Arrow Pharmaceuticals Limited v Merck & Co Inc. [2004] FCA 138 (25 February 2004)

Last Updated: 27 February 2004

FEDERAL COURT OF AUSTRALIA

Arrow Pharmaceuticals Limited v Merck & Co Inc. [2004] FCA 138

PATENTS – amendment of patent application the subject of present litigation by narrowing of the scope thereof – no opposition by challenger to validity of patent – amendment would reduce the number and scope of claims pursuant to the patent – application granted


Wimmera Industrial Minerals Pty Ltd v RGC Mineral Sands Ltd (No 3) (1997) AIPC 91-366
Smith Kline & French Laboratories Ltd v Evans Medical Ltd [1989] FSR 561
Rescare Ltd v Anaesthetic Supplies Pty Ltd (Federal Court of Australia, 4 March 1993, unreported)
Eli Lilly and Company v Pfizer Research and Development Company NV/SA [2003] FCA 988


Patent Act 1900 (Cth) ss 102, 105 and 112

Federal Court Rules 1976 (Cth) Order 50 rule 10(1)



















ARROW PHARMACEUTICALS LIMITED v MERCK AND CO INC.

N 1211 OF 2002


CONTI J
25 FEBRUARY 2004
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1211 OF 2002

BETWEEN:	ARROW PHARMACEUTICALS LIMITED APPLICANT
AND:	MERCK & CO INC. RESPONDENT
JUDGE:	CONTI J
DATE OF ORDER:	24 FEBRUARY 2004
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. Australian Letters Patent No. 741818 be amended in the manner specified in Annexure B to the affidavit of John Richard Roy Simpson sworn and filed 12 November 2003.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1211 OF 2002

BETWEEN:	ARROW PHARMACEUTICALS LIMITED APPLICANT
AND:	MERCK & CO INC. RESPONDENT

JUDGE:	CONTI J
DATE:	25 FEBRUARY 2004
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1 By notice of motion filed on 12 November 2003, the respondent to these proceedings (‘Merck’) seeks amendment to Australian Letters Patent No. 741818 in the manner specified in Annexure B to the affidavit of John Richard Roy Simpson sworn and filed 12 November 2003. Such an application is required pursuant to s 112 of the Patent Act 1990 (Cth) (‘Act’), which provides that while ‘relevant proceedings’ in relation to a patent are pending, any amendment(s) of a complete specification is prohibited, except by order of the court made pursuant to s 105 of the Act.

2 It should be recorded that the applicant to these proceedings (‘Arrow’) and the Commissioner of Patents (‘Commissioner’) did not appear and neither they, nor any other person, indicated any opposition to the amendments sought.

3 Merck has taken all the necessary statutory steps required to amend its Letters Patent. A notice of application to amend letters patent pursuant to section 105 of the Act (‘Application’), and an advertisement pursuant to Order 58 rule 10(1) of the Federal Court Rules 1976 (Cth), were filed with the Commissioner on 14 August 2003, who promptly responded on 8 September 2003 to the effect that she was prima facie satisfied that the requirements of s 102 of the Act were met, and would therefore not appear in the proceedings before this Court. The advertisement of the Application was published in Vol 17, No. 38 of the Official Journal on 25 September 2003 and, on 10 November 2003, the Commissioner again wrote to the respondent, this time advising that no notice of opposition to the proposed amendments had been received.

4 According to the concisely framed written submissions of Ms Howard of counsel for Merck, the amendments sought ‘essentially involve the deletion of certain claims and consequential amendments to the remaining claims and to the body of the specification’, the aim of which being said to be to ‘reduce the number and scope of some of the claims in an attempt to make these proceedings more manageable for both the parties and the Court’. So much was verified by the affidavit of Patent Attorney, Shahnaz Irani, sworn 19 February 2004.

5 Section 105(1) of the Act provides that the court may, by order, direct the amendment of the patent, the patent request or the complete specification in the manner specified in that order. However, by virtue of sub-s (4), such an amendment must not be directed if it is not allowable under s 102.

6 It is not necessary in the present case to undergo a detailed analysis of s 102 of the Act, so much having been undertaken by Sundberg J in Wimmera Industrial Minerals Pty Ltd v RGC Mineral Sands Ltd (No 3) (1997) AIPC 91-366. In reliance on that authority, counsel for Merck argued in her written submissions that the proposed amendments satisfy the requirements of s 102, in that:

‘(i) The specification as a result of the amendment does not claim any matter not in substance disclosed in the specification as filed;

(ii) The claims of the specification as a result of the amendment fall within the scope of the claims of the specification before amendment; and

(iii) The specification as a result of the amendment complies with subsections 40(2) and (3).’

