Aktiebolaget Hässle v Alphapharm Pty Limited

Aktiebolaget Hässle v Alphapharm Pty Limited - [2002] HCA 59 - HCA 2002 case summary — Zoe

[10]

The Patent claims an oral pharmaceutical preparation in the form of a tablet, capsule or pellet containing omeprazole as the active ingredient. Omeprazole is a compound first synthesised in 1979. When absorbed in the upper part of the small intestine it inhibits gastric fluid secretions, and is useful in the treatment of gastric and duodenal ulcers. Astra held Standard Patent No 529,654 under the 1952 Act for this compound ("the compound patent"). This patent has expired and was not in suit in the present litigation.
The discovery of omeprazole and the grant of the compound patent was not itself sufficient to bring about the commercial exploitation of the compound by oral dosage. This was because the compound was not easily formulated into a satisfactory pharmaceutical composition. There was a problem in the administration of the drug which was answered with the formulation claimed in the Patent. The problem had several aspects. In broad terms, omeprazole rapidly degrades in an acid or neutral solution and, further, its stability also is affected by moisture and organic solvents. For omeprazole to work as a drug, it must be protected from acidic gastric juice on its way through the stomach and must be released rapidly when it reaches the top of the small intestine.
The Patent has 17 claims. Claims 1‑12 are product claims, each for a pharmaceutical preparation comprising a particular combination of constituents. Claims 1‑11 are for a tablet or pellet and claim 12 is for capsules. Claims 2‑12 are dependent upon claim 1. Claims 13 and 14 are process claims and claim 15 is for a preparation obtained by the process claimed in claims 13 and 14. Claim 16 is for the use of a preparation according to any one of claims 1‑12 and 15 for the manufacture of a medicament for the treatment of gastrointestinal diseases. Claim 17 is a method claim, the method being the administration in a therapeutically effective amount to a host in need of treatment for gastrointestinal disease. However, the focus in the litigation has been upon the broadest of the product claims, claim 1, and it is to the validity of that claim that attention will be given in these reasons.
The tablet or pellet claimed in claim 1 is a combination of three integers or elements. The first is the "core material" containing omeprazole as the active ingredient with an alkaline reacting compound; an alkali is a substance which neutralises or effervesces with acids. The second is one or more inertly reacting subcoating layer(s) on the core material, and the third an outer layer which is an enteric coating. An enteric coated tablet or pellet is one which assists through the stomach unaltered the contents then released in the intestine. The inert reacting subcoating layer(s), the second integer, comprise(s) excipients, that is to say, inactive substances that serve as a vehicle or medium for the core material. The excipients are soluble or rapidly disintegrating in water or are polymeric, water soluble, film-forming compounds optionally containing pH‑buffering alkaline compounds.
The tablet or pellet thus claimed is a combination in the proper sense of that term, combining three elements which interact with each other to produce the new product; it is the interaction which is the essential requirement of invention and such a combination may be constituted by integers each of which is old or some of which are new[2]. Thus, for example, in the present case, it is not to the point that of the three integers it may be said that omeprazole was known as an acid labile compound and that it was known that enteric coatings were resistant to acids. The question for decision concerns the ingenuity of the combination, not of the employment of any one or more integers taken individually. Astra complains that this analysis by dissection is what the Patent has wrongly been subjected to by the Full Court.
In many parts of the world, including Australia, Astra has sold a preparation manufactured in accordance with the Patent under the trade name "Losec". Losec has been a very effective and successful product. For example, for the period 1 July 1997 to 30 June 1998, the amount paid under the Commonwealth Pharmaceutical Benefits Scheme for Losec was considerably greater than the amount paid for any other branded drug.

[11]

The respondent ("Alphapharm") markets "generic" drug formulations. In 1998, as the term of the compound patent neared its end, Alphapharm commenced steps to import and sell in Australia a pharmaceutical preparation containing omeprazole for therapeutic use in the treatment of gastrointestinal diseases. It applied to the Therapeutic Goods Administration to import and market in Australia such a pharmaceutical preparation. However, even after the compound patent expired and even if Alphapharm otherwise secured the necessary approvals by the Australian regulatory authorities, Alphapharm would not be at liberty to proceed with its proposals without overcoming the obstacle still presented by the Patent.
In August 1998, Astra instituted a proceeding in the Federal Court to restrain apprehended infringement of each of the claims of the Patent and for other relief. In its Defence, Alphapharm admitted it proposed to import and market its product in Australia after the compound patent expired and it had received the necessary regulatory approvals. However, it denied that there would be any infringement of any claim in the Patent and by its cross-claim sought revocation of the Patent.
The primary judge (Lehane J) held[3] that, assuming validity, the acts threatened by Alphapharm would constitute infringement of several of the claims of the Patent. However, his Honour held that Alphapharm succeeded on its cross‑claim. He made an order for revocation, with the result that the claim for infringement failed. The ground upon which his Honour determined that there should be revocation was obviousness. Alphapharm had attacked validity on various additional grounds, including lack of novelty. However, Lehane J held that none of the prior publications relied upon by Alphapharm rendered any of the claims not novel in Australia on the priority date[4].
On or about 30 May 1997, that is to say, before suit, an amended specification of the Patent had been filed and the amendments sought had been allowed. Alphapharm made various complaints based upon the allowance of the amendments but these were rejected by the primary judge and, for present purposes, nothing turns upon them. Nor, despite the submissions by Alphapharm in this Court respecting alleged admissions by Astra against interest arising from the amendment process, does that process assist in dealing with the issues respecting obviousness with which this appeal is concerned.
An appeal by Astra to the Full Court (Wilcox, Merkel and Emmett JJ)[5] was dismissed. The Full Court upheld the finding of Lehane J as to obviousness, but its reasoning in some significant respects differed from that of his Honour. The Full Court did not consider the additional matters raised by Alphapharm in its Notice of Contention. The issue on the appeal to this Court by Astra is whether the Full Court erred in not rejecting the finding by the primary judge with respect to obviousness. Were Astra to succeed in this Court, that would leave unresolved the balance of the issues before the Full Court. It should be added that the order for revocation made by the primary judge is, by order of the Federal Court, stayed until final determination of the appeal to this Court.

[15]

It should be observed immediately that the 1952 Act directed attention to what was known or used in Australia at the priority date and that for the patent in suit this is 30 April 1986. That lapse of time is sufficient, without more, to foreclose any consideration for present purposes of what information might have been available by electronic research methods since developed on an international scale.
The 1952 Act was repealed by s 230 of the Patents Act 1990 (Cth) ("the 1990 Act"). The 1990 Act commenced on 30 April 1991. The 1990 Act deals with obviousness in terms which differ from those found in the 1952 Act, a matter adverted to in Firebelt Pty Ltd v Brambles Australia Ltd[6]. However, Lehane J referred to authorities construing the transitional provisions in Ch 23 (ss 231‑240) of the 1990 Act and concluded that, whilst the Patent might now be revoked only under the 1990 Act, for Alphapharm to succeed it would have to bring its case on obviousness within the terms of that ground as expressed in s 100 of the 1952 Act[7]. That was accepted as common ground by the parties in the Full Court[8] and the appeal to this Court has been conducted on the same basis.
The distinctions between the 1952 Act and the 1990 Act in the treatment of obviousness are important for this litigation. The 1990 Act provides some relaxation of the rule established in this Court (to which further reference will be necessary) which forbade the use of prior disclosures which, whilst publicly available, were not proved to be part of common general knowledge at the priority date[9]. The further amendments by the Patents Amendment Act 2001 (Cth) appear to continue this trend. However, the scheme of the 1990 Act was to preserve the rights of patentees under the 1952 Act by not imperilling validity through use of any broader grounds provided by the 1990 Act.
Nevertheless, the Amended Particulars of Invalidity filed by Alphapharm were framed in terms drawn from the text of the 1990 Act. Paragraph 8 of the Particulars used terms such as "prior art base" and "related documents" which a person skilled in the art "would treat … as a single source of … information". Reliance also was placed upon listed prior art documents taken alone as well as in combination and upon each of the integers of the claimed combination as forming part of the common general knowledge. Both the primary judge and the Full Court emphasised that it was the 1952 Act which was applicable. Nevertheless, as will appear, their treatment of the issues does suggest the intrusion of considerations adverse to Astra which may have had a firmer footing in the 1990 Act.
The warning by Judge Learned Hand in Lyon v Bausch & Lomb Optical Co[10] respecting "unexpressed and unacknowledged [judicial] misgiving" about the facility with which patents appear to have been granted is in point here. His Honour added[11]:

[26]

