Consideration
107 The discretion arising under s 105 of the Act is broad. However, it is generally exercised by reference to a number of guiding principles that seek to balance the right of the patentee to apply to amend its patent in an appropriate case and the public interest in ensuring that an amendment application is made promptly, for proper purposes, and not so as to allow the patentee to obtain an unfair advantage were it to be allowed. The most well-known statement of the guiding principles appears in the following passage from judgment of Aldous J in Smith Kline & French Laboratories Ltd v Evans Medical Ltd [1989] 1 FSR 561 at 569:
The discretion as to whether or not to allow amendment is a wide one and the cases illustrate some principles which are applicable to the present case. First, the onus to establish that amendment should be allowed is upon the patentee and full disclosure must be made of all relevant matters. If there is a failure to disclose all the relevant matters, amendment will be refused. Secondly, amendment will be allowed provided the amendments are permitted under the Act and no circumstances arise which would lead the court to refuse the amendment. Thirdly, it is in the public interest that amendment is sought promptly. Thus, in cases where a patentee delays for an unreasonable period before seeking amendment, it will not be allowed unless the patentee shows reasonable grounds for his delay. Such includes cases where a patentee believed that amendment was not necessary and had reasonable grounds for that belief. Fourthly, a patentee who seeks to obtain an unfair advantage from a patent, which he knows or should have known should be amended, will not be allowed to amend. Such a case is where a patentee threatens an infringer with his unamended patent after he knows or should have known of the need to amend. Fifthly, the court is concerned with the conduct of the patentee and not with the merit of the invention.
108 The fact that a patentee failed to act promptly after becoming aware of facts or circumstances that would lead a reasonable person to apply to amend the claim may provide a sufficient basis for refusing an application to amend. Such facts and circumstances will usually include the state of the prior art and the patentee's knowledge of it and the scope of the relevant claim including, for example, the absence of any limitation that the patentee may wish to introduce. Ultimately, however, these are matters that must be considered in light of all other facts and circumstances relevant to the exercise of a broad statutory discretion.
109 An assumption underlying Apotex's submissions is that Neurim understood, or ought reasonably to have understood, that there was a need to amend claim 1 to avoid the relevant prior art. The correctness of that assumption depends upon a consideration of the scope of claim 1 and the relevant prior art.
110 Although Professor Zisapel's understanding of the prior art was explored at length in her cross-examination, the scope of claim 1 received less attention in cross-examination and Apotex's closing submissions. Professor Zisapel's evidence indicates that she has always understood claim 1 of the Patent to be confined to the use of the relevant compounds in the manufacture of a medicament for treating and improving the restorative quality of sleep in a patient suffering from primary insomnia. Apotex did not suggest that Professor Zisapel's evidence of her understanding should not be accepted or that it did not reflect her honest and reasonable belief.
111 On Professor Zisapel's interpretation, claim 1 only covers one medical use, namely, the treatment of lack of restorative sleep in patients suffering from primary insomnia. On her view of claim 1, the words "and improving the restorative quality of sleep in said patient" would convey to the skilled addressee that the patient's primary insomnia is characterised by non-restorative sleep. The proposed amendment would, if allowed, make this clear.
112 However, claim 1 of the Patent is open to a broader interpretation that covers the use of the relevant compounds in the manufacture of a medicament for the treatment of primary insomnia or for improving the restorative quality of sleep. If the claim was to be interpreted in that manner then the case for finding the claim invalid on the basis that it was either not novel or obvious would seem to me to be quite strong. In these circumstances, I think the application for amendment should be approached on the basis that the patentee in this case either knew or ought reasonably to have known that if claim 1 was given the broader interpretation to which I have referred then there would be a substantial risk that claim 1 would be invalid. The question that then arises is whether Neurim should have appreciated that claim 1 might well be given the broader interpretation to which I have referred.
113 Professor Zisapel's evidence as to her understanding of claim 1 was not challenged in cross-examination and I accept that she has always believed that the claim should be interpreted as covering one medical use. Although her own understanding of the meaning of claim 1 is relevant, it is of course necessary to look to see what objective support exists for that understanding and what other facts and circumstances should have alerted Professor Zisapel to the possibility that the claim might be more broadly interpreted. It is in this regard that Apotex points to the amendments made in the USA, Canada and Europe.
114 The USPTO did not raise any issue as to the proper construction of the words "in treating and improving the restorative quality of sleep in a patient suffering from primary insomnia." The amendments made on 16 April 2008 appear to me to have been aimed at making clear what the USPTO may well have understood to be the effect of the claims before amendment, namely, that it was directed to the use of the relevant compounds in the treatment of primary insomnia resulting from a lack of restorative sleep. In my view, the objections raised by the USPTO had more to do with a lack of understanding of the different types of primary insomnia and, in particular, the differences between lack of sleep and poor sleep quality (ie. a lack of restorative sleep). I do not think the prosecution history of the US patent supports the view that Professor Zisapel should have appreciated that claim 1 of the Patent as granted was, or may well be, invalid in the absence of an amendment making clear that it was directed to a treatment for primary insomnia characterised by non-restorative sleep.
115 The position in Canada was not dissimilar. As previously explained, the objection that was raised by the Examiner in Canada was that the use of melatonin to improve restorative sleep was not novel. The amendment to claim 1 appears to have been aimed at bringing it into alignment with the claim allowed by the USPTO following the USPTO's consideration of Professor Zisapel's declaration on which Neurim also relied in Canada.
