Federal Court of Australia Novartis AG v Arrow Pharmaceuticals Pty Ltd (No 2) [2020] FCA 1475 File number: NSD 859 of 2019 Judgment of: BURLEY J Date of judgment: 12 October 2020 Date of publication of reasons: 13 October 2020 Catchwords: PATENTS – appeal under s 60(4) of the Patents Act 1990 (Cth) – where opponent has filed submitting notice and Commissioner of Patents is not taking active part in proceedings – where there is no evidence to support grounds of opposition – appeal allowed – opposition dismissed – patent allowed to proceed to grant Legislation: Patents Act 1990 (Cth) ss 18(1)(b)(ii), 59, 60 and 105(1A) Cases cited: Arrow Pharmaceuticals Pty Ltd v Novartis AG [2019] APO 22 Cadbury Schweppes Plc v Effem Foods Pty Ltd [2006] FCA 1267; (2006) 69 IPR 584 Daiichi Sankyo Company, Limited v Alethia Biotherapeutics Inc. [2016] FCA 1540 European Community v Commissioner of Patents [2006] FCA 706; (2006) 68 IPR 539 Novartis AG v Arrow Pharmaceuticals Pty Ltd [2020] FCA 139 Division: General Division Registry: New South Wales National Practice Area: Intellectual Property Sub-area: Patents and associated Statutes Number of paragraphs: 8 Date of hearing: 12 October 2020 Counsel for the Appellant: Mr C. Burgess Solicitor for the Appellant: Clayton Utz Counsel for the Respondent: The Respondent filed a submitting notice, save as to costs ORDERS NSD 859 of 2019 BETWEEN: NOVARTIS AG Appellant AND: ARROW PHARMACEUTICALS PTY LTD Respondent order made by: BURLEY J DATE OF ORDER: 12 OCTOBER 2020 THE COURT ORDERS THAT: 1. The appeal be allowed. 2. The decision of the delegate of the Commissioner made on 10 May 2019 concerning opposed Australian Patent Application No. 2013204752 ([2019] APO 22) be set aside. 3. Arrow Pharmaceuticals Pty Ltd's opposition to Australian Patent Application No. 2013204752, including as amended pursuant to order 1 of the orders made by Jagot J on 24 February 2020, be dismissed. 4. Australian Patent Application No. 2013204752, as amended pursuant to order 1 of the orders made by Jagot J on 24 February 2020, proceed to grant. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT (Revised from transcript) BURLEY J: 1 The appellant, Novartis AG, is the applicant for Australian patent application No. 2013204752 which bears the title "Pharmaceutical compositions comprising an S1P modulator". Broadly, the application relates to pharmaceutical compositions that comprise an S1P modulator, including methods of treating or preventing multiple sclerosis, and methods of protecting against neurodegenerative brain inflammation, that involve administering such compositions. 2 The patent application was examined and accepted by the Commissioner of Patents, and the respondent, Arrow Pharmaceuticals Pty Ltd subsequently filed a notice of opposition pursuant to s 59 of the Patents Act 1990 (Cth). On 10 May 2019 a delegate of the Commissioner upheld the opposition under s 60 of the Patents Act, on the basis that the claimed invention lacked an inventive step within s 18(1)(b)(ii): Arrow Pharmaceuticals Pty Ltd v Novartis AG [2019] APO 22 at [88] – [112], [124], [141]. 3 On 30 May 2019 Novartis filed the present appeal, which is an appeal to the Court pursuant to s 60(4) of the Patents Act. An appeal under s 60(4) of the Patents Act is a proceeding in the original jurisdiction of the Court, and is in the nature of a hearing de novo. On 24 February 2020 the Court made orders pursuant to s 105(1A) of the Patents Act, amending the claims of the application: Novartis AG v Arrow Pharmaceuticals Pty Ltd [2020] FCA 139 (Jagot J). 4 Novartis now seeks orders that its appeal be allowed, that the decision of the delegate be set aside, that Arrow's opposition to the grant of the application (as amended) be dismissed and that the patent application proceed to grant. 5 The basis upon which these orders are sought is set out in an affidavit sworn by the solicitor for Novartis, John Collins, a partner at Clayton Utz. In short, on 10 August 2020, Arrow filed a submitting notice in the appeal. The Commissioner was informed of this development and asked to confirm that she did not intend to appear or take any part in the proceedings. On 10 September 2020 the Commissioner responded, stating that she did not intend to exercise any right to appear in the proceedings. 6 At the stage that Arrow filed its submitting appearance, it had not filed any evidence in the proceedings in opposition to the patent application. That has important consequences in the present case. Whilst Novartis is styled as the appellant, because it seeks to overturn the decision of the delegate, as the opponent to the grant of the patent application, Arrow is the effective moving party. The onus remains on Arrow to establish that the grounds upon which it seeks to oppose the grant of the patent are made out. Where a party in the position of an opponent has withdrawn from the proceedings, and the Commissioner has indicated on the hearing of the appeal that she does not wish to take any active part in the proceedings, and there is no evidence before the Court capable of supporting any actual or potential ground of opposition, there is no basis on which the Court can uphold any ground of opposition: European Community v Commissioner of Patents [2006] FCA 706; (2006) 68 IPR 539 (Young J) at [11] – [16]; Cadbury Schweppes Plc v Effem Foods Pty Ltd [2006] FCA 1267; (2006) 69 IPR 584 (Lindgren J) at [16]; Daiichi Sankyo Company, Limited v Alethia Biotherapeutics Inc. [2016] FCA 1540 (Burley J) at [5]. 7 I have helpfully been taken through the materials by Mr Burgess, counsel for Novartis, and I am satisfied that there is no evidence before the Court that is capable of supporting any actual or potential ground of opposition. I take into account the position adopted by the Commissioner, which I regard as of some importance. I do not consider it necessary in the present case to join the Commissioner as a party to the proceedings. 8 In these circumstances I will make the orders sought. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Burley. Associate: Dated: 13 October 2020