Australia: Infringement Of Method Claims By Threatened Importation Clarified By The Full Federal Court

Last Updated: 1 May 2018
Article by Ian Pascarl and Grace O'Connor

On 23 February 2018 the Full Court of the Federal Court of Australia (comprised of Jagot, Yates and Burley JJ) handed down its decision in Warner-Lambert Company LLC v Apotex Pty Limited (No 2) [2018] FCAFC 26, upholding the first instance decision of Justice Nicholas.

In 2016 Justice Nicholas dismissed the application filed by Apotex which sought revocation of certain claims of Australian Patent No. 714980 (owned by Warner Lambert). His Honour also made orders for injunctive relief to restrain Apotex's threatened infringement of the patent.

See here for our discussion of the first instance decision of Justice Nicholas.

The patented invention

Broadly speaking, the invention concerned a method of treatment involving the use of known compounds (including the compound known as pregabalin, marketed by Pfizer under the name LYRICA®) in pain therapy. These compounds had previously been used in the treatment of central nervous system disorders. As a result, the invention was the application of these compounds to a new therapeutic use.

The patent was sufficient, and the false suggestion was immaterial

On appeal, Apotex challenged the finding of Justice Nicholas that the patent was valid and contended that:

  1. the patent suffered from an insufficiency of description; and
  2. the false suggestion contained within the patent was material to the grant of the patent.

Apotex's challenge failed on both points.

The Full Court upheld the validity of the patent, and noted that the sufficiency enquiry under s 40(2)(a) of the Patents Act 1990 (Cth) is concerned with what the skilled addressee could do based on the description in the specification, and not what a clinician would not do with the specification in the absence of safety and efficacy data.

In relation to the ground of false suggestion, the Full Court noted that even if the misrepresentation had been omitted from the specification, the relevant claims would not lack fair basis. As a result, the false suggestion did not have the materiality for which Apotex contended.

The threatened importation was a threatened infringement

In relation to infringement, Apotex challenged the primary judge's finding that it had threatened to infringe claims 16 to 30 of the patent, which were all "Swiss" style claims.

Apotex contended that the primary judge had erred in finding that, by threatening to import and supply in Australia medicines containing pregabalin made outside the patent area by a third party, Apotex threatened to infringe the Swiss claims of the Patent.

Apotex submitted that the primary judge had erred in his assessment of infringement of the Swiss claims by failing to recognise that paragraph (b) of the definition of "exploit" in Schedule 1 to the Patents Act relates only to products resulting from the use of the relevant method in the patent area1.

Apotex contended that the right conferred by s 13(1) of the Act only has effect through the patent area (in essence, within Australia). As a result, Apotex submitted that to infringe a method or process claim, the method or process must be used in the patent area or the infringer must exploit, in the patent area, a product arising from such use.

Section 13(1) relevantly provides:

Subject to this Act, a patent gives the patentee the exclusive rights, during the term of the patent, to exploit the invention and to authorise another person to exploit the invention.

'Exploit' is defined under the Patents Act as follows:

exploit, in relation to an invention, includes:

  1. where the invention is a product—make, hire, sell or otherwise dispose of the product, offer to make, sell, hire or otherwise dispose of it, use or import it, or keep it for the purpose of doing any of those things; or
  2. where the invention is a method or process—use the method or process or do any act mentioned in paragraph (a) in respect of a product resulting from such use.

The practical effect of Apotex's submission is that if a product was manufactured outside of Australia using a method or process which was patented within Australia the importation of that product would not be a threatened or actual infringement as it did not result from the use of that method or process in Australia.

The Full Court recognised that the construction proposed by Apotex was specifically rejected by Justice Lindgren in Alphapharm Pty Ltd v H Lundbeck A/S [2008] FCA 559, where his Honour observed that if this construction was correct, where an invention is for a method or process, the reference to "importing" in s 13(1) would be superfluous, as in these circumstances importation would not be a form of exploitation unless the product resulted from the use of the method or process in Australia.

Apotex contended that Lindgren J's approach was wrong as it would lead to the absurdity that paragraph (b) of the definition of exploit would be taken as reading:

...use the method or process in the patent area or do any act mentioned in paragraph (a) in respect of a product resulting from such use anywhere.

The Full Court noted that Nicholas J had at first instance reached the same conclusion as Justice Lindgren, but on different reasoning.

Importation of a product arising from the use of a patented method outside of Australia – the preferred approach

Justice Nicholas observed that the definition of "exploit" makes no reference to the patent area, with the territorial limitation being found in ss 12 and 13. As a result, in his Honour's view there was no reason to read down the words of either para (a) or para (b) of the definition of "exploit" to found any territorial limitation. This was because the Patents Act expressly provides that a patent only has effect in the patent area.

As Justice Nicholas identified:

Paragraph (b) of the definition of "exploit" refers to the doing of an act referred to in para (a) which includes to make or import a product. The patentee's exclusive rights are infringed (subject to available defences) if another person does any such act within the patent area. The fact that the patented method is performed outside the patent area does not avoid infringement of a method claim (including a Swiss claim) if the product imported and sold in Australia was made using the patented method because "the acts of importation and sale occur within the patent area." The relevant act of infringement is not the use of the method outside the patent area but the exploitation (by importation and sale) in Australia of a product made using the patented method.

...contrary to the approach taken by Lindgren J, the relevant territorial limitation is reflected in the language of ss 12 and 13(3) and there is therefore no justification for importing words of territorial limitation into the definition of "exploit". It follows that I take a somewhat different approach to the construction of the definition of "exploit" to that taken by Lindgren J in Alphapharm, though I do not think the difference has any impact on whether or not Apotex threatens to infringe the Swiss claims in this case.

The Full Court preferred the approach of Justice Nicholas to that of Justice Lindgren, but noted that Apotex's criticisms of the approach of Justice Lindgren, including that his Honour's construction would lead to an absurd result, were not warranted.

In any event, the Full Court upheld the primary judge's finding that the conduct of Apotex in threatening to import and supply in Australia pharmaceuticals containing pregabalin manufactured outside Australia was a threatened infringement of the Swiss claims of the Patent.

Footnote

1 Under the Patents Act "patent area" means:

  1. Australia; and
  2. the Australian continental shelf; and
  3. the waters above the Australian continental shelf; and
  4. the airspace above Australia and the Australian continental shelf.

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