To this it may be added, as Lehane J explained, that Dr Marshall had not arrived at the precise formulation claimed in the Patent even after the preparation of six reports on varying instructions from Alphapharm which developed his initial brief to formulate an appropriate dosage form of omeprazole for use by adults[19]. Dr Marshall's evidence was important because, unlike other Alphapharm experts, he was not shown the Patent[20].
Against that background, at first blush it is surprising that the primary judge held that Alphapharm had made out its case for revocation. It is necessary to trace the steps by which this result was reached.
Lehane J noted that there was no significant dispute as to who was to be regarded as the hypothetical non‑inventive worker in the field; this was a person (or, it would seem to have been accepted, a team of persons) experienced in the practical work of formulating drugs for therapeutic use. Such persons would be highly qualified pharmaceutical chemists with, usually, a demonstrated capacity for original research. The hypothesis which the case law required fixed upon members of that class who were not "particularly imaginative or inventive"[21]. There are conceptual difficulties in applying what is said in some of the older authorities respecting "workmen" and the like to modern conditions in the pharmaceutical and other industries. But the employment of highly skilled research teams, as a matter of course, was noted over 70 years ago, well before the 1952 Act[22]. In this respect, there is no challenge to the way Lehane J approached the case.
The primary judge rejected Alphapharm's submission that the common general knowledge of the skilled formulator in Australia included material which the formulator might find by conducting computer searches and the like, being means available to and used by formulators. His Honour correctly did so because the corollary of the submission was that information should be treated as part of the common general knowledge in Australia, even in the absence of evidence of its general acceptance and assimilation by what he called "the formulating community". This was a proposition which Lehane J recognised[23] was foreclosed by the authority of this Court, in particular by Minnesota Mining and Manufacturing Co v Beiersdorf (Australia) Ltd[24].
However, the primary judge erred in his further identification of the legal concept of obviousness against which the facts were measured. The Full Court also fell into error in this respect. Before turning to consider the nature and extent of these false steps, it is convenient to isolate several preliminary matters concerning the statutory formulation for "obviousness" in par (e) of s 100(1) of the 1952 Act as it has been interpreted in this Court, and to compare the position in several other countries, in particular the United Kingdom and the United States.

[41]

In the argument in this Court, as in the Federal Court, reliance was placed upon various decisions in the United Kingdom. Reference has already been made to some divergence between the case law concerning the 1952 Act and the United Kingdom legislation in 1949 and 1977. There are further areas of divergence, the failure in an appreciation of which was of determinative significance for the decisions both of Lehane J and the Full Court.
The first concerns "mosaics" (a term of disparagement apparently first used by James LJ in 1880[40]), and related issues. The holding for which Minnesota Mining is celebrated is the rejection, as inapplicable to the terms of the 1952 Act, of the reasoning in certain English decisions. This might have permitted the basing of an argument of obviousness upon prior publicly available publications, without evidence that they had become part of the common general knowledge at the priority date[41]. Common knowledge, Windeyer J had pointed out in Sunbeam Corporation v Morphy-Richards (Aust) Pty Ltd[42], is the correlative of subject-matter or inventiveness, and available knowledge the correlative of lack of novelty.
The respondent in Minnesota Mining had relied upon a number of prior patent specifications available in Australia for public inspection to base an argument of obviousness. But the respondent led no evidence that they were part of the common general knowledge on or before the priority date. There was no evidence that those working in the field of adhesives or surgical tapes followed a practice of studying and making themselves familiar with all patent specifications as they became available for inspection in the Patents Office library. Therefore, the issue of obviousness was to be determined without reference to the prior publications[43]. A fortiori obviousness was not determined by asking whether a diligent searcher might have selected the elements of the claimed invention by taking pieces from those prior publications and putting them together[44].
In accordance with this reasoning, the respondent's case in Minnesota Mining would have been no better off if the contents of the Patents Office library had been "online" and so even more readily available to search. The issue was not whether it was "obvious" to search there, but whether what a search would have disclosed had entered the body of common general knowledge. On the other hand, Aickin J did have regard to evidence relating to the use of surgical tapes in hospitals and in medical practice as indicative both of what products were the common general knowledge and of the problem awaiting solution[45].
The divergence in the case law marked by Minnesota Mining has since been widened by changes in statute law. It is unnecessary to consider further the changes in Australia brought about by the 1990 Act. They were discussed to some extent in Firebelt[46]. In the United Kingdom, the 1977 UK Act caused, as Professor Cornish has put it[47], the "largest culture shock" received by the British patent system in its history.
Section 3 of the 1977 UK Act says that "[a]n invention shall be taken to involve an inventive step if it is not obvious to a person skilled in the art, having regard to any matter which forms part of the state of the art by virtue only of section 2(2)". Section 2(2) provides:

[78]

Buckley LJ did refer, among other authorities, to what had been said by Diplock LJ in Johns‑Manville[84]. Diplock LJ, after, as indicated above, decrying the use of particular verbal formulae, had rejected a postulate of prior certainty of success before actually performing particular tests; it was enough for a case of obviousness that the person versed in the art would assess the likelihood of success "as sufficient to warrant actual trial". Later, in Technograph Printed Circuits Ltd v Mills & Rockley (Electronics) Ltd[85], Lord Reid said that the hypothetical technician there under consideration must be supposed "to try everything which would appear to him as giving any prospect of valuable results" (emphasis added).
On the other hand, in American Cyanamid Co v Ethicon Ltd[86], Graham J held, with reference to Johns-Manville, that it was not obvious to try a substance (the invention claimed) which had been a candidate for inclusion in a research programme, given the extent of that programme. Reference has been made to what actually was decided in Amoxycillin. In Johns-Manville, the holding had been that the use of a known, but recently developed, flocculating agent to separate water from asbestos cement in the process of manufacture of asbestos cement pipes and boards was obvious. There was no question of dissection of a combination claim.
Later English decisions[87] applying the 1977 UK Act to chemical and biotechnological patents treat what was said by Diplock LJ in Johns-Manville as synonymous with "worth a try" and "well worth trying out". On that basis, a number of patents have been held invalid for obviousness. These cases include Genentech Inc's Patent[88] upon which Alphapharm relied. The outcome may reflect the approach in European law that "the assessment of inventive step depends upon the extent to which a skilled person would have been technically motivated towards the claimed invention"[89]. But cases such as Genentech mark a divergence from the treatment of obviousness in the decisions of this Court. The Full Court of the Federal Court recognised this in ICI Chemicals & Polymers Ltd v The Lubrizol Corporation Inc[90].
However, in the present case, a differently constituted Full Court, after setting out the passage from Amoxycillin to which reference has been made above, noted that[91]:

[90]

Astra complains that the Full Court denied it procedural fairness. The Full Court took the view that Lehane J may have had in mind a possible rather than a probable result of the hypothetical formulator's activity; if so, then, in the Full Court's view, Lehane J had erred[100]. The Full Court then set out on a detailed review of the expert evidence. Astra complains that it was denied the opportunity of addressing the Full Court on the findings of fact which it made and that the Full Court wrongly assumed there to have been no dispute at trial respecting the evidence of Alphapharm's experts. It does appear that express rulings were never made at trial upon a number of objections. This failure by trial judges was described as unfortunate in Firebelt[101] and this case provides another example. Parties should know, before addresses are taken, the final state of the evidence, whether the trial be by judge and jury or judge alone.
It is unnecessary, for this appeal, further to pursue Astra's submissions on this aspect of the litigation. After its review of the evidence, the Full Court concluded[102] that Astra's "development" of the formulation "was essentially an exercise in trying out various known possibilities until the correct solution emerged" (emphasis added). That view of the matter wrongly takes as the starting point the assumed result. It succumbs immediately to the seduction of hindsight. Also, the notion of trying out possibilities invites the repetition of criticisms made earlier in these reasons.
The result is that the Full Court erred in the grounds upon which it supported the outcome at trial. The point is made from time to time that obviousness is a "jury question" and that the answer given to it by trial judges, juries long having since departed this scene in Australia, should be treated on appeal like any other factual resolution. All that is true, as it is, for example, of trials of negligence actions; but in all these fields the criteria of principle against which the evidence is measured are supplied by the law, whether by the common law, or by statute, in this case the 1952 Act and the decisions construing its provisions. In this litigation, both at trial and in the Full Court, Alphapharm was held to have made out its case by processes which were determined by errors of law.
Alphapharm and Astra referred to litigation in a number of countries respecting the validity of the patent protection for the formulation of omeprazole. This shows that upon variously expressed laws and differing factual findings a range of outcomes has been reached.
There are obvious advantages in a substantial measure of uniformity between the patent laws of countries with which Australia maintains international arrangements under its patents legislation. But these reasons reveal that the law respecting obviousness in various jurisdictions currently diverges and that the extent of this divergence changes from time to time. There is no universal view of a matter which at bottom reflects a range of attitudes to the balance of interests at stake in patent law. Nor is it to the point that had the obviousness of the claims of the Patent fallen for decision solely under the 1990 Act, whether in its initial or amended form, the law may have favoured Alphapharm's case more than did the 1952 Act.

