Two articles of importance: the Cho article and the Schiestl article
34 Two scientific articles loomed importantly in the debate. The first was referred to as the Cho article and was discussed by Dr Ibarra in her first affidavit. The primary judge described it at [41] and described Dr Ibarra's evidence about it at [42], as follows:
[41] Dr Ibarra draws attention to an article entitled "Evaluation of the structural, physicochemical, and biological characteristics of SB4, a biosimilar of etanercept" by Cho et al (Cho article). The Cho article records that it was written by employees of SBK or its collaborator, Biogen, and the work was funded by SBK. It refers to a product identified as "SB4" which is accepted by SBA to be the BRENZYS etanercept product. Dr Ibarra notes that the Abstract indicates that SB4 was developed as a biosimilar to ENBREL and refers to extensive structural, physicochemical, and biological testing that was performed using state-of-the-art technologies during a side-by-side comparison of the two products.
[42] In her evidence in chief at [121], Dr Ibarra notes five relevant matters in relation to the assessment in the Cho article of the similarities between BRENZYS and ENBREL; (a) the amino acid sequences were identical; (b) the characteristics of certain disulfide-linked peptides and their bonds; (c) that a total of 23 peaks corresponding to N-glycan structures were detected by hydrophilic interaction liquid chromatography, and 21 species of N-glycan were identified in SB4. This suggested, according to the authors, that the structure of each N-glycan species on SB4 was identical to that of the corresponding species on the reference product and that there was no N-glycan structure specific only to SB4; (d) that the level of Peak 3 impurity consisting of both aggregates and disulfide-scrambled species, was lower for SB4 than for the reference product; and (e) the overall ability of SB4 to inhibit TNF was similar to that of the reference product. In her reply evidence, Dr Ibarra places significant reliance on (c), to which I refer further below. Matter (d), on its face, is a dissimilarity between BRENZYS and the reference product, while matter (e) simply suggests that the efficacy of both products is 'similar'. Comparable efficacy is a requirement to establish biosimilarity, and as is addressed below, this is not of itself sufficient to support an inference that the BRENZYS Process takes the integers of the patents.
35 The matter (c) referred to in [42] is the glycosylation profile that came to be at the centre of the debate between Dr Ibarra and the witnesses called by SBA. Put shortly for the moment, Dr Ibarra's view was that the close similarity of the glycosylation profiles of ENBREL and BRENZYS was a basis to believe that the same upstream bioprocessing process (phase (b)) had been employed by SBA as used by Pfizer.
36 At [43] to [46], the primary judge discussed the views of Prof Mahler who contested Dr Ibarra's views in para 121 of her affidavit, discussed by the primary judge at [42] of his reasons (see above). After recording that Pfizer accepted in argument that the similarity in features (a) and (b) referred to in [42] was unlikely to bespeak similarity of process, the primary judge said the following at [45] and [46]:
[45] Professor Mahler developed his observations in this regard by reference to an article entitled "Acceptable changes in quality attributes of glycosylated biopharmaceuticals" in Nature Biotechnology 2011 by Schiestl et al (Schiestl article) which is referred to in the materials annexed to Dr Ibarra's first affidavit. The changes identified in this article arise from the change in the manufacturing process of ENBREL. The Schiestl article says (emphasis added):
The data [for ENBREL] revealed a highly consistent quality profile for batches having expiry dates until the end of 2009. After this time period, batches with a second and changed quality profile appeared on the market in parallel (Fig. 3). Major differences were found in the glycosylation profile. The amount of variants containing the N-glycan G2F decreased from ~50% in the pre-change to ~30% in the post-change material (Fig. 3b, d and Supplementary Fig. 3b, d). The CEX analysis showed a change of the amount of the basic variants, which corresponds primarily to C-terminal lysine variants from 15-30% in the pre-change to 40-60% in the post-change material (Fig. 3a, c and Supplementary Fig. 3a, c). As for the other products … the pre- and the post-change versions of Enbrel were also marketed under the same label.
…
… the data we present here reveal substantial alterations of the glycosylation profile for all tested products. Different lots of… Enbrel also showed changes of the N- and C-terminal heterogeneity. … Because of the abruptness and the magnitude of the observed alterations, they are most probably caused by changes in the manufacturing processes. As the glycosylation profile is defined by the production cell line, growth conditions and the purification sequence, these findings may reflect changes in one or more of these components. The data indicate the magnitude of changes in quality attributes of marketed products. All tested products remained on the market with unaltered labels in the tested time frame, indicating the observed changes were predicted to not result in an altered clinical profile and are therefore acceptable by the health authorities.
[46] Professor Mahler agrees with the conclusions expressed in the Schiestl article insofar as they suggest that the changes in the ENBREL product signify a change in the manufacturing process, that the change could be a change in any one of phases (a) (cell line production), (b) (upstream growth conditions) or (c) (downstream processing) and that despite the changes the regulatory authorities were apparently satisfied that the changes did not result in clinically significant differences to the end product.
