FEDERAL COURT OF AUSTRALIA Apotex Pty Ltd v Les Laboratoires Servier (No 2) [2014] FCA 751 Citation: Apotex Pty Ltd v Les Laboratoires Servier (No 2) [2014] FCA 751 Parties: APOTEX PTY LTD ACN 096 916 148 v LES LABORATOIRES SERVIER and SERVIER LABORATORIES (AUST) PTY LTD File number: NSD 51 of 2012 Judge: RARES J Date of judgment: 26 May 2014 Legislation: Patents Act 1990 (Cth) Cases cited: Apotex Pty Limited v Les Laboratoires Servier [2013] FCA 1426 referred to Enka BV v E I Du Pont de Nemours & Company 1987 BP 13 referred to Expo-Net Danmark A/S v Buono-Net Australia Pty Ltd (No 2) [2011] FCA 710 referred to Multisteps Pty Ltd v Source & Sell Pty Ltd (No 2) [2013] 103 IPR 482 referred to Novozymes A/S v Danisco A/S (No 2) [2013] FCAFC 55 referred to Rural Press Limited v Australian Competition and Consumer Commission (2003) 216 CLR 53 applied Date of hearing: 26 May 2014 Date of orders: 29 May 2014 Place: Sydney Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 16 Counsel for the Applicant: Mr D K Catterns QC Solicitor for the Applicant: Herbert Smith Freehills Counsel for the Respondents: Mr A J L Bannon SC Solicitor for the Respondents: Allens IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 51 of 2012 BETWEEN: APOTEX PTY LTD ACN 096 916 148 Applicant AND: LES LABORATOIRES SERVIER First Respondent SERVIER LABORATORIES (AUST) PTY LTD Second Respondent JUDGE: RARES J DATE OF ORDER: 29 MAY 2014 WHERE MADE: SYDNEY THE COURT DECLARES THAT: 1. The specification of Australian Patent 2003200700 does not comply with s 40(2)(a) of the Patents Act 1990 (Cth) because it fails to disclose the best method known to the patentee of performing the invention, being the following: (a) The arginine salt has been made in the following manner. 12 g (32.56 mmol) of perindopril (free form) and 5.67 g (32.56 mmol) of L arginine were mixed and then dissolved in 150 ml of permuted water. The resulting mixture was filtered on a sintered filter to eliminate insoluble particles. The filtrated solution was then lyophilised (freeze dried). The residue was taken up again in 150 cc of anhydrous ethyl ether, stirred for two hours and passed through a sintered filter again, before being dried in a desiccator. This resulted in a white crystalline product weighing 16.58 g. (b) The arginine salt has also been made in the following manner. 16.268 g (44.15 mmol) of free form perindopril was mixed with 7.306 g (41.94 mmol) of L arginine and 50 ml of permuted water. Those three ingredients were mixed in a 100 ml spherical flask, resulting in a semi-limpid solution. This was stirred for 15-20 minutes and evaporated until dry. The residue was retaken in a trituration using 150 ml of anhydrous ether. The solution was stirred overnight. Then the product was filtered under a vacuum, washed again with anhydrous ether and dried again in a desiccator under another vacuum. This produced 21.29 g of white crystalline substance, being perindopril arginine. THE COURT ORDERS THAT: 2. The applicant's claim for relief in paragraph 1 of its amended originating application dated 27 April 2012 be otherwise dismissed. 3. The following questions be reserved for further consideration: (a) the question as to whether any amendment to Australian Patent 2003200700 ought be granted; (b) all questions as to orders consequential upon the success or failure of the first respondent's application to amend Australian Patent 2003200700, including costs; (c) the question of what further orders for final relief, including any order for revocation of the patent in suit, ought to be made. 4. The date for filing any notice of appeal be extended until 21 days from the date on which any application by the First Respondent/Cross-Claimant to amend the specification of Australian Patent 2003200700 is finally determined. 5. Costs be reserved. Note: 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 51 of 2012 BETWEEN: APOTEX PTY LTD ACN 096 916 148 Applicant AND: LES LABORATOIRES SERVIER First Respondent SERVIER LABORATORIES (AUST) PTY LTD Second Respondent JUDGE: RARES J DATE: 26 MAY 2014 PLACE: SYDNEY REASONS FOR JUDGMENT (REVISED FROM THE JUDGMENT) 1 On 24 December 2013, I published my reasons determining the substantive issues in the proceedings and directed the parties to confer and prepare draft orders, including as to costs, to give effect to those reasons with consequential orders, in the event they did not agree, for the matter to come back to Court for the making of orders: Apotex Pty Limited v Les Laboratoires Servier [2013] FCA 1426. Following that, Servier filed an interlocutory application on 21 March 2014 that sought leave to amend the patent in suit, pursuant to s 105 of the Patents Act 1990 (Cth), by inserting, as page 3A into the patent, descriptions of the two methods of classical salification used by Servier and Mr Damien in 1986 and 1991. I found that Servier's failure to describe those