[91]

The appeal should be allowed with costs. The orders made by the Full Court on 9 October 2000 should be set aside. The matter is remitted to the Full Court for the determination of any remaining grounds on Alphapharm's Notice of Contention. The operation of order 2 made by Lehane J on 18 June 1999 (which dealt with revocation) should be further stayed until further order of the Federal Court. The costs of the whole of the proceedings in the Federal Court are to be in the discretion of the Full Court.
McHUGH J. The issue in this appeal is whether "the invention, so far as claimed in any claim of the complete specification ... was obvious and did not involve an inventive step having regard to what was known or used in Australia on or before the priority date of that claim"[103]. This issue raised a question of fact that had to be determined by applying a statutory expression. A summary of some of the extensive evidence adduced in the case is contained in the joint judgment of Gleeson CJ, Gaudron, Gummow and Hayne JJ.
I would dismiss the appeal on the ground that there are concurrent findings of fact by Lehane J and the Full Court of the Federal Court that should not be disturbed by this Court. They were findings that were open to them on the evidence, they involved the application of a flexible, indeterminate expression and they were not flawed by any legal error.
The meaning of ordinary English words in a statute is a question of fact. "Obvious" is an ordinary English word whose primary meaning is "very plain"[104]. The question for Lehane J, therefore, sitting as a juror, was whether the inventive step claimed was "very plain". That involved making a judgment concerning a large volume of evidence. Different minds could reasonably have come to different conclusions about the effect of the evidence. If I had been the trial judge, I suspect that I would have applied the approach to the issue of "obviousness" that Gleeson CJ, Gaudron, Gummow and Hayne JJ follow in their joint judgment and if I had done so, I would probably have reached the same result as their Honours do. But, as a matter of law, I would not have been bound to use the approach that their Honours outline. Despite the many judicial statements to which their Honours refer, the issue in this case involved a factual conclusion[105] whose resolution could legitimately give rise to a number of differing approaches and answers[106]. In Johns-Manville Corporation's Patent[107], Diplock LJ refrained from providing a definition of "obviousness" so that it could not be cited in later cases concerning different types of claims. Diplock LJ said that patent law "can too easily be bedevilled by linguistics" and that "obviousness" does not depend upon the use of a particular verbal formula or reliance upon cases about other inventions of different kinds.
A judge trying the obviousness issue is not bound, as a matter of law, to determine that issue by reference to persons who are not "particularly imaginative or inventive"[108]. Nor is the judge, in a case like the present, bound to ask "whether the hypothetical addressee faced with the same problem would have taken as a matter of routine whatever steps might have led from the prior art to the invention, whether they be the steps of the inventor or not"[109]. Nor is the judge bound to ask whether a notional research group would be directly led, as a matter of course, to try the approach of the "inventor" in the expectation that it might well produce a useful result or alternative[110]. These statements, and similar ones, have been made by judges, highly experienced and eminent in patent law, and applied by many other judges. A judge faced with a situation similar to those dealt with in a judgment containing one of these statements would be well advised to follow it, reflecting as it does the collective wisdom of the judiciary on this type of situation. And to do so helps to achieve consistency in fact finding, a matter of great importance if the law is to maintain the confidence of litigants. Equal justice under the law requires that like cases should be decided alike. Nevertheless, all such judicial statements merely reflect reasoning processes concerning factual issues. They do not lay down any legal principles and they have no precedent value. They are not binding upon judges hearing future cases.
In many fields of law governed by statute, such as income taxation, workers' compensation, environmental planning and patents, judges and practitioners, who specialise in those fields, have a tendency to treat judicial statements, determinative of particular cases, as principles of law. Few of them are. Most of the time, they simply reflect how experienced judges have resolved particular factual situations. As Dixon CJ once said[111], in rejecting an argument that a departure from observations made in an earlier case warranted the grant of special leave to appeal, "it is not everything that appears in the Law Reports that is law". Some may see this statement as a cynical reference to the Law Reports containing erroneous statements of legal principle. But given its context, I think that the great Chief Justice was emphasising that many statements in the Law Reports are concerned with reasoning about factual situations. So in Conkey & Sons Ltd v Miller[112], after referring to a passage in the judgment of Fullagar J in The Commonwealth v Butler[113] with which Dixon CJ and Kitto J had agreed, Barwick CJ said:

[93]

When a trial judge has made, and an intermediate court of appeal has affirmed, a finding or findings of fact, this Court will almost invariably refuse to grant special leave to appeal against that finding or those findings. Unless the lower courts have misapplied the law in making the factual findings, the case is not "special" enough to warrant the grant of special leave to appeal.
I was a party to the grant of special leave to appeal in this case. At the time, I thought that, despite the concurrent findings of fact, the case arguably raised questions of principle. But after further examining the matter, I think that the case is really concerned with factual findings and reasoning.
Once special leave to appeal is granted, the Court, of course, must examine the evidence and facts for itself. But that does not mean that, in determining the appeal, the Court should or must always do so without regard to concurrent findings of fact made in the lower courts. Where the case involves the application of a flexible and indeterminate standard such as "reasonable", "fair" or "unconscionable" - or "obvious" − this Court should be slow to depart from the concurrent findings. Often - perhaps usually - there is no single, right answer to the question of fact posed by such indeterminate standards. Moreover, the trial judge has had the advantage of seeing and hearing witnesses give evidence, usually over many days. This is a significant factor even in a case where the credibility of witnesses is not an issue. Even in a case of that kind, the trial judge's findings may well have been influenced, consciously or unconsciously, by the judge's perceptions of the witnesses and the evidence, as it has unfolded in detail over many days. That the judgment fails to record this fact is of little importance. As Lord Hoffmann pointed out in Biogen Inc v Medeva PLC[114], the judgment of the trial judge is "inherently an incomplete statement of the impression which was made upon him by the primary evidence".
I am not persuaded that the learned trial judge and the judges of the Full Court misunderstood the law or the issue that they had to decide. Nor am I persuaded, after taking into account the advantages of the trial judge, that he erred in his conclusion concerning the issue for decision.
I would dismiss the appeal with costs.
KIRBY J. In Biogen Inc v Medeva plc[115] Lord Hoffmann observed that: "The question of whether an invention was obvious has been called 'a kind of jury question' … and should be treated with appropriate respect by an appellate court."

[94]

Obviousness was the issue in these proceedings. The primary judge (Lehane J), and on appeal the Full Court of the Federal Court of Australia, unanimously concluded that issue in favour of the respondent, Alphapharm Pty Ltd ("Alphapharm"). Now Aktiebolaget Hässle, a Swedish corporation, and Astra Pharmaceuticals Pty Ltd (together "Astra"[116]), by special leave, challenge the factual conclusions reached at each level in the Federal Court.
The conclusions on obviousness in the proceedings below represented the outcome of a judicial evaluation of a mass of evidence. In the assessment of that evidence, and in the conclusion to be derived from it, the primary judge and the Full Court were better placed to perform the function of fact-finding than this Court is. Unless some error is shown in the application of the relevant law, it would be a rare step for this Court to condescend to re-evaluate such a factual conclusion, reached by concurrent decisions at two levels of the judicial hierarchy[117]. Cases like the present have been described as "difficult cases involving questions of degree"[118]. For that reason this Court normally leaves such decisions to others. Typically, they are cases that involve issues relating to the "particular application of legal principles, rather than the content of those principles"[119].
A majority of this Court has concluded that the judges of the Federal Court erred in their respective approaches to the applicable law. I disagree. I remind myself at the outset that, under the Constitution, the function of this Court is to correct judgments and orders of the courts from which appeals come. It is not, as such, to correct every phrase or sentence in the exposition of reasons that explain how the judges of those courts arrived at the contested conclusion.
Because obviousness is ultimately a factual conclusion (of a kind once normally decided by a jury[120]) it will not always be possible for judges, explaining their opinions, to express all of the considerations that lead them to the evaluative and partly intuitive conclusion required in the particular case. Any exposition of judicial reasons explaining such factual findings is "inherently an incomplete statement of the impression which was made upon [the judge] by the primary evidence"[121]. Judges having replaced juries in such matters in Australia, and having entangled themselves in a web of horrible verbal formulae, must do their best to explain their conclusions where, in the past, juries simply announced their verdicts.
In this appeal we need to follow the judges of the Federal Court into the forest of verbal elaboration that now burdens this field of law[122]. We do so because that is what is customary. It is the way the matter was argued in the courts below, as well as in the appeal before this Court. No party has suggested a simpler and less convoluted approach.
However, before I enter upon the decisional verbiage, I remind myself of what essentially I am doing. This Court is reviewing for error the application of an extremely short passage of a statute enacted by the Australian Parliament, invoked by reference to the detailed facts proved in evidence at the trial. The passage ultimately calls forth a factual conclusion. In the end, that comes down to the application to the facts of simple words of the English language. Before this Court disturbs such a factual conclusion, it should remember that, in terms of the statute, the issue was not as complicated as legal ingenuity and judicial verbosity (often urged on by large commercial interests) have sometimes made it seem in the past. As was said in another context, courts must be wary of the professional danger that "attends the formulation of principles and doctrines and all reasoning a priori in matters which in the end are governed by the meaning of the language in which the Legislature has expressed its will"[123].