(Emphasis in the primary judgment)
37 The Schiestl and Prof Mahler's views are crucial to two aspects of the argument. Pfizer submits that the major differences in the glycosylation profile, referred to in the first quoted paragraphs of Schiestl, is explained by the change in production process (in phase (b)) from the use of bovine serum to a serum-free method. This reinforced the belief that a change in process in phase (b) leads to differences in the glycosylation profile, and similarity in process in phase (b) leads to similarity in glycosylation profile. SBA, on the other hand, emphasised Prof Mahler's views that the glycosylation profile is defined not just by phase (b) but also by phases (a) and (c). (See the underlined part in the second quoted paragraph in [45].) This was the foundation of his view that similarity in glycosylation profile did not necessarily tell one anything about the process of the upstream bioprocessing process (phase (b)).
38 After a discussion of the cases on preliminary discovery, the primary judge considered the arguments of the parties. Before examining his Honour's approach, it should be stated that there was no suggestion that the primary judge misstated how Pfizer put its case, which he summarised at [57] as follows:
Pfizer relies on six contentions which it submits, when considered cumulatively, give rise to the conclusion that it has the requisite belief within FCR 7.23(1)(a). I consider each separately below, and then cumulatively when I express my conclusions.
39 The first contention of Pfizer concerned satisfaction of three integers of claim 1 of the 034 and 036 patents, and integer 1 of claim 1 of the 632 patent. The primary judge thought this was neutral (see [58]). This was not contested on appeal.
40 The second contention was said to be the advantage and opportunity by knowledge of the patent, and was put as described by the primary judge at [59]:
Pifzer contends that in the development of the process for making BRENZYS, SBK had incentives, due to the advantages set out in the patents of the claimed processes and the widely recognized importance of those advantages, and the opportunity, given that the patents had been published, to adopt the processes used in the patents.
41 From [60] to [65], the primary judge referred to Dr Ibarra's and Prof Mahler's evidence about the patents and their advantages as supporting the proposition that there was an incentive to use them:
[60] As to the incentive for a party such as SBK to utilise the patents, Pfizer points to the evidence of Dr Ibarra who summarises the effect of the patents. In relation to the 034 and 036 patents, Dr Ibarra says that the process provides an improved system for large-scale production of polypeptides in cell culture, which involves the provision of amino acids, glutamine, asparagine, inorganic ions and concentrations that support relatively high levels of viable cell density and cell production that result in lower accumulation of metabolic waste products. These advantages are, it is said, reflected in the integers of the claims, which provide ranges desirable for media formulations.
[61] Professor Mahler's evidence refers to each of the patents. Dr Ibarra in her evidence in reply does not specifically take issue with the Professor's evidence concerning the effect of the patents. He understands the 034 patent to be concerned with phase (b), upstream processing and in particular "Media Prep" feeding into the large-scale bioreactors. In particular, he understands it to be primarily directed to batch and fed-batch processes with minimal feeds, although perfusion processes are not necessarily excluded. He points out that although the 034 patent teaches that a culture medium with "one, several or all" of the characteristics set out in integers 5 - 9 of claim 1 of the 034 patent may be used to optimise cell growth he observes that the patent does not teach that a culture medium with one or more of those characteristics will necessarily optimize the conditions of cell grown, viability and/or protein production (including etanercept). Professor Mahler developed this point by reference to an example given in the 034 patent of the use of a medium containing glutamine and having a medium characteristic selected from the group selected from the ranges set out in integers 5 - 9 of claim 1. He notes that the example given demonstrated that the medium having none of the characteristics identified within the ranges in the claim demonstrated a growth rate of relevant cells that was similar to that which did fall within the ranges.
[62] In relation to the 036 patent, Professor Mahler notes that it is generally concerned with the same aspects of the biologics production process as the 034 patent.
[63] In relation to the 632 patent, the process claimed is said in the specification to produce proteins such as etanercept with less aggregates and fewer misfolded proteins, in circumstances where the presence of such things is said to be undesirable because it may lead to an adverse event upon administration to patients. Dr Ibarra gives evidence that cells grown in cell cultures at temperatures above 30˚C and at a pH above 7 can result in increased cell aggregation and misfolding compared to cells grown in cell cultures within this temperature and pH range.
[64] In relation to the 632 patent, Professor Mahler expresses the view that it is also generally concerned with phase (b), upstream bioprocessing, but, unlike the other two patents, more particularly with the bioprocessing or environmental conditions, which take into account dissolved oxygen concentration, osmolality, pH, temperature and shear. He notes that there are many steps in the production process which precede and follow those aspects and which collectively impact on the final product.
[65] Professor Mahler takes issue with a suggestion in Dr Ibarra's affidavit that if the method claimed in claim 1 of the 632 patent is followed there will necessarily be a reduction in aggregates and fewer misfolded proteins. He says that this is not established, in particular because the cell line used in the experiments in the 632 patent is not disclosed and is likely to be a proprietary master cell line which is not available to the public. Different cell lines will behave somewhat differently under various culture conditions. It does not follow that the results in one may be extrapolated to all other master cell lines.
42 It is to be noted that Prof Mahler's views in [64] and [65] reinforce his view elsewhere expressed and discussed by the primary judge at [45] of his reasons (see [36] above) that the process used in phase (b) is but one of a number of factors that affect the characteristics of the final product.
