Prejay Holdings Ltd v Commissioner of Patents [2003] FCAFC 77 | Case summary

REASONS FOR JUDGMENT WILCOX AND COOPER JJ: 1 This is an appeal against a decision of a judge of the Court (Heerey J) dismissing an application, under the Administrative Decisions (Judicial Review) Act 1977, for review of a decision of a delegate (Dr Gillian Jenkins) of the Commissioner of Patents, the respondent to the appeal. Pursuant to s 74(3) of the Patents Act 1990 ("the Act"), the delegate refused to accept an application by the present appellants, PreJay Holdings Limited and Woco Investments Ltd, for an extension of the term of patent number 582540 ("the patent"), held by them. The basis of the delegate's decision was that she found the relevant pharmaceutical substance did not fall within the scope of the patent's claims. Background 2 The patent contains a number of claims. All of them are method claims, not product claims. Both parties argued the appeal by reference to claim 14, agreeing that the application of the relevant law to that claim was sufficient to dispose of the case, one way or the other. 3 Claim 14 reads: "A method of hormonally treating menopausal or post-menopausal disorders in a woman, comprising administering to said woman continuously and uninterruptedly both progestogen and estrogen in daily dosage units of progestogen equivalent to laevo-norgestrel dosages of from about 0.025 mg to 0.05 mg and of estrogen equivalent to estradiol dosages of about 0.5 mg to 1.0 mg." 4 The patent contains three tables setting out "preferred unit dosages, minimum unit dosages and maximum unit dosages for the estrogens and progestogens useful in this invention". It is agreed between the parties that a pharmaceutical substance known as Premia 2.5 Continuous ("the substance") falls within the stipulated dosages in respect of both estrogens and progestogens. This substance is apparently marketed by persons associated with the appellants. The substance has been registered since 12 June 1997 on the Australian Register of Therapeutic Goods, established under the Therapeutic Goods Act 1989. The application for extension 5 The patent is due to expire on 1 August 2004. On 27 July 1999 the appellants applied to the respondent for an extension of the term of the patent. An issue arose as to whether the application satisfied s 70(2) of the Act. 6 In order to put that statement into context, we set out subss (1) to (4) of s 70 of the Act: "(1) The patentee of a standard patent may apply to the Commissioner for an extension of the term of the patent if the requirements set out in subsections (2), (3) and (4) are satisfied. (2) Either or both of the following conditions must be satisfied: (a) one or more pharmaceutical substances per se must in substance be disclosed in the complete specification of the patent and in substance fall within the scope of the claim or claims of that specification; (b) one or more pharmaceutical substances when produced by a process that involves the use of recombinant DNA technology, must in substance be disclosed in the complete specification of the patent and in substance fall within the scope of the claim or claims of that specification. (3) Both of the following conditions must be satisfied in relation to at least one of those pharmaceutical substances: (a) goods containing, or consisting of, the substance must be included in the Australian Register of Therapeutic Goods; (b) the period beginning on the date of the patent and ending on the first regulatory approval date for the substance must be at least 5 years. (4) The term of the patent must not have been previously extended under this Division." 7 The delegate conducted an inquiry into that matter. On 24 April 2001, she published a decision in which she accepted that the substance was "disclosed in the specification" of the patent. She also accepted that the application satisfied subss (3) and (4). However, in her opinion, the substance did not "in substance fall within the scope of the claim or claims of that specification". 8 In reaching that decision, the delegate drew on a decision of Heerey J, Boehringer Ingelhein International v Commissioner of Patents [2000] FCA 1918, that was subsequently affirmed by a Full Court: see Boehringer Ingelhein International GmbH v Commissioner of Patents [2001] FCA 647; 112 FCR 595. The High Court of Australia recently refused special leave to appeal against the Full Court's decision. 