FEDERAL COURT OF AUSTRALIA Bristol-Myers Squibb Company v Apotex Pty Ltd (No 4) [2012] FCA 1433 Citation: Bristol-Myers Squibb Company v Apotex Pty Ltd (No 4) [2012] FCA 1433 Parties: BRISTOL-MYERS SQUIBB COMPANY and OTSUKA PHARMACEUTICAL CO., LTD v APOTEX PTY LTD (ACN 096 916 148) File number: NSD 1116 of 2009 Judge: YATES J Date of judgment: 14 December 2012 Catchwords: EVIDENCE – examples of experiments in specification of patent in suit – whether leave should be granted to rely on examples as experimental proof – where specification has been otherwise admitted into evidence Legislation: Evidence Act 1995 (Cth) Federal Court Rules 2011 Cases cited: Lucent Technologies Inc v Krone Aktiengesellschaft (No 2) (1999) 94 FCR 124 Dates of hearing: 13, 14 December 2012 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 33 Counsel for the Applicants: Mr AJL Bannon SC and Ms CL Cochrane Solicitor for the Applicants: Allens Counsel for the Respondent: Mr DK Catterns QC and Mr NR Murray Solicitor for the Respondent: Herbert Smith Freehills IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1116 of 2009 BETWEEN: BRISTOL-MYERS SQUIBB COMPANY First Applicant OTSUKA PHARMACEUTICAL CO., LTD Second Applicant AND: APOTEX PTY LTD (ACN 096 916 148) Respondent JUDGE: YATES J DATE OF ORDER: 14 DECEMBER 2012 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Leave be granted to the applicants to rely on Reference Example 1 and Reference Example 2 in the specification of Australian Patent No. 2002334413 as experimental proof. Note: Settlement and entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1116 of 2009 BETWEEN: BRISTOL-MYERS SQUIBB COMPANY First Applicant OTSUKA PHARMACEUTICAL CO., LTD Second Applicant AND: APOTEX PTY LTD (ACN 096 916 148) Respondent JUDGE: YATES J DATE: 14 DECEMBER 2012 PLACE: SYDNEY REASONS FOR JUDGMENT (REVISED FROM TRANSCRIPT) 1 This proceeding concerns the alleged infringement, and validity, of certain claims of Australian Patent No. 2002334413 entitled "Low hygroscopic aripiprazole drug substance and processes for the preparation thereof" (the patent). One of the inventors named in the specification of the patent is Satoshi Aoki. 2 An important issue in the proceeding is whether the properties of a particular crystalline form of aripiprazole can be affected by the drying conditions under which those crystals are prepared to yield a new product characterised as Anhydrous Aripiprazole Crystals B (Crystals B). 3 Objection has been taken to the reading of the following passage in an affidavit made by Mr Aoki: … The method of this reproduction and the test result (being 1.78%) are reported in Reference Example 2 of the Crystalline Patent and demonstrate that these crystals do not exhibit low hygroscopicity. 4 This passage calls into question, more critically, the use that should be made of Reference Example 1 and Reference Example 2, which are set out in the specification of the patent. The specification has been tendered as Exhibit A. It was tendered at an early stage in the applicants' opening. That course is not unusual in proceedings of this kind. 5 Those Reference Examples are set out in the specification in the following terms: Reference Example 1 19.4 g of 7-(4-chlorobutoxy)-3,4-dihydrocarbostyril and 16.2 g of 1-(2,3-dichlorophenyl) piperadine 1 hydrochloride were added to 8.39 g of potassium carbonate dissolved in 140 ml of water, and circulated for 3 hours under agitation. After reaction the mixture was cooled and the precipitated crystals filtered out. These crystals were dissolved in 350 ml of ethyl acetate, and about 210 ml of water/ethyl acetate azeotrope removed under reflux. The remaining solution was cooled, and the precipitated crystals filtered out. The resulting crystals were dried for 14 hours at 60°C to produce 20.4 g (74.2%) of raw aripiprazole. 30 g of the raw aripiprazole obtained above was recrystallized from 450 ml of ethanol according to the methods described in Japanese Unexamined Patent Publication No. 191256/1990, and the resulting crystals dried for 40 hours at 80°C to obtain anhydrous aripiprazole crystals. The yield was 29.4 g (98.0%). The melting point (mp) of these anhydrous aripiprazole crystals was 140°C, matching the melting point of the anhydrous aripiprazole crystals described in Japanese Unexamined Patent Publication No. 191256/1990. When these crystals were left for 24 hours in a dessicator set at humidity 100%, temperature 60°C, they exhibited hygroscopicity of 3.28% (see Table 1 below). Reference Example 2 6930 g of the intermediate raw aripiprazole obtained in Reference Example 1 was heat dissolved in 138 liters of hydrous ethanol (water content 20%) according to the method presented at the 4th Japanese-Korean Symposium on Separation Technology, gradually (2-3 hours) cooled to room temperature, and then chilled to near 0°C. The precipitated crystals were filtered out, producing about 7200 g of aripiprazole hydrate (wet state). The wet-state aripiprazole hydrate crystals obtained above were dried for 30 hours at 80°C to obtain 6480 g (93.5%) of conventional anhydrous aripiprazole crystals. The melting point (mp) of these crystals was 139.5°C. These crystals were confirmed by the Karl Fischer method to be anhydrous, with a moisture value of 0.03%. When left for 24 hours in a closed container set at humidity 100%, temperature 60°C, these crystals exhibited hygroscopicity of 1.78% (see Table 1 below). 