43 One can see in this debate about the evidence that the application and its resolution are being directed towards the resolution of scientific issues by reference to competing views of scientists. It is to be noted that Dr Ibarra's views are, however, not being criticised as ones that cannot reasonably be held by anyone in her position.
44 On appeal it was submitted that the analysis of the patents undertaken revealed an overly detailed analysis by the primary judge going beyond what was necessary and appropriate to assess whether Pfizer reasonably believed that it may have a right to relief. I will say something more as to the correct question to ask and the correct framework of analysis in due course, but at this point, it can be said simply, and in defence of the primary judge, that his Honour was dealing with the arguments that were put to him by the parties.
45 At [66], the primary judge expressed his conclusions about the advantages of the patents as follows:
I accept that the patents point to advantages in the methods to which they refer. I also accept that these advantages are confined to discrete aspects of the phase (b) part of a process that may, but need not necessarily, be used to produce etanercerpt. In the result, I give a little, but not a great deal of weight to any inference arising from the "desirable" aspect of the patents in suit insofar as it is submitted to provide an "incentive" to a third party to following the process described. The patent claims are not specifically directed to etanercept. Absent other evidence to suggest that the processes described may have been used, the fact that these patents exist does little to indicate that the processes described therein have been utilized in the BRENZYS Process. This point rises little above the proposition that "a patent exists, therefore it must be desirable to adopt the features therein". I accept, however, that the fact that the patents were published before SBK commenced work on the development of BRENZYS indicates that there was an opportunity for SBK to review them. The affidavit of Mr Lee gives some indication of the size and scope of the work conducted by SBK in developing BRENZYS and it is entirely possible that the patents were obtained in searches.
46 The error in this assessment that was asserted in submissions on appeal by Pfizer was the sentence that: "The patent claims are not specifically directed to etanercept". To the extent that this is to be taken as a statement that the patents do not mention etanercept, it is wrong. It is, however, correct to say that the patents are not process patents directed to the production of the product etanercept, as opposed to patents for the bioprocessing of proteins and polypeptides that can be used in the production of etanercept. There was little doubt that the primary judge understood this distinction.
47 The third contention concerned the fact that a serum-free process is used to produce BRENZYS.
48 The contention was put at a broad level of generality and as one of several cumulative inferences to suggest that the process to produce BRENZYS is similar to the Pfizer process: see [68] of the reasons.
49 The contention in Dr Ibarra's evidence was referred to by the primary judge at [67] as follows:
The product information for the BRENZYS products states that their active ingredient etanercept is manufactured using a "serum free process". Dr Ibarra states in her evidence that since 2007 the manufacture of etanercept for the ENBREL products has employed a process that is serum free. Her evidence is that the Pfizer Process is the only serum-free process that she knows of that has been used for the commercial production of etanercept. Whilst the Pfizer Process is not publicly known, the patents in suit provide, in Pfizer's submission, an opportunity for the manufacturer of a biosimilar to emulate the Pfizer Process by adopting aspects of the method of production described and claimed. In this regard, Pfizer points to evidence that indicates that manufacturers are recommended, so far as possible, to look for guidance in the production of a biosimilar from the processes used by the innovator. Such recommendations are to be found in the World Health Organization Guidelines on evaluation of similar bio-therapeutic products.
50 The primary judge agreed with SBA's submission that there is no real weight to this contention - the serum-free process is not part of the patents and is not indicative that the patents have been used; a number of patents and papers have been written describing serum-free processes for the production of etanercept and like proteins; and the fact that Dr Ibarra does not know of any commercially used process other than Pfizer's is hardly surprising, given that competitors will keep their processes confidential.
51 In fairness to Dr Ibarra, these criticisms would appear to over-analyse this contention as a deconstructed element of her overall belief. That serum-free production of the product is not part of the patents is neither here nor there. It is relevant to the similarity of process in phase (b). Further, it may be that there are reasons why her view about not knowing about other (if there are any) commercially used serum-free process is limited by process confidentiality; but that does not mean that it cannot be a factor that reinforces a belief otherwise founded that there may be infringement.
52 The fourth contention was at the heart of the appeal. It concerns biosimilarity and glycosylation profiles and was expressed in [73] in terms that were not said to misstate the submission:
Pfizer contends that as the BRENZYS products have been determined to be biosimilar to the ENBREL products, and given the similarities identified in the Cho article, this suggests (to Dr Ibarra) that the etanercept in the BRENZYS products may be made by a process that is very similar to the process for manufacturing the etanercept in the ENBREL products. This leads to the fifth of Pfizer's contentions (which I address below), which is closely related to the fourth, which is that the Pfizer Process falls within the claims of each of the patents in issue, and this permits the inference that the BRENZYS Process may fall within the claims.
53 At [75] of the reasons, the primary judge identified the broad parameters of the debate:
There was no dispute on the evidence that the characteristics of a biological medicinal product are a result of the process used to manufacture it. The parties also agree that the quality, safety and efficacy of biological medicines are linked to the process by which they are manufactured and may be influenced by even minor alterations in the manufacturing processes and conditions used. However, they are at odds as to the conclusions that may safely be drawn from these propositions.