two methods in the complete specification amounted to a failure to describe the best method known to it of performing the invention: [2014] FCA 1426 at [187]. The issue about the form of final orders 2 In the course of the interlocutory arguments as to how the amendment application could and should progress, the parties debated whether, if the amendment application were to proceed, it would be open to Apotex to rely on other possible methods, if any, that were known to Servier that were better than those, the subject of my earlier findings, in order to oppose the amendment under s 105. That raised the question of whether it was appropriate for me to make final orders that reflected, so far as it was possible, the reasons for my conclusions on the substantive points that I had reached so that any consideration of what further evidence or grounds of contest on the amendment application could be put in issue in that context. Both parties debated the effect of my findings as to the nature of Servier's failure to disclose the best method as, in effect, assisting one or the other side's position. Consideration 3 In my opinion, the parties conducted the proceedings at trial on the basis of the particulars of invalidity as defining the matters that were substantively in issue. Critically, Apotex' final version of its contention on Servier's alleged failure to describe in the complete specification the best method known to it of performing the invention was that contained in pars 40-42 of its further amended particulars of invalidity. For present purposes, the critical issue that was propounded in those particulars, to which the parties drew attention in the course of argument today, arose from par 41, which stated, relevantly: "41 Further, or in the alternative, if (which is not admitted) the process to make the perindopril arginine salt forms part of the inventive step described in the Arginine Patent, the specification does not describe the best method known to the Patentee of performing the invention as claimed in each claim of the Arginine Patent, being the means of making the perindopril arginine salt so as to obtain the alleged benefits of the invention. Particulars … (f) [Apotex'] case is that the Arginine Patent does not disclose the best method of performing the invention known to the Patentee because: 1. the Arginine Patent discloses no method of carrying out the matters referred to in paragraph 41 above; and 2 the Patentee knew at the date of filing the application of the Arginine Patent of at least one method for performing the matters referred to in paragraph 41 above as set out in the confidential particulars at paragraph 49 of Annexure A to these Further Amended Particulars of Invalidity [being the 1986 and 1991 methods]. (g) [Apotex] does not rely on any method which the Patentee may have had other than the method described in paragraph 49 of Annexure A to these Further Amended Particulars of Invalidity." (emphasis added) 4 Apotex confined its particularisation to the failure to disclose anything other than the 1986 and 1991 salification methods, as reflected in particular 41(g). That was because of the way in which it had drawn back from pursuing its application to amend its particulars of invalidity more broadly in late July 2013. Apotex made that application relatively shortly before the trial that was fixed to commence on 8 October 2013. Servier had argued, in resisting the amendment, that if Apotex' then broadly-framed amendment on the issue of non-disclosure of best method were granted, Servier would have to conduct further investigations, review its own internal documents, consult with and obtain expert evidence and make further discovery, all of which would have made it impossible to maintain the hearing date. The common sense of that position appears to have informed the limitation that came to be contained in particular 41(g) so that Apotex relied at trial solely on Servier's failure to disclose the 1986 and 1991 methods of salification in the complete specification in the patent. Thus, by relying on particular 41(g), Apotex abandoned any case wider than one that the only best method that Servier had an obligation to disclose was the 1986 and 1991 methods. 