30    Deep Vein Thrombosis (DVT) refers to the formation of a blood clot in a deep vein, usually in the leg. If DVT is left untreated, the blood clot can break off from the formation site and travel to the lungs causing PE. PE occurs where there is a blockage of the pulmonary artery in the lung and can be life-threatening.

31    Direct compression is a tablet manufacturing process in which the API is blended with excipients and compressed into finished tablets without modifying the physical nature of the blended material itself.

32    Dissolution rate refers to the rate at which a solid or liquid (eg a solid or liquid form of a drug) dissolves in a solvent.

33  Distribution refers to both the rate and extent to which an API moves into, and out of, different body components, including movement between plasma and blood cells or between the bloodstream and tissues. For APIs that become systemically available via the blood, the extent of the API’s distribution can be quantified by the term “apparent volume of distribution” (V), which is a proportionality between the total amount of the API in the body and the concentration of the API in the plasma:  

For example, if 100 mg of an API is in the body at a particular time and, at that same time, the plasma concentration is 5 mg/L, the volume of distribution will be 20 L.

34    Dosage form refers to the form in which the API is administered to the patient, such as tablets, capsules, solutions, suspensions, nasal sprays etc.

35    Dosage regimen refers to the regimen by which an API is administered, and includes the dose (quantity of API administered), dosage form, route (eg oral, intravenous, subcutaneous) and frequency of administration.

36    Elimination refers to the irreversible removal of an API from the body by metabolism (conversion to a different chemical species) and/or excretion.

37    Elimination half-life refers to the time taken for the concentration of the API in blood, plasma or serum to fall by half during the elimination phase of a pharmacokinetic profile.

38    Excretion refers to the removal of the API from the body via an excretory process, such as filtration across the kidneys and removal via the urine, breath, sweat and faeces.

39    Factors refers to the main enzymes involved in the coagulation cascade.

40    Fibrin is the fibrous protein that makes up a clot or thrombus.

41    First order elimination occurs where the rate of elimination of a drug is directly proportional to drug concentration.

42    Granulation involves the combination of powder particles, often with a binder, to form granules. Granules comprise multiple different particles. These granules are an intermediate product, which are compressed into a tablet or filled into a capsule. Granulation methods can be broken into two categories: wet and dry. Wet granulation involves the combination of drug particles with a binder and other excipients into granules in the presence of a solvent, typically water. The parties agreed that moist granulation and wet granulation refer to the same process. Dry granulation is a similar process conducted in the absence of the solvent.

43    In vitro refers to analysis, tests or evaluations conducted outside a living organisation (eg in a test tube).

44    In vivo refers to analysis, tests or evaluations conducted in a living organism.

45    International Normalized Ratio (INR) is a corrected ratio that expresses the patient’s prothrombin time (PT) over the mean normal PT, adjusted by the thromboplastin responsiveness value (known as the international sensitivity index (ISI), which is specific to each thromboplastin reagent).

46    Log P is the logarithm of the octanol-water coefficient of a molecule. That is, it is the logarithm of the ratio of a compound’s concentration in octanol (which is an organic solvent) and water.

47    Melting point is the temperature at which a compound will change from solid to liquid state.

48    Metabolism refers to the process by which enzymes in the body change the chemical structure of the API, thereby converting it into a different chemical form. Metabolism of an API occurs primarily in the liver, but can occur to varying extents in other organs. The extent of metabolism and the type of metabolism of an API depends on its interactions with the many metabolic enzymes in the body, and is thus highly dependent on the API’s chemical structure.

49    Metabolites are the products of metabolism. As metabolites have a different chemical structure to the parent API, they can have different pharmacokinetic and pharmacodynamic properties to the parent API. Metabolites can be inert, can contribute to the improvement in the condition (efficacy) or produce side effects.

50    Off-target side effects refers to the consequences that can occur when a drug affects targets or tissues other than targets with which the drug was meant to bind.

51    Parenteral administration refers to administration other than by the GI tract (eg mouth), generally injection or infusion.

52    Peripheral vascular disease refers to where the arteries develop atherosclerosis, which is the thickening or hardening of arteries caused by the build-up of plaque in the inner lining of an artery. Rupture of the plaque results in a highly thrombotic surface, resulting in blood clot formation.

53    Permeability refers to the ability of an API to move across cell membranes such as those lining the GI system. Permeability encompasses passive movement (eg through or between the cells of the GI lining) and active movement (eg via transporters within the GI lining). Permeability is also affected by efflux transporters which restrict movement across the GI lining.

54    Pharmacokinetics refers to the study of the time course of API in the body. The pharmacokinetic profile of an API depends on its:

(a)    absorption;

(b)    distribution;

(c)    metabolism; and

(d)    excretion.

“Elimination” is the combination of metabolism and excretion. Pharmacokinetics is sometimes referred to as PK or by using the acronym ADME.

55    Pharmacodynamics refers to the time course of the intensity of the pharmacological effect(s) that an API has in the body. Pharmacodynamics incorporates both (i) the therapeutic effect of the API (ie treating or improving the relevant condition) and (ii) any side effects caused by the API. Pharmacodynamics may be distinguished from pharmacokinetics in that pharmacodynamics describes how an API affects the body, whereas pharmacokinetics describes how the body affects an API. Pharmacodynamics is sometimes referred to as PD.

56    Plasma refers to the liquid component of blood after it has undergone centrifugation to separate the cellular components such as red and white blood cells and platelets.

57    Pre-formulation typically includes experimental, in vitro investigations into at least the stability, dissolution and solubility of the drug (in various potentially relevant biological and environmental conditions), its crystal form and polymorphism, as well as its compatibility with any excipients that might be selected for use in the formulations used in clinical trials. To assess such matters, particularly for potentially sold oral dosage forms, in vitro solubility and dissolution testing are often performed.

58    Prothrombin time (PT) test is a clotting test that was used to measure the effects of warfarin treatment before the priority dates. It was known to respond to reductions in factors II, VII, IX and X during warfarin therapy. It was performed by adding thromboplastin (generally a phospholipid-protein tissue extract) and calcium to plasma, which has been treated with citrate, to prevent it from clotting.

59    Pulmonary embolism occurs where there is a blockage of the pulmonary artery in the lung.

60    Solubility refers to the maximum amount of a compound that will dissolve in a given volume of specified fluid at a particular temperature and pH. Solubility is distinct from dissolution, which refers to the rate at which particles dissolve in solution.

61    Steady-state occurs during repeated (or constant) administration once there is no further accumulation of a drug. Once a drug reaches steady-state, values of Cmax and Cmin remain constant and plasma levels remain within what is defined as a “steady-state range”.

62    Stroke can be caused by clots occluding blood vessels or from bleeding outside blood vessels. Clots can be formed from atrial fibrillation (with the clot forming in the heart), or in cerebral blood supply vessels (both large and small calibre), or from thrombosis in the deep veins of the legs that crosses into the arterial system through a hole in the heart. Some clots may move further after they have detached from the initial location (eg embolized) and travelled to the brain.

63    Terminal half-life is the time taken for a drug concentration to decrease by half across the final portion of a drug concentration versus time profile.

64    Tmax is the time at which Cmax occurs.

65    Therapeutic index or therapeutic window in anticoagulants refers to the range of anticoagulant effect, spanning a lower limit where the risk of thrombosis is unacceptably increased, to an upper limit where unwanted bleeding occurs with unacceptable frequency. A narrow or low therapeutic index is to be distinguished from a high or wide therapeutic index. A higher or wider therapeutic index is one where a broader range of doses of the compound can be given to a person to achieve a desired effect without having adverse effects. A low therapeutic index will mean a risk of toxicity if levels are too high and therapeutic failure if levels are too low.

66    Thromboembolism is a general term describing the combined processes of thrombosis (where a vessel is occluded by clots in part, or in entirety), or embolism (when a clot breaks off from the formation site and lodges elsewhere in the body). Thrombotic or thromboembolic disorders involve thrombosis and/or thromboembolism, which may develop in the venous or arterial circulatory systems.

67    Thrombosis is a pathological clot formation resulting in the obstruction of blood flow through a blood vessel. The primary mechanisms for thrombosis are the improper regulation of the coagulation cascade, and/or excessive platelet activation.

68    Venous thromboembolism (VTE) refers to a clot that develops in the venous system. Common manifestations of VTE are DVT and pulmonary embolism.

4.    EVIDENCE

69    Bayer relies on the evidence of Professor James Polli in support of its cross-claim for infringement. Professor Polli is a Professor and Ralph F. Shangraw/Noxell Endowed Chair in Industrial Pharmacy and Pharmaceutics at the University of Maryland, Baltimore. He obtained a PhD in pharmaceutics from the University of Michigan in 1993. Professor Polli made two affidavits dated 6 October 2022 and 29 January 2023.

70    Professor Polli has published approximately 100 scientific articles in the areas of dissolution, drug intestinal permeability, transporter substrate requirements, prodrug design, oral bioavailability, in vitro-in vivo correlation and bioequivalence. His two primary research interests are improving oral bioavailability of drugs through formulation and chemical approaches, and developing public quality standards for oral dosage forms.

71    Bayer relies on the evidence of Professor Polli, Professor Allan Evans and Professor Mark Crowther in relation to the validity of the 613 and 226 Patents.

72    Professor Evans is a pharmaceutical scientist and pharmacologist, with extensive teaching, research and industry experience in drug discovery and development. He is a Professor of Pharmaceutical Science at the University of South Australia. He obtained a PhD in pharmacokinetics at the University of Adelaide. Professor Evans made one affidavit dated 8 February 2023.

73    At the relevant dates, Professor Evans was Head of the School of Pharmacy and Medical Sciences at the University of South Australia. He was also lecturing in pharmacokinetics, biopharmaceutics, clinical pharmacology and pharmacy practice.

74    Professor Evans has acted as primary investigator, investigator or consultant in at least 50 clinical trials studying the pharmacokinetics, safety and/or efficacy of APIs. A focus of Professor Evans’ work was to understand whether doses were safe and therapeutically effective in humans and the relationship between safety and therapeutic effectiveness.

75    Professor Crowther is a haematologist specialising in the treatment of thromboembolic disorders with extensive clinical, research, teaching and industry experience. He is a Professor and Chair of the Department of Medicine and Leo Pharma Chair in thromboembolism research at McMaster University in Canada. Professor Crowther made one affidavit dated 7 February 2023.

76    Professor Crowther obtained a Doctor of Medicine from the University of Western Ontario in 1990 and completed a residency in internal medicine and haematology. He went on to become a research fellow in thromboembolism at McMaster University and the Medical Research Council of Canada, as well as a clinical fellow in internal medicine. Professor Crowther also completed a Master of Science in epidemiology and biostatistics from McMaster University in 1998. He is listed as an author on over 600 peer-reviewed articles.

77    Professor Crowther has consulted extensively with the pharmaceutical industry. He has training in clinical trial design and has been engaged in a number of clinical studies including as principal or co-principal investigator to determine the most appropriate dose to initiate and maintain the therapeutic effect of warfarin. Professor Crowther has also been engaged as the principal investigator of an international project for approximately 10–15 studies in the field of coagulation. Most of Professor Crowther’s clinical trial experience has been in Phase II and III clinical trials, but he has also been involved in the early phase discussions as a consultant when defining the therapeutic objectives of a trial program.

78    Bayer also relies on an affidavit from a patent analyst, Dr Louisa King, made on 30 January 2023.

79    Dr King is a director of IP searching and an IP analyst at Aperture Insight. Dr King gave evidence reflecting the results of searches she carried out to locate “PCT/04/01289” referred to on page 10 of the 613 Patent.

