Boehringer Ingelheim International GmbH v Commissioner of Patents

The facts 3 The appellant, Boehringer Ingelheim International GmbH ("Boehringer"), was the grantee of patent no 531074. The patent was granted (under the Patents Act 1952) on 17 November 1983 with a priority date of 4 July 1979. The patent term expired on 4 July 1999. 4 The patent was concerned with compositions for the treatment of nasal hypersecretion (runny nose). However, the subject patent made no claim in respect of the composition alone. Heerey J described the position in this way (at para 3): "Claim 1 of the Patent is as follows: '1. A container comprising an aerosol or spray composition for nasal administration which composition comprises as active ingredient a quaternary tropane alkaloid derivative with atropine-like activity [hereafter "the Substance"], the container being provided with a nozzle adapted for nasal administration of the composition.' Claims 2 and 3 are for a container where the composition comprises or contains specified substances, being more particular forms of the Substance. Claim 4 is for a container claimed in any one of the preceding claims having a metering device. Claim 5 is for the container of claim 4 wherein the metering device is adapted to deliver specified quantities of the Substance. Claims 6 to 9 are directed to methods of treatment of nasal hypersecretion comprising the nasal administration of an effective amount of a pharmaceutical composition comprising as active ingredient the Substance or particular forms or quantities of the Substance. Claims 10 to 12 are omnibus claims. Claim 13 is for a method of treatment as claimed in claim 6 with reference to any one of the Examples. Claims 14 to 16 are directed to an aerosol or spray composition as claimed in claim 1 when used in the container of claim 1." 5 Counsel for the appellant, Mr B Hess and Dr L Duncan, disputed elements of Heerey J's summary. However, they conceded that a container was fundamental to each of the claims, in the sense that, absent a container as described in claim 1, there would be no infringement of the patent. They also said that, absent a pharmaceutical substance as described, there would be no infringement. 6 On 2 July 1999 Boehringer applied for an extension of the patent pursuant to s 70(2)(a) of the Act. The company supported its application with a copy of a certificate of registration, on the Australian Register of Therapeutic Goods, of goods described in this way: "ATROVENT NASAL ipratropium bromide 22 microgram/ actuation spray solution, aerosol pump actuated metered dose" 7 The commencement date of registration of the goods was 30 August 1995. 8 It is common ground in this proceeding that the description on the Therapeutic Goods Register is an accurate description of the therapeutic agent in the pharmaceutical substance that is a component of the compositions referred to in each of the claims of the patent. 9 On 28 August 1999 the application for extension of patent 531074 was rejected by an examiner, on the ground that the identified pharmaceutical substance did not meet the requirements of s 70(2)(a) of the Act. Leave to amend the patent was granted, but the extension refusal was maintained. 10 The extension application was set down for an oral hearing, which was held on 2 February 2000 in Canberra before Ms Gillian Jenkins, a delegate of the Commissioner of Patents. On 3 March 2000, Ms Jenkins issued a decision in which she found "that none of the claims of patent AU 530174 define a pharmaceutical substance per se". In consequence, she refused the extension request.