54 The essential contention of SBA was that biosimilarity tells one nothing about the particular process of manufacture. This was demonstrated by Pfizer itself producing by two very different methods (bovine serum and serum-free methods) the same biosimilar etanercept. At [78] the primary judge, in discussing the Schiestl article referring to the differences in the glycosylation profile, said the following:
The Schiestl article indicates, amongst other things, that major differences were to be found in the glycosylation profile of the etanercept produced. It also points to the fact (as the underlined passages in the quotation at [45] above indicate) that glycosylation can be brought about in phase (a) (cell line development), phase (b) (upstream processing) and phase (c) (downstream processing) of the production process. Despite these differences, the TGA has continued to accept ENBREL as a product on the ARTG for the same indications as those for which it was registered before the change in process. In the result, Professor Mahler concludes, the new process for making etanercept using the Pfizer Process is "biosimilar" to the process used for producing serum-based media in the old process.
55 Importantly, at this point (at [79] and [80]), the primary judge identified the nature of the debate:
[79] Taken together, these matters support the view (held by each of Professors Gray and Mahler) that the fact that a product is biosimilar does not inform one as to the process by which it is made.
[80] Pfizer accepts that SBA's position represents one available inference, but puts forward another one, which, it submits, is no less available.
56 Thus, what followed was Pfizer's case that there was an available scientific view that the evidence supported a reasonable belief that it may have a right to relief.
57 Pfizer pointed to the Schiestl article and submitted at [82], [83] and [85] as follows:
[82] Pfizer submits that Fig. 3d shows that the size of the peaks in the glycosylation profile "pre-change" and "post-change" is significantly different, although the peaks are located broadly similarly. The significant difference in size supports the proposition, it submits, that a significantly different process was used to make ENBREL.
[83] By contrast, the Cho article demonstrates aspects of physicochemical similarity between the etanercept in ENBREL (as produced by the Pfizer serum-free process) and the etanercept in BRENZYS produced by SBA's serum-free process. The glycosylation profiles reported in Cho are, the experts on all sides agreed, "very similar". On page 127 of the Cho article , the authors report:
A total of 23 peaks corresponding to N-glycan structures were detected by hydrophilic interaction liquid chromatography (HILIC) with a fluorescence detector (Fig. 8), and 21 species of N-glycan were identified in SB4 by LC-ESI-MS/MS. Each HILIC peak revealed an identical MS/MS spectrum between SB4 and the reference product [ENBREL]. This result suggested that the structure of each N-glycan species on SB4 was identical to that of the corresponding species on the reference product and that there was no N-glycan structure specific only to SB4. …
…
[85] Dr Ibarra concludes that the structure of each N-glycan species was identical to the corresponding species on the reference product (that is, ENBREL). The relative closeness of the glycosylation profiles demonstrated in Cho, when contrasted with the differences exhibited in Schiestl, lead to the available inference, Pfizer submits, that the closeness demonstrates a similarity between the process used to make ENBREL and the process used to make BRENZYS.
58 These views of Dr Ibarra form a syllogism that is the foundation of Pfizer's argument: similarity of process used produces similar, near identical glycosylation profiles and different processes produce different glycosylation profiles.
59 At this point, Professor Gray disagreed with Dr Ibarra. The debate between them was set out at [86] to [88], as follows:
[86] Professor Gray disagrees with Dr Ibarra's conclusion. He accepts that the two products were sufficiently similar such that the BRENZYS product has been granted marketing approval by the TGA on the basis of biosimilarity to ENBREL, which indicates to him that the products are expected to have comparable safety and efficacy. But he draws attention to what he describes as minor differences (lower content of high molecular weight aggregates, lower level of impurities and some difference in the glycosylation profiles in the BRENZYS product) as informing him that there will be differences between the processes used in the manufacture of BRENZYS compared to its reference product. Further, Professor Gray notes (as does Professor Mahler and the Schiestl article itself) that the glycosylation profile may be caused by each of phases (a) - (c) of the production process. As I have earlier noted, this distinction has relevance to the present debate because the patents in issue are only directed to aspects of the process that fall within phase (b) (upstream processing).
[87] Dr Ibarra takes issue with aspects of Professor Gray's evidence and says first, that the method claims for each of the 034 and 036 patents include a cell culture medium with one or more of five median characteristics which are expressed as ranges. Whilst differences, such as those observed by Professor Gray in the BRENZYS product, may be associated with differences in the manufacturing process (as Professor Gray contends), they do not cause her to alter her view that the process used in making the BRENZYS product may fall within the ranges set out in the claims.
[88] Secondly, Dr Ibarra contends there is a limited ability to influence glycosylation in the downstream process and that although there is a theoretical possibility that the glycosylation may be influenced in phase (a), cell production, that likelihood is significantly diminished by the fact that both Pfizer and SBK use the CHO mammalian ovary cell line in phase (a). Dr Ibarra's evidence in reply is that in her experience generally cell lines of a similar type would fall within a predictable range of values and respond to environmental conditions in a generally similar manner (because the vast majority of the cell machinery of the two cell lines will be highly similar). Accordingly, Dr Ibarra's view is that the most likely source of the glycosylation profile is in the process used in phase (b), which is the phase to which the claims of the patents are directed.