[95]

The proceedings now before this Court are the local aspect of a world-wide attempt by Astra to resist applications by manufacturers of "generic" pharmaceuticals to obtain the revocation of patents granted in the 1980s for a pharmaceutical product that in Australia (as in England) is sold under the proprietary name "Losec". Astra has already enjoyed the benefit of twenty years of patent protection for the pharmaceutical compound omeprazole ("the compound patent"), the active ingredient in Losec. In the financial year 1997-1998, more than 1.5 million packs of Losec were sold in Australia under the Commonwealth Pharmaceutical Benefits Scheme. In that year, the cost to the Federal Government was more than $141 million[124]. Ultimately, such cost is borne by Australian taxpayers.
The stakes for the parties are therefore high. The entry of generic drugs as cheaper substitutes for branded ones at the expiration of patent protection is a feature of the market for pharmaceuticals in many countries[125]. The strategies that large pharmaceutical manufacturers have employed to avoid such generic competition, which include the use of intellectual property law, have been detailed elsewhere[126]. They have attracted the attention and response of the Federal Trade Commission in the United States[127]. Such battles have had their counterparts in many other countries. They present serious issues for the developing world[128]. In its interpretation of the legislation, and in identifying the proper approach to the ultimately factual determination of obviousness called for by that statute, this Court should avoid creating fail-safe opportunities for unwarranted extensions of monopoly protection that are not clearly sustained by law.
The patents in suit relate to the formulation of an oral preparation that delivers the compound omeprazole to human patients. The compound is useful in the treatment of gastro-intestinal diseases because it inhibits the secretion of gastric juices. The compound patent granted to Astra expired in April 1999. The subject patents involve tablets or pellets devised to deliver omeprazole in such a way that the compound will pass through the stomach and into the intestines of the patient. The claim, the subject of the patents in suit, involves the form of oral administration of omeprazole in such a way as to be resistant to stomach acid but "bioavailable in the intestines"[129].
Concurrently with the proceedings in Australia that have now reached this Court, actions were commenced in the Patents Court of the High Court in England for revocation of the formulation patents granted to Astra's interests in the United Kingdom. After the decisions of the primary judge and the Full Court of the Federal Court in Australia, the judge of the Patents Court (Laddie J) gave his judgment and published his reasons in March 2002[130]. His decision was concerned, substantially, with factual questions relating to the obviousness said to affect the United Kingdom equivalent of the patents in suit, similar to those before the primary judge. In his reasons, Laddie J concluded that claim 1 of the European Patent (UK) granted to Astra's interests in 1986 was invalid for obviousness[131].
It was common ground that the action for revocation of the patents in suit in these proceedings was to be decided by reference to the applicable ground of revocation stated in s 100(1)(e) of the Patents Act 1952 (Cth) ("the Act"). It was not to be judged in terms of later Australian legislation[132]. As the joint reasons in this Court point out, under the influence of European law, the patent law of the United Kingdom has lately introduced concepts in some ways different from those expressed in the Act, as interpreted by this Court. However, this divergence should not be overstated.
In Mölnlycke AB v Procter & Gamble Ltd (No 5)[133], in examining the operation of s 1 of the Patents Act 1977 (UK) ("the 1977 UK Act"), the Vice-Chancellor stressed a number of points: first, that the question of obviousness is a factual determination on which prior decisions[134] and semantic arguments[135] are of only limited assistance; secondly, that expert evidence is the primary evidence on which such determinations are based; and finally that the proper approach to determinations of obviousness under the 1977 UK Act is no different from the one followed with respect to earlier provisions[136].
True it is, that on the definition of "[t]he state of the art" in s 2(2) read together with s 3 of the 1977 UK Act, skilled formulators in that country are deemed to have read more widely than their Australian counterparts under the Act as interpreted by the decision of this Court in Minnesota Mining and Manufacturing Co v Beiersdorf (Australia) Ltd[137]. However, as the decision of the Full Court demonstrates, nothing turns in these proceedings on the inclusion or exclusion of particular documents affecting the common general knowledge[138].
Furthermore, an examination of the reasons of Laddie J in the English proceedings[139] shows that his Lordship substantially focussed his attention on a simple, straight-forward factual question. It was the one also posed by the terms of the Act for the Australian judges in these proceedings. In Laddie J's reasons, there was no ponderous examination of the mountain of decisional law typically urged on the Australian judges, and on this Court, in an endeavour to convert a factual conclusion into a legal one. In the English Patents Court, at least, judges seem at last to be heeding the plea of Diplock LJ not to approach cases of this kind with their minds frozen by opaque verbal expressions that aim to paraphrase the words of the Act and risk distracting the attention of the decision-maker from the evidence and the factual conclusions that must ultimately be arrived at[140].
Similar evidence was presented before Laddie J as had earlier been tendered in the Australian proceedings before the primary judge. In the English decision there is a thorough examination of that evidence. In the result, Laddie J reached a conclusion that is not only identical in its outcome with that reached by all judges of the Federal Court. It is similar in its reasoning. His Lordship said[141]:

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The background facts of the dispute between Astra and Alphapharm are set out in other reasons[142]. So are the applicable provisions of the Act[143]. So is the way in which, notwithstanding the enactment of the Patents Act 1990 (Cth) ("the 1990 Act"), the question of revocation argued in the appeal is to be decided in accordance with the law stated by the Act of 1952[144].
Also set out in other reasons is a description of the relevant background, including the course of the litigation[145] together with extracts from the reasons of the primary judge and from the conclusions of the Full Court. I will not repeat any of this material.
On a number of crucial issues there was common ground between the parties. Thus, it was not contested that Alphapharm bore the onus in its cross-claim for revocation to establish obviousness; and that the issue of obviousness had to be determined, in terms of the Act, by reference to "what was known or used in Australia on or before the priority date". In this case that date was 30 April 1986. Nor was there any contest that this Court would apply the approach to the concept of obviousness in the Act, based on the decisions in cases such as Minnesota Mining and Wellcome Foundation Ltd v VR Laboratories (Aust) Pty Ltd[146].
The lastmentioned agreement does not, however, carry with it the degree of concurrence that Astra suggested. As McHugh J points out in his reasons[147], the question of obviousness turns upon the particular facts under consideration. The way in which the approach formulated in cases such as Minnesota Mining and Wellcome Foundation will be applied in a different factual setting must be illuminated by the evidence about the claimed invention, and particularly the relevant field of knowledge and research which may be significantly different from, or more complicated than, those considered in other decisions[148]. The Act remains the same. Its language is relevantly unaltered. The words remain comparatively simple. A factual determination is still required. But it is a factual determination that must now be derived from different scientific evidence, in the context of a particular problem that presented itself for solution, and in a particular field of knowledge that is also not static.
What will, or will not, be "obvious" (and therefore what will, or will not, involve an "inventive step") necessarily depends upon the field of knowledge in question. It moves in pace with the practices and complexity of such a field. That was certainly the argument that Alphapharm urged, successfully, in the Federal Court but which Astra resisted. For reasons that I will explain, I consider Alphapharm's argument correct in this respect. It sustains the approach and conclusions of the primary judge and the Full Court. Those decisions are compatible with the reasoning of this Court in Minnesota Mining and Wellcome Foundation, when such reasons are read in the light of the evidence, offered in a case such as the present, considering the nature of the particular field and the state of the prior knowledge involved.
Because the parties agreed at trial that the conclusion about obviousness was to be decided by reference to the answer to the question: "whether the invention would have been obvious to a non-inventive worker in the field, equipped with the common general knowledge in that particular field as at the priority date, without regard to documents in existence but not part of such common general knowledge"[149], it was necessary for the primary judge (and on appeal the Full Court) to answer that somewhat opaque, but common, interrogatory. To provide his answer, the primary judge accepted the evidence of the Australian formulators tendered by Alphapharm[150]. He noted that Astra had not called anyone with the Australian experience of such formulators to contradict their evidence concerning the factual matters that were within their knowledge and experience at the applicable time[151]. These conclusions present a very substantial evidentiary obstacle for Astra to overcome.
The twenty year term of the compound patent expired at the same time as the primary judge delivered his decision in this case[152]. The patents in suit did not claim the compound omeprazole. The primary judge found that the addition of an alkaline compound to the core and the use of the enteric coat (described as the first and third integers of claim 1), were both "obvious" at the outset of the formulation stage[153]. The potential for a reaction between a (basic) core and an (acidic) enteric coat and the use of an intermediate (water-soluble) film to isolate one from the other would also have been readily apparent to those working in the art.
The primary judge also accepted that, on or before the priority date, a formulator in Australia asked to formulate omeprazole in a form suitable for oral dosage, would have started with a literature search at least to discover the learning that was readily available about omeprazole and its characteristics[154]. Having discovered such characteristics from the then readily available literature and "having tried the first simple formulation", the formulator would have done "substantially what Astra did". He or she would have "submitted it to appropriate tests, including tests for stability on manufacture and on storage and for acid resistance"[155]. Having encountered a problem of incompatibility between the core and the enteric coat, the primary judge concluded that the formulator, as a matter of routine steps, taken in the course of the formulation process, would readily have reached the combination claimed in the patents in suit[156].
In reaching these conclusions, the primary judge made it clear that he was not considering the irrelevant question of whether the individual integers of the combination were obvious. Instead, he was addressing the relevant question, namely whether the combination was obvious[157]. In this Court, the primary judge was criticised for applying the test of obviousness to the separate integers of the formulation. Had he done this it would indeed have been a mistake[158]. With inventions it will often be the case that particular steps in the right general direction, viewed in isolation and separately (and especially with the benefit of hindsight[159]), will be obvious although the combination of such steps (from all the others that would theoretically be possible) will constitute the "inventive step" and negate the claim of obviousness. The primary judge was clearly alert to the danger of such fallacious reasoning. His reasons explicitly demonstrate that his mind was concentrated on whether the identified formulator would "have arrived at the combination"[160].
Just because a claim is for a combination of a number of integers which interact in some way, that does not mean that it is automatically non-obvious and thus patentable under the Act[161]. The way in which the primary judge went about resolving the question whether the combination was obvious, in light of evidence about the research process, was entirely legitimate. As a first step, his Honour accepted the experts' evidence that the starting point of the formulation would be an enteric coated alkaline dosage of omeprazole. From there, what Astra did was to follow the predictable course that a skilled though unimaginative formulator would have followed as a matter of course or as a matter of routine.
The primary judge was fortified in his conclusion by the evidence of Dr Marshall, called by Alphapharm[162]. Dr Marshall undertook a task of simulated or hypothetical formulation, without having seen the patent and based on instructions "to formulate an appropriate dosage form of omeprazole for use by adults"[163]. Astra made much of the fact that, in his reports, Dr Marshall did not arrive at the precise combination of the patent. His failure to do so was trumpeted by Astra as proof that its "invention" was not "obvious". This submission has found favour in this Court[164].
In my respectful opinion this is erroneous reasoning. The primary judge correctly recognised the evidence of Dr Marshall for what it was. As he pointed out, it "was not an actual formulation of a substance which he had but a theoretical or hypothetical one, and that presented difficulties and (as he commented) frustrations"[165].
The primary judge went on[166]:

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Nor, in my view, are the criticisms of the reasons of the Full Court made good. It is important to read the Full Court's reasons in the light of the primary judge's reasons and the issues raised in Astra's appeal to the Full Court.
Although before this Court Astra suggested that it had been deprived of natural justice before the Full Court, it did not appeal against the primary judge's treatment of the objections to evidence mentioned in other reasons[168]. It will often be convenient, at trial, to proceed as the primary judge did in this case. There was no substantive injustice in the course that the primary judge took. It involved a common approach, often sensible and practical. Before offering criticism, this Court should also recall that the primary judge, at the request of both parties, was hearing the suit as a matter of urgency because the compound patent was then about to expire. In my view, and particularly heeding Lord Hoffmann's warning in Biogen[169], this provides an additional reason for caution in an ultimate appellate court before disturbing the findings of the primary judge.
Much of the force of Astra's appeal to the Full Court was addressed, as would be normal in such a proceeding, to the factual findings and conclusions reached at trial. Before the Full Court, extensive oral and written submissions on behalf of Astra addressed the facts. In the circumstances, discharging its appellate function properly in an appeal by way of rehearing, the Full Court was bound to address the parties' arguments[170]. Astra submitted that the primary judge's ultimate finding required a conclusion contrary to that which the judge had reached. The "error of principle" involved, in this regard, was the statement by the primary judge that the combination in the patent claim "might"[171] (rather than "would"[172]) have been arrived at by the hypothetical formulator. Because Alphapharm bore the onus of proof to sustain its cross-claim for revocation of the patents in suit, this focus on the primary judge's words (although they are borrowed virtually word for word from Wellcome Foundation[173]) became a central foundation for Astra's attack in the Full Court on his reasons.
In my opinion, it would have been open to the Full Court to have dismissed this suggestion of error by reference to the way in which the primary judge, in the same paragraph, went on to conclude[174]:

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The "view" there referred to was that an enteric coated alkaline dosage would be the appropriate starting point for the formulation. As I have pointed out, according to his Honour's evaluation of the evidence, selecting that as the appropriate starting point would have led to the subsequent steps and the ultimate result actually reached[175].
However, doubtless aware of the interests at stake and the possibility of an application to this Court for special leave following its decision, the Full Court assumed that the reference to a possibility ("might") in the primary judge's reasons could be viewed as ambiguous. The Full Court therefore proceeded, in an orthodox appellate way, to review the evidence for itself. In reviewing the expert evidence, the Full Court, like the primary judge, pointed to the fact that an enteric coated dosage was considered the appropriate starting point in the formulation by all the experts called[176]. Having done this, the Full Court unanimously concluded that solving the interaction between the core and coat by the introduction of a subcoat to separate them did not show that the combination involved an "inventive step". On such evidence, the combination was, having regard to the common general knowledge available in Australia on or before the priority date, "obvious". The most that could be said was, in effect, that Astra was "first in the field, or richer or more determined"[177].
The Full Court also considered that it should review the factual findings on the basis that it might be concluded that the primary judge had fallen into error by making reference to documents found after a routine literature search. The Full Court did not express a final view on this issue, as their Honours held that, even without reference to the documents and the manufacturers' literature, the primary judge's conclusion on obviousness would stand. Again, there was no error in his Honour's reasoning. Any skilled formulator in the field of pharmaceutical formulation, presented with a problem however simple, would, as a first step, have sought access to such literature commonly available in Australia[178]. In my view, allowing a reference to be made to the results of a routine literature search is not inconsistent with the words of the Act, nor for that matter with the approach of this Court in Minnesota Mining. I shall return to this issue.
If the view is taken, as I would favour, that the approach of the primary judge was fundamentally correct and that no error in his reasoning necessitated (or justified) a reconsideration of the evidence by the Full Court, the primary judge's decision would stand. This Court should affirm the Full Court's judgment unless some new error is discerned that invalidates the conclusion that was reached at trial. In my opinion, the Full Court's entry upon the review of the evidence in the case was unnecessarily cautious. There was no error in the approach of the primary judge. The criticisms of his reasoning are unconvincing. This Court should confirm the primary judge's conclusion and judgment.

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Factual findings and lawyers' fictions: There is great force in McHugh J's note of caution in this case, with which I agree, about attempting to turn a process of reasoning as to findings of fact into binding propositions of law[179]. Nevertheless, some of the concepts applied to test the obviousness of a claimed invention (such as the hypothetical skilled formulator and the notion of the prior knowledge or art base) are embedded in patent law and practice and are consistently applied in the case law[180]. Such constructs, although artificial, are said to provide consistency, as well as a structured and principled approach to the fact-finding required, which is consonant with the terms, objectives and policy of the Act. However, they do not relieve the primary decision-maker of the responsibility to examine the relevant evidence. Even less, do they pre-determine the answer to the inquiry.
In light of the foregoing observations, and because these issues were fully argued by the parties (and are addressed in other reasons), I will add some observations of my own as to the proper approach to making findings on obviousness. In particular, I will express my reasons for the conclusion that the approach of the primary judge in evaluating the evidence was legitimate, error-free and in fact preferable. In my view, his Honour's approach is not only consistent with the words of the Act, but also with subsequent judicial attempts to flesh out and explain the statutory language.
Statutory construction and purposive interpretation: First, it is necessary to recall a basic point already alluded to. The duty of this Court is ultimately to the Act. It is the Act that states the applicable law. When a statute becomes encumbered in such a way as to obscure its operation and obfuscate the meaning of the simple words used (such as here, "obvious" and "inventive step"), it is time to return to basics. As was said long ago, in another area, courts must arrest the practice, common amongst lawyers, that introduces "lamentable and disgraceful technicalities"[181].
The Act is not set apart from the development of general principles for the interpretation of Australian statutes. True, it has ancient predecessors and a long history. It is concerned with large and valuable property interests. It is reasonable that parties should seek predictability in the operation of statutory language, drawn from judicial approaches to that language in the past. But in the end the duty of courts is owed not to judicial synonyms or lawyers' metaphors used to explain the language of the statutes. The duty is to the statutory language itself.
From time to time, specialist lawyers need to be brought back to such basic principles. Otherwise, they may take possession of provisions enacted by the Parliament and read them with spectacles focussed only on the glosses of decisional history. There is no justification for treating the Act differently from other federal statutes. I remain of the opinion that I stated in the context of another Act that has likewise become entangled in unnecessary decisional verbiage[182]:

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In deciding this case, the primary judge was, as this Court is, giving meaning to the words "was obvious and did not involve an inventive step having regard to what was known or used in Australia". Such statutory language should be read in the interpretive manner now generally followed in Australia. The words should be read in context[183]. They are not to be read literally, in isolation, but in the entire sentence and provision in which they appear[184]. In this instance, the reference to "what was known or used in Australia" in s 100(1)(e) affords some meaning to the terms "obvious" and "inventive step". To decide "what was known or used", a reference point is necessary. Hence the invention of the hypothetical skilled worker in the field. The larger context also matters. The Act in the same section (s 100(1)(g)) makes it clear that novelty alone is not sufficient to sustain a valid patent. This requirement adds further meaning to the concepts of obviousness and inventive step. What does not find expression in the Act as part of the concept of an "inventive step" is mere effort, labour or the expenditure of resources.
Secondly, the statutory language is to be read so far as possible to achieve the purpose of the legislation discerned from the words, the context and any other available and permissible sources[185]. The mischief which the original Statute of Monopolies 1623 (Eng)[186] sought to address included the excessive grant of monopolies by the Crown, and the negative effects this had for the public at large[187].
In this Court, Astra submitted that "the undoubted policy underlying the patent system is to encourage and reward research and development". I agree that this is one important purpose of the Act. But it is not the only one. Another, equally important, object is to avoid the grant of monopoly protection where there is no merit of inventiveness, that is, where there is no contribution to the general knowledge that was not only new (and possibly overcame a problem[188]), but also would not have been evident or readily discoverable to anyone possessing the relevant skill and knowledge in the field.
The role of the tests of novelty and obviousness in patent law has been described, correctly in my view, in this way[189]:

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Routine steps, worthwhile to try: Attempts by judges and lawyers to give meaning to the concept of obviousness, including under the Act presently the subject of consideration, have produced a mountain of verbal formulations to explain the reasons for making a particular factual determination. Some such formulations have included: that the invention was "very plain"[196] or "lying in the way"[197]; that the steps taken from the prior art to the invention were "a matter of routine"[198]; that the hypothetical formulator would "directly be led as a matter of course" to the particular solution[199], yet that "it is not necessary to establish that [the] success [of a step or process] is clearly predictable"[200]; or that the steps taken were obvious or worthwhile to try[201].
The parties to the present appeal urged one or another of those formulations as buttressing their case and representing the proper approach to the inquiry mandated by the statute. An illustration of the distraction that can occur when placing excessive emphasis on such formulations may be found in the consideration given in the case to the use by the primary judge of the word "routine". In this respect, once again, the judge was merely borrowing a word used by Aickin J in this Court in Wellcome Foundation[202]. The word is not mentioned in the Act itself. In some judicial expositions it has been elevated almost to a statutory status. This is so although it is little more than a synonym to convey an attribute of obviousness existing in some cases. To some extent, the Full Court also may have fallen into the same trap, by placing excessive emphasis on the primary judge's use of "might" instead of "would".
The various formulations outlined above may have presented useful lines of inquiry in the particular factual circumstances, research settings and fields of knowledge in individual cases. But as Diplock LJ warned, there is no verbal formula that precisely captures the correct reasoning in making a finding on obviousness provided by a statute[203]. None of the verbal formulations from past judicial decisions represents a universally appropriate paraphrase of the words of the statute. None is a binding statement of law that will pre-determine the answer in every case. As Windeyer J[204] observed in another setting where a factual determination by a judge was called for, the answer to such questions can "[i]n no case … be found in words, however eloquent, uttered by judges, however eminent, about the facts of some other case".
There is nothing in the language of s 100(1)(e) of the Act that confines the "obvious" to universally simple and self-evident concepts. On the contrary, the context (in a field of endeavour such as the development of modern pharmaceutical drugs) may envisage that a team of highly trained and qualified scientists, with relevant knowledge about the field, would be engaged in the research. If to such a team (as distinct from to a judge or an ordinary citizen) the invention claimed in the patent in suit is "obvious", that would provide a relevant ground for revocation. Thus, the measure of obviousness depends on the art or field relevant to the invention. It also depends on the skills and expertise essential to the particular field and the nature of the research process involved.
The hypothetical skilled formulator and the relevant field: It is appropriate to remember why courts in the past have invented the hypothetical formulator instead of simply expressing their own opinions on subjects of this kind. The reason for interposing this fictitious person is clear. Judges themselves (or juries in the days when juries decided such questions) could not be expert in all the fields of science and technology involved. They were, therefore, invariably reliant upon expert evidence in the particular field to prove what was "obvious" at the relevant date and what was not; what involved an "inventive step" and what did not. It would defeat the purpose of the Act if the applicable test were to be expressed in terms of what was obvious, as such, to a jury, to a judge or even to a reasonable person.
It follows that the posited formulator must necessarily have some knowledge of the relevant art, if only to be in a position to evaluate the presence, or absence, of obviousness. What is imagined cannot be a layman completely unskilled in the art. It must be someone sufficiently skilled and competent to answer the questions posed by the Act. A dullard or ignoramus the hypothetical formulator cannot be. And yet courts have also said that what is required is someone skilled but "non-inventive"[205] or someone "unimaginative"[206] or someone "lacking in inventive capacity"[207].
The foregoing exposition illustrates why this field of law has become encumbered with verbal expressions, sometimes remote from the statute. Unfortunately, such expressions are then picked up and applied to the case in hand in place of the statute itself. The special difficulties inherent in constructing the fictitious worker in a field such as pharmaceutical formulation were recognised by the primary judge[208]. The process has introduced so many layers of obscurity that there is now a real danger of entering upon "a degree of unreality … going well beyond reasonable hypothesis"[209] so that even a consientous decision-maker will lose the way and forget that the statute is ultimately the only true statement of the governing law.
It is true that the words of the Act provide but limited guidance as to the approach in deciding inventiveness. Some judicial elaboration is therefore probably necessary. The Act makes reference to the concept of obviousness in relation to "what was known or used". Ascertaining what was "known or used" cannot be done in a vacuum. Thus, in giving meaning to the statutory words, the focus is on the knowledge and practices of the skilled formulators in the field or discipline and at the priority date. This provides an anchor for the decision-maker. It is a matter of evidence. It presents a question of fact.
In Genentech, Mustill LJ observed that in construing the 1977 UK Act, deciding the meaning of "inventive step" and "obvious" and the characteristics attributed to the hypothetical skilled worker will "take one much of the way, if not necessarily all the way, to a conclusion on the issue as a whole"[210]. This statement emphasises the factual nature of the inquiry. It also illustrates why it is illusory to speak about a divergence in the law, since the answer is to be provided by reference to the standards of the field relevant to the particular invention. It is implicit in his Lordship's statement that the particular field of knowledge, which is the proper reference point, needs to be identified and characterised.
The identification of the relevant field will, in its turn, determine the characteristics of the notional worker skilled in the art who must provide the answer to the question whether the invention was obvious. Such characteristics will include the qualifications of the notional worker, the setting in which and resources with which he or she operates[211] and the practices and techniques that he or she will regard as commonplace and known. This proposition was accepted, to some extent, by Astra. Thus, it did not submit that s 100(1)(e) of the Act would be applied by reference to what was "obvious" to an individual researcher working on his or her own. Astra accepted that hypothetical formulators would, at least in the art involved in this case, commonly perform research in teams[212]. This being the case, it was common ground that obviousness was to be judged, in such circumstances, by reference to the pooled knowledge of a hypothetical team[213].
In the area of pharmaceutical development, the hypothesised formulator will ordinarily have postgraduate qualifications in science[214], just as in other fields it has been acknowledged that skilled formulators will be "trained engineers and scientists, who are well versed in the periodical literature of their subjects"[215]. The notion that such a formulator sits alone, speculating with nothing more than knowledge remembered from university lectures that are retained at the front of the mind, is absurd. It has rightly been rejected by the courts[216].
Effort and resources or inventive step: In Biogen Lord Hoffmann suggested that "[a] proper statement of the inventive concept needs to include some express or implied reference to the problem which it required invention to overcome"[217]. This was because the evaluation of whether or not a particular product involved an inventive step would depend upon the formulation of the inventive concept. Thus, the way in which the objective of the researcher in undertaking the particular research is stated may influence whether or not the outcome is judged to be obvious. In some circumstances merely stating or identifying the problem may indicate the non-obvious element or the inventive step, and primary decision-makers should be alert to such a possibility.
In Beecham Group, Buckley LJ made reference to a situation where the "uninventive but skilled man having a particular problem or need in mind" is "attempting to solve [that] problem … which has not been resolved or satisfied by the prior art but which appears to his uninventive mind to be possibly capable of solution or satisfaction by taking the step or doing the thing under consideration"[218]. In such circumstances, his Lordship felt that, if the particular step has the consequences hoped for, it is likely to be found to be obvious and not inventive. On the other hand, his Lordship indicated that the result may be different where "the skilled man has no particular problem or need in mind but merely regards some part of the known art as giving a good lead for further research, which may result in the discovery of some useful further knowledge"[219].
Buckley LJ's judgment in Beecham Group was cited both by the appellants and the respondent in support of their submissions before this Court. Alphapharm latched onto the statement that it is sufficient to show it would be apparent to the hypothetical formulator that "to try the step or process would be worthwhile"[220]. Astra on the other hand pointed to the result in that case - namely, the invention was held not to be obvious. I reiterate, that Buckley LJ's analysis has no precedential value beyond the facts of that case. However, his Lordship's mode of reasoning is instructive. In Beecham Group the patent was found to fall into the latter of the categories outlined - it was the choice of the particular path as a good lead for further research without a specific destination in mind that constituted the inventive step.
The foregoing reasoning affords an explanation for the approach of the courts in the case at hand. It was a legitimate approach. It involved no legal error. The identification of the problems that Astra's team had to solve did not constitute an inventive step. The solution that was apparent was the one ultimately arrived at. Both the destination and the selection of the research path to follow were obvious. Simply because more than one problem was faced in the process, does not require a conclusion that the combination involved an inventive step.
It may well be, as the primary judge conceded, that at the time, a similar problem had not been encountered, at least in Australia, in the formulation of enteric coated drugs[221]. This may be because no other compound presented similar properties, and no other entity would be doing work on omeprazole since Astra owned the compound patent. In that sense, while the final outcome may have been novel, that does not mean it was not obvious. That a reaction may occur between an alkaline core and an acidic coat would have been apparent to "any ordinary man with a working knowledge of chemistry"[222]. To proceed by adding a subcoat would have involved merely "employing an obvious technique to get round an awkward corner"[223]. This was precisely the way in which Dr Marshall proceeded in his hypothetical formulation. The hypothetical researcher would thus have overcome the problems encountered through "pertinacity, sound technique or trial and error, with no more"[224].
It is true that Astra had a strong commercial incentive to pursue the research in order to be able to market the compound. However, that fact is not relevant to the issue of obviousness[225]. It may also be true that the research path was not short; although this point should not be overstated. Astra proceeded to the ultimate solution fairly quickly. Much of the time that elapsed before the finalisation of the formulation is explained by the need for verification and long-term stability tests and experiments which are not only necessary, but essential to deliver on the market a drug for human subjects. However, such testing does not in any way add to the stock of knowledge. It did not turn an obvious concept into an inventive one.
It is not diligence and determination or the input of time, labour, skill and effort or the expenditure of resources that meet the criteria in the Act[226]. Something more is needed. And this, it seems to me, presents the substantive difference between the approach that I favour, and that of other members of this Court. As Mustill LJ puts it[227]:

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The process of developing a formulation of omeprazole that would be bioavailable in the intestines, in the end, may have involved a "triumph of method"[228]. It was a useful and commercially important achievement. It may also have involved a substantial investment in resources before it was finally brought to the market. However, judged by the standards of the relevant art at the priority date, it did not involve an inventive step in the sense that that criterion is required by the Act.
Common stock of knowledge and routine literature searches: Much has been made in this Court of the primary judge's discussion of the appropriate role to be assigned to documents which a formulator would have obtained as a result of a routine literature search. However, as the reasons of the Full Court demonstrate, in this particular case the conclusion of obviousness did not turn on this issue. The documents to which the primary judge made reference included the Pilbrant and Cederberg article, as well as the compound and salts patents[229]. They were only useful to the extent that they contained information about the properties of omeprazole, which the Full Court correctly concluded the skilled formulator would have been able to obtain through standard experiments and tests[230]. The existence of the other two documents (Shin-Etsu H-17 and the Röhm-Pharma notes) prior to the priority date was thought to corroborate the expert evidence as to what was commonly known and used in the industry at the relevant time[231]. However, the Full Court found that "[o]ur ultimate conclusion … does not depend on the contents of manufacturers' literature"[232]. I address this issue only because it raises an important question of principle.
The Full Court, and the majority of this Court, have found fault in the approach of the primary judge who held that the skilled though unimaginative formulator could be assumed to have had access to documents that would be found on a routine literature search[233]. This approach is said to be illegitimate after Minnesota Mining. I disagree.
The identification of what forms part of the common general knowledge is in itself a somewhat artificial exercise. It only arises because of the statutory command that whether or not a patent claim is obvious is to be determined by reference to "what was known or used in Australia" at or before the priority date. While Minnesota Mining held that the mere existence of particular documents, without more, did not mean that they formed part of the common general knowledge, Aickin J in that case also emphasised the fact-specific nature of the inquiry and the importance of evidence of common practices in the relevant art[234].
Once it is accepted that the common practices of researchers in the relevant field are relevant and that "the whole of the content of 'common general knowledge'" need not be "within the conscious awareness of the hypothetical non-inventive skilled worker"[235] it becomes clear that whether or not particular documents or publications are part of "what was known or used" is also a matter of degree.
Reference to the results of a routine literature search may be important in certain fields of knowledge (which include the formulation of pharmaceutical drugs) for at least two reasons. First, to deny such an inquiry, would be to take a completely artificial approach to the process of research and formulation in such fields. The experts giving evidence before the primary judge would all have started the process of formulation by a search of the literature. Secondly, if the inclusion of documents in the common stock of knowledge is a matter of degree, then the fact that a skilled (though unimaginative) worker would have located certain documents only after a routine literature search, or that such documents are readily available or accessible, should be evidence that they are more likely to be part of the relevant general knowledge. This may explain why the primary judge was confining his comments to publications found as a result of a routine search, as opposed to what would be found by a diligent searcher of more obscure sources[236].
What does or does not form part of the common knowledge should also depend upon the practices of workers in the field in question. It was correct for the primary judge to take into account the approach that skilled but uninventive workers in the field would have had to solving the presented problem. Even if a solution were immediately apparent, workers in the field of pharmaceutical chemistry would normally, as a first step, consult the basic literature readily available. Even if particular documents are known to exist and form part of the common stock of knowledge, a "routine" search, whether library or (more recently) electronic, would be necessary to locate them[237].

[117]

In Minnesota Mining, the above statement by Williams J was disapproved[244]. A distinction was drawn between information disclosed in publications which were not shown to be part of the common general knowledge in the relevant field and knowledge generally known and accepted by "the bulk of those who are engaged in the particular art", that can be described as "part of their common stock of knowledge relating to the art"[245]. This distinction was drawn because the Act talks of "what was known or used in Australia" rather than what was available to a researcher operating from Australia. However, the availability of a much greater range of scientific literature and the advent of technology making such literature more easily accessible may make important information more readily "known … in Australia" to formulators in this art.
According to the findings of the primary judge, it was no longer necessary, at the relevant date, to go offshore or to search obscure literature available but only far away. By reason of information resources within Australia and advances in technology, which were "used" by formulators at the relevant time, such knowledge was more readily accessible. It could easily be retrieved. If, therefore, on or before the priority date, a person with ordinary skill in the given art would know of certain documents or sources of knowledge, or could readily access them after a literature search if that were essential to the task in hand; and if there was also evidence that such techniques were "used" in the field, there is no reason to deny access to the results of a search in the determination of obviousness.
There is nothing in the language of s 100(1)(e) of the Act that locks the decision-maker into a particular technology or confines the hypothetical formulator to the knowledge and information about the art enjoyed according to sources then physically present in Australia. Once one returns to the language of the Act, it adapts quite easily to the contemporary practices in the relevant field, including in some circumstances searches of the literature if they are found to be commonly used in that field. As I have pointed out, Aickin J in Minnesota Mining also made reference to the significance of evidence as to the common practices of skilled workers in the relevant field in deciding what does or does not form part of the prior knowledge[246].
Once it is appreciated that we are talking here about a "skilled" worker in a sophisticated and technical art; that the worker may, and usually will, operate within a team; and that he or she may take routine experimental steps and conduct tests so as to check hypotheses, the notion that reference cannot be made to industry literature and other readily available data, found on a routine search of the literature, takes on a surrealist air. It is not a conclusion that is necessary, either by the terms of the Act or the decisions of this Court.
It may be that Williams J's view in HPM Industries was consistent with the terms of s 100(1)(e) of the Act and is in fact preferable. It may also be that it is more consistent with international developments in patent law[247]. That view has now arguably found a statutory expression in Australia in the 1990 Act[248]. It may be that Williams J's interpretation is also consistent with a proper analysis of what falls into the "common general knowledge" particularly in those fields of endeavour, which would include most areas of scientific research, where it is normal for researchers to approach tasks by a search of the literature as a very first step. The primary judge may have been too cautious in limiting the results of the literature search. There is no reason why something that was commonly used, or based on an act commonly done in practice, should be treated differently from that which is known, or is in a document or in basic texts in a standard scientific library. However, although this is my opinion, it is not necessary to explore it further in this appeal. The primary judge and the Full Court reached their conclusions without reference to this consideration.
In light of this analysis, it is unnecessary to consider Alphapharm's further contention concerning the inferences alleged to be available as a result of Astra's late action in obtaining the amendment of the patents in suit[249]. It is also inherent in what I have said that I would reject Astra's complaints of procedural unfairness in the Federal Court.

[121]