The hearing before Heerey J 11 On 27 March 2000 Boehringer filed in this Court an application based upon the Administrative Decisions (Judicial Review) Act 1977. The application sought review of Ms Jenkins' decision on several grounds. However, when the matter came before Heerey J for determination, it became clear there was only one substantial issue in the case. At para 1 his Honour described that issue as being: "whether the delegate misconstrued s 70(2)(a) in finding that 'one or more pharmaceutical substances per se' did not 'fall within the scope of the claim or claims' of the specification of the Patent." 12 Heerey J gave judgment on 22 December 2000, dismissing Boehringer's application for review: see Boehringer Ingelheim International GmbH v Commissioner of Patents [2000] FCA 1918. 13 In his reasons for judgment, after describing the claims in the patent and setting out the terms of s 70, Heerey J said (at paras 6 and 7): "Basic to the applicant's case is the submission that the words 'per se' confer no special or different meaning on the expression 'pharmaceutical substance'. In other words, there is no difference between 'pharmaceutical substance per se' and 'pharmaceutical substance'. It being common ground that the Substance is a 'pharmaceutical substance' it follows, so the applicant says, that the condition of s 72(2)(a) is met. At the outset, it can be observed that words are usually inserted in legislation for good purpose. The Latin words 'per se' have an accepted meaning as an expression in English, namely 'by or in itself', 'intrinsically' or 'essentially' (Macquarie, New Shorter Oxford). It would be surprising if the expression as used in s 70(2)(a) added nothing and had no work to do. But, as counsel for the Commissioner submitted, the history of the legislation shows that this is not the case." 14 Heerey J noted that, under Part IX of the Patents Act 1952, a patentee could seek an extension of up to ten years, if it could be shown the patentee had been "inadequately remunerated". Part IX applied to all patents, irrespective of subject matter. However, his Honour said, "extension applications were frequently brought in the case of pharmaceutical patents because regulatory approval requirements often meant that the product could not enter the marketplace until a substantial part of the patent protection period had already passed." 15 Heerey J noted the first particularised legislative treatment of pharmaceutical patents was by the insertion, in 1989, of a new section (s 90) into the 1952 Act. That section read: "(1) Where: (a) a pharmaceutical substance is in substance disclosed in the complete specification of a standard patent and in substance falls within the scope of the claim or claims of that complete specification; and (b) the patentee has requested the issue of a marketing approval certificate in respect of that substance, the patentee may, by notice in writing in accordance with the prescribed form given to the Commissioner not later than 12 months before the end of the term of the patent, apply for an extension of the term of the patent in respect of that substance and any other pharmaceutical substance which is in substance disclosed in the specification and in substance falls within the scope of the claim or claims of the specification." 16 Heerey J commented that, when the 1990 Act replaced the 1952 Act, Part IX of the 1952 Act - as amended in 1989 - "was in substance re-enacted": see ss 70 to 79 of the 1990 Act as originally enacted. However, the Patents (World Trade Organization Amendments) Act 1994 repealed those provisions. As Heerey J recounted: "Section 70 and related sections in their present form were introduced by the Intellectual Property Laws Amendment Act 1998 (Cth). For the first time, provision was made for the extension of not just of a "pharmaceutical patent", but a "pharmaceutical patent per se". 17 Heerey J went on, in paras 13 to 16 of his reasons, to set out his conclusions about the critical issue: "The 1990 Act in its present form manifests a policy which draws a distinction between, on the one hand, a pharmaceutical substance that is the subject of a patent claim and, on the other hand, a pharmaceutical substance that forms part of a method or process claim. The specific exception to the latter (an exception which proves the rule) is the provision for recombinant DNA technology in s 70(2)(b). Broadly speaking, a claim in relation to a pharmaceutical substance can be made in three ways (i) a new and inventive product alone; (ii) an old or known product prepared by a new and inventive process; (iii) an old or known product used in a new and inventive mode of treatment. What is clear in s 70 is that only the first type of claim to a pharmaceutical product is to be subject to extension rights. So far as a new process is concerned, it is only when the new process answers the particular description in s 70(2)(b) (recombinant DNA process) that it can be the subject of an extension. As counsel for the Commissioner submitted, the policy to be deduced in the light of the legislative history is that Parliament has decided that what is intended to be fostered is primary research and development in inventive substances, not the way they are made or the way they are used, with the sole (and important) exception of recombinant DNA techniques, this being an area particularly worthy of assistance for research and development. In the light of this history, the relevance of the expression 'per se' becomes clear. Section 70(2)(a) is only to make extension rights available when the claim is for a pharmaceutical substance as such, as opposed to a substance forming part of a method or process." 18 Heerey J drew support for his conclusion from the Patent Office Manual of Practice and Procedure. He made it clear he did not treat the manual as "extrinsic material like explanatory memoranda or second reading speeches which might reveal what in fact was the intention behind legislation". Rather he used it "in the same way as counsel's submissions or text books or articles in learned journals. It shows a way in which the language of the statute can be given a workable meaning". 19 We find it unnecessary to go beyond the legislative history outlined by Heerey J and the submissions made by counsel to us. 20 Heerey J referred to submissions by Boehringer that Ms Jenkins' approach was inconsistent with the granting of extensions for other patents. His Honour did not think this a fruitful line of argument. We agree. When the argument was put to us, we pointed out to counsel that, even if it was possible to show inconsistency, that would not mean Ms Jenkins erred; the decisions in the other cases may have been wrong. Counsel saw the point and did not press the argument.