60 The submission of Pfizer, which it is to be recalled, was being put as an available scientific inference was summarised at [89]:
89 Taken as a whole, Pfizer submits that this material leads to the result that the substantially similar glycosylation profiles identified in the Cho article permit the inference of a substantially similar manufacturing process being used in the production of the etanercept in BRENZYS. In this context, Pfizer relies heavily on [21] of Dr Ibarra's second affidavit which is as follows:
In paragraph 144, Professor Gray cites page 312 of the Schiestl paper for the proposition that "the glycosylation profile is defined by the production cell line, growth conditions and the purification sequence". I note that the Schiestl paper found "major differences" between the glycosylation profiles of the etanercept for ENBREL® manufactured by the previous serum-based process and the Current Pfizer Process, whereas the glycosylation profiles of SB4 (being the Brenzys Products) and the etanercept in ENBREL®, as compared in the Cho Article, are very similar. In subparagraph 72(c), Professor Gray describes the differences between these glycosylation profiles of etanercept made by the Current Pfizer Process and etanercept in the Brenzys Products as "slight". In my opinion, based on my experience in the manufacture of biological medicines, differences between manufacturing processes producing the same therapeutic protein, are likely to result in differences between the glycosylation profiles of the two resulting proteins. As there is a limited ability to influence glycosylation in downstream processing, the similarity in glycosylation profiles between the etanercept in the Brenzys Products and the etanercept made by the Current Pfizer Process suggests to me that just as the Current Pfizer Process takes each of the integers of claim 1 of each of the '034 and '036 Patents, the process for manufacturing the Brenzys Products may take the integers of these claims.
(Emphasis in the primary judgment)
61 This evidence fixes on the similarity of the glycosylation profiles as central. At [90] the primary judge remarked that the emphasis only emerged in Dr Ibarra's response to Professors Mahler and Gray.
62 At [91] the primary judge commented on the conclusion of Dr Ibarra on glycosylation profiles and the patent, as follows:
Nothing in the evidence adduced by Dr Ibarra leads to the conclusion that by reason of the similarity of the glycosylation profiles per se one or more integers of the claims in issue are present. Indeed, in annexures NI-12 to NI-14, where Dr Ibarra conducts an integer-by-integer analysis of the claims, no mention is made of the glycosylation profile as being indicative of the presence of any integers.
63 In fairness to Dr Ibarra, I would understand that conclusion to have within it the further step (to which I will come) that the Pfizer product was made using the patents. Further, the criticism in the last sentence of [91] is not, with respect, justified. Annexure N1-12 does refer to the Cho article (in paras 121 of her affidavit) and that this suggests that the BRENZYS etanercept may be made by the same process as etanercept in ENBREL, "being the process claimed in this claim". The same appears in para 21 of Dr Ibarra's affidavit of 31 January 2017 in answer to Prof Gray (see [57] above).
64 At [92] the primary judge said:
Further, the logic of Dr Ibarra's conclusion (that because certain glycosylation profiles are very similar, the BRENZYS Process may be within the claims) is difficult to accept. The claims do not refer to glycosylation at all. No evidence suggests that by following the methods claimed in one or more of the patents, a glycosylation profile will be produced that has any particular characteristics or be similar in one way or another to another produced (by a different organization, under different conditions).
65 With respect, I have difficulty with the third sentence. The evidence (of course, contested by Professors Gray and Mahler) given by Dr Ibarra was that like phase (b) processes produced like glycosylation patterns.
66 The heart of the matter, however, was what was dealt with by the primary judge at [94] to [97] of the reasons:
[94] Dr Ibarra's second answer to Professor Gray is that glycosylation may be affected in phase (b) and that because of the common use of CHO mammalian cells it is unlikely to occur in phase (a). That observation does not accord with the teaching of the patents. For instance, in relation to the 632 patent integers 2 and 3 of claim 1 of the 632 patent direct attention to growing cells in a cell culture at a reduced temperature (to a range of 27˚C to less than 30˚C) and a reduced pH (in a range of 6.80 to less than 7.00). However, the examples in the 632 patent indicate that glycosylation is a step which takes place prior to the process steps the subject of the claims. For instance, at [0114] of the 632 patent it says (emphasis added):
… For instance, growing cells at a reduced temperature of 29.5˚C significantly reduced concentration of both misfolded and aggregated TNFR-Fc, while having minimal effects on TBFR-Fc glycosylation.
[95] Similar observation was made in relation to reduced pH which at [0123] was said to significantly reduce the proportion of misfolded and aggregated TNFR-Fc protein, "while having minimal effects on glycosylation of TNFR-Fc".
[96] The consequence is that claim 1 of the 632 patent is directed towards minimising an adverse effect on glycosylation, but not the step of glycosylation itself. The 034 and 036 patents barely refer to glycosylation at all. Each patent assumes, naturally enough, that phase (a) has taken place where, the experts agree, the characteristics of the glycosylation profile may be determined. It is not, in my view, persuasive to dismiss the effects of this phase, on the basis that both Pfizer and the BRENZYS process use CHO mammalian cell line. Not only is cell variation within CHO inevitable (as the evidence indicates), in addition, phases (a) and (c) influence glycosylation.