80    Sandoz relies on the evidence of Professor Michael Roberts. Professor Roberts is currently the Adjunct Professor of Therapeutics & Pharmaceutical Science at the University of South Australia, an Emeritus Professor of Clinical Pharmacology & Therapeutics and Director of Therapeutics Research Centre at the Diamantina Institute, University of Queensland.

81    Professor Roberts made three affidavits dated 3 October 2022 in support of Sandoz’s case on invalidity, 30 January 2023 in answer to Bayer’s evidence on infringement and 3 March 2023 in reply to Bayer’s evidence on validity.

82    Professor Roberts gave evidence of his active research in areas of pharmacology and toxicity. He has authored more than 578 peer reviewed articles and contributed chapters or other sections to more than 75 books.

83    Professor Roberts was involved in University of Tasmania projects from 1978–1984 developing a slow release oral dosage form of aspirin for use in the prevention of stroke and heart attacks. The teams on these projects conducted in vitro and human dose ranging studies on the antithrombotic effect of aspirin with enteric coating. From 1986–1989, in his capacity as head of the University of Otago Department of Pharmacy, Professor Roberts was involved in conducting clinical trials, including early-phase clinical trials or later stage comparative trials comparing innovator and generic products.

84    Bayer accepts that Professor Roberts is suitably qualified to express an opinion as to matters of formulation and clinical pharmacology in this proceeding.

85    Prior to the hearing, Professor Polli and Professor Roberts prepared a joint report for the Court in which they gave their responses to 11 questions posed by the parties, and indicated where they agreed or disagreed in their response (JER1). The two experts gave concurrent oral evidence at the hearing as a joint expert session (JES1). The parties rely on JER1 primarily in relation to the validity of the 226 Patent. During the course of JES1, it became clear that Professor Roberts had a broader experience in pharmaceutics than Professor Poli.

86    Sandoz also relies on the evidence of Professor Ross Baker, a senior consultant haematologist and clinician scientist, in support of its case of invalidity. Professor Baker made one affidavit dated 3 October 2022.

87    Professor Baker has over 30 years’ experience as a senior consultant haematologist, has published over 138 peer reviewed papers in journals and acted as principal investigator in over 133 international Phase II and Phase III clinical trials. He has worked as principal investigator and in an advisory capacity for pharmaceutical companies in the development of various anticoagulants (eg rivaroxaban, ximelagatran, fondaparinux, dabigatran and apixaban).

88    Professor Baker has also acted as a peer reviewer for scientific abstracts submitted to the International Society on Thrombosis and Haemostasis Annual Congress.

89    Sandoz also relies on the evidence of a patent attorney, Mr Rodney Cruise, in support of its case in relation to best method and ascertainment. Mr Cruise made one affidavit in the proceeding on 30 September 2023.

90    Mr Cruise is a principal of the intellectual property firm, Phillips Ormonde Fitzpatrick, and the manager of the intellectual property research company, IP Organisers Pty Ltd. Mr Cruise’s evidence related to searches for patent and non-patent literature on the Chemical Abstracts database.

91    Prior to the hearing, Professors Roberts, Baker, Crowther and Evans prepared a second joint report for the Court in which they gave their responses to 10 questions posed by the parties, and indicated where they agreed or disagreed in their response (JER2).

92    The experts gave concurrent oral evidence in two groups at the hearing: Professors Polli and Roberts in the first session, and Professors Roberts, Baker, Crowther and Evans in the second session.

4.1    Person skilled in the art

93    The person skilled in the art is not a reference to a specific person but is a legal construct drawn by reference to the available evidence. As French CJ explained in AstraZeneca AB v Apotex Pty Ltd (2015) 257 CLR 356 at [23] (AstraZeneca HC):

The notional person is not an avatar for expert witnesses whose testimony is accepted by the court. It is a pale shadow of a real person — a tool of analysis which guides the court in determining, by reference to expert and other evidence, whether an invention as claimed does not involve an inventive step.

94    The legal construct may not be a single person but may be a team of persons “whose combined skills would normally be employed in that art in interpreting and carrying into effect instructions such as those which are contained in the document to be construed”: General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1972] RPC 457 at 485 (per Sachs LJ, Buckley and Orr LJJ agreeing).

95    The person skilled in the art is likely to have a “practical interest in the subject matter … and may often work in the art in which the invention is connected”: KD Kanopy Australasia Pty Ltd v Insta Image Pty Ltd (2007) 711 IPR 615 at [16] (per Kiefel J). They are unimaginative and without inventive capacity.

96    In relation to the 226 Patent, Sandoz says that the skilled team includes a haematologist, a formulator and a pharmacologist.

97    Bayer considers the person skilled in the art possesses a mixture of attributes drawn from a team of skilled scientists, including a medicinal chemist, a clinician (being a haematologist), a formulator and a clinical pharmacologist.

98    The parties agreed that the question of construction for the 226 Patent is informed by the views of a formulator, and that Professors Roberts and Polli were appropriately qualified to give such evidence. However, Sandoz expressed some doubt regarding Professor Polli’s experience as a formulator and his expertise in pharmaceutics, pointing to the evidence he gave that he had only taught compounding and physical pharmacy, not tabletting, for the past 30 years.

99    The experts agreed that a drug company’s clinical trial program is very carefully constructed and will require the input of all team members, including pharmacologists and clinicians. The experts agreed that clinical trials involve a broad range of specialists for Phase I and II studies. A clinician will be involved in the conduct of clinical trials and will have input, with others, into their design, analysis and interpretation. Professor Baker considered that the input from a clinician would be particularly relevant in developing anticoagulant drugs given the complexity of the coagulation system. Other specialists that may be included in the team as required include pharmaceutical scientists, toxicologists, statisticians, analysts and database specialists, as well as experts in regulatory requirements as these studies will form a seminal component of a regulatory filing for the product. The roles of the various members of the skilled team and their involvement during the stages of the drug development process are discussed further below in section 10.1.14 “Stages of drug development”.

100    Professor Crowther noted that the term “clinician” is quite broad, which may help explain some of the differing views of the experts, particularly with respect to the role of a clinician in the early stages of drug discovery and development. Professors Evans and Crowther considered that the term applies to a health professional (a medical practitioner or specialist) providing day-to-day care (directly or indirectly) in a clinical setting such as a hospital. Professors Roberts and Baker took the view that the “clinician” was the person providing a clinical perspective, and that may be, for instance, in providing advice on an aspect of patient care or providing advice to other clinicians working directly with patients, as may arise for clinicians working in anatomical and chemical pathology, clinical pharmacology, public health and laboratory medicine. They gave as an example a haematologist specialising in laboratory medicine who will frequently have postgraduate fellowship and/or PhD qualifications and whose main responsibility is to supervise routine clinical, as well as translational, research laboratories. The haematologist’s duties may include laboratory and clinical research, pathology testing and/or patient care.

101    The experts agreed that there should be a clinical perspective in a drug development program. In this case, I consider that the “clinician” would be a practising haematologist with experience in treating patients with thromboembolic disorders and diseases, and who may also have some laboratory experience.

102    The clinician may be involved at the outset of a drug discovery program in terms of providing input as to desirable drug properties and, crucially, desirable improvements over current therapies (the existing standard of care). Clinicians are not generally involved in the drug discovery aspect of the program, or selecting the drug or defining the development program, but they play a critical part in the design, conduct and evaluation of the clinical studies themselves. A clinician’s involvement in design may be limited in the case of multi-centre clinical trials (usually Phase III) but there is usually at least one clinician who has a central role in leading the entire clinical trial program.

103    The roles of the various members of the skilled team and their involvement during the stages of the drug development process are discussed further below in section 10.1.14 “Stages of drug development”.

5.    PATENTS IN SUIT

5.1    The 226 Patent

104    Sandoz alleges that the claims of the 226 Patent are invalid for lack of clarity, by reason of their use of the unfamiliar term “in hydrophilized form”. This term is not defined in the 226 Patent and neither Professor Polli nor Professor Roberts had heard of the term “hydrophilization” before.

105    The 226 Patent claims an earliest priority date of 27 November 2003 (First Priority Date).

106    The 226 Patent was amended on 18 May 2010 to introduce seven new consistory clauses on page 2a described as further aspects of the invention, to delete claim 21 and insert new claims 21 to 23. Bayer does not rely on the added consistory clauses to provide fair basis for the claimed invention.

107    The invention described in the 226 Patent is said to relate to a process for the preparation of a solid, orally administrable pharmaceutical composition, comprising 5-chloro-N-({(5S)-2-oxo-3-[4-(3-oxo-4-morpholinyl)-phenyl]-1,3-oxazolidin-5-yl}-methyl)-2-thiophenecarboxamide (compound I) in hydrophilized form, and “its” use [ie use of the pharmaceutical composition comprising compound I in hydrophilized form] for the prophylaxis and/or treatment of diseases.

108    Compound I is now known as rivaroxaban. It is a direct factor Xa inhibitor.

109    The specification of the 226 Patent explains that rivaroxaban is a low molecular weight, orally administrable inhibitor of blood clotting factor Xa, which can be employed for the prophylaxis and/or treatment of various thromboembolic diseases.

110    The 226 Patent does not otherwise describe rivaroxaban in detail, instead referring the reader to WO 919 and incorporating the disclosure of WO 919 by reference (page 1, lines 6–12). More will be said about WO 919 later, as Sandoz relies on WO 919 in its inventive step challenge to both the 226 and 613 Patents.

111    The specification of the 226 Patent explains that rivaroxaban has a relatively poor water solubility and that, therefore, difficulties with oral bioavailability and an increased biological variability of the absorption rate can result. The specification observes that various concepts have been described in the past to increase oral bioavailability. Three concepts for increasing bioavailability are discussed. It is in relation to the third, “a process for hydrophilization”, that a reference is made to two papers (the Lerk papers) (at page 1, line 17 to page 2, line 4):

Thus, solutions of active compounds are frequently used which can be filled, for example, into soft gelatine capsules. On account of the poor solubility of the active compound (I) in the solvents used for this purpose, this option is not applicable, however, in the present case, since, in the necessary dose strength, capsule sizes would result which are no longer swallowable.

An alternative process is the amorphization of the active compound. Here, the solution method proves problematical, since the active compound (I) is also poorly soluble in pharmaceutically acceptable solvents such as ethanol or acetone. Amorphization of the active compound by means of the fusion method is also disadvantageous because of the high melting point of the active compound (about 230°C), since an undesirably high proportion of breakdown components is formed during the preparation.

Furthermore, a process for the hydrophilization of hydrophobic active compounds as exemplified by hexobarbital and phenytoin has been described (Lerk, Lagas, Fell, Nauta, Journal of Pharmaceutical Sciences Vol. 67, No. 7, July 1978, 935 – 939: “Effect of Hydrophilization of Hydrophobic Drugs on Release Rate from Capsules” [Lerk 1978]; Lerk, Lagas, Lie-A-Huen, Broersma, Zuurman, Journal of Pharmaceutical Sciences Vol. 68, No. 5, May 1979, 634-638: “In vitro and In vivo Availability of Hydrophilized Phenytoin from Capsules” [Lerk 1979]). The active compound particles are blended here in a mixer with a methyl- or hydroxyethylcellulose solution with extensive avoidance of an agglomeration step and then dried. The active compound thus obtained is subsequently filled into hard gelatine capsules without further treatment.