9 Dr Jenkins said: "Thus, it seems clear to me from this decision that Heerey J is saying that section 70(2)(a) is only available to extend the term of a patent when there is at least one claim to a pharmaceutical substance by itself, which is unqualified by process or method components. The intent of the legislation is only to provide an extension of term for a patent in certain circumstances and that such an extension is not available in relation to method claims. As noted above, patent 582540 has 24 claims, all of which are method claims. There are no claims to a pharmaceutical substance per se and the patentee has not disputed this. Mr Gibson submitted that there is no requirement in the Act that there must be a claim to a pharmaceutical substance per se, only that a pharmaceutical substance per se must in substance fall within the scope of the claim or claims of the specification. However, in light of the above I must disagree." The primary hearing 10 At the hearing before Heerey J, counsel for the appellants argued the delegate erred in law in concluding that the substance failed to fall within the scope of the patent. They made a formal submission that Boehringer was wrongly decided; but their substantial argument was that it was distinguishable on the facts. They said that, unlike the claim in Boehringer, claim 14 of the present patent does not have a physical component, such as the container with nozzle present in that case. However, Heerey J did not accept that argument. He said (at para 14): "In both Boehringer and the present case the claims included integers other than the pharmaceutical substance itself. The fact that in Boehringer the other integer was a particular physical device and in the present case the other integer is a particular method of use is to my mind a distinction without a difference." 11 Counsel also argued the subject of the present patent was not an "old or known product". But Heerey J said, at para 16, it did not matter whether it was or not: "The fact remains that claim 14 is a method claim and, mere use of the substance otherwise than in accordance with the specified method would not infringe. The reasoning in Boehringer was applicable and was correctly applied by the delegate." 12 Finally, counsel for the appellants put to Heerey J an argument based on s 117 of the Act. That section provides: "(1) If the use of a product by a person would infringe a patent, the supply of that product by one person to another is an infringement of the patent by the supplier unless the supplier is the patentee or licensee of the patent. (2) A reference in subsection (1) to the use of a product by a person is a reference to: (a) if the product is capable of only one reasonable use, having regard to its nature or design - that use; or (b) if the product is not a staple commercial product - any use of the product, if the supplier had reason to believe that the person would put it to that use; or (c) in any case - the use of the product in accordance with any instructions for the use of the product, or any inducement to use the product, given to the person by the supplier or contained in an advertisement published by or with the authority of the supplier. 13 At para 18-19 Heerey J described the s 117 argument in this way: "Senior counsel argued that the 'scope' of a claim is to be tested by enquiring what would infringe the claim. In determining what infringes a claim it is necessary to take into account the effect of s 117. The expression 'in substance' has the effect that one must look at the scope of the claim as a matter of substance, not merely as a matter of form. In the present case the pharmaceutical substance (Premia) has only one reasonable use. This use both satisfies the test for pharmaceutical substance and falls within the scope of claim 14. Hence, so the argument goes, the supply of Premia from one person to another is an infringement of claim 14. But the therapeutic use of Premia necessarily involves supply from one person to another and hence infringes claim 14. Therefore the pharmaceutical substance, Premia, in substance falls within the scope of claim 14." 14 Heerey J commented (at para 20): "In my opinion, s 117 does not assist the applicants. It was introduced to clarify the difficulties and uncertainties associated with contributory infringement at common law: Lahore, Patents, Designs and Trade Marks Law (Butterworths) at [18,285]. It is concerned with the liability for infringement of a supplier. 'Supply' is defined in sch 1 to include 'supply by way of sale, exchange, lease, hire, or hire-purchase'. Section 117 makes a supplier of a product liable as an infringer when there is, or would be, as a result of the supply, an infringing use of the product by the person supplied in one of the ways stipulated in subs (2). Section 117 does not extend the 'scope' of claim 14 by making a claim for a method of using a particular product into a claim for the product only." 15 Applying the reasoning of Black CJ and Lehane J in Bristol-Myers Squibb Company v F H Faulding & Co Limited (2000) 97 FCR 524 at [82]-[97], Heerey J said (at paras 24-27): "…where the applicants' argument was based only on par (a), I think the expression in s 117(1) 'the use of a product (which) would infringe a patent' means, in the case of a patent for a method, use of the