5 The evidence at the trial was limited to evidence bearing on whether, first, the patent disclosed any method of carrying out or performing the invention (which I rejected on the basis that the disclosure in the patent of a method of classical salification sufficed to identify a method) and, secondly, the 1986 and 1991 methods, which the parties regarded as relevantly or substantially the same, were a better method and, hence, the best method known to Servier at the time of the filing of the complete specification for the purposes of s 40(2)(a) of the Act. 6 I discussed, in my principal reasons ([2013] FCA 1426 at [168]-[169]), the process of establishing a contention that a complete specification failed to describe fully the best method known to the applicant of performing the invention. I referred to Bennett J's reference in Expo-Net Danmark A/S v Buono-Net Australia Pty Ltd (No 2) [2011] FCA 710 at [16] to a useful analysis in the earlier South African decision in Enka BV v E I Du Pont de Nemours & Company 1987 BP 13 at 22-23, saying: "168 The party seeking revocation must prove that the patentee knew of a better method than was disclosed at the time of filing of the complete specification: Expo-Net [2011] FCA 710 at [15]. Her Honour found useful the analysis of an analogue of s 40(2)(a) by Harms J, the Supreme Court of South Africa, Transvaal Provincial Division in Enka BV v E I Du Pont de Nemours & Company 1987 BP 13 at 22-23 (Ackerman and Van Zyl JJ concurring). Bennett J summarised that analysis as follows at [16]: 'Justice Harms said that an applicant for revocation must show that: (a) the method which the patentee failed to disclose is a method of performing the invention; (b) the method is in fact a better method of performing the invention than the method disclosed in the specification; (c) the method was known to the patentee at the time when the application for the patent was lodged at the Patent Office; (d) the method is not disclosed in the specification; and (e) the patentee knew that the method was better than the method(s) described in the specification." 7 Apotex argued that all it needed to do at the trial in order to establish its ground that the complete specification did not comply with s 40(2)(a) for the purposes of s 138(3)(f) was to prove that there was a better method known to the patentee, whether or not that method was the only better method so known, provided that the better method it proved was one not disclosed in the complete specification and that the patentee knew that that method was better. 8 While the analysis of Harms J was useful for the South African analogue of s 40(2)(a), it is important to bear in mind that the issue in the trial before me was whether Servier had met the requirements of s 40(2)(a) of the Act. That issue would be determined on whether Apotex had proved that the terms of s 138(3)(f) were met in that it had proved its particularised case that the complete specification did not describe fully the best method known to Servier of performing the invention. Apotex' final particularised case that went to trial confined its allegation to the 1986 and 1991 methods as being the best method known to Servier for performing the invention that was not, but should have been, disclosed in the complete specification: i.e. Apotex' case was that there was a best method that should have been disclosed and that was the 1986 and 1991 methods. The issue for decision at trial was whether or not Apotex had made out its case that Servier's failure to disclose those two methods amounted to a failure to disclose the best method known to Servier. The way in which the trial was conducted was encapsulated in final address by senior counsel for Apotex when he stated, in his submissions in reply: "We say there was a best method and it's the ones that Dr Spargo exhibits [being the 1986 and 1991 methods] and your Honour knows about [that]. That is the best method." (emphasis added) 9 That was the case that I determined on the evidence and arguments at the trial and in my reasons. I did so by finding that the 1986 and 1991 methods were better than that disclosed in the patent. That was because the 1986 and 1991 methods eliminated the risks as to time and resources needed in trial and error experimentation potentially involved in a skilled addressee following the variety of possible, but unspecified, methods of classical salification, the latter being the only clue given in the patent as to how to perform the invention ([2013] FCA 1426 at [183]). 10 I found that the disclosure in the patent was sufficient to enable a skilled addressee to produce something within each claim, but that fell short of disclosing the best method known to Servier of doing so; that is, the best method known to the patentee that yielded an arginine salt that could be used in a pharmaceutical composition ([2013] FCA 1426 at [184]). I found that Servier had used a particular method or methods described in the 1986 and 1991 salifications, that those two methods worked to produce an active pharmaceutical ingredient that could be used in a tablet form and that, for the reasons given by the experts those two methods were the best method known to the patentee ([2013] FCA 1426 at [185]-[186]). I stated my conclusion as ([2013] FCA 1426 at [187]): "187 By omitting a sufficient description of the or one successful method it had employed, the patentee failed to describe in the complete specification the best method known to it of performing the invention. Hence, the complete specification did not satisfy one of the essential requirements of s 40(2)(a)." 