[97] Ultimately, Dr Ibarra's evidence in this respect does not rise above speculation (Pfizer refers to it as an inference) that the similarities observed might mean that the BRENZYS Process is similar to the Pfizer Process. That speculation, in my view, clings tenuously to the coincidences identified in Cho. These coincidences are cogently explained by a far more available inference; that the end products are biosimilar. That fact does not suggest similarity of process.
(Emphasis in the primary judgment)
67 The first basis to reject Dr Ibarra's views as to the centrality of phase (b) was the teaching of the patents (see [94] and [95] of the reasons). The second basis is to direct attention to the fact that patent 632 is not directed to glycosylation and 034 and 036 barely refer to glycosylation. The third basis is the proposition said to be a natural assumption in the patent conformable with what all the experts (by which I do not take the primary judge to refer to Dr Ibarra, not because she has no expertise, but because she was saying something to the contrary) agree that in phase (a) the characteristics of the glycosylation profile may be determined. The judge said that it was not "persuasive" to dismiss the effects of this phase.
68 A number of things can be said about these three considerations. First, it is not determinative that the claims are not directed to a glycosylation profile. The proposition for which Dr Ibarra and Pfizer contended was a different one and not one dependent on the claims being directed to the glycosylation profile - it was that similar processes in phase (b) lead to similar glycosylation profiles. Secondly, the fact that the patents are not so directed might make one cautious as to the teaching of the patents about glycosylation. Thirdly, and centrally, the primary judge appears to find, and find comfortably, that the characteristics of the glycosylation profile here can be affected by what happens in phases (a), (b) and (c), and thus rejects the fundamental plank of Dr Ibarra's hypothesis that it is driven here by what happens in phase (b). Her opinion was said not to be "persuasive".
69 It is at this point that one needs to remind oneself of the nature of the task demanded by r 7.23(1)(a) in circumstances such as this. The relevant question posed by the rule is whether the applicant reasonably believes that it may have the right to obtain relief. It is not whether one scientific view is more or less persuasive than another. In the field of science, expert views may differ about important scientific aspects that can be seen to bear upon a question. If the applicant has a belief that is founded on considerations or views reasonably open (even if contested as incorrect by others) that may well found a conclusion that the applicant has a relevant reasonable belief. On the other hand, if in the application it can be shown that the belief of the applicant appears to be based on considerations or views that are unreasonable, untenable, irrational or baseless, it would be difficult to conclude that the applicant has a reasonable belief. Much will depend on the evidence and the nature of the question in issue. The kind of interlocutory hearing anticipated for the operation of the rule will, however, generally be inapt for the making of final judgments on contested scientific evidence. This is all the more so when, as here, there was no cross-examination.
70 The primary judge's conclusions about Dr Ibarra's evidence in this regard are in [97] of the reasons. The primary judge may be seen as concluding that Dr Ibarra's opinion has been shown to be scientifically speculative. There are four difficulties with any such conclusion that reveal, in my respectful opinion, error by the primary judge. First, it is misleading and distracting to use "speculation" as the relevant enquiry. It is liable to misdirect the enquiry. Secondly, the conclusion rests on a rejection of Dr Ibarra's evidence and involves the view that, in the circumstances here, Professors Gray and Mahler were to be preferred as to the potential for phases (a) and (c) (and not just phase (b)) to affect the glycosylation profile of the product. There appears to be a real scientific contest about that in the particular circumstances here. There has been no trial of the issue, no cross-examination and the presentation of competing views. Dr Ibarra may be wrong, but it is difficult to see how her views can be put to one side as unreasonable or untenable in a hearing such as took place. Thirdly, the debate was not framed by a question whether Dr Ibarra's views were untenable or unreasonable. Neither Prof Gray nor Prof Mahler said as such. Competing views were placed before the primary judge who found one view not persuasive. This, with respect, was a misdirected enquiry. Fourthly, biosimilarity may well not "cogently explain" the coincidences. The Schiestl article shows the same product ENBREL was biosimilar when made by bovine serum and later by a serum-free method, but there were significant differences in its glycosylation profiles using the two different processes. These errors were related and combined to permit the primary judge to prefer Professors Gray and Mahler to Dr Ibarra. The correct question was not who was more persuasive or to be preferred, but whether Dr Ibarra's views so lacked foundation that reliance on them by Mr Silvestri did not demonstrate that he reasonably believed that Pfizer may have a right to obtain relief.
71 The fifth contention concerned whether the Pfizer process fell within the claims of the patents. At [98] the primary judge expressed the issue:
This then leads to the fifth aspect of Pfizer's submission, which is that the similarities demonstrated in the Cho article permit the inference that the BRENZYS Process is similar to the Pfizer Process and, as the Pfizer Process falls within the relevant claims, it may be inferred that so too does the BRENZYS Process.
72 In argument before the primary judge, senior counsel for Pfizer put the matter as follows in discussion with the primary judge:
HIS HONOUR: As I understand it, the way that the respondent puts it, the underpinning for your entire argument depends on the proposition that the biosimilar was made - or the similarities between the Samsung product and the reference product connotes a similarity of process for the manufacture of the two and that in turn leads to the available inference that the Samsung process infringes the claims. So the argument is contingent on the proposition that the Pfizer process falls within the claims also.