6 At the time of the tender of Exhibit A, the question whether the specification could and should be used as proof of the experimental work referred to in it was raised by the respondent. That question arose again in the course of the respondent's opening, which was made immediately after the applicants' opening. 7 At that time, there was an exchange in general terms between senior counsel for the respondent and me about whether s 136 of the Evidence Act 1995 (Cth) (the Evidence Act) should be applied to limit the use to be made of statements in the specification about experimental work. At that time, the matter was left somewhat inconclusively. In making that observation, I intend no criticism of counsel. The plain fact is that, at that time, I was endeavouring to gain an appreciation of the legal and factual issues that were likely to arise in the proceeding. In fairness to senior counsel for the respondent, he was plainly raising the use to which the specification could be put as experimental proof. He specifically raised the question of whether a limitation on the use of the specification, in relation to Reference Example 1 and Reference Example 2, should be imposed and indicated that the question was likely to arise when considering the admissibility of Mr Aoki's evidence. When I expressed the view that I did not then have a sufficient understanding of the case to come to a view on that question, senior counsel for the respondent said that the respondent would not be prejudiced if the question were to be deferred. It is true that during the course of that exchange, senior counsel also indicated that the respondent would be content to leave the issue as one to be determined as a matter of the weight to be given to the evidence. However, I do not regard the question as having been substantively determined at that time. 8 The question has now come into sharp focus with the objection taken to the reading of the above passage in Mr Aoki's affidavit. My appreciation of the legal and factual issues in the proceeding has also been sharpened by the oral evidence of two experts called by the respondent – Associate Professor McGeary and Professor Black – although neither witness addressed, in oral evidence, Reference Example 1 or Reference Example 2 in the specification. 9 The specification is undoubtedly admissible as evidence in the proceeding. It is admissible for a variety of purposes. The parties have not suggested otherwise. The statements in the specification concerning Reference Example 1 and Reference Example 2 are undoubtedly hearsay, as indeed are most of the statements made in the specification. Once again, the parties have not suggested otherwise. 10 Section 60(1) of the Evidence Act provides that the hearsay rule does not apply to evidence of a previous representation that is admitted because it is relevant for a purpose other than proof of an asserted fact. Accordingly, the hearsay rule does not apply to the statements in the specification concerning Reference Example 1 and Reference Example 2. 11 That, however, is not the end of the matter. Section 136 of the Evidence Act may still have work to do. 12 Section 136 provides as follows: The court may limit the use to be made of evidence if there is a danger that a particular use of the evidence might: (a) be unfairly prejudicial to a party; or (b) be misleading or confusing. 13 In this connection, a closely related consideration arises under r 34.50 of the Federal Court Rules 2011, which provides: (1) If a party (the proponent) proposes to tender, as evidence in a proceeding, experimental proof of a fact, the proponent must apply for orders in relation to the experimental proof, including orders about any of the following: (a) the service on other parties of particulars of the experiment and of each fact that the proponent asserts is, will or may be proved by the experiment; (b) any persons who must be permitted to attend the conduct of the experiment; (c) the time when, and the place where, the experiment must be conducted; (d) the means by which the conduct and results of the experiment must be recorded; (e) the time by which any other party (the opponent) must notify the proponent of any grounds on which the opponent will contend that the experiment does not prove a fact that the proponent asserts is, will or may be proved by the experiment. (2) Evidence of the conduct and results of the experiment is admissible in the proceeding, only: (a) if the proponent has complied with subrule (1) and any orders given under that subrule; or (b) with the leave of the Court. (3) If an order mentioned in paragraph (1) (e) has been made, and the opponent has not complied with the order in relation to a ground, the opponent may rely on the ground only with the leave of the Court. 