In arriving at this conclusion, drawn initially from the affidavit of Ms Irani, the following paragraphs of that affidavit are relevant, in that they form the basis for her final conclusion:

‘7. The old claims include various "subsets" of different types of claims including "method of treatment" claims, "kit" claims, and claims of the "when used" format. In the proposed amended claims ("the new claims") some of these "subsets" have been deleted in their entirety as indicated below:

(a) Old claims 1 to 44 directed to a "method of inhibiting bone resorption";

(b) All old claims of the "when used" format (e.g. old claim 2); and

(c) All kit claims and "use of a kit" claims, old claims 129 to 220;

8. The pharmaceutical composition/oral pharmaceutical composition claims which originally numbered from old claim 221 to and including old claim 346 (i.e. 125 claims) have been reduced to new claims 27 to 63 (i.e. 26 claims).

9. Old claims 45 to 86 were directed to a "method for treating osteoporosis" (including claims to the use of a bisphosphonate for the manufacture of a unit dose for treating osteoporosis). Old claims 87 to 128 were directed to "a method for preventing osteoporosis" (including claims to the use of a bisphosphonate for the manufacture of a unit dose for treating or preventing osteoporosis). These old claims have been combined into a single group of claims (new claims 1 to 26) directed to a "method of treating or preventing osteoporosis" (including claims to the use of a bisphosphonate for the manufacture of a unit dose for treating or preventing osteoporosis). This group of claims is limited to treating or preventing osteoporosis by administering a bisphosphonate. The combination of a bisphosphonate with a histamine (H2) receptor blocker or a proton pump inhibitor, which was present in the old claims, has also been deleted from the new claims.

10. As a consequence of the foregoing, I inserted new claims 5, 15, 16, 18, 19, 30, 44 and 45.’

7 I agree with both counsel and Ms Irani that the requirements of s 102 are met. However, this is not conclusive in favour of the application, since the court retains a general discretion to refuse an amendment, even though it is allowable under s 102: Wimmera at 39,789. There, Sundberg J cited a passage from the reasons for judgment of Aldous J in Smith Kline & French Laboratories Ltd v Evans Medical Ltd [1989] FSR 561 at 569, which listed a number of principles relevant to the exercise of judicial discretion:

‘First, the onus to establish that amendment should be allowed is upon the patentee and full disclosure must be made of all relevant matters. If there is a failure to disclose all the relevant matters, amendment will be refused. Secondly, amendment will be allowed provided the amendments are permitted under the Act and no circumstances arise which would lead the court to refuse the amendment. Thirdly, it is in the public interest that amendment is sought promptly. Thus in cases where a patentee delays for an unreasonable period before seeking amendment, it will not be allowed unless the patentee shows reasonable grounds for his delay. Such includes cases where a patentee believed that amendment was not necessary and had reasonable grounds for that belief. Fourthly, a patentee who seeks to obtain an unfair advantage from a patent, which he knows or should have known should be amended, will not be allowed to amend. Such a case is where a patentee threatens an infringer with his unamended patent after he knows or should have known of the need to amend. Fifthly, the court is concerned with the conduct of the patentee and not with the merit of the invention.’

8 Justice Sundberg in Wimmera observed that the above passage was cited with approval by the Court of Appeal in England in Hsiung’s Patent [1992] RPC 497 at 522, and subsequently by Gummow J in Rescare Ltd v Anaesthetic Supplies Pty Ltd (Federal Court of Australia, 4 March 1993, unreported).

9 Counsel for the respondent submitted moreover that where the amendment sought involves the deletion of claims, the amendment should only be refused in exceptional circumstances. As was stated by Heerey J in Eli Lilly and Company v Pfizer Research and Development Company NV/SA [2003] FCA 988 at [20]:

‘One obvious reason for this approach is that there is a public interest in the validity of a patent, extending beyond the patentee and those currently seeking revocation. The existence of patent claims which are in truth invalid, and which the patentee does not seek to propound, may inhibit persons from engaging in lawful and productive economic activity, with resultant disadvantage to the public by loss of competition and innovation.’

10 I do not consider that the circumstances of this case warrant any withholding of a favourable exercise of the judicial discretion. As was submitted by counsel for Merck, this is perhaps the only application to amend Letters Patent which has been unopposed by any of the Commissioner, or another party to proceedings on foot, or an interested member of the public. There are no exceptional circumstances, or disadvantage to the public, here involved by any loss of competition and innovation that would justify refusing the amendments sought. The application to amend was promptly made after the particulars of invalidity were amended by Arrow for a second time on 25 July 2003, and before any evidence was filed in these proceedings. Further, I agree that the amendments will reduce the number and scope of some of Merck’s claims, and tend to render these already complex proceedings more manageable for both parties and the Court, and thus more readily susceptible to resolution.

11 The relief sought by Merck by its notice of motion of 12 November 2003 should be granted.

I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti.

Associate:

Dated: 25 February 2004

Counsel for the Respondent:	Ms K J Howard
Solicitor for the Respondent:	Cropper Parkhill
Date of Hearing:	24 February 2004
Date of Judgment:	25 February 2004