The appellant's submissions 21 Counsel for the appellant submit, correctly, that the respondent Commissioner does not dispute that sub-ss (3) and (4) of s 70 are satisfied in this case; the question is whether s 70(2)(a) applies. Counsel say it does; it was erroneous of Heerey J to interpret paragraph (a) "as requiring the claim or claims of the patent to exclusively define a pharmaceutical substance per se or to be limited or confined to a pharmaceutical substance per se". They say s 70(2)(a) "requires … no more than that a pharmaceutical substance must be included in one or more of those claims as an essential feature". Counsel submit that, in the present case, "all of the relevant claims specifically include as an essential feature a pharmaceutical substance per se (the subject of an ARTG registration)". They say it does not matter that each claim also includes one or more other elements. 22 Counsel for the appellant argue their approach is consistent with the policy objectives underlying s 70. They describe those objectives in this way: "• promoting access to new and innovative pharmaceutical products, thus benefiting Australian consumers; and • ensuring that producers of such products obtain an appropriate financial return, having regard to the long time taken to develop and market a new pharmaceutical product." 23 Those objectives are said to be revealed by the Second Reading Speech of the Minister for Customs and Consumer Affairs in connection with the Bill (the Intellectual Property Laws Amendment Bill 1997) that inserted the current ss 70 to 79A into the Patents Act. It is desirable to set out the whole of the relevant part of the speech. The Minister said: "The development of a new drug is a long process. A new chemical entity, from which a pharmaceutical is derived, is patented early in the process. However, considerable research and testing is still required before the product can enter the market. This long development time, combined with the considerable regulatory process to register and market a new product, means that companies usually have considerably fewer years under patent in which to gain a return on their investment. This becomes significant to the industry, as companies rely heavily on patents to generate the substantial cash flows necessary to finance the development of new drugs. A country's patent system is also an important factor in investment decisions. A strong patent system contributes significantly to a positive investment climate and sends a signal that Australia values an innovative pharmaceutical industry. The objective of this part of the bill is to provide an 'effective patent life' more in line with that available to inventions in other fields of technology. It will also create a patent regime for pharmaceuticals which is in line with our competitors. An extension of up to five years will be available for a standard patent relating to a pharmaceutical substance that is the subject of first inclusion on the Australian Register of Therapeutic Goods. The scheme will apply to all existing 20-year patents as well as those patents granted after the commencement of the scheme. An extension is not, however, automatic. Companies will need to apply within six months of the inclusion of the product on the ARTG or within six months of the date the patent is granted, whichever is the later. Transitional arrangements will be put in place to accommodate existing patents. The new arrangements make provision for 'springboarding' activities. This allows manufacturers of generic drugs to undertake certain activities prior to the expiry of the patent solely for the purposes of meeting pre-marketing regulatory approval requirements. Companies will be permitted to springboard any time after the extension has been granted." See House of Representatives, Official Hansard, 26 November 1997, 11274-11275. 24 Counsel for the appellant submit the words "per se" "make no substantial contribution to, and provide no limitation upon, the statutory provisions of s 70(2)(a), especially having regard to the stated Government policy of this section". In that connection, they quote two extracts from the Explanatory Memorandum for the Bill: "The extension of term provisions will be available for patents that include claims to pharmaceutical substances per se provided the other criteria are met. These claims to pharmaceutical substances per se, would usually be restricted to new and inventive substances. Patents that claim pharmaceutical substances when produced by a product by process claims, will not be eligible unless the process involves the use of a recombinant DNA technology. Claims which limit the use of a known substance to a particular environment, for example claims to pharmaceutical substances when used in a new and inventive method of treatment, are not considered to be claims to the pharmaceutical substance per se. … The extension of term provisions will not be available for claims to new processes of making pharmaceutical substances or new methods of using pharmaceutical substances, where the substances themselves are known." 25 Counsel for the appellant referred to the decision of Lee J in Astra Lakenedel Aktiebolag v Commissioner of Patents (1995) 31 IPR 1 ("Astra"), relating to an application for a patent extension made under the provisions enacted in 1990. They argue the current provisions should be interpreted in such a way as to provide the result reached in that case. 26 Counsel submit the words, in s 70(2)(a), "must in substance be disclosed in the complete specification of the patent" mean no more than that the pharmaceutical substance must be a specific claimed feature of the invention. They say that is the situation in the present case; it does not matter that the substance appears only as one element in a combination of elements. 27 Counsel deal in this way with the words "fall within the scope of" the claim or claims of the specification: "In the Applicant's submission, the requirement that a pharmaceutical substance per se 'fall within the scope of' the claim or claims of the specification should be interpreted with regard to the purpose of the legislation. On the one hand, it is clear the intention of the legislation is to exclude from extension, patent claims with no reference at all to a pharmaceutical substance. Thus, for example, claims to mechanical combinations, chemical processes, chemicals for use in agriculture and industry (including for example pesticides and herbicides) would not qualify for extension under s70(2)(a) of the Act. On the other hand, it is equally clear that claims which define or are confined or limited to a pharmaceutical substance per se, being exclusively an active ingredient (perhaps with carriers and/or excipients) would clearly fall within the legislative provisions (assuming that ARTG registration had been obtained). So much would not be disputed by the Respondent. In the Applicant's submission, … the plain words of the requirement that a pharmaceutical substance per se [must] 'fall within the scope of' the claim or claims of the specification should be given a natural meaning in the context of the legislation. The expression mandates nothing more than that the claims include as an essential feature the pharmaceutical substance."