14 It is apparent that the applicants wish to rely on Reference Example 1 and Reference Example 2 to prove the existence of the facts stated therein, namely that the steps referred to in each example were carried out and that the results referred to were obtained. They submit that to the extent that leave is required to enable them to rely on Reference Example 1 and Reference Example 2 in this way, such leave should be granted. 15 In Lucent Technologies Inc v Krone Aktiengesellschaft (No 2) (1999) 94 FCR 124, Lindgren J held that O 58 r 31 – the predecessor rule to r 34.50 – applied to experimental proof, whether the experiment was carried out before or after the commencement of the proceeding in which proof of the experiment is sought to be tendered. 16 In my view there is no difference between the current rule and its predecessor that would warrant a different application of the current rule in that regard. Although the kinds of orders specifically referred to in r 34.50(1) speak of prospective steps – and thus steps that can only be taken after the proceeding has been commenced – that part of the rule is expressed in inclusive terms and thus does not deny, in my view, an application of the rule to proof in relation to experiments conducted before the commencement of the proceeding. 17 I am satisfied that r 34.50 is engaged in the present case: in substance, the applicants have sought to include within their tender of the specification the tender of experimental proof. I am satisfied that, within the terms of r 34.50, leave is required to use the specification in that regard. What is essentially bound up in ruling on the admissibility of the challenged passage in Mr Aoki's affidavit is a consideration of whether leave should be granted to the applicants to use the specification in the way that I have discussed. 18 In considering the question of leave, Lindgren J in Lucent said at [11]: No doubt, many factors might suggest a granting of leave… The experiment or test may have been carried out long before the parties were in dispute; a physical object on which it was conducted may have been destroyed in the process or lost, and so be no longer available for a repetition of the experiment or test; the result of the experiment or test may not be seriously in dispute; repetition of the experiment or test may involve undue expense and inconvenience. But such considerations do not go to the applicability of the rule in the first place. 19 Here the applicants, not unnaturally, rely on the fact that the experiments to which Reference Example 1 and Reference Example 2 refer were carried out many years ago, and in circumstances plainly unrelated to the conduct of litigation. That consideration supports the discretion being exercised in favour of the applicants. 20 The following additional matters are also relevant to the question of how the discretion should be exercised in the present case. 21 First, I am not aware of any objection based on r 34.50 having been taken to a patent specification in other patent infringement, revocation or opposition proceedings. In the usual course of events the parties proceed on the basis of the asserted truth of the matters stated in the specification, including the conduct of experiments and the results that are recorded in the specification, unless those statements are specifically and directly challenged. Even then, there is no challenge to the admissibility and use to be made of the specification in that regard. The present objection is, at least to that extent, an unusual one. 22 Secondly, and relatedly, a ground of revocation of a patent is that it was obtained by fraud, false suggestion or misrepresentation: see s 138(3)(d) of the Patents Act 1990 (Cth). Such a ground is raised in the present proceeding but not on the basis that Reference Example 1 or Reference Example 2 was not conducted as described in the specification, or that the reported results were not obtained or have been misrepresented. The case of false suggestion brought in the present case is of a fundamentally different nature, namely that the second applicant represented, incorrectly, in the course of the prosecution of the patent application, that it had obtained a new crystalline form of aripiprazole with new and different properties. 23 Thirdly, Mr Aoki's affidavit was served on or about 20 September 2012. No objection was made to that affidavit until 30 November 2012. That in itself is not a criticism of the respondent, in light of the pre-trial directions that had been made on 19 November 2012 following a case management conference on that day. I would have expected, however, that if any issue were to arise out of the tender of the specification (as must have been expected) and the use to which it could be put, that matter would have been raised at the case management conference. Indeed, it seems to me that it is an issue of such significance that it should have been raised considerably earlier. No objection was notified in respect of the tender of the specification itself or of the use to which it could be put until notification of the objection to the passage in Mr Aoki's affidavit. 24 Fourthly, I am informed that full discovery has been given in relation to purported reproductions of prior art methods by the second applicant, which the parties seem to accept included discovery in respect of the Reference Examples in the patent. No complaint has been brought forward about the adequacy of discovery in that regard. A number of documents in relation to the experimental work undertaken by the second applicant have already been tendered by the parties, respectively. 