product by that method. Unless that criterion is satisfied, one does not get to the particular sub-set of infringing use in par (a). The point of subs (2) is that it stipulates particular types of use which will constitute 'use' by a person for the purposes of subs (1), thus making supply to that person an infringement. The 'use' to which s 117(1) refers must be an infringing use, but not all infringing uses are caught - only those specified in subs (2). If the patent is for a product only, then of course use by a person of the product would be exploitation and thus infringement (see par (a) of the definition of 'exploit' in sch 1) and (additionally) if that use was the only use of which the product is reasonably capable, then by virtue of s 117(1) and (2)(a) a supplier to that person would infringe also. Where there is a patent for a method, such as 'Substance X when used…', it would usually follow that there is more than one reasonable use of X. If that were not so, one would expect the patent to be only for Substance X per se. The applicants' construction makes s 117 operate not as a clarification or extension of the ways in which infringement may occur but as a substantial extension of the monopoly granted by the patent itself. If one were to accept the applicants' case, where once there was a patent for use of a particular substance in a particular way, there would now be a patent for use of that product in any way, provided only it was therapeutic. And this would occur without any need to establish novelty and all the other criteria of s 18(1) even at the priority date, let alone at the date of extension." (Original emphasis) 16 Heerey J dismissed the application with costs. The arguments on appeal 17 At the hearing before us, counsel for the appellants, Mr D Catterns QC, essentially repeated the arguments put to Heerey J. He sought to distinguish Boehringer by pointing to para 38 of the Full Court's judgment in that case, in which the Full Court observed that the then appellant's argument "effectively reads out of s 70(2)(a) the words 'per se'". The Full Court said that, on this 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'." 18 Mr Catterns said: "… those words mean that it is not sufficient to demonstrate that, with the addition of further elements, the claim would be infringed. Rather it must be shown that the therapeutic use of the substance (or the supply of the substance) would, without more, infringe the claim." 19 He added: "As the therapeutic use of Premia 2.5 would, without more, infringe claim 14, Premia 2.5, per se, falls within the scope of that claim." 20 Mr Catterns developed an argument based on para (b) of s 70(2) of the Act. He contended this paragraph permitted the extension of a method (or process) patent, provided it involves the use of recombinant DNA technology. He argued this indicates that subs (2) is not concerned merely with product claims, as distinct from process claims. 21 Finally, Mr Catterns repeated the s 117 argument put to Heerey J. 22 Counsel for the respondent, Mr G C McGowan and Mr B J Fitzpatrick, relied on the reasons adopted by Heerey J. They said Boehringer was not distinguishable. Although that case concerned a product combination, the essence of the decision is that a substance falling within s 70(2)(a) must itself be the subject of a claim. A substance that is included in a claim only in combination with other products, as in Boehringer, is not a pharmaceutical substance per se that falls within the scope of the claim. Similarly, a substance that is mentioned only in the context of a claim for a method or process is not claimed per se. Conclusion 23 The conclusion of Heerey J was correct. Although there is a difference between the patent under consideration in Boehringer and the subject patent, the ratio of Boehringer is directly in point. In para 42 of its reasons, the Full Court there said: "… 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." 24 As is apparent from the context of these words, especially the Full Court's references to the legislative history of s 70, the Full Court was saying that, for a substance to fall within s 70(2)(a) it must itself be the subject of a claim in the relevant patent. It is not enough that the substance appears in a claim in combination with other integers or as part of the description of a method (or process) that is the subject of a claim. The policy adopted in s 70 was to confine extensions to patents that claim invention of the substance itself. 25 This conclusion is not negatived by the terms of s 70(2)(b) of the Act. Contrary to the submission of Mr Catterns, that paragraph does not require disclosure of a process. Rather, it requires the disclosure of "one or more pharmaceutical substances" that are produced by a particular process. 26 For the reasons given by Heerey J, Mr Cattern's s 117 argument must be rejected.