The respondent's submissions 28 Counsel for the respondent, Mr G C McGowan and Mr B J Fitzpatrick, took the Court through the history of Australian legislation permitting patent extensions. They pointed out the provisions initially included in the 1990 Act enabled a patentee to "apply for an extension of term of the patent in respect of that [pharmaceutical] substance: see s 70(1)". This requires the patentee, in the words of counsel, "to propose claims in order to articulate the pharmaceutical substance in respect of which an extension was sought": see s 71(b). 29 Counsel suggest the 1998 provisions followed a different strategy: "… there was no requirement for a patentee to propose claims for the extension. Rather, s 70(2)(a) provided that, if a relevant pharmaceutical substance per se was in substance disclosed, and in substance fell within the scope of at least one claim, an extension would be granted for the whole patent. The only exception to this was s 70(2)(b) which provided that claims directed to a pharmaceutical product produced by the use of recombinant DNA technology were also capable of extension. This was balanced by s 78, which provided that, notwithstanding that the whole patent was extended, the patentee was only given exclusive rights in relation to the pharmaceutical substance per se for its therapeutic use." 30 Section 78 is as follows: "(1) if the Commissioner grants an extension of the term of a standard patent, the exclusive rights of the patentee during the term of the extension are not infringed: (a) by a person exploiting: (i) a pharmaceutical substance per se that is in substance disclosed in the complete specification of the patent and in substance falls within the scope of the claim or claims of that specification; or (ii) a pharmaceutical substance when produced by a process that involves the use of recombinant DNA technology, that is in substance disclosed in the complete specification of the patent and in substance falls within the scope of the claim or claims of that specification; for a purpose other than therapeutic use; or (b) by a person exploiting any form of the invention other than: (i) a pharmaceutical substance per se that is in substance disclosed in the complete specification of the patent and in substance falls within the scope of the claim or claims of that specification; or (ii) a pharmaceutical substance when produced by a process that involves the use of recombinant DNA technology, that is in substance disclosed in the complete specification of the patent and in substance falls within the scope of the claim or claims of that specification. (2) If the Commissioner grants an extension of the term of a standard patent, the exclusive rights of the patentee after the grant of the extension are not infringed by a person exploiting: (a) a pharmaceutical substance per se that is in substance disclosed in the complete specification of the patent and in substance falls within the scope of the claim or claims of that specification; or (b) a pharmaceutical substance when produced by a process that involves the use of recombinant DNA technology, that is in substance disclosed in the complete specification of the patent and in substance falls within the scope of the claim or claims of that specification; solely for the purposes in connection with: (c) having goods included in the Australian Register of Therapeutic Goods, where the goods are intended for therapeutic use; or (d) obtaining similar regulatory approval under a law of a foreign country or of a part of a foreign country." 31 Counsel for the Commissioner argue Heerey J did not err in law. They say: "The simple reason for this is that all of the claims are limited by reference to a container, or directed to methods of treatment, and are therefore not directed to a pharmaceutical substance per se. The claims of Patent No. 530174 therefore do not satisfy the second requirement of s 70(2)(a). The effect of s 70(2)(a) insisting that substances fall within the scope of the claims of the specification is to prevent any extensions of term from having a broadening effect on the claims of the extended patent. This policy of not allowing any broadening by extensions is demonstrated by the new s 78. To extend the patent in this case would have that very effect of widening when it did not, during its primary term, include protection for the substance alone. This would make an infringement something which was not previously an infringement. Alternatively, if s 70 is construed consistently with s 78 and the accepted tests for infringement were applied, the extension of term would be of no effect as the patentee's rights pursuant to s 78 could never be infringed." 32 Counsel submit that, as noted by Heerey J: "there are three types of claims relating to pharmaceutical products. The first type is to a new and inventive pharmaceutical substance. The second is to a known product produced by a new and inventive process. The third type of claim is for a known product used in a new and inventive method of treatment. It is clear that the legislature intended that s 70(2)(a) relate only to the first type of claim. Accordingly, it is only claims to new and inventive pharmaceutical substances per se which are capable of being extended pursuant to s 70. The only exception to this is s 70(2)(b) which provides that the second type of claim, when the pharmaceutical substance is produced by a process that involves the use of recombinant DNA technology, may also be extended." 33 Counsel suggest this intention is disclosed in the first extract from the Explanatory Memorandum that is quoted in para 24 above. 34 Referring to the meaning of "per se", counsel quote dictionary definitions: "by or in itself, intrinsically, essentially" (New Shorter Oxford English Dictionary), "taken alone; essentially; without reference to anything else" (Butterworth's Australian Legal Dictionary); "taken alone" (Osborn's Concise Law Dictionary, 6th ed). Counsel say: "The introduction of this wording into section 70 by the 1998 amendments indicates a clear intention by the legislature to limit the operation of s 70 to patents disclosing and claiming a pharmaceutical substance by or in itself." 35 Counsel for the respondent submit the words, "in substance fall within the scope of the claim or claims" of the specification, refer to the elements that make up the claim or claims. They point out that, if one essential integer is removed from a patent claim, the effect is to broaden the claim. They note their opponents concede that the use of the pharmaceutical substance itself would not be an infringement; it would be necessary for the infringer also to replicate the additional elements of any claim that was said to be infringed. It follows, according to counsel, that the pharmaceutical substance, standing alone, does not "in substance fall within the scope of" any claim of the specification. 36 Finally, counsel for the Commissioner submit the appellant's reliance on the decision of Lee J in Astra is misplaced; that decision was made with respect to s 70 of the 1990 Act; the words "per se" did not appear in that section; moreover Lee J placed reliance on other provisions in the repealed legislation that were not re-enacted in 1998.