MR MACAW: Yes. Indeed.
HIS HONOUR: There - so do you accept as the foundational proposition that if you don't make out that as a matter of evidence, you have a problem?
MR MACAW: Yes. Yes, we do. That's the bridge. Your Honour has identified it precisely, with respect.
HIS HONOUR: Very well.
MR MACAW: That's the relevance.
HIS HONOUR: Yes.
MR MACAW: And I think we are about to debate the question of admissibility.
HIS HONOUR: Yes.
MR MACAW: If that's convenient.
HIS HONOUR: Yes, it is.
73 At [101], the linkage of Pfizer's process and the patents was explained:
Next, Pfizer relies on the evidence of Dr Ibarra that the Pfizer Process falls within the claims in issue. This is a central part of Pfizer's reasoning, because without it (as I explain further below) there is no basis at all upon which it might be inferred that there is any relationship between the claims asserted and the BRENZYS Process.
74 The essence of Dr Ibarra's evidence was set out by the primary judge at [103] to [105] as follows:
[103] In her first affidavit of 5 January 2017, Dr Ibarra said (emphasis added):
45. As part of my work described above, I have observed that, since 2007, Wyeth Ireland, and then Pfizer Ireland, has manufactured the etanercept for ENBREL® using a serum-free process; that is, a process that uses chemically defined media, and that does not contain foetal bovine serum (the Current Pfizer Process). The Current Pfizer Process has at all times fallen within at least claim 1 of each of the Etanercept Patents.
[104] Words to similar effect to those underlined appear elsewhere in Dr Ibarra's first affidavit. On 6 February 2017 Dr Ibarra affirmed a further affidavit during which she said (emphasis added):
9. I refer to the first two columns of Annexure NI-12 of My First Affidavit, and confirm that I am aware, based upon my personal observations of the Current Pfizer Process in the course of my work, that the Current Pfizer Process has each of the features identified in that table as integers 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, and 12 of claim 1 of the '034 Patent.
[105] Dr Ibarra gave similar evidence for each of the 036 and 632 patents. After objection was taken to that evidence, she affirmed a further affidavit on 8 February 2017 in which she referred to her third affidavit of 6 February 2017, gave some evidence as to how she construed some terms within the patents (by reference to the body of the specification) and then gave evidence as to her opinion as to the presence of certain integers. In the context of the 632 patent, her additional evidence also addressed integer 4 of claim 1 and said:
15. I am aware, based upon my personal observations of the Current Pfizer Process in the course of my work, that in the Current Pfizer Process, the etanercept for ENBREL® is produced in a cell culture where the cells are grown at a temperature in a range of 27.0˚C to less than 30.0˚C, and at a pH in a range of 6.80 to less than 7.00, and misfolded proteins and/or aggregated proteins are measured at less than 25% (see also page 1143 in the Cho paper annexed as NI-11 to my First Affidavit, which reports 13.5% to 13.6%) of the protein produced.
(Emphasis in the primary judgment)
75 Objection was taken by SBA to the admissibility of Dr Ibarra's evidence on the basis of a failure to lay a foundation of the evidence: Dasreef Pty Ltd v Hawchar [2011] HCA 21; 243 CLR 588 at 604 [37].
76 Pfizer's position was summarised by the primary judge at [107] as follows:
Pfizer submits first, that the evidence the subject of the objection was not opinion evidence at all but a statement of fact as to the presence of physical features of the process. Dr Ibarra's intimate experience with the process as a result of her employment enabled her to state matters of fact. Secondly, that s 76 of the Evidence Act does not apply to applications of the present type because the task of the Court is not to determine questions of fact on a binding basis Optiver Australia Pty Ltd v Tibra Trading Pty Ltd [2007] FCA 1560; (2007) 163 FCR 554 (Optiver Australia) per Tamberlin J at [4]. Thirdly, that the Court should, in any event, dispense with the application of s 76 of the Evidence Act pursuant to the operation of s 190 of that Act; citing Dallas Buyers Club LLC v iiNet Limited [2015] FCA 317; (2015) 112 IPR 1 (Dallas Buyers Club) at [96] - [99] and Optiver Australia at [22].
77 The primary judge referred to three cases as to admissibility: Gyles J in C7 Pty Ltd v Foxtel Management Pty Ltd [2001] FCA 1864, Tamberlin J in Optiver Australia Pty Ltd v Tibra Trading Pty Ltd [2007] FCA 1560; 163 FCR 554, and Perram J in Dallas Buyers Club LLC v iiNet Ltd [2015] FCA 317; 112 IPR 1. Using these authorities, his Honour had regard to the evidence.
78 How the Evidence Act 1995 (Cth) operates in applications of this kind was, in my view, correctly expressed by Gyles J in C7 at [17], as follows:
…I have not limited myself to considering evidence which is in a form which would be strictly admissible at a final trial. During the hearing I ruled that press reports and other hearsay material were not necessarily excluded on that account. The issue against which the admissibility of evidence is to be tested is whether there is reasonable cause to believe that the applicant may have the right to obtain relief. This does not tender an issue of fact in the usual way.