112    The Lerk papers are described in more detail below in section 6.5.

113    Immediately following the discussion of the three concepts the specification states:

Surprisingly, it has now been found that a special treatment of the surface of the active compound (I) in the course of the moist granulation brings about improved absorption behaviour. The use of the active compound (I) in hydrophilized form in the preparation of solid, orally administrable pharmaceutical compositions leads to a significant increase in the bioavailability of the formulation thus obtained.

114    The present invention is said at page 2, line 10, to relate to a process for the preparation of a solid, orally administrable pharmaceutical composition comprising rivaroxaban in hydrophilized form, in which:

(a)    first granules comprising the active rivaroxaban in hydrophilized form are prepared by moist granulation; and

(b)    the granules are then converted into the pharmaceutical composition, if appropriate with addition of pharmaceutically suitable additives.

115    The specification states that the moist granulation in step (a) can be carried out in a mixer (mixer granulation) or in a fluidized bed (fluidized bed granulation). Fluidized bed granulation is said to be preferred.

116    From page 2a, line 24, some preferred embodiments are described by reference to the particular form of the active compound (crystalline or micronized), and the specification then moves on at page 3 to a more detailed description of the process of the invention. The granulating liquid “used according to the invention” is said to contain a solvent, a hydrophilic binding agent and, if appropriate, a wetting agent. The hydrophilic binding agent is, in this case, dispersed in the granulating liquid or preferably dissolved therein.

117    From page 3, line 4 onwards, the specification discusses solvents used for the granulating liquid, hydrophilic binding agents employed for the granulating liquid, hydrophilic polymers (including hydroxypropylmethylcellulose (HPMC)) and optionally present wetting agents.

118    The specification describes that the granules obtained in process step (a) are subsequently converted into the pharmaceutical composition according to the invention in process step (b). At page 4, lines 20–22, a number of options are described for step (b) of the process, including tabletting, filling into capsules and filling as sachets.

119    At page 5, lines 3–12, the specification discusses the solid, orally administrable pharmaceutical composition of the invention:

The present invention further relates to a solid, orally administrable pharmaceutical composition, comprising 5-chloro-N-({(5S)-2-oxo-3-[4-(3-oxo-4-morpholinyl)-phenyl]-l,3-oxazolidin-5-yl}- methyl)-2-thiophenecarboxamide (I) in hydrophilized form.

The solid, orally administrable pharmaceutical composition according to the invention by way of example and preferably comprises granules, hard gelatine capsules or sachets filled with granules, and tablets releasing the active compound (I) rapidly or in a modified (delayed) manner. Tablets are preferred, in particular tablets rapidly releasing the active compound (I). In the context of the present invention, rapid-release tablets are in particular those which, according to the USP release method using apparatus 2 (paddle), such as described in the experimental section in chapter 5.2.2., have a Q value (30 minutes) of 75%.

120    The specification further describes at page 5, lines 28–32, that the invention relates to the use of the pharmaceutical composition according to the invention for the prophylaxis and/or treatment of various thromboembolic diseases such as cardiac infarct, angina pectoris (including unstable angina), reocclusions and restenoses after an angioplasty or aortocoronary bypass, cerebral infarct, transitory ischemic attacks, peripheral arterial occlusive diseases, pulmonary embolisms or deep venous thromboses.

121    The invention is illustrated by means of preferred exemplary embodiments, each of which involves wet granulation (page 6, line 1 to page 11, line 8). The specification notes at page 6 that the examples are “preferred exemplary embodiments” and non-limiting.

(a)    Example 1 describes the preparation of a tablet comprising compound I in hydrophilized form by a fluidized bed granulation process (a type of wet granulation).

(b)    Example 2 describes the preparation of a tablet comprising compound I in hydrophilized form via a “high speed granulation process”.

(c)    Examples 3 and 4, respectively, describe preparation of sachets, and preparation of gelatine capsules, each containing compound I in hydrophilized form. In both cases, the drug is prepared using a method similar to Example 1.

(d)    Example 5 compares the tablet properties and improved bioavailability of formulations comprising hydrophilized compound I prepared by the fluidised bed process described in Example 1, with a tablet comprising micronized compound I in non-hydrophilized form, prepared by direct tabletting without granulation.

122    The specification ends with 23 claims. Claims 1 to 7 claim a process for the preparation of a solid, orally administrable pharmaceutical composition comprising compound I in hydrophilized form, using the two-step process described above at [114].

123    Claims 8 to 22 claim a pharmaceutical composition of rivaroxaban “in hydrophilized form”, and methods involving the use of such a composition. These claims are asserted against Sandoz.

124    Claim 23 is an omnibus claim which is not asserted.

5.2    The 613 Patent

125    The 613 Patent relates to a method of treatment of thromboembolic disorders by once daily administration of a rapid-release tablet comprising rivaroxaban.

126    The 613 Patent claims an earliest priority date of 31 January 2005 (Second Priority Date).

127    The background of the invention identifies the blood coagulation mechanism, the blood coagulation cascade, the fact that there are numerous factors and intrinsic and extrinsic pathways, as well as the fact that activated serine protease Xa cleaves prothrombin to thrombin, allowing a further step in the cascade to occur. Following a discussion of haemostasis, coagulation and thromboembolic disorders, there is then a discussion of the existing anticoagulants (heparin, low molecular weight heparin (LMWH) and warfarin) and their “often severe disadvantages” which make the effective treatment of thromboembolic disorders “very difficult and unsatisfactory”.

128    Heparin is said to be administered parenterally (intravenously or subcutaneously) and to have a non-selective action as it inhibits a plurality of factors of the blood coagulation cascade at the same time. Warfarin is described as a vitamin K antagonist with a slow onset of action (latency to the onset of action 36 to 48 hours). Owing to the high risk of bleeding and the narrow therapeutic index, time-consuming individual adjustment and monitoring of the patient are said to be required.

129    The specification then describes at page 2, lines 20–29, a novel therapeutic approach for the treatment of thromboembolic disorders which aims to inhibit factor Xa.

130    The specification sets out that oral application is the preferable route of administration, and that once daily oral application is preferred for convenience and compliance. However, it says this can be “difficult to achieve depending on the specific behaviour and properties of the drug substances, especially its plasma concentration half-life”.

131    The 613 Patent then states at page 3, lines 5–10:

When the drug substance is applied in no more than a therapeutically effective amount, which is usually preferred in order to minimize the exposure of the patient with that drug substance in order to avoid potential side effects, the drug must be given approximately every half live [sic] (see for example: Malcolm Rowland, Thomas N. Tozer, in “Clinical Pharmacokinetics, Concepts and Applications”, 3rd edition, Lea and Febiger, Philadelphia 1995, pp 83).

132    Following this, at page 3, line 17, the invention in the 613 Patent is identified:

Surprisingly, it has now been found in patients at frequent medication that once daily oral administration of a direct factor Xa inhibitor with a plasma concentration half lifetime of 10 hours or less demonstrated efficacy when compared to standard therapy and at the same time was as effective as after twice daily (bid) administration.

133    From page 3a, line 18, a preferred embodiment of the invention is said to be:

In a preferred embodiment, the present invention relates to [rivaroxaban], a low molecular weight, orally administrable direct inhibitor of blood clotting factor Xa (see WO-A 01/47919, whose disclosure is hereby included by way of reference) as the active ingredient.

134    On page 4, lines 6–9, the plasma concentration half-life of rivaroxaban is described:

For [rivaroxaban] a plasma concentration half life of 4-6 hours has been demonstrated at steady state in humans in a multiple dose escalation study (D. Kubitza et al, … [Blood Abstract 3004]).

135    Page 4 of the 613 Patent discusses a clinical study, set out in greater detail on pages 11 to 14, that compared rivaroxaban administered once and twice daily with LMWH in patients undergoing orthopaedic surgery.

136    There is then discussion of various other (unclaimed) compounds which are said to be preferred embodiments of the invention, each of which appear to have been the subject of a publication. These are other factor Xa inhibitors, in addition to rivaroxaban. They are not within the scope of the claims (the claims having been amended to narrow them to rivaroxaban, after the application for the 613 Patent was filed). For example:

AX-1826 [S. Takehana et al. Japanese Journal of Pharmacology 2000, 82 (Suppl. 1), 213P; T. Kayahara et al. Japanese Journal of Pharmacology 2000, 82 (Suppl. 1), 213P]

HMR-2906 [XVIIth Congress of the International Society for Thrombosis and Haemostasis, Washington D.C., USA, 14-21 Aug 1999; Generating greater value from our products and pipeline. Aventis SA Company Presentation, 05 Feb 2004]

137    On page 10 of the 613 Patent, tablets rapidly releasing the active compound are said to be preferred, in particular those with a particular release rates defined by reference to a specified USP release method. Then follows the passage relevant to the best method case, which Bayer seeks to amend:

Very particularly preferred are rapid-release tablets containing 5-Chloro-N-({(5S)-2 oxo-3-[4-(3-oxo-4-morpholinyl)-phenyl]-1,3-oxazolidin-5-yl}-methyl)-2 thiophenecarboxamide as active ingredient. Preparation of such tablets is for example described in PCT/04/01289, whose disclosure is hereby included by way of reference.

138    The 613 Patent then discusses the clinical trial study (comprising 642 patients) that was referred to on page 4, which involved orally administering to different groups of patients different doses of rivaroxaban as rapid-release tablets — 2.5 mg, 5 mg, 10 mg, 20 mg and 30 mg twice daily, and 30 mg once a day. The data on page 14, lines 5–7, demonstrates the safety and efficacy of such once daily dosing of rivaroxaban.

139    The 613 Patent has four claims. Claims 1 and 3 are independent. Claim 1, a Swiss style claim to the use of rivaroxaban to manufacture a medicament, and claim 2, which claims the use of that medicament to treat thromboembolic disorders, were not pressed at the hearing.

140    Claim 3 provides:

A method for the treatment of a thromboembolic disorder in a patient said method comprising administration to the patient of a rapid-release tablet comprising 5-Chloro-N-({(5S)-2-oxo-3-[4-(3-oxo-4-morpholinyl)phenyl]-l,3-oxazolidin-5-yl}methyl)-2-thiophenecarboxamide once daily for at least five consecutive days, and wherein the 5-Chloro-N-({(5S)-2-oxo-3-[4-(3-oxo-4-morpholinyl)phenyl]-l,3-oxazolidin-5-yl}methyl)-2-thiophenecarboxamide has a plasma concentration half life of 10 hours or less when orally administered to a human patient.

141    Claim 4 is to the method of claim 3, wherein the thromboembolic disorder is selected from a specified group.

142    Claims 3 and 4 are asserted against Sandoz.

6.    INFRINGEMENT

6.1    613 Patent

143    Subject to the validity of the 613 Patent, Sandoz Australia admits the direct and indirect infringement of each of the asserted claims of the 613 Patent.

6.2    226 Patent

144    The only issue for determination on infringement arises in respect to the 226 Patent. The term “in hydrophilized form” forms an essential part of the definition of the invention in all of the claims (either directly, or via dependency) of the 226 Patent. Bayer’s infringement case turns upon the construction of the term “in hydrophilized form” in each of the asserted claims of the 226 Patent.

145    Sandoz’s primary submission is that the term “in hydrophilized form” is unclear, such that the claims of the 226 Patent are unclear and are liable to be revoked on that basis. It follows that there can be no infringement. Sandoz submits that Bayer’s attempt to give meaning to “in hydrophilized form” by resorting to the Lerk papers — two prior art papers cited in the background section of the Patent, each dated more than 24 years before the asserted priority date — is both illegitimate, in that it is plainly wrong as a matter of construction, and unsuccessful, in that it fails to give any clear meaning to the term even if that impermissible process of construction is adopted.

146    If, contrary to that submission, the term “in hydrophilized form” can be given any meaning, Sandoz submits that it must refer to a composition that is produced using a wet granulation technique having regard to the disclosure of the 226 Patent. As Bayer concedes, Sandoz’s rivaroxaban products are not produced by such a process, and therefore it follows that there can be no infringement on that construction.

147    If, however, the term “in hydrophilized form” is given a broader meaning to encompass a composition made by a process not involving wet granulation, Sandoz submits the asserted claims of the 226 Patent are not fairly based, or not entitled to their claimed priority date, and are liable to be revoked as a result. It follows again that there can be no infringement. Sandoz also challenges the validity of the asserted claims on other bases, not related to the use of the term “in hydrophilized form”.

148    The parties came to an agreement on day one of the trial confining the scope of the 226 Patent infringement case as follows:

1.    The Applicants/Cross-respondent (Sandoz) accept that, if, contrary to its submission, the Court finds that:

a.    the asserted claims of the 226 Patent are valid;

b.    the term "in hydrophilized form" in the asserted claims of the 226 Patent is clear; and

c.    on its proper construction, that term encompasses a composition in which the surface of the hydrophobic active pharmaceutical ingredient (API) has been rendered hydrophilic as a result of close physical interactions between rivaroxaban and hydrophilic excipients without the use of any liquid,

then the Sandoz Rivaroxaban Products (as defined in the Amended Statement of Cross-claim) have the features of the asserted claims.

2.     Bayer accepts that, if the term "in hydrophilized form" in the asserted claims of the 226 Patent, on its proper construction, only refers to a composition which has been made with the use of wet or moist granulation, or a liquid, then the Sandoz Rivaroxaban Products do not have the features of the asserted claims.

6.3    Principles of construction and clarity

149    A patent is construed through the eyes of the person skilled in the art: GlaxoSmithKline Consumer Healthcare Investments (Ireland) (No 2) Limited v Generic Partners Pty Limited (2018) 131 IPR 384 at [106] (per Middleton, Nicholas and Burley JJ) (GSK FC).

150    The principles governing claim construction are well established and have been recently set out by Rares, Moshinsky and Burley JJ in Airco Fasteners Pty Ltd v Illinois Tool Works Inc [2023] FCAFC 7 at [48], citing Jupiters Ltd v Neurizon Pty Ltd (2005) 65 IPR 86 at [67] (per Hill, Finn and Gyles JJ):

(i)     the proper construction of a specification is a matter of law: Décor Corp Pty Ltd v Dart Industries Inc (1988) 13 IPR 385 at 400;

(ii)    a patent specification should be given a purposive, not a purely literal, construction: Flexible Steel Lacing Company v Beltreco Ltd (2000) 49 IPR 331 at [81]; and it is not to be read in the abstract but is to be construed in the light of the common general knowledge and the art before the priority date: Kimberley-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1 at [24];

(iii)     the words used in a specification are to be given the meaning which the normal person skilled in the art would attach to them, having regard to his or her own general knowledge and to what is disclosed in the body of the specification: Décor Corp Pty Ltd at 391;

(iv)     while the claims are to be construed in the context of the specification as a whole, it is not legitimate to narrow or expand the boundaries of monopoly as fixed by the words of a claim by adding to those words glosses drawn from other parts of the specification, although terms in the claim which are unclear may be defined by reference to the body of the specification: Kimberley-Clark v Arico at [15]; Welch Perrin & Co Pty Ltd v Worrel (1961) 106 CLR 588 at 610; Interlego AG v Toltoys Pty Ltd (1973) 130 CLR 461 at 478; the body of a specification cannot be used to change a clear claim for one subject matter into a claim for another and different subject matter: Electric & Musical Industries Ltd v Lissen Ltd [1938] 56 RPC 23 at 39;

(v)     experts can give evidence on the meaning which those skilled in the art would give to technical or scientific terms and phrases and on unusual or special meanings to be given by skilled addressees to words which might otherwise bear their ordinary meaning: Sartas No 1 Pty Ltd v Koukourou & Partners Pty Ltd (1994) 30 IPR 479 at 485-486; the Court is to place itself in the position of some person acquainted with the surrounding circumstances as to the state of the art and manufacture at the time (Kimberley-Clark v Arico at [24]); and

(vi)     it is for the Court, not for any witness however expert, to construe the specification; Sartas No 1 Pty Ltd, at 485–486.

151    To those, I would also add:

(a)    when construing claims, “a generous measure of common sense should be used”: Product Management Group Pty Ltd v Blue Gentian LLC (2015) 116 IPR 54 at [36] (per Kenny, Nicholas and Beach JJ); and

(b)    a construction that would lead to an absurd result is to be avoided: NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd (1993) 26 IPR 513 at 559 (per Northrop, Lockhart and Burchett JJ).

152    It is impermissible for either the court or the witnesses to approach the issues of construction with any regard to the alleged infringing articles: Fresenius Medical Care Australia Pty Ltd v Gambro Pty Ltd (2005) 67 IPR 230 at [95] (per Wilcox, Branson and Bennett JJ). As observed by Heerey J in Welcome Real-Time SA v Catuity Inc (2001) 51 IPR 327 at [21]:

All that needs be added is the perhaps trite observation that the alleged infringement is to be ignored when construing the patent. Although the forensic contest will throw up the particular construction issues to be resolved, a patent must, as the saying goes, be construed as if the infringer had never been born.

153    Although it is preferred that claims should be construed in a manner that avoids redundancy, Full Courts of this Court have indicated that where the plain meaning of a claim has the effect that one or more dependent claims are redundant, then the consequence of redundancy would not drive the construction of the claim itself: Nichia Corporation v Arrow Electronics Australia Pty Ltd [2019] FCAFC 2 at [41] (per Jagot J, Besanko J agreeing at [1] and Nicholas J agreeing at [126]); Davies v Lazer Safe Pty Ltd [2019] FCAFC 65 at [65] (per Greenwood, White and Burley JJ).

154    Claims should be construed in the context of the specification, even where there is no ambiguity: Product Management at [37] (per Kenny, Nicholas and Beach JJ), cited in Esco Corporation v Ronneby Road Pty Ltd (2018) 131 IPR 1 at [144] (per Greenwood, Rares and Moshinsky JJ). Reference is made to the specification to understand the background and context of the claims and to ascertain the meaning of technical terms: Minnesota Mining and Manufacturing Co v Beiersdorf (Aust) Ltd (1980) 144 CLR 253 at 271–287 (per Aickin J). Terms in the claim which are unclear may be clarified or defined by reference to the body of the specification: Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1 at [15] (per Gleeson CJ, McHugh, Gummow, Hayne and Callinan JJ). However, the plain and unambiguous meaning of a claim cannot be varied or qualified by reference to the body of the specification: Kimberly-Clark at [15].

155    The requirement of clarity is also well-established. Relevantly, s 40(3) of the Patents Act 1990 (Cth) requires that the claims of a patent specification be clear. In Welch Perrin & Co Pty Ltd v Worrel (1961) 106 CLR 588 at 610, Dixon CJ, Kitto and Windeyer JJ said:

It is, however, fitting that we remind ourselves of the criterion to be applied when it is said that a specification is ambiguous. For, as the Chief Justice pointed out in Martin v Scribal (1954) 92 CLR 17, at p 59 … we are not construing a written instrument operating inter partes, but a public instrument which must, if it is to be valid, define a monopoly in such a way that it is not reasonably capable of being misunderstood. Nevertheless, it is to be remembered that any purely verbal or grammatical question that can be resolved according to ordinary rules for the construction of written documents, does not, once it has been resolved, leave uncertain the ambit of the monopoly claimed (see Kauzal v Lee (1936) 58 CLR 670, at p 685).

156    Sandoz submits that given the unfamiliar and ambiguous nature of the term “in hydrophilized form”, this is not a case of a “purely verbal or grammatical question that can be resolved according to ordinary rules for the construction of written documents”.

157    As Bayer submits that it is legitimate to have regard to the disclosure in the Lerk papers in order to properly understand the term “in hydrophilized form”, it is also necessary to refer to the principles that bear upon the extent to which, if at all, a document cited in a patent specification may be treated as part of its disclosure for the purpose of resolving any issue of clarity or construction.

158    The specification is to be construed in the light of the common general knowledge before the priority date. However, the common general knowledge is limited to information which had entered the common stock of knowledge and was well known to, and generally accepted by, the bulk of those in the field at that time. Sandoz submits that documents, such as the Lerk papers, which do not form part of the common general knowledge cannot be taken into account via that route.

159    For a cited document which did not form part of the common general knowledge, it is necessary to have regard to the nature and purpose of the reference to the document in the specification in question. A cited document may, for example, be said to be incorporated by reference into the specification. In such a case, it may be legitimate to have regard to its contents. However, the authorities demonstrate that, even in such cases, it remains necessary to have regard to the nature and purpose of the reference to the document, and that it may be legitimate to use the contents of the document for some purposes but not others: Idenix Pharmaceuticals LLC v Gilead Sciences Pty Ltd (2017) 134 IPR 1 at [165] (per Nicholas, Beach and Burley JJ).

160    Sandoz submits that where (as in the 226 Patent) the cited document is not incorporated by reference, the prima facie position is that its contents cannot be referred to, or treated as part of the disclosure of the specification. Sandoz accepts that it is not strictly necessary to use the incantation of “incorporation by reference” in order to ensure that a document, or part of its contents, which is cited in the specification is incorporated into, or forms part of, the disclosure of the specification. However, regard must be had to the nature and purpose of the reference in considering whether or not the patentee intends to incorporate some or all of its contents as part of the disclosure. The citation of a document as prior art in the background section of the specification is unlikely to entail such an indication. Further, where the material details of the prior art process or the product are themselves described in the specification, Sandoz submits that it is likely that the reference is to be understood as providing background only, or further information, rather than evincing an intention to incorporate additional content into the disclosure of the specification.

161    Bayer submits that Sandoz’s approach to the Lerk papers is erroneous and should be rejected. Bayer submits that the correct approach is that, where the patentee demonstrates an intention that words used in the specification have a particular meaning, effect should be given to such a “dictionary”: see Austal Ships Sales Pty Ltd v Stena Rederi Aktiebolag (2008) 77 IPR 229 at [13] (per Heerey, Finn and Dowsett JJ) quoting Flexible Steel Lacing Co v Beltreco Ltd (2000) 49 IPR 331 at [76]–[77] (per Hely J).

162    Bayer submits that the correct approach to construction by reference to a document referred to in a specification is that described by Greenwood J in Uniline Australia Ltd v SBriggs Pty Ltd (2009) 81 IPR 42 at [73]–[75].

6.4    Meaning of “in hydrophilized form”

163    The term “in hydrophilized form” does not have an ordinary meaning. Neither of the very experienced formulation experts were familiar with the term “in hydrophilized form”. Both experts agreed that a formulator would probably not have heard the term before reading the 226 Patent.

164    As Sandoz points out, the Lerk papers are not said to be incorporated by reference, nor do they form part of the common general knowledge. That being so, the correct approach according to Sandoz is to not read them. Sandoz submits that if there is any permissible use to be made of the Lerk papers in construing the 226 Patent, which Sandoz disputes, that use is very limited. At best, they might give some context to the particular discussion of the Lerk papers by the authors of the 226 Patent: see Uniline at [75] (per Greenwood J). They are not put forward as, and do not stand as, a means of defining the term “in hydrophilized form”, which is unclear to the skilled reader. They are not referred to for that purpose, or as part of a definition of that term.

165    Sandoz submits that the construction of claims that use an unfamiliar term to describe an essential characteristic of the invention is not to be determined by “plumbing the depths” of the disclosure of papers cited as prior art in the background section of the patent and then adding common general knowledge. Relying on Welch Perrin at 610 (per Dixon CJ, Kitto and Windeyer JJ), Sandoz submits that a patent is a public instrument “which must, if it is to be valid, define a monopoly in such a way that it is not reasonably capable of being misunderstood”. Sandoz submits that the Lerk papers do not remedy the lack of definition in the 226 Patent.

166    If, contrary to its primary submission, the person skilled in the art would have regard to the Lerk papers, Sandoz submits that the term is still unclear as the Lerk papers do not purport to define the term and do not provide any clear disclosure of, or the boundaries of the concept of, “in hydrophilized form”.

167    If, contrary to those submissions, it is possible to discern any meaning of the term “in hydrophilized form”, Sandoz submits that it is not the all-encompassing meaning contended for by Bayer. The only process disclosed in the 226 Patent for preparing a composition comprising rivaroxaban “in hydrophilized form” involves wet granulation with a hydrophilic binder such as HPMC, a standard technique for formulating solid oral dosage forms before the priority date, and an excipient commonly used in wet granulation. Similarly, Sandoz submits that the only process disclosed in the Lerk papers for “hydrophilizing” a hydrophobic active compound involves blending particles of the compound in a mixer with a solution of a hydrophilic excipient. In both cases, the production of a compound “in hydrophilized form” requires the use of a liquid with a hydrophilic excipient. On this construction, Sandoz submits that there is no infringement because the Sandoz rivaroxaban products are not made using wet granulation or a liquid.

168    Sandoz submits that, following the joint session, there was no consensus between the experts on what was taught by the Lerk papers, rather the entire discussion tended to underscore the ambiguity in the term.

169    Bayer submits, employing the language in Uniline, that the person skilled in the art would read the Lerk papers to give context to, and to understand, the words “hydrophilization” and “in hydrophilized form” in light of the particular discussion in the 226 Patent of “hydrophilization” and “a process for the hydrophilization of hydrophobic active compounds” the subject of the Lerk papers.

170    Bayer contends that it does not seek to refer to the Lerk papers beyond that permitted context and understanding. In that context, Bayer submits that the person skilled in the art would read and understand the words “in hydrophilized form” in the context of the whole of the specification to describe the surface of a hydrophobic drug particle which has been rendered hydrophilic as a result of close physical interactions with a hydrophilic excipient.

171    Bayer contends that, consistent with the evidence of Professors Roberts and Polli, the Lerk papers would be understood by the person skilled in the art to disclose a principle for improving dissolution beyond the precise experiments conducted in those papers. Having read the Lerk papers, Bayer submits that the person skilled in the art would understand that “in hydrophilized form”, which requires achieving close physical interactions between a hydrophobic drug particle and a hydrophilic excipient, might be achieved in a number of different ways, including intensive mixing without the use of a liquid in a confined space or a lower energy process with water.

172    As I explain below, I consider that the person skilled in the art would have recourse to the Lerk papers. Thus, it is appropriate to briefly outline the manner in which the Lerk papers arise in the specification and their contents.

173    The reference to the Lerk papers arises in the section of the 226 Patent which discusses three concepts to increase oral bioavailability which have been discussed in the past.

174    The first involves solutions of active compounds being filled into gelatine capsules. That option is said to be unavailable in the present case as the capsule size required in order to provide the necessary dose would not be swallowable.

175    Second is a process of amorphization of the active compound which Professor Polli described as being a process wherein a crystalline drug is converted to a non-crystalline, amorphous drug form in the hope that the amorphous form will have higher solubility. The “solution method” of amorphization is said by the specification to be problematical as the active compound, as well as being relatively poorly soluble in water, is also poorly soluble in pharmaceutically acceptable solvents such as ethanol or acetone. The “fusion” method is also said to be disadvantageous due to the high melting point of the active compound, which would lead to an undesirably high proportion of breakdown components forming during the preparation.

176    Third is “a process for the hydrophilization of hydrophobic active compounds as exemplified by hexobarbital and phenytoin [which] has been described [in the Lerk papers]”. The specification describes how the active compound particles are blended in a mixer with methyl- or hydroxyethylcellulose solution with extensive avoidance of an agglomeration step and then dried. The active compound thus obtained is subsequently filled into hard gelatine capsules without further treatment.

177    Immediately following the discussion of the three past concepts for increasing oral bioavailability is the “surprisingly, it has now been found” paragraph (extracted above at [113]). This paragraph refers to a “special treatment of the surface of the active compound (I) in the course of the moist granulation [which] brings about improved absorption behaviour”. That special treatment results in the active compound (I) being “in hydrophilized form” and leads to a “significant increase in the bioavailability of the formulation thus obtained”.

178    Before considering the Lerk papers, it is useful to summarise the state of the common general knowledge about wet and dry granulation as at the First Priority Date. As at that date, there were two commonly used production methods for the manufacture of a solid oral dosage form, being:

(a)    granulation (encompassing wet and dry granulation); and

(b)    direct compression.

179    Granulation involves the combination of powder particles with a binder to form granules. The rationale for granulation includes: to increase the bulk density of the powder, to improve the flowability of the powder, to improve mixing homogeneity, and to affect the dissolution process for hydrophobic poorly soluble particles. The granules are compressed into a tablet or filled into a capsule.

180    Wet granulation involves the combination of drug particles with a binder and other excipients into granules in the presence of a granulating fluid, usually water. The granulation liquid may be used alone, or as a solvent containing a binding agent. Organic solvents, rather than water, may be used if the drug is water sensitive or rapid drying is required. At the First Priority Date, wet granulation was considered an effective means, in terms of production and cost, to prepare good-quality granulation.

181    Wet-granulation techniques were widely used in the pharmaceutical industry to make tablets to achieve a number of objectives, including homogeneity, improved flowability, compactibility and stability, and to cause the production of hydrophilic surfaces. Wet granulation is not suitable for drugs that are sensitive to moisture or heat.

182    Dry granulation is a similar process, but carried out in a dry environment in which no liquid is used (eg using a dry binder). Dry granulation is generally suitable for drugs that are sensitive to moisture and heat. It involves less processing steps than wet granulation but generally does not result in the advantages of wet granulation in terms of improved flowability and compactibility. Therefore, dry granulation can generally only be used where the tablet ingredients have sufficient inherent binding or cohesive properties.

6.5    The Lerk papers

183    The first thing to note is that, at the First Priority Date, the Lerk papers were over 24 years old. They are clearly not common general knowledge, nor had the term “hydrophilized” been embraced by formulators after the publication of the Lerk papers as neither expert had come across the term “hydrophilized” prior to reading the 226 Patent in 2022, over 40 years after publication of the Lerk papers.

6.5.1    Lerk 1978

184    Lerk 1978 is entitled “Effect of Hydrophilization of Hydrophobic Drugs on Release Rates from Capsules”.

185    The abstract states that the release of poorly soluble hydrophobic drugs from capsules can be improved significantly by the creation of a hydrophilic surface by intensive mixing of the hydrophobic drug with a small amount of a solution of a hydrophilic excipient. The abstract continues:

The data presented indicate that the hydrophilic material is mechanically distributed over the hydrophobic surface. The creation of hydrophilic capillaries in a capsule or tablet allowed the rapid penetration of the dissolution fluid, resulting in a dispersion of well-wetted particles, so that the maximum surface area of the powder was exposed to the dissolution medium.

186    The last sentence of the abstract concludes that “hydrophilization of hydrophobic drugs has the important benefit that the release rate from capsules is independent of the surface tension of the dissolution medium”. This is to be contrasted with non-hydrophilized, hydrophobic drug samples in which the release rate varied with the surface tension properties of the dissolution medium.

187    The body of the article begins by discussing several methods for increasing the dissolution rate of poorly water-soluble drugs, and the problems associated with those methods. The article continues:

In an ideal situation, the drug would be released from the dosage form as discrete, well-wetted particles, so that the maximum surface area afforded by the powder would be exposed to the dissolution medium. For hydrophobic materials, such a situation may be difficult; but it may be possible to achieve if the surface properties of the material are changed from hydrophobic into hydrophilic by coating the hydrophobic particles with a hydrophilic material. Such a coating should aid in the penetration of fluid and the wetting of individual particles but should not unduly retard the dissolution rate of the drug.

188    Lerk 1978 states that the coating of particles may be achieved by fluidisation techniques (endnoting four articles) but notes that problems may arise if the powder is cohesive. The authors note that, in their study, a technique described by de Jong (a further endnoted article) was used, in which a powder (the hydrophobic API hexobarbital) was intensively mixed with a small amount of hydrophilic binder in solution in a high-speed mixer so that the hexobarbital was rendered hydrophilic. The rigorous mixing is said to inhibit agglomeration, resulting in a fine free-flowing powder. The authors note that, although this method was originally developed for microgranule production, it is claimed that the powder is coated with the binding agent so hydrophobic substances can be rendered hydrophilic. The authors state “[t]his study applied this technique to increase the dissolution rate of a hydrophobic, relatively insoluble drug from hard gelatin capsules”.

189    The materials section records that the mean particle sizes of the milled and classified hexobarbital, the methylcellulose and milled HPMC were 17, 30 and 32 µm respectively.

190    The methods section also records that dispersion of the binder over the drug surface was carried out in a small high-speed mixer (two or four minutes at ~9000 rpm). Dry-mixed powders of hexobarbital and binder were prepared using a tumbler mixer running at 90 rpm for 30 minutes.

191    Lerk 1978 compared the dissolution rates of the different forms of hexobarbital: intensively mixed (treated with 1%, 3% or 5% binder solution), physically mixed (dry mixed) and pure, each loosely packed into hard gelatin capsules.

192    The results and discussion section reported:

(a)    The physical mixes exhibited release rates of the same order of magnitude as the pure drug.

(b)    The results indicate that the degree of distribution of a hydrophilic binder over the surface of a hydrophobic drug affects the release rate from capsules.

(c)    The input energy of the mixer can promote spreading of the liquid. The success of this operation depends, first, on factors affecting the spreading such as mixer efficiency, contact angle and viscosity, and second, whether the film is stable when formed.

(d)    High-speed mixing of hexobarbital with methylcellulose or HPMC solutions resulted in decreased contact angles.

(e)    The release rate of a strongly hydrophobic drug like hexobarbital from capsules can be increased considerably by rendering the hydrophobic surface of the drug hydrophilic.

193    Lerk 1978 concludes with the statement that the results show the release rate of the treated drug to be independent of the surface tension of the dissolution medium. Because there are differences in surface tension of human gastric juice, the realisation of a release rate from capsules that is independent of the surface tension of the medium is of practical importance, especially where absorption is dissolution rate limited.

6.5.2    Lerk 1979

194    Lerk 1979 is entitled “Availability of Hydrophilized Phenytoin from Capsules”.

195    It explains that the purpose of the study’s investigation was to examine the penetration rate effect on the availability of poorly soluble, hydrophobic drugs from capsules. To this end, the effect of phenytoin hydrophilization on the liquid penetration rate into prepared plugs, on the disintegration time, on the in vitro release rate and on in vivo absorption in seven healthy volunteers was studied.

196    The abstract of Lerk 1979 states that “[h]ydrophilization was performed by intensive mixing of the hydrophobic drug [phenytoin] with a small amount of methylcellulose solution.” The intensive mixing was carried out in a small high-speed mixer which was run for six minutes at ~9000 rpm. A bioavailability study in seven healthy volunteers showed immediate absorption of the treated (hydrophilized) drug, but a one hour absorption lag time for the pure, untreated drug.