Conclusions 37 The submissions made on behalf of the respondent are clearly to be preferred. We think the decision of Heerey J was correct, substantially for the reasons his Honour set out in paras 13 to 16 of his reasons for judgment, reproduced at para 17 above. 38 There are serious difficulties about the appellant's argument. One is that it effectively reads out of s 70(2)(a) the words "per se". On the appellant's argument, it is enough that the complete specification disclose one or more pharmaceutical substances, whether as the sole element in an invention or in combination with other elements. If that had been the legislative intention, the paragraph could have read: "one or more pharmaceutical substances must in substance be disclosed". There would have been no need for "per se". 39 Second, the Second Reading Speech and the Explanatory Memorandum provide no support to the appellant's argument; quite the contrary. The Second Reading Speech speaks about the "development of a new drug" and the research and testing required before "the product" can enter the market. This is plainly a reference to the drug itself; not to the drug in combination with other elements. 40 Similarly, the Explanatory Memorandum says that claims to "pharmaceutical substances per se, would usually be restricted to new and inventive substances". The Explanatory Memorandum excludes the application of the new provisions to "new processes of making pharmaceutical substances or new methods of using pharmaceutical substances, where the substances themselves are known". 41 Third, as counsel for the respondent pointed out, the appellant's argument produces an interpretation of s 70 that is anomalous, having regard to s 78. It is apparent from s 78(i)(b)(ii) that only exploitation of the pharmaceutical substance itself by a third party is an infringement during the extended term. No other embodiment of the invention is protected. In the present case, however, exploitation of the substance itself is not an infringement of any claim which might be extended. 42 The appellant's best point is that in ordinary usage a necessary integer of a whole would be regarded as falling within the scope of that whole. However, in the context of s 70(2)(a), we think that falling within the scope of a claim in a patent specification means included amongst the things claimed. Here, the substance, in itself, is not a thing claimed in the patent sense. 43 We agree with counsel for the respondent that the decision of Lee J in Astra provides no assistance in this case. It dealt with different legislation.

Disposition 44 The appeal should be dismissed. 45 There was debate between counsel concerning the appropriate costs order if the appeal were successful. As that is not the case, we need not deal with the submissions put to us on that matter. It was common ground that, if the appeal failed, the appellant should pay the respondent's costs. We will so order.

I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.

Counsel for the Applicant: B Hess and Dr L Duncan

Solicitor for the Applicant: Callinan Lawrie Solicitors

Counsel for the Respondent: G C McGowan and B J Fitzpatrick

Solicitor for the Respondent: Australian Government Solicitor