25 In my view, all these matters weigh significantly in favour of leave being granted to the applicants to rely on the experimental proof provided by the specification and, in particular, Reference Example 1 and Reference Example 2. 26 For its part, the respondent submits that it is unable to test the evidence of the experiments in Reference Example 1 and Reference Example 2 without access to supporting documents. If, however, the respondent wished to challenge Reference Example 1 and Reference Example 2, it was always within its power to seek specific discovery on that issue or, perhaps, to endeavour to obtain documents by issuing a notice to produce. I have already referred to the fact that discovery – apparently more broadly based – has been given in relation to purported reproductions of prior art methods used by the applicants in making aripiprazole. 27 The respondent is able to cross-examine Mr Aoki on the experimental proof provided by the documents that have been given on discovery, and has sought to do so even though he is not the author of all of those documents. The respondent would be equally able to cross-examine Mr Aoki on the experimental proof provided by examples in the patent. He may or may not be able to comment on those particular examples, just as he may or may not be able to comment on experiments referred to in discovered documents which he himself has not authored. The point to be made here is that the manner in which the respondent has elected to test the evidence of experiments described in the discovered documents means that it is in no different position in relation to testing the evidence of experiments described in the specification. 28 I should add that the respondent itself has tendered its own experimental proof, principally through Associate Professor McGeary, in relation to the performance of what has been described as Example 1 in European Patent Application No. 0367141A2 (the European Patent Application). It did so by obtaining leave under O 58 r 31 of the then Federal Court Rules. On 15 June 2011, orders were made requiring the respondent to provide particulars of the experimental proof on which it proposed to rely. Had it wished to challenge Reference Example 1 or Reference Example 2, or any other example in the specification, it was open to it to conduct its own experiments and, if it wished to tender proof of those experiments, to apply under either O 58 r 31 or r 34.50, just as it had done in relation to Example 1 in the European Patent Application. 29 In my view any disadvantage which the respondent perceives it suffers at the present time in not being able to test Reference Example 1 and Reference Example 2 could have been overcome by the respondent itself. It must have been clear to it that the specification would be tendered. The description of the invention in the specification, including the best method of performing it, was always going to be before the Court. Reference Example 1 and Reference Example 2 are integral parts of that description. Moreover, as I have pointed out, the respondent does not in fact allege that either Reference Example 1 or Reference Example 2, in and of itself, contains a false suggestion or misrepresentation concerning the steps that were carried out or the results that were obtained. 30 It is unfortunate that this contentious issue has arisen at this stage, but I am firmly of the view that, objection now having been taken to reliance on Reference Example 1 and Reference Example 2 as experimental proof, leave should be granted to the applicants to rely on them for that purpose. 31 That being the case, I can see no residual work for s 136 of the Evidence Act to do in the given circumstances. In my view, there is no danger that the evidence in that regard will be misleading or confusing – indeed, it has not been suggested that it would be – and I am not satisfied that the use of the examples in the specification as experimental proof will be unfairly prejudicial to the respondent. 32 The respondent has also called in aid s 135 of the Evidence Act, which provides that the Court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might be unfairly prejudicial to a party, or be misleading or confusing, or cause or result in undue waste of time. I am not satisfied that the conditions for the exercise of the discretion to reject the evidence of Reference Example 1 and Reference Example 2 as experimental proof exist in the present case. 33 That leaves the objection to the particular passage in Mr Aoki's affidavit. This passage is not itself experimental proof. When taken with an earlier passage in his affidavit to which no objection has been taken, it merely identifies that the crystals referred to in Reference Example 2 were made by him as Type I crystals, about which much evidence has already been given in the proceeding. I propose to admit that evidence. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Yates. Associate: Dated: 14 December 2012