that the invention, so far as claimed in any claim of the complete specification or in the claim of the petty patent specification, as the case may be, was obvious and did not involve an inventive step having regard to what was known or used in Australia on or before the priority date of that claim".
Without reference to the long history of the Act and the glosses that have been placed upon it, a reader might read the clause, giving all of its words meaning and effect, to mean that a patent should be revoked if, but only if, the invention, that is, its manner of manufacture was not new as appeared in and from the complete specification, it was obvious, and it involved no inventive step. And, as to the last, regard to what was known or used in Australia on or before the priority date of the claim would be necessary.
On the basis of such a meaning, on the evidence, and the trial judge's findings, the respondent's application for revocation would be bound to fail. There was no doubt that the manner of manufacture, the coating of this active agent with the layers of the particular materials used in the respective quantities, thicknesses and places, was new. Let it however be assumed that the invention was "obvious", that is, in the sense that an enteric coated omeprazole pill was such a desirable product that as a concept it was familiar, and therefore obvious to those interested in the subject. Two matters, one clearly, and the other either implicitly found or such that it should have been found by the trial judge, nevertheless necessarily established that an inventive step was involved, having regard to whatever was known or used in Australia at the relevant time, a matter itself of some controversy. The first is that the development of a process of manufacturing an enteric coated pill (after a manufacturer understood that an enteric coated dosage might be effective) which would have followed would have been "a complex, detailed and laborious one, involving a good deal of trial and error, dead ends and the retracing of steps". That such a process might be undertaken as a matter of scientific and industrial routine may readily be accepted. But what actually and precisely had to be done, and was done, by way of unravelling the complexities, identifying and correcting errors, and, in particular, in deciding which steps to retrace, and in which direction to step thereafter, must have involved one or more inventive steps.
It is not entirely clear whether the trial judge did in terms accept the uncontradicted evidence of Dr Marshall an expert called by the respondent. I summarise it. He was the only one of the respondent's experts who was not given a copy of the appellants' patent. He was, in effect, asked to devise his own manner of manufacture of an effective form of oral dosage of omeprazole for adults. In all he made six reports. After the first, he searched a database containing abstracts of various articles. At that stage he had the benefit also of a report by Pilbrant and Cederberg[252] which was provided to him by the respondent. The respondent then instructed Dr Marshall to do further work on the basis of some assumptions that the former asked him to make. Neither his research, any of the further five reports that he made, nor various other communications from the respondent, resulted in an acceptable form of manufacture. In short, Dr Marshall's failure to achieve a satisfactory result, armed as he was with the materials and suggestions that I have mentioned, argues strongly against the absence of any "inventive step". There is no reason why the trial judge should not have accepted Dr Marshall's evidence and given effect to it. Accordingly, I will take his fairly detailed reference to it as acceptance and not a mere narration of it.
However, the ordinary and natural meaning of the words of s 100(1)(e) may not be read, uninstructed by long standing authority. The terms "obvious" and "inventive step" are the antitheses of each other. Buckley LJ in Beecham Group[253] said that "[w]hat is obvious cannot be inventive"[254] notwithstanding that the word "obvious" when used in the Act qualifies "invention" that is, manner of manufacture, whereas "inventive" qualifies a step or steps involved in that manner of manufacture.
The primary judge posed the question for himself in this way[255]:

[123]

It seems to me, with respect, that his Honour placed too much emphasis upon the question whether the relevant steps could be regarded as "routine" or not. I do not think the use of that word in the circumstances particularly helpful, because, as I have pointed out, although the taking and retracing of steps almost certainly would be done as a matter of routine, the selection of each of the steps to be retraced and taken, and the identification of error, are by no means necessarily dictated by any particular routine. Aickin J, although he used the word "routine"[257] in his judgment in Wellcome Foundation was not in my opinion intending to substitute an exclusive test of routineness for the test posed by the statutory language. It is important to keep in mind that the attention of the Court there was focused upon an issue of discovery only, and that his Honour's remarks naturally took into account the types of activities in which researchers and manufacturers would ordinarily be concerned.
It is only to be expected that an expression (now found in the definitions section of the Act[258]) "manner of new manufacture"[259] which predated the Statute of Monopolies in 1623[260] and has repeatedly been construed by courts throughout the common law world, would not have escaped the application of layers of gloss. "Obviousness" has also, naturally, received much judicial attention, for example: something which "would at once occur to anyone acquainted with the subject"[261]; "the obvious or natural suggestion of what was previously known"[262]; "whether the hypothetical addressee faced with the same problem would have taken as a matter of routine whatever steps might have led from the prior art to the invention, whether they be the steps of the inventor or not"[263]; and, simply "very plain"[264]. It is difficult to see why, with respect, any court would have gone beyond the last of the suggested meanings. Authority in the United Kingdom has however entrenched a judicial approach to par (e) of s 100(1) of the Act and its near analogues and analogues elsewhere that questions whether "the alleged inventive step [would be] obvious to a normally skilled addressee in the art"[265]. The variety of forms in which the questions have been asked on other occasions is further illustrated by some examples collected in the Manual of Practice and Procedure[266]:

[134]

In General Tire & Rubber Company Sachs LJ[267] traced some of the history of the current forms of questions, and the use in patent law of the word "obvious", to the speech of Lord Herschell in the American Braided Wire case[268]. What his Lordship was referring to however when he used the word "obvious" in that latter case was the manner of manufacture in total, the "mode" of use, application and fixation of the various components, and not, each, or any, particular step, whether inventive or not, in the achievement of the total invention.
It is easy to see how the tension created by the competing considerations of policy, between reward and incentive for ingenuity, and the desirability of the general availability to humankind of the products of that ingenuity, has contributed to different approaches to the questions and their answers. The problems are compounded by the difficulties of assessing, after the event, what the relevant and reasonably accessible learning or art was at the material time, the complexities for lawyers of the scientific and technical matters in issue, and the fact that almost everything, particularly to people knowledgable in the field, can have an appearance of obviousness after the event. Also almost always present in these cases is the fact that those who seek the revocation of a patent are commercial competitors with like resources and goals to those of the patentee but who have not themselves been able to, or have not had the inspiration to invent the invention. Here, a skilled practitioner, Dr Marshall, armed with suggestions from the respondent, and with the desired result identified for him, was unable to replicate the appellants' pill.
I have formed the view that on any of the stated tests, having regard to Dr Marshall's uncontradicted evidence, its source, from the respondent's side, and the trial judge's apparent and necessary acceptance of it, the answer must still be in the negative. The respondent's submission in this Court that Dr Marshall may have, indeed, even probably would have arrived at the solution had he had more time for experimentation demands no different an answer. The fact alone that he was still weighing up possible alternative methods that may or may not have worked, is a clear indication of an absence of obviousness.
The particular question that authority in this country requires me to ask is the one posed by this Court in Minnesota Mining[269]: whether the pill (as a combination patent) would have been obvious to a non-inventive skilled worker in the field able to select from a possibly large range of publications, and whether it would have been obvious to that worker to select the particular combination of integers from those selected publications[270]. It is important to keep in mind what the question is not, that is, "whether a diligent searcher might find pieces from which there might have been selected the elements which make up the patent."[271]
It may be that in Australia a less rigorous test is adopted than the one currently used in England[272] as was suggested by the Full Court of the Federal Court in ICI Chemicals & Polymers Ltd v The Lubrizol Corporation Inc[273]. United States authority does not assist very much because the statutory provision there contains manifestly different language - 35 USC s103(a) provides as follows:

[139]

In my opinion the primary judge erred in focusing upon, and, with respect, not only attaching too much importance to routineness, but also in failing to distinguish between an established routine, no doubt followed by experiments, of research, of trying out ideas, identifying and correcting errors, of retracing old and taking new steps on the one hand, and, on the other, of the ingenuity involved, in carrying out the routine, of finding and eliminating error and choosing which out of a multiplicity of choices, was the right one. The Full Court of the Federal Court should therefore have upheld the appeal to it.
The Full Court (Wilcox, Merkel and Emmett JJ) chose a different test from either the one that Minnesota Mining requires or the one of "routineness" that the primary judge sought to apply. The Full Court adopted the question posed by Buckley LJ in Beecham Group[279], whether "it is shown that it would appear to anyone skilled in the art but lacking in inventive capacity that to try the step or process would be worthwhile" (emphasis added). And, the Full Court did not, in any event, in applying that test, give effect to the important qualification contained in it, that the notional skilled worker be lacking in inventive capacity.
It is interesting that the Full Court dealt over some fifty or so paragraphs in great detail with the evidence of all of the experts called, with one critical exception, Dr Marshall. Of his evidence the Full Court only observed, erroneously, that his "practical reactions"[280] supported the theoretical evidence of two of the respondent's experts. The primary judge's finding in relation to those two experts was no more than that their "general descriptions … of the way in which they would go about the formulation of a new drug" should be accepted[281].
I cannot leave the discussion of the evidence without some observations of my own. It is clear that at the trial, each of the parties, particularly the appellants took lengthy objections to much of the evidence, especially to parts of the affidavits of the respondent's experts upon which the primary judge did not rule. As almost always, and at this trial, that course was bound to create difficulties for the appellants in cross-examination. What was in evidence, and what was not? What could be taken to have been sufficiently challenged by the tendering of the appellants' own experts' affidavits? The difficulties stemming from his Honour's abstention from ruling were increased by the absence of clear findings as to what he relied upon and accepted.
In those circumstances the Full Court's reliance on a claimed failure of the appellants' counsel to put various matters to the respondent's experts was, with respect, misplaced. These matters strengthen my opinion that the appeal should be upheld. Trial judges should insist upon proper proof of controversial material, and limit the reception of evidence, including evidence in writing, to what is relevant and admissible, by timely rulings on it.
I do not overlook that the issue for decision under par (e) of s 100(1) of the Act has long been said to be in the nature of a jury question. Even so, for the reasons I have given, the appeal must be allowed. Not only was the right test not posed by both the primary judge and the Full Court, but also it was not posed in relation to the compelling uncontradicted evidence of the respondent's own expert, Dr Marshall, whose evidence bore much more directly on the issue than any of the other evidence in the case. And, because this is so, I would not remit the case to the Full Court for further consideration of the application of par (e) of s 100(1) of the Act. There are however other issues outstanding, and the case will need to be remitted for the resolution of these.
I would allow the appeal with costs and order that the respondent pay the appellants' costs of the trial so far, and the appeal to the Full Court. I would remit the case to the Full Court for further disposal.

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