11 I reject Apotex' argument that this was simply a finding that the 1986 and 1991 methods were merely better than that disclosed in the complete specification, being the uninformative disclosure of a method of classical salification. As I said there, the omission from the patent of a sufficient description of the materially identical 1986 and or 1991 methods was the reason why Servier did not describe the best method known to it of performing the invention. What form of declaration ought be made? 12 Apotex argued that the form of declaration to reflect the patentee's failure to comply with s 40(2)(a) should simply state that the complete specification did not comply with that section "because it does not disclose the best method known to [Servier] of performing the invention claimed in each of the claims". It contended that a declaration that went further would descend into matter that was unnecessary to reflect my reasons. It pointed to declarations made in a number of decisions in which the issue of the giving of precise content to the declarations had not been argued. In those cases, the Courts had made less elaborate declarations, simply identifying claims in a patent and then declaring them to be invalid or giving less elaborative explanations for the invalidity than those proposed by Servier: see Multisteps Pty Ltd v Source & Sell Pty Ltd (No 2) [2013] 103 IPR 482 at 483 [4] and order 2 at 484 per Yates J; Novozymes A/S v Danisco A/S (No 2) [2013] FCAFC 55 at [4]. In the latter case, Greenwood, Jessup and Yates JJ said at [4] that a declaration should be made "…as it would make clear the basis upon which those claims are being revoked". Consideration of form of declaration 13 The basis upon which I found the complete specification not to comply with the requirement in s 40(2)(a) that it describe the invention fully was that it did not set out the 1986 and 1991 methods of salification that were, in fact, the best method known to Servier of performing the invention. Servier's amendment application identified how Servier contends that description should have been given in the patent. However, as presently drafted, that description omits two important additions, as Apotex pointed out, namely that in both cases the salifications resulted in a white crystalline substance or product. It would not be appropriate to reflect my reasons in a declaration that merely referred, as Servier contended, to numbered paragraphs in my reasons in which I summarised, among other material, what those two methods were. 14 I am of opinion that I should make a declaration to reflect the conclusion at which I arrived. That declaration will give content to and indicate the gist of my findings: Rural Press Limited v Australian Competition and Consumer Commission (2003) 216 CLR 53 at 91 [89] per Gummow, Hayne and Heydon JJ. Their Honours there explained how appropriate content should be given to declarations: 216 CLR at 91-92 [90], [94]-[95]. Conclusion 15 For these reasons I will make a declaration that the patent does not comply with s 40(2)(a) of the Act because it failed to describe the best method known to the patentee of performing the invention, namely: "The arginine salt has been made in the following manner. 12 g (32.56 mmol) of perindopril (free form) and 5.67 g (32.56 mmol) of L arginine were mixed and then dissolved in 150 ml of permuted water. The resulting mixture was filtered on a sintered filter to eliminate insoluble particles. The filtrated solution was then lyophilised (freeze dried). The residue was taken up again in 150 cc of anhydrous ethyl ether, stirred for two hours and passed through a sintered filter again, before being dried in a desiccator. This resulted in a white crystalline product weighing 16.58 g. The arginine salt has also been made in the following manner. 16.268 g (44.15 mmol) of free form perindopril was mixed with 7.306 g (41.94 mmol) of L arginine and 50 ml of permuted water. Those three ingredients were mixed in a 100 ml spherical flask, resulting in a semi-limpid solution. This was stirred for 15-20 minutes and evaporated until dry. The residue was retaken in a trituration using 150 ml of anhydrous ether. The solution was stirred overnight. Then the product was filtered under a vacuum, washed again with anhydrous ether and dried again in a desiccator under another vacuum. This produced 21.29 g of white crystalline substance, being perindopril arginine." 16 I have added emphasis in those descriptions to indicate the amendment that Servier made to its initial proposed wording for the passages it seeks be inserted on page 3A of the patent. Servier added the emphasised sentences to its proposed amendment following the argument on 26 May 2014. I will give directions to bring the amendment application to hearing. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. Associate: Dated: 18 July 2014