197    The authors of Lerk 1979 note that when a disintegratable tablet or capsule is administered orally to humans, gastric fluid must penetrate the porous mass before disintegration and absorption can occur. Any factor influencing the penetration rate may influence the absorption rate. The authors note that the liquid penetration rate into a porous mass is given by the “Washburn equation”.

198    Citing Lerk 1978, the authors note that the effect on the capsule release rate of a surface hydrophilic binder distribution over a hydrophobic drug had been the subject of recent study. The increased hydrophilized hexobarbital release rate (observed in Lerk 1978) was said to be independent of the dissolution medium wetting potency, in contrast to the untreated drug.

6.6    Evidence

199    Professor Roberts’ evidence was that he came to the case not knowing what “hydrophilized” meant. Professor Polli was also not familiar with the term “in hydrophilized form” at the First Priority Date.

200    Professor Roberts’ instinctive reaction after reading the term in the 226 Patent was that it was reminiscent of “lyophilized” and “lyophilisation” — a freeze drying process in which water is removed from a product.

201    Professor Roberts agreed that in the normal course of reading the 226 Patent at the priority date he would, upon reading the reference to the Lerk papers, get copies of the papers and read them with the objective of understanding what the patentee meant by the term “hydrophilized”. Contrary to his usual practice, and over his specific request to see the papers, Professor Roberts was instructed to provide a meaning for “in hydrophilized form” without recourse to the Lerk papers. He arrived at two possible definitions in the context of the 226 Patent and in the absence of the Lerk papers:

(a)    a hydrophobic drug which has been subjected to a rudimentary wet granulation process which is mixed with a solution binder and then dried; or

(b)    a micronized drug that has been suspended in a solution with a binder and surfactant and added as granulating liquid to a powder mixture of at least a diluent and a disintegrant in the course of wet granulation.

202    Professor Polli’s evidence was that, in accordance with his usual practice, when he encountered the reference to the Lerk papers in the context of a term with which he was not familiar, he requested copies of the Lerk papers in order to understand the exemplified “process for hydrophilization” in the 226 Patent.

203    In JER1, both experts considered the Lerk papers “highly relevant” to the meaning of “in hydrophilized form” and agreed that a formulator would carefully read the two articles with the objective of understanding the meaning of the term used by the patentee.

204    Professor Polli had regard to the Lerk papers which he said described a process for the hydrophilization of hydrophobic active compounds. Professor Polli’s evidence in his first affidavit was that, having read the specification of the 226 Patent and the Lerk papers, he understood the term “in hydrophilized form” as used in the 226 Patent to describe that the surface of the hydrophobic API had been rendered hydrophilic as a result of close physical interactions with a hydrophilic excipient. He understood that the “hydrophilized form” referred to in the 226 Patent might be achieved in a number of different ways at the First Priority Date. The way in which the Lerk papers described that an API could be rendered “in hydrophilized form” was by high-speed mixing which, as Professor Polli described, achieves intensive mixing of, and consequently close physical interactions between, the API and the hydrophobic excipients. Professor Polli was aware of different processes utilizing various equipment to achieve high-speed or intensive mixing at the First Priority Date.

205    Before he was given access to the Lerk papers, Professor Roberts was asked to comment on Professor Polli’s understanding of “in hydrophilized form”. Not unsurprisingly, Professor Roberts focussed on the disclosure in the 226 Patent to take issue with Professor Polli’s opinion that “in hydrophilized form” might be achieved in a number of different ways. In particular, Professor Roberts noted the 226 Patent only disclosed “hydrophilization” in the course of moist or wet granulation. Any other method by which “hydrophilization” might be achieved was, in his view, inconsistent with the preparation of example 1. Professor Roberts’ evidence was that he did not understand from the 226 Patent that intensive or high-speed mixing was required.

206    After his first affidavit was finalised and he had commented on Professor Polli’s understanding (reached with the benefit of reading the Lerk papers), Professor Roberts was given access to the Lerk papers, and asked whether he agreed with Professor Polli’s understanding having regard to the Lerk papers and the 226 Patent.

207    Professor Roberts maintained his disagreement with Professor Polli’s understanding – he did not understand the 226 Patent to be claiming a concept described in the Lerk papers. He gave three reasons for his disagreement:

(a)    Professor Polli’s definition omits the requirement that the drug is mixed with a binder in the presence of a solution in circumstances where the Lerk papers do not provide a basis to do so.

(b)    The definition appears to be limited to surface interactions or surface effects which Professor Roberts considered was not involved in the experiments described in the Lerk papers.

(c)    The definition appears to extend to all surface interactions that render the surface of the hydrophobic API hydrophilic. Professor Roberts considered this statement to be contrary to the disclosure in the 226 Patent.

208    In his second affidavit, Professor Roberts observed that the Lerk papers did not describe any examples of “hydrophilization” in which the hydrophilic excipient was not “in solution”. Professor Roberts considered that, in some cases, the cellulose polymers would technically be present as a colloidal solution or suspension, so he preferred to say “in the presence of a liquid”.

209    Professor Roberts considered that the process described in the Lerk papers was a “rudimentary wet granulation process”. He understood the reference to “hardly any granulation” occurring during preparation in Lerk 1979 to refer to agglomeration – the combination of two or more drug particles, not the creation of a mass larger than the drug alone.

210    Professor Roberts observed that he did not expect high-speed mixing of dry powders to achieve the same reduction in surface tension and contact angle of the drug-particle interface as mixing in the presence of a liquid. Professor Roberts’ evidence was that he did not understand from Lerk 1978 that “hydrophilization” could take place with intensive, high-speed dry mixing in the absence of a solution.

211    In JER1, Professor Polli disagreed with Professor Roberts’ definition of “hydrophilization” as he did not agree that a formulator would consider a definition which did not consider the main findings from the two Lerk articles and which focussed on a process. He disagreed that “hydrophilization” necessarily involves wet granulation as he considered that Lerk 1978 purposely avoids agglomeration (eg avoids an agglomeration step; avoids making granules). The powder in Lerk is barely wet and not indicative of wet granulation. The main reasons to employ wet granulation concern manufacturing (eg flow, dusting) which are not issues in the Lerk papers. Also, in Professor Polli’s opinion, a formulator would see that the 226 Patent, in summarising the Lerk papers, emphasises the avoidance of an agglomeration step.

212    In JER1, the experts disagreed in relation to the information that a formulator might derive from the Lerk papers read in the context of common general knowledge. Professor Polli considered that a formulator would understand from Lerk 1978 that the improved dissolution from the hydrophilized drug was achieved via intensive mixing of drug with a hydrophilic excipient, modifying the drug surface:

A formulator would take special note of Figure 2 in Lerk 1978, which concerns release rate from capsule, or more specifically percent drug dissolved versus time (or dissolution profile or dissolution curve) from capsules. Figure 2 plots dissolution curves of drug hexobarbital that were untreated, treated, and mixed with methylcellulose. Methylcellulose (and hydroxyethylcellulose) are denoted to be binders. From methods, untreated is pure drug packed into capsules. Treated is hydrophilized drug (using term in 226 patent) packed into capsules. Mixed with methylcellulose is “dry mixed powders of hexobarbital and binder” packed into capsules, respectively. Mixed is also sometimes denoted as physically mixed or physical mixes.

Figure 2 shows treated dissolution profile was significantly higher than each untreated and physically mixed. Dissolution profiles of physical mixes were about the same (or lower) than untreated (i.e. pure drug). That is, the composition of drug and the binder methylcellulose alone itself (physically mixed, but without intensive mixing) did not enhance dissolution at all.

…

Hydrophilized drug was produced using a high-speed mixer (about 9000rpm). Physical mixes were produced using a tumbler mixer (90rpm), which was not intensive mixing. In describing the low dissolution of the physical mixes, the manuscript states that results indicate that the degree of distribution of a hydrophilic binder over the surface of a hydrophobic drug affects the release rate from capsules. The manuscript further indicates that the input of energy from the mixer can promote spreading of the liquid (i.e. promote wettability of the powder, as assessed by contact angle measurement). Contact angle measurement involves the surface of the powder. I disagree (with Roberts 1, 48) that the most significant difference between the treated drug and physical mix is the presence of water during mixing.

213    In contrast, Professor Roberts considered that the most significant difference between the “treated drug” and the “physical mix” in Lerk 1978 was the presence of water during mixing (rather than the 100 fold difference in mixing speed). He noted that Lerk 1978 did not describe any examples of “hydrophilization” in which the hydrophilic excipient was not in the form of a solution, and indicated that where the drug is dry mixed with excipients the results are worse than both the wet mixed samples, and the drug alone without any binder.

214    In the joint session, Professor Roberts referred to the observation in Lerk 1978 that the release rate of the treated hexobarbitol was independent of the surface tension of the dissolution medium. He mused that the results in figure 12 of Lerk 1978 for the dissolution rate in a dissolution medium with varying concentrations of polysorbate 80 demonstrated that the increased dissolution rate involved more than just coating of the surface of the hydrophobic active compound, possibly wicking via capillaries. He referred to the discussion of the Washburn equation in Lerk 1979 to support his theory.

215    It was suggested to Professor Polli in cross-examination that making a hydrophilized form of a hydrophobic active compound via direct compression after dry granulation with a hydrophilic excipient only occurred to him during oral evidence, as he had not expressly mentioned dry granulation in his affidavit. That suggestion was rejected by Professor Polli. His written evidence was that a range of techniques could be used to render a hydrophobic API surface hydrophilic, and he did not consider that he needed to expressly discuss dry compression or dry granulation as one of the range of available techniques in that context.

216    In the joint session, Professors Polli and Roberts agreed the following:

(a)    that the fluid penetration in the Lerk papers is being promoted by the API being coated with hydrophilic excipient;

(b)    the process described in the Lerk papers to render the surface of the hydrophobic active hydrophilic used:

(i)    intensive mixing (of active compound and solution); and

(ii)    a very small amount of liquid;

(c)    there were no examples in the Lerk papers where the hydrophilic excipient is not in the form of a solution;

(d)    the treated drug in the Lerk papers had a better dissolution rate than the untreated drug; and

(e)    other ways to reduce particle size via high-speed mixing existed at the First Priority Date, such as a hammer mill.

217    Ultimately, the experts reached agreement that in a “hydrophilized form”, the hydrophobic surface of an active compound is rendered hydrophilic by being at least partially coated with a hydrophilic excipient.

218    However, the experts disagreed as to whether the process via which the result of hydrophilization of the hydrophobic active was achieved was limited to the process described in the Lerk papers (ie with some, but minimal, liquid or solvent) or by a variety of methods (including those without liquid or solvent), of which the one described in the Lerk papers was just one example.

6.7    Consideration

219    The only construction issue on the 226 Patent is the meaning of the term “in hydrophilized form”. Prior to this proceeding, neither expert had encountered the term.

220    The evidence of both experts was that they would in their normal practice refer to the Lerk papers when seeking to understand what was meant by “hydrophilized”. Professor Roberts’ definitions reached in the absence of the Lerk papers can be put to one side.

221    It is true that the Lerk papers are not common general knowledge or expressly incorporated by reference, but the patentee has made reference to them for a reason.

222    In Uniline, the specification of the patent in suit recited that the problem of “stairstepping” and “excessive torsional loading” was discussed in another patent specification, AP825. The experts in that case were not familiar with the term “stairstepping” or the AP825 patent. Both experts obtained a copy of AP825 and had regard to its contents to assist them in understanding the description of the prior art disclosed in AP825, and the term “stairstepping”. In that context, Greenwood J stated at [75]:

The correct approach to the use of AP825 for the purposes of construction, is not to read the document and substitute into the patent in suit the content of the prior art disclosures made by the document. The prior patent may be read by a person skilled in the art of the patent in suit to give context to and better understand the particular discussion selected by the author of the patent in suit in the specification, concerning the device or method the subject of the prior patent.     