Allsop J 28 I have had the benefit of reading the draft reasons of Wilcox J and Cooper J. Their Honours' reasons enable me to be brief. I agree with the orders their Honours propose. I also agree with their Honours' reasons, though I wish to add some further comments of my own. 29 To the extent that the decision of the Full Court in Boehringer Ingelheim International GmbH v Commissioner of Patents (2001) 112 FCR 595 can be seen as determinative of this appeal, I reject the submission that this Court should not follow it: Transurban City Link v Allan (1999) 95 FCR 553, 560-61; and Telstra Corporation Limited v Treloar (2000) 102 FCR 595 at [23] to [28], especially [27] and [28]. 30 The appellant submitted that there was a difference between the patent in Boehringer and claim 14 of the patent in question here. In Boehringer, the additional integer was a container with a nozzle. That additional integer was physical. In contrast, it was submitted, claim 14 involved a pharmaceutical substance (being a combination of progestogen equivalent and oestrogen equivalent in particular amounts) and a "method integer" directed to or concerning therapeutic use: that the combination in the particular amounts is to be administered to a woman continuously and uninterruptedly daily, that is daily without any interruption as to days. 31 The fact that the integer in addition to the substance is a method integer concerned with therapeutic use means, it was submitted, that par 70(2)(a) of the Patents Act 1990 (Cth) (the Act) is complied with, by virtue of the definition of "pharmaceutical substance" in Schedule 1 of the Act. 32 That definition is as follows: pharmaceutical substance means a substance (including a mixture or compound of substances) for therapeutic use whose application (or one of whose applications) involves: (a) a chemical interaction, or physico-chemical interaction, with a human physiological system; or (b) action on an infectious agent, or on a toxin or other poison, in a human body; but does not include a substance that is solely for use in in vitro diagnosis or in vitro testing. [emphasis added] 33 Here, it was submitted, there was a pharmaceutical substance per se which in substance fell within the scope of the claim because it was a substance for therapeutic use (as otherwise defined in Schedule 1) per se. The additional integer was concerned with therapeutic use and was part of the pharmaceutical substance (as defined) per se. 34 Thus understood, there was to be a distinction drawn with Boehringer. There, the additional integer was not concerned with therapeutic use and so did not fall within the definition of pharmaceutical substance. 35 Whilst the Full Court in Boehringer was dealing with a patent involving what might be called a physical integer, the reasoning of the Full Court at [37] to [42] is not susceptible to valid distinction for present purposes. The reasoning of Heerey J at first instance in Boehringer was expressly adopted by the Full Court: see [17] and [33] of the Full Court's reasons. It is plain that the Full Court was endorsing, as an essential part of its reasoning, the following statement by Heerey J in [15] of his Honour's reasons at first instance in Boehringer: What is clear in s 70 is that only the first type of claim above [referring to a claim for a new and inventive product] to a pharmaceutical product is to be subject to extension rights…[T]he 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 (an important) exception of recombinant DNA techniques, this being an area particularly worthy of assistance for research and development. 36 Whilst I would reserve comment on the exhaustiveness of the three categories of claim in relation to pharmaceutical substances set out in [14] of the reasons of Heerey J at first instance in Boehringer, endorsed as they were by the Full Court in that case, that paragraph and the exhaustiveness of the classification of claims were not essential either to the reasoning of Heerey J, or the Full Court in Boehringer. 37 Thus, the disposition of this appeal should, it seems to me, be governed by the reasoning of the Full Court in Boehringer. 38 I also make the following comments conformable with that result. 39 The argument of the appellant turns on the meaning of the definition of "pharmaceutical substance". It requires the definition to be sufficiently wide (because of the presence of the phrase per se in par 70(2)(a) of the Act) to incorporate both the substance and a method integer, as long as the additional method integer is concerned with therapeutic use. 40 I do not see the definition so widely. The definition refers to a substance, which must have a purpose or use - therapeutic use, and whose application involves the other matters identified in the definition. The definition is of a particular kind of substance, but it is of a substance, and only a substance. 41 So understood, when one turns to par 70(2)(a) of the Act, the substance (that is the combination of the hormones in the amounts) per se must fall within the scope of the claim. If, as is conceded, use of the substance outside the particular administration regime in the claims is outside the scope of the claim, then it cannot be said that the substance per se falls within the scope of the claim. 42 Whilst the secondary materials are not entirely internally consistent, the above result and the above construction accord with what appears to me to be the burden of the secondary materials, exemplified by the following part of the Explanatory Memorandum, referred to by the Full Court in Boehringer at [24]: 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 claims, will not be eligible unless the process involves the use of 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. [emphasis added] I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop.

Prejay Holdings Ltd v Commissioner of Patents

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