79 With respect, it is wrong to say the Evidence Act does not apply to an application under r 7.23. It is an interlocutory application in the exercise of federal jurisdiction: Hooper v Kirella Pty Ltd [1999] FCA 1584; 96 FCR 1. The question is the purpose of the evidence that is tendered. As Gyles J said in C7, one needs to know the purpose of the evidence. Newspaper articles might be relevant because reading them was the basis of the belief held by the applicant. Here, Mr Silvestri has relied upon an affidavit of Dr Ibarra. He could have had a report authored by her. No principle of evidence and no section of the Evidence Act requires the material that Mr Silvestri took into account to be in admissible form. Pfizer is entitled to rely on Dr Ibarra's affidavit as the basis for Mr Silvestri's belief. It may be reasonable for Mr Silvestri to hold the belief based on knowing that someone in the organisation with the skill and experience of Dr Ibarra holds the opinion that Pfizer's process was in accordance with the patents.
80 If, on the other hand, Pfizer chooses to seek to prove a fact said to be relevant to its belief that depends for its proof on a matter of expert evidence, I see no reason why the Evidence Act is not relevant. Here, the evidence of Dr Ibarra was admissible as proof of the material upon which Mr Silvestri formed his belief.
81 For the above reasons, in my respectful view, the primary judge approached the matter by asking himself the wrong question. It was not a matter of which body of expert evidence to prefer; rather, it was whether Pfizer reasonably believed that it may have a right to relief. That involved the question whether Dr Ibarra's views were capable of giving a reasonable basis for a belief about that matter.
82 That being so, it falls for this Court to re-exercise the discretion. The respondent seemed to submit that it wished to make submissions on all aspects of such a re-exercise. That, with respect, is unsatisfactory. Two full days of argument were taken up with this appeal canvassing the detail of the evidence, including the central topic of Pfizer's failure to produce its own primary material showing that it employed its own patents to produce its product. I do not see that as critical to the application or to the exercise of discretion. It can be accepted that an applicant must show the Court that it has done what it can to find out whether it has a right to relief. Here, that was done, and was not affected by the absence of primary documents to substantiate, in an evidential sense, the opinion of Dr Ibarra, if her opinion was being used as evidence of a fact to which her opinion was directed.
83 It was put that the Pfizer documents may show how close to the boundaries of the patents' processes Pfizer reaches in the making of ENBREL. This, it was submitted, would tell one of the likely ability to produce etanercept around the margins of the patent and so demonstrate a lessened degree of likelihood that SBA is infringing. The primary judge adverted to this issue at [174] to [176] of the reasons. There the primary judge said the following:
[174] In the present case, SBA contends that there has been less than full disclosure by Pfizer about the process it uses to manufacture ENBREL. It submits that Dr Ibarra's opinion that the Pfizer process falls within the asserted claims is central to her reasoning, and yet no evidence of that process has been provided. As a consequence, the Court has no evidence to assess whether or not Dr Ibarra's opinion is correct or where within the quantitative boundaries described by the claims the Pfizer Process may sit.
[175] In my view this submission has some force. Whilst I have ruled that Dr Ibarra's evidence is properly admitted into evidence, the manner of its presentation does pose difficulties. It was clearly open to Pfizer to elucidate the position supporting Dr Ibarra's conclusion by reference to evidence going to the facts upon which it is based. That is not to say that the facts need to be established to the standard necessary for a final hearing, but at present no facts upon which the conclusions expressed by Dr Ibarra have been provided. This leads to the practical difficulty that SBA is in no position to contest the correctness of the conclusion advanced and that the Court is similarly deprived of the opportunity to consider it. The Court would be expected to exercise the coercive powers of discovery without having any way to consider how the requisite belief may apply to one or all of the patents raised. Whilst the rule is beneficial to an applicant, and necessarily operates asymmetrically (Optiver at [43]), in my view it is not intended to operate without this sort of check. It is not necessary for the applicant to prove its cause of action, but the applicant must place before the Court all of the evidence already available to it relevant to the sufficiency of the information it possesses to enable a decision to be made whether to commence a proceeding; Reeve at [65].
[176] In the present application Pfizer has not to do so. Accordingly, in the event that I had been satisfied that FCR 7.23(1)(a) had been made out, I would nonetheless have declined to grant the order sought.
84 This is another example, in my view, of the over-refinement of this application. The application is not a contest about whether Dr Ibarra's views are correct, or about the quantitative boundaries of the claims on the Pfizer process. It is about the existence of a reasonable belief. The evidence did not disclose that Dr Ibarra's views were not ones capable of being held. There was a basis upon which Mr Silvestri could reasonably believe that Pfizer may have a right to relief. I see no discretionary basis to deny the access to some documents.
85 The respondents should be heard on the form of the orders, in particular the extent of the orders and the identity of the persons who should be shown the documents. This may be a case for the utilization of a report by a suitably qualified person to report to the parties and the Court on the existence or not of a right to relief. The terms and nature of any order would need to protect any legitimate claims for confidentiality. These matters are best dealt with by the primary judge on remittal.
86 For these reasons, I would allow the appeal, set aside the orders made by the primary judge and remit the matter to the primary judge for consideration of the form of orders to be made for the production of documents. I agree with the form of orders proposed by Perram J.
I certify that the preceding eighty-six (86) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Allsop.