(Emphasis in original.)

223    In Idenix, Nicholas, Beach and Burley JJ observed at [164] that the Emory patent referred to in the patent in suit was “merely one of more than 200 documents referred to in the Idenix patent”. They further noted that it was referred to in the background section for a purpose unrelated to the synthesis of the compound under consideration and, contrary to the evidence in the present case, it was apparent from the evidence that none of the experts had regard to the Emory patent. Their Honours commented that the boilerplate-provision to the effect that all publications mentioned in the specification were incorporated by reference was not of assistance. The Full Court at [166] rejected Idenix’s attempt to finesse the relevant disclosure by reference to the Emory patent.

224    In Becton Dickinson Pty Ltd v B Braun Melsungen AG [2018] FCA 1692, the parent patent of the patent in suit referred to a “device of this kind” said to be known from a European patent. The parent patent was incorporated by reference into each of the three patents in suit. All of the patents in suit expressly referred to the European patent. As in this case, the European patent was neither incorporated by reference (in that case into the parent) nor shown to be common general knowledge. At [79], Nicholas J considered that it was not permissible to have regard to the European patent for the purpose of construing the claims of the patents in suit.

225    A process for the “hydrophilization” of hydrophobic active compounds is first mentioned as the third of three processes discussed in a passage detailing concepts “described in the past” to increase oral bioavailability. Hydrophilization follows after “amorphization”, which is explained above at [175].

226    Like the process of amorphization produces an active compound in an amorphous form, hydrophilization would be understood by the person skilled in the art as a process which results in a drug in hydrophilized form.

227    The question is: what does the person skilled in the art understand by the term “in hydrophilized form”?

228    The specification of the 226 Patent states from page 1, line 28:

a process for the hydrophilization of hydrophobic active compounds as exemplified by hexobarbitol and phenytoin has been described [in the Lerk papers]. The active compound particles are blended here in a mixer with a methyl- or hydroxyethylcellulose solution with extensive avoidance of an agglomeration step and then dried. The active compound thus obtained is subsequently filled into hard gelatine capsules without further treatment.

229    From the reference to “hydrophilization” in this passage, which occurs in the section discussing methods to increase oral bioavailability of active compounds, it is apparent that hydrophilization is a process performed on hydrophobic active compounds (such as hexobarbitol) in order to increase their oral bioavailability.

230    I consider that the approach outlined by Greenwood J at [75] in Uniline is appropriate. The person skilled in the art may read the prior art Lerk papers to give context to, and better understand, the discussion in the 226 Patent, commencing at page 1, line 28, and the claims. This accords with the evidence as to what the experts would do in the normal course of reading the 226 Patent. Both experts agreed they would read the Lerk papers to glean an understanding of what the patentee meant by the term “hydrophilization” and “in hydrophilized form” in the specification and the claims.

231    The person skilled in the art reading the 226 Patent specification and wanting further understanding of the terms “hydrophilization” and “in hydrophilized form” would obtain and read copies of the Lerk papers. The person skilled in the art turning to the Lerk papers would begin by reading the abstracts of the papers. The abstracts of both papers begin in a similar way, by describing hydrophilization, or the creation of a hydrophilic surface on a hydrophobic drug “by intensive mixing of the hydrophobic drug with a small amount of” a solution of a hydrophilic excipient or a small amount of methylcellulose solution. The only process of “hydrophilization” described in the Lerk papers involves the intensive mixing of the hydrophobic drug in the presence of a small (or minimal) amount of hydrophilic excipient in solution.

232    Bayer accepts that the specific exemplifications of “hydrophilization” in the 226 Patent, including by reference to the Lerk papers, take place in the presence of liquid (in the case of the Lerk papers, the amount of liquid is “very small”). However, Bayer submits that the meaning of “in hydrophilized form” is not confined to a product of the specific exemplifications of the processes for hydrophilization in the 226 Patent or the Lerk papers. The 226 Patent expressly states at page 6 that the invention is not restricted to the preferred exemplary embodiments. Bayer submits that the experts understood (and would have understood at the First Priority Date) that liquid would not be required to achieve “hydrophilization”. The surface of hydrophobic API could also be rendered hydrophilic by high-speed mixing without liquid in a confined space.

233    It must be recalled that the person skilled in the art, turning to the Lerk papers for an understanding of the terms “hydrophilization” and “in hydrophilized form”, has not encountered the terms before. They have no understanding of the terms and are not seeking clarification or a more detailed understanding of the terms. They are simply looking for a meaning. It must also be recalled that the person skilled in the art is not mining the depths of the discussion in the Lerk papers by examining in minute detail the graphs and figures found therein; they are looking to the Lerk papers to give context to, and better understand, the use of the terms in the 226 Patent’s specification and claims. That context is obtained from reading the abstract and the discussion of the processes used in the Lerk papers, each of which involved intensive mixing with a small amount of solution.

234    The person skilled in the art reading the 226 Patent would be well familiar with wet granulation. They would understand that the patentee must intend “hydrophilization” to be something other than what they understand to be ordinary wet granulation. If ordinary wet granulation was intended, there is no need for the patentee to resort to the unfamiliar term “hydrophilization” to describe the intended concept.

235    The process by which a hydrophobic API is hydrophilized in the Lerk papers involves intensive mixing of the API with a hydrophilic excipient in a small amount of solution. Lerk 1978’s mention of “fluidisation techniques” and citation of three papers obliquely suggests that there are other methods by which the coating of the particles with hydrophilic material may be achieved. However, it notes that problems may be experienced if the powder is cohesive. The only hydrophilization process actually discussed in Lerk 1978 is the technique described by de Jong (endnote 12) which was used in the study, in which a powder and a small amount of binder solution are mixed intensively in a kneading machine or high-speed mixer.

236    I therefore consider that a person skilled in the art reading the specification of the 226 Patent, including the Lerk papers, would construe the term “in hydrophilized form” to describe where the hydrophobic surface of an active compound is rendered hydrophilic by being at least partially coated with a hydrophilic excipient through a process of intensive mixing of the hydrophobic active compound with the hydrophilic excipient in a small amount of solution. The process of “hydrophilization” is the process whereby the surface properties of a hydrophobic API are rendered hydrophilic by coating the hydrophobic particles with a hydrophilic material via a process of intensive mixing of the hydrophobic active compound with the hydrophilic excipient in a small amount of solution. In short, these processes necessarily include the use of a liquid.

6.8    Conclusion

237    On the basis of the construction of “in hydrophilized form” that I have adopted above, Bayer accepts that the Sandoz Rivaroxaban Products do not infringe the asserted claims of the 226 Patent.

7.    VALIDITY

238    Sandoz advances a number of substantive grounds of invalidity against all of the claims in each of the 226 and 613 Patents. Sandoz also says the asserted claims of the 226 Patent are not entitled to a priority date earlier than 18 May 2010.

239    In relation to the 226 Patent, Sandoz submits that, first, the asserted claims are not fairly based. Second, the 226 Patent is anticipated by WO 940 if the claims have the deferred priority date and therefore lacks novelty. Third, the invention claimed in each of the claims of the 226 Patent is obvious at the First Priority Date in light of the common general knowledge together with WO 919. Alternatively, if the priority date is shifted to the date of the amendments to the specification to incorporate consistory clauses, the invention claimed in the asserted claims are obvious in light of WO 940. In either case, the 226 Patent lacks an inventive step. Lastly, the claims of the 226 Patent lack clarity.

240    Sandoz seeks to invalidate the claims of the 613 Patent because it submits the 613 Patent does not disclose the best method known to Bayer for making a rapid-release tablet containing rivaroxaban and therefore does not comply with s 40(2)(a) of the Act. Second, Sandoz contends that the 613 Patent is obvious in light of the common general knowledge considered together with either WO 919 or the Blood Abstracts, and therefore lacks an inventive step. Lastly, Sandoz submits that each of the claims are not clear and do not comply with s 40(3) of the Act.

8.    FAIR BASIS AND PRIORITY DATE (226 PATENT)

241    Sandoz submits that if the term “in hydrophilized form” is given a broader meaning, such as to encompass a composition made by a process not involving wet granulation, or otherwise not involving the use of a liquid with a hydrophilic excipient, then the asserted claims of the 226 Patent are not fairly based. This because there is no real and reasonably clear disclosure of such an invention in the body of the specification (whether or not regard is had to the contents of the Lerk papers).

242    Sandoz’s priority date, novelty, and fair basis grounds only arise if, contrary to Sandoz’s submission, the consistory clauses on page 2, line 23 to page 2a, line 21 of the 226 Patent provide fair basis for the asserted claims. Throughout the hearing and in closing submissions, Bayer made a point of not placing any reliance on the seven aspects of the invention added by the 18 May 2010 amendments in support of its construction of “in hydrophilized form”.

243    On the basis of the construction of “in hydrophilized form” that I have adopted above, it is not necessary to consider Sandoz’s novelty case, fair basis case, or its priority date case.

9.    BEST METHOD (613 PATENT)

9.1    Principles

244    Section 40(2)(a) of the relevant version of the Act imposes two distinct but closely related requirements. First is the sufficiency requirement. The second requirement is that the complete specification disclose the best method known to the applicant of performing the invention at the filing date: GSK FC at [184] (per Middleton, Nicholas and Burley JJ).

245    The requirement to disclose the best method is not met simply by satisfying the sufficiency requirement: Les Laboratoires Servier v Apotex Pty Ltd (2016) 117 IPR 415 at [135] (per Bennett, Besanko and Beach JJ); BlueScope Steel Ltd v Dongkuk Steel Mill Co, Ltd (No 2) (2019) 152 IPR 195 at [839] (Beach J).

246    The key to understanding the obligation of the patentee is to understand that the section is directed to the method of performance of the invention. In the context of the best method requirement, “the ‘invention’ is the embodiment which is described and around which the claims are drawn”: Sandvik Intellectual Property AB v Quarry Mining & Construction Equipment Pty Ltd (2017) 126 IPR 427 at [94] (per Greenwood, Rares and Moshinsky JJ) referring to the High Court in Kimberley-Clark at [21] (per Gleeson CJ, McHugh, Gummow, Hayne and Callinan JJ). As Bennett, Besanko and Beach JJ stated in Servier 2016 at [124], “[t]he monopoly is circumscribed by the claims but the nature of the invention is as described in the whole of the specification”.

247    The Full Court in Servier 2016 had regard to the definitions of “perform” at [123]:

Perform is relevantly defined in the Macquarie Dictionary to include: “to carry out; execute, do”; and “to carry into effect; fulfil”. The meanings of “perform” in the Shorter Oxford English Dictionary are relevantly “execute, accomplish, do, (any action, operation or process undertaken or ordered)” and “make or construct (an object)”.

248    It also had regard to the definition of “method” at [125]: “Method is relevantly defined in the Macquarie Dictionary as: ‘a mode of procedure’ and ‘a way of doing something’”.

249    The best method requirement applies to all patents, whether they contain product claims or method claims, or both. No distinction is drawn in the language of the statute between a product and a process in providing for the obligation to provide the best method of performing the invention. In Servier 2016, Bennett, Besanko and Beach JJ at [108] observed that “a distinction between products and processes that ignores the specific features of the invention claimed is unhelpful”.