116 In Europe the objections raised by EPO as set out in its response of 2 February 2011 raised numerous issues, but did not suggest that claim 1 (which had not been amended at that stage) would be invalid merely because the prior art showed that melatonin had been used in the treatment of primary insomnia. On the contrary, my reading of the correspondence between the EPO and Neurim's attorneys suggests that it understood that claim 1 in its original form was directed to treating and improving the restorative quality of sleep in patients suffering primary insomnia due to poor sleep quality.
117 Accordingly, I do not think the prosecution history in the USA, Canada or Europe should have indicated to Neurim that, absent the amendments now sought to be made, claim 1 of the Patent was, or may well be, invalid.
118 Another matter that needs to be taken into account is the patent specification itself. The specification expressly states that the invention relates to a method of treating primary insomnia when characterised by non-restorative sleep and proceeds to discuss the invention in the context of improving the restorative quality of sleep in subjects suffering from primary insomnia. While I do not propose to decide the question of construction, I think I can say that Professor Zisapel's interpretation of claim 1 finds considerable support when read in the context of the specification as a whole.
119 In a situation where amendments made to claims in a patent application in a foreign jurisdiction are relied upon as a basis for inferring that the owner of an Australian patent that has previously been granted should have been aware of the need to make amendments in the same or similar terms to the claims of the Australian patent, it would be wrong to assume that the amendments made in the foreign jurisdiction were made because the patent applicant understood, or should have understood, that the claims would or may be invalid in the absence of those amendments. This is because a patent applicant may reasonably believe that the claims granted in unamended form would be valid but that it is nonetheless desirable to amend in order to overcome an objection.
120 The history of the European application (the European patent having been granted some 15 years after the PCT application was filed) provides a vivid illustration of why a patentee might think it expedient to amend to overcome an objection which the patent applicant believed, on reasonable grounds, lacked substance.
121 Another reason to be cautious in drawing an inference against a patent applicant in such circumstances is that the patent laws of the foreign jurisdictions are quite different to the laws against which the validity of the Australian patent is to be assessed. In the present case the principles applicable to a challenge to the claims of the Patent based on alleged insufficiency, lack of fair basis and obviousness are different from the principles that the EPO was required to apply when considering the European application. However, I accept that this point will have considerably less force when the alleged invalidity is founded upon an alleged lack of novelty.
122 In the result, I do not accept Apotex's submission that Neurim has known, or ought reasonably to have known, since at least 10 August 2011, that claim 1 of the Patent in its current form was, or may well be, invalid on the ground that it was not novel or did not involve an inventive step in the absence of the non-restorative sleep limitation. On the contrary, I am satisfied that Neurim had reasonable grounds to believe that there was no need for such an amendment because it reasonably believed that claim 1 would be construed in accordance with Professor Zisapel's interpretation of it.
123 The other proposed amendments to claim 1 remain to be considered.
124 The claims of both the US patent and the Canadian patent do not include the melatonin limitation. The objection raised by the EPO (ie. that the class of compounds described as "melatonin agonists" was insufficiently defined) was not raised in the USA, Canada or Australia. Nor is there any evidence from which I would infer that the melatonin limitation was introduced due to a concern that the term "melatonin agonists" is not sufficiently clear or that its continued presence would have any impact on the validity of the claim. For that reason I do not accept that Neurim delayed bringing its amendment application in circumstances where it knew, or ought reasonably to have known, that claim 1 may be invalid in the absence of the melatonin limitation.
125 As to the prolonged release limitation, it also does not appear in either the US patent or the Canadian patent. It is not clear why the prolonged release limitation was introduced into the claims of the European Patent. While the amendment may have more fully described the invention, there is no evidence to indicate that it was introduced into the European application for the purpose of avoiding relevant prior art. I do not think there is any basis to find that Neurim knew, or ought reasonably to have known, that claim 1 of the Patent may be invalid in the absence of the prolonged release limitation.
126 The range limitation is not included in the independent claims of the US patent or the Canadian patent both of which specify "an effective amount within a range of 0.0025 to 50 mg". In Europe, claim 1 in the amended form proposed by Neurim on 10 August 2011 specified 2 mg rather than a range. There is nothing in the evidence to indicate that Neurim concluded that it was necessary to confine claim 1 of the European application to a the 2 mg dosage in order to avoid prior art.
127 It follows that I do not accept that Neurim has been guilty of unreasonable delay in seeking to amend the Patent or that it has taken any unfair advantage by retaining the benefit of a monopoly that it should have appreciated was broader than was justified.
128 With regard to disclosure, I am not persuaded that there has been any failure by Neurim to make full and frank disclosure of matters relevant to the proposed amendments. In particular, I do not accept the submission that Neurim has failed to give a full and frank disclosure of its reasons for seeking to make the relevant amendments. In my view they have been adequately disclosed in Professor Zisapel's written and oral evidence.
129 In the circumstances, I am satisfied that this is a case in which the proposed amendments to claim 1 should be allowed.
130 The respondents did not advance any separate or different arguments in opposing the proposed amendments to the other claims or to the body of the specification. I am satisfied that all of the other proposed amendments should be allowed.
131 The respondents submitted that there should be an order that Neurim pay the respondents' costs of the interlocutory application in accordance with what they referred to as the usual practice: see Bayer Pharma Aktiengesellschaft v Generic Health (2012) 99 IPR 59 at [232]. Neurim did not make any contrary submission and, in those circumstances, I am satisfied that this is the appropriate costs order to make.
132 There will be orders accordingly.
I certify that the preceding one hundred and thirty-two (132) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholas.