Merck & Co., Inc. v Arrow Pharmaceuticals Ltd [2004] FCAFC 152 (26 March 2004)

Last Updated: 25 June 2004

FEDERAL COURT OF AUSTRALIA

Merck & Co., Inc. v Arrow Pharmaceuticals Ltd [2004] FCAFC 152

CORRIGENDUM

MERCK & CO., INC. v ARROW PHARMACEUTICALS LTD
N277 of 2004

EMMETT, GYLES & ALLSOP JJ
26 MARCH 2004 (Corrigendum 24 June 2004)
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N277 Of 2004

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	MERCK & CO., INC. APPLICANT
AND:	ARROW PHARMACEUTICALS LTD RESPONDENT
JUDGES:	EMMETT, GYLES & ALLSOP JJ
DATE OF ORDER:	26 MARCH 2004 (Corrigendum 24 June 2004)
WHERE MADE:	SYDNEY

CORRIGENDUM

1.	In the reasons for judgment of Allsop J in the last line of paragraph 14 the word "presiding" should be inserted before the word "judge".

I certify that the preceding one (1) paragraph is a true copy of the Corrigendum to the Reasons for Judgment of the Honourable Court.

Associate:
Dated: 24 June 2004

FEDERAL COURT OF AUSTRALIA

Merck & Co., Inc. v Arrow Pharmaceuticals Ltd [2004] FCAFC 152

MERCK & CO., INC. v ARROW PHARMACEUTICALS LTD

N277 OF 2004




EMMETT, GYLES & ALLSOP JJ
26 MARCH 2004
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N277 OF 2004

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	MERCK & CO., INC. APPLICANT
AND:	ARROW PHARMACEUTICALS LTD RESPONDENT
JUDGES:	EMMETT, GYLES & ALLSOP JJ
DATE OF ORDER:	26 MARCH 2004
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The application be dismissed.

2. The applicant for leave to appeal pay the costs of the respondent to the application for leave.

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	N277 OF 2004

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

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

JUDGES:	EMMETT, GYLES & ALLSOP J
DATE:	26 MARCH 2004
PLACE:	SYDNEY

REASONS FOR JUDGMENT

EMMETT J:

1 We have before us an application for leave to appeal from orders made by Conti J dismissing a notice of motion filed 10 November 2003. The applicant for leave, Merck and Co., Inc. (‘Merck’), is the registered proprietor of Australian Patent No. 741818 (‘the Patent’). The respondent to the leave application, Arrow Pharmaceuticals Limited (‘Arrow’), has commenced a proceeding for revocation of the Patent.

2 The invention the subject of the Patent is concerned with a dosage regimen for treating or preventing osteoporosis by administration of alendronate. Alendronate was known before the priority date of the Patent to be highly efficacious for treating or preventing osteoporosis. However, the regimen was a difficult one and was associated with a relatively high incidence of substantial adverse side effects.

3 The invention is said to arise from work done by Merck, which showed that alendronate could be administered safely for the treatment and prevention of osteoporosis in larger doses, but less frequently than in the earlier regimens. In the application, Arrow asserts that the Patent is invalid on various grounds, including lack of novelty. In its particulars of invalidity, Arrow has furnished particulars, in purported compliance with O 58 r 15, and r 12.4, concerning acts of prescribing doses of alendronate by various medical practitioners to patients. In its motion, Merck sought, amongst other things, a declaration that the further amended particulars of invalidity do not comply with O 58 r 15 of the Federal Court Rules.

4 Underlying the relief claimed in the notice of motion was a contention on the part of Merck that the construction of the Patents Act 1990 (Cth) (‘the Act’) adopted in Arrow’s particulars of invalidity is bad as a matter of law. Order 58 r 15(2) relevantly provides as follows:

‘If one of the grounds referred to in subrule (1) is that an invention is not a patentable invention because of information about the invention through the doing of an act, the particulars must specify
...
(b) in the case of an act:

(i) the name of the person alleged to have done the act; and

(ii) the period in which, and the place where, the act is alleged to have been done publicly; and
(iii) a description that is sufficient to identify the act...’

5 Arrow has particularised instances where medical practitioners have prescribed alendronate. These medical practitioners have either given, or propose to give, evidence by affidavit as to those acts of prescription. The particulars of invalidity assert that the prior art information was made publicly available by the communication of certain information by medical practitioners to their patients, because when the medical practitioner prescribed a dose of alendronate to a patient, the patient was under no legal duty or obligation to keep such information confidential or to refrain from disclosing it to any other person and the medical practitioner himself or herself was under no legal duty or obligation to keep such information confidential or to refrain from disclosing it, save for the name or other personal details identifying the patient.

6 In essence, Merck seeks, prior to the commencement of a trial, a determination of the question whether, as a matter of law, the acts particularised would constitute making the information communicated to the patient publicly available. There has been no application made under Order 29 for the determination of that question of law separately from, and prior to, the determination of other questions in the proceeding. Nor has Merck applied for summary dismissal of Arrow’s application, in so far as it is based upon that view of the law.

7 In dealing with the motion, the primary Judge identified the act described in the particulars of validity as:

‘...an occasion or the occasion, when each medical practitioner undertook or performed the conduct of a professional nature constituting a procedure or practice as to treatment of osteoporosis, either by himself in person or by way of recommendation to a fellow practitioner.’

His Honour did not consider that it was necessary or essential to specify, with precision, the times, places and indeed some other related circumstances of each prescription of alendronate sodium. In reaching that conclusion, his Honour was not, on any fair reading of his reasons, expressing a final view as to whether or not the particulars relied on by Arrow will, in fact, constitute making the relevant information publicly available under the Act. His Honour simply took the view that, if the applicant’s construction of the law is correct, the particulars are adequate.

8 In my view it is inappropriate, in the absence of an order under O 29, to embark on a consideration of the question of law that is raised. The question is, no doubt, one of some significance and it will be one of importance for the trial Judge to determine in the fullness of time. The dismissal of the motion seeking that declaration does not, in any way, preclude Merck from maintaining its contention.

9 In the course of argument, it became apparent that much of the concern that gave rise to the motion relates to matters appropriately dealt with as an incident of case management by the trial Judge. In one of the affidavits intended to be relied on by Arrow, a medical practitioner makes assertions such as:

‘As at July 1997, I did have patients who had suffered GI side-effects because of alendronate. I prescribed some of these patients antacids or H2 receptor blockers to take concurrently with the alendronate which had the effect of increasing the PH of the gut by neutralising the acid or by minimising the extent of the release of acid, which is an irritant of the oesophagus...

Sometimes, however, I wanted the patient to continue to take alendronate because it had a higher efficacy than the other bisphosphonates available at the time such as etidronate. In these cases, I prescribed a dosing regimen involving the administration of alendronate less frequently from once every day. My reasoning was that the alendronate clinical trials has proven that a 5 mg daily dose worked quite well for the prevention of alendronate.’

It may be that assertions in that generalised form would be the proper subject of objection. That is a matter for the trial Judge. However, some specificity was added to the general assertions by annexure to the affidavit of copies of reports in respect of specific patients. The attachments are complete, except for the redaction of the patients’ names.

10 It may be that Merck would have a legitimate interest in examining the material relating to particular patients, to ensure that there is no possibility that those patients constitute a minority, with particular characteristics that would render the prescription of alendronate in the circumstances referred to atypical. For that reason, Merck sought orders giving leave, pursuant to O 27 r 2, for subpoenas to be issued to the medical practitioners concerned. In his Honour's reasons for dismissing the motion, his Honour observed that an order in the terms sought would tend to operate oppressively upon the medical practitioners concerned, since the proposed subpoenas required the production of all documents that record or relate to the treatment or prevention of osteoporosis in a patient by the medical practitioner administering or recommending that another practitioner administer the drug Fosamax. A subpoena in those terms appears to be much wider than would answer the legitimate concerns of Merck. I make that observation without intending to pre-empt the question of whether it was in fact in wider terms than would be appropriate. That seems to have been the conclusion reached by his Honour. His Honour did say that he would stand the application for relief over for further consideration if Merck so required in the light of subsequent developments.

11 That is a clear indication that his Honour has not foreclosed the possibility that further documents may legitimately be sought by Merck by way of subpoena or other appropriate processes, such as third party discovery. In fairness to Merck, we are not asked to second-guess the issues that have arisen before the trial Judge, concerning case management. In the light of what I have said, there may well be further matters that could legitimately be raised, and no doubt will be. There is no reason to think that his Honour will not deal with them appropriately.

12 Once the view is taken that it is inappropriate to foreclose the question of the meaning of ‘publicly available’, there is no ground, in my view, for leave to be granted to appeal from the orders dismissing the motion. In my view, the application for leave should be dismissed.

I certify that the preceding twelve (12) numbered paragraph is a true copy of the Reasons for Judgment herein of the Court.

Associate:

Dated: 15 June 2004

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 277 OF 2004

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

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

JUDGES:	EMMETT, GYLES AND ALLSOP JJ
DATE:	26 MARCH 2004
PLACE:	SYDNEY

GYLES J:

13 I agree. I should add that the issue as to the admissibility of Dr Rowe's report has not been foreclosed by his Honour. As I read what his Honour did, there is no barrier to that matter being brought back before him.

I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.

Associate:

Dated: 15 June 2004

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N277 OF 2004

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

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

JUDGES:	EMMETT, GYLES & ALLSOP J
DATE:	26 MARCH 2004
PLACE:	SYDNEY

REASONS FOR JUDGMENT

ALLSOP J:

14 I agree and I wish to add this: that to the extent that the application for leave was based on an assertion that Merck was being required to prepare their case without adequate information from the doctors or others, procedural steps for the resolution of that case management issue have not been exhausted, and, indeed, it is not clear to me that they have been fully agitated or fully explored by Merck. If it is unfair for Arrow to rely on these affidavits without Merck obtaining access to information, that issue should be squarely put to the docket judge and Merck should seek to persuade his Honour of the fact that it is unfair to force them to trial on these affidavits without further steps being taken or further information being provided to them. This application is not the vehicle to determine that issue, in my view. I otherwise agree with the learned judge.

I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop.

Associate:

Dated: 15 June 2004

Counsel for the Applicant:	J Mc L Emmerson QC & K J Howard
Solicitor for the Applicant:	Cropper Parkhill
Counsel for the Respondent:	D K Catterns QC & SCG Burley
Solicitor for the Respondent:	Baker McKenzie
Date of Hearing:	26 March 2004
Date of Judgment:	26 March 2004