250    In Sandvik, Greenwood, Rares and Moshinsky JJ summarised the key principles with respect to best method at [115]:

(a) The purpose of the requirement in s 40(2)(a) to disclose the best method known to the applicant of performing the invention is to allow the public the full benefit of the invention when the monopoly expires: Servier at [108].

(b) Although a patentee might not be explicitly required to act in good faith, principles of good faith underlie the best method requirement: Servier at [108].

(c) The nature and extent of the disclosure required to satisfy the best method requirement will depend on the nature of the invention itself: Firebelt at [52]–[53]; Servier at [108].

(d) The key to understanding the obligation of the patentee is to understand that the section is directed to the method of performance of the invention. The monopoly is circumscribed by the claims, but the nature of the invention is as described in the whole of the specification: Servier at [124].

(e) The requirement to describe the best method of performing the invention is ordinarily satisfied by including in the specification a detailed description of one or more preferred embodiments of the invention: Firebelt at [53]; Servier at [104]. See also Blanco White (5th ed) at [4-516]; Bodkin C, Patent Law in Australia (2nd ed, Thomson Reuters, 2014) at [5280].

(Emphasis in original.)

251    The best method does not need to be identified as such in the specification: Pfizer Overseas Pharmaceuticals v Eli Lilly & Co (2005) 68 IPR 1 at [374] (per French and Lindgren JJ).

252    In Servier 2016, Bennett, Besanko and Beach JJ stated at [103] and [104]:

[103]     The authorities that have dealt with s 40(2)(a), its precedents and equivalents, must be understood in context. The first, and most important, factor is the nature of the invention being described and claimed. Servier divides this simply into products and processes but that is not sufficient. It is necessary to understand the invention itself in order to appreciate what is required of an inventor by way of disclosure in the specification in order to secure a monopoly from the public. In some cases, the claim to a product will require no description of the method of obtaining it and it can be left to the skilled worker (as in AMP v Utilux). In other cases, the product claim, properly understood, will require sufficient directions in order to obtain the monopoly.

[104]    The Full Court in Firebelt observed that the statutory obligation was an obligation to disclose the best method of performing the invention. Their Honours also said (at [53]), referring to the requirement of s 40(2) of the Act (in its totality), that the patentee is required to give the best information in his (or now her) power as to how to carry out the invention (emphasis in the original). The Full Court was of the view that the requirement is ordinarily satisfied by including a detailed description of one or more preferred embodiments of the invention and concluded in that case that, by taking account of the rest of the specification together with the figures, an embodiment was depicted of the claimed device.

253    Their Honours further observed at [135]: “The patentee has an obligation to include aspects of the method of manufacture that are material to the advantages it is claimed the invention brings”.

254    In that case, Servier did not disclose its specific method of making perindopril arginine. It simply referred to using a “classical salification method”. However, it argued the invention was to a product and the process for making the product was not part of the inventive step, therefore its specific method did not need to be disclosed: see at [145]. Servier pointed to the fact that the primary judge did not find that Servier “knew that the classical method of salification was inferior to either of the two methods that it did utilise”. It also claimed that there was no evidence that classical salification would fail to produce the patented product with the same quality, stability and utility: see at [145]–[147]. Servier ultimately argued that a method was disclosed in the specification, “it employed two versions of a method of classical salification and that there was no obligation actually to employ the best method identified”. This argument was rejected by the Court. The evidence showed that there may be different approaches and different parameters to “a classical salification” method. Their Honours observed at [173] and [177]:

[173]     The disclosure of the 1986 or 1991 methods would have saved the skilled addressee the possible dead ends and false starts that would otherwise have been risked in attempting to make the salt. It would have disclosed certainty of method rather than leaving the skilled addressee at risk of failure and of choosing from all of the parameters that may be used in classical salification.

…

[177]     In describing only the general method of classical salification rather than a specific method, such as the known 1986 and 1991 method, which would have provided the information to the skilled reader of a method for obtaining a form of perindopril arginine which met the characteristics of the claimed invention, Servier failed to describe the best method known to it of performing the invention.

255    Further, and relatedly, Beach J stated in BlueScope at [836]:

A patent will satisfy the best method requirement if the skilled addressee can arrive at the best method known to the patent applicant of performing the invention by some routine experimentation, but without ingenuity or undue experimentation. A patent applicant does not need to disclose details of the method which would be well-known and understood by the skilled addressee such as well-known analytical agents, commonly used methods, well-known terms of art, or a description of machinery in standard use. But a complete specification must disclose each essential element or feature for performing the invention, even if a skilled addressee would know or could readily ascertain that element. Where the best performance of the invention requires a step that is omitted by the complete specification, even if it could be readily ascertained by a skilled addressee, that will not meet the best method requirement.

256    Justice Beach went on to say at [840] that “[t]he patentee was not entitled to leave the public with the risk of the non-ascertainment of this step, since it had practical relevance to whether the benefit of the invention was obtained”.

257    Both the Full Courts in Servier 2016 and Sandvik considered that principles of good faith underlie the best method obligation. The Servier 2016 Full Court explained at [64] the proposition underlying the best method requirement in s 40(2)(a) as follows:

The proposition underlying a separate and additional obligation on the part of the inventor filing a complete specification is that where an inventor in fact knows of a method at the time of filing the complete patent application, which has taken the methodology to a more satisfactory stage or provides more certainty so that the public may more quickly and easily utilise the invention for which a monopoly is granted, the inventor is under an obligation to disclose that method.

(Emphasis added.)

258    The obligation for the patentee to disclose the best method known to them is longstanding. As their Honours explained in Servier 2016 at [72]:

[I]n Edison and Swan United Electric Light Company v Holland (1889) 6 RPC 243 at 279, the [English] Court of Appeal said that the patentee must state “in what manner the patented invention is to be performed” so that others know how practically to avail themselves of the invention when the patent is expired: “how they are to do what is necessary to carry out the new invention”, that is, how the invention is to be performed.

259    Both the Servier 2016 (at [73]) and the Sandvik (at [100]) Full Courts referred to the fact that the English Court of Appeal in Vidal Dyes Syndicate Ltd v Levinstein Ltd (1912) 29 RPC 245 differentiated between the two duties incumbent upon a patentee. First, the obligation by which the patentee must “particularly describe and ascertain the nature of the invention” and, second, that by which the patentee must “particularly describe and ascertain ‘in what manner the same is to be performed’”. In relation to the second duty, the Court of Appeal in Vidal said at 269:

It is settled law that a patentee must act towards the public uberrima fide, and must give the best information in his power as to how to carry out the invention. He is therefore bound to tell the public all the steps that can advantageously be taken in carrying out the invention. But he is not limited to claiming only the best way of carrying it out.

260    The disclosure of the method must be such as to relieve the skilled addressee seeking to implement the invention, including achieving the advantages associated with the invention, as at the expiry of the patent from being faced with undertaking a potentially extensive course of trial and error experiments to overcome the blind alleys and pitfalls which the patentee had already navigated or overcome as at the filing date.

9.2    Parties’ submissions

261    Sandoz submits that the 613 Patent does not disclose the best method of working the invention because it does not disclose the best method known to Bayer for making a rapid-release tablet containing rivaroxaban, which Bayer has admitted was that described in WO 940. Sandoz submits that it is the invention as described in the whole of the specification for which the best method must be provided, not necessarily the invention claimed.

262    Bayer admits that the best method known to it of making a rapid-release tablet containing rivaroxaban is the wet granulation method disclosed in the international publication of the 226 Patent.

263    Sandoz submits that claims 1 and 2 of the 613 Patent (which are Swiss style claims) involve the manufacture of a rapid-release tablet. Therefore, even if the best method requirement were limited to the invention as claimed (which Sandoz submits is contrary to principles articulated in Sandvik), that invention involves the manufacture of a rapid-release tablet. The best method in relation to a Swiss style claim would always have included the manner of making the medicament. Even asserted claims 3 and 4, which are to a method, require a rapid-release tablet to be administered as part of the method.

264    Sandoz submits that the only disclosure of the “rapid-release tablet” feature is that at page 10, lines 10–13, of the 613 Patent:

Very particularly preferred are rapid-release tablets containing [rivaroxaban] as active ingredient. Preparation of such tablets is for example described in PCT/04/01289, whose disclosure is included by way of reference.

265    Sandoz submits that “PCT/04/01289” is meaningless. Although it appears to the person skilled in the art to be a patent reference, a search for that reference on Google, Chemical Abstracts, or Patentscope does not produce any results, as a document with that reference does not exist. Sandoz accepts that an expert patent searcher would be able to investigate and determine that “PCT/04/01289” is an incorrect reference to the patent application number “PCT/EP2004/012897”. However, according to Sandoz, the skilled addressee of the 613 Patent does not include an expert patent searcher. At its highest, Sandoz submits that the evidence in support of Bayer’s case is that the skilled addressee could engage a patent searcher to supply the correct reference. Sandoz submits this is not sufficient to satisfy the best method requirement because it does not have the effect of disclosing the best method, and common general knowledge cannot fill the gap.

266    Bayer submits the invention claimed in asserted claims 3 and 4 is a method of treatment of a thromboembolic disorder, not the underlying dosage form.

267    Bayer submits that an unintentional and inadvertent error in the course of drafting the priority document (omitting the number “7” and the country code “EP”) should not invalidate the entire patent. Bayer says this sentence is not required to understand the best method.

268    Bayer further submits that the preferred embodiment of the invention, being a method of treatment, is disclosed. Bayer submits that the best method requirement is satisfied as the particulars for the best embodiment are given at page 10, lines 7–12, including “[v]ery particularly preferred are rapid-release tablets containing [rivaroxaban] as active ingredient”.

269    Bayer put its position in its closing submissions as follows.

(a)    A rapid-release tablet is an essential integer of the invention claimed in the 613 Patent.

(b)    The best method known to Bayer at the filing date of the 613 Patent for making the rapid-release tablet containing rivaroxaban described in the claims of the 613 Patent, was described in PCT/EP04/012897 (also known as WO 2005/060940); this application became the 226 Patent.

(c)    As to the preparation of rapid-release tablets containing rivaroxaban, the 613 Patent states: “Preparation of such tablets is for example described in PCT/04/01289, whose disclosure is hereby included by way of reference”.

(d)    The reference to “PCT/04/01289” was an unintentional and inadvertent mistake. It should read PCT/EP04/012897.

(e)    The skilled team, either through the inclusion of individuals with expertise in intellectual property, or by assistance from a patent searcher, would have been able to find the correct PCT reference in 15 minutes or less.

(f)    Alternatively, given the 613 Patent (disclosing rivaroxaban and no formulation information), the person skilled in the art could, by way of common general knowledge and permissible routine experimentation, make a rapid-release tablet comprising rivaroxaban.

270    Bayer contends that it is not required to disclose the method of making a rapid-release tablet containing rivaroxaban in order to satisfy the requirement for it to disclose the best method known to it of performing the invention, which it says is a method of treatment.

271    Bayer submits that if the best method of performing the invention in the 613 Patent requires disclosure of the separate and distinct invention in the 226 Patent (which relevantly includes a process for preparing rivaroxaban “in hydrophilized form”), that should be rejected as it is not the statutory requirement. Section 40(2)(a) is directed towards the best method of performing the invention described in the patent, not a separate and distinct invention claimed in a separate patent (the 226 Patent).

272    Bayer submits that if, contrary to its contention, it was obliged to disclose a method of making a rapid-release tablet containing rivaroxaban (“in hydrophilized form”) in the 613 Patent to satisfy the best method requirement, the mistake in the PCT reference does not vitiate the disclosure of that method because: