03 December 2010

Federal Court Punishes CSL for Amendment Delay

CSL Limited v Novo Nordisk Pharmaceuticals Pty Ltd (No 2) [2010] FCA 1251 (18 November 2010)

Amendment – application to amend under section 105 of the Patents Act 1990 – whether patentee's delay in applying to amend was unreasonable – whether patentee took unfair advantage of unamended patent


This Federal Court decision follows on from a ruling issued back in the early days of this blog (nearly six months ago – an eternity on the internet!)
The court has refused an application by the patentees, CSL Limited and Monash University, for leave to amend the patent-in-suit on the basis that their delay in requesting the amendment was unreasonable, and that they sought to take unfair advantage of a patent that they had good cause to believe was invalid.

This decision further emphasises the antipathy of the Federal Court to applications to amend patents in cases in which there were earlier opportunities to address any potential validity issues.


In June, the Federal Court granted an application to Novo Nordisk, ordering 'further and better discovery' of documents relating to a request by patentees CSL Limited and Monash University ('CSL') for leave to amend their Australian patent no. 716,747 relating to a 'method for the preparation of a stable, liquid formulation of growth hormone'.  We reported the earlier decision here, and mentioned it again in our Tale of Four Amendment Requests (which is almost becoming a central Patentology theme... following our previous report this week).

To summarise the background in this case, CSL commenced infringement proceedings against Novo Nordisk on 10 March 2009, and later sought to amend its patent claims by way of a Notice of Motion filed on 6 November 2009.  The amendment appeared to be motivated by opposition proceedings before the European Patent Office (EPO), relating to the corresponding European patent.  The EPO had issued a decision on 25 May 2009 finding the original independent claim to be invalid for lack of novelty.  However, claims including a pH limitation of 5.0 to 6.8 in the patented method were found to be novel.

The applicants claim that it was this decision that set in train the sequence of events that led to them filing the amendment application on 6 November 2009. However, the Notice of Opposition was originally filed on 26 June 2007, and the proposed claim amendments first filed at the EPO (albeit as a 'fall-back' position) on 11 April 2008, ie long before the application to amend was filed in Australia, and also well in advance of commencement of the Australian litigation.


It does not seem to be hyperbole to state that the Federal Court has severely punished CSL for its conduct in this case.  The judge (Justice Jessup) made the court's opinion quite clear on the fundamental issues of delay, and unfair advantage:

Given the history to which I have referred, I consider that the applicants delayed unreasonably before moving to amend the patent in suit in November 2009.  Clearly they were in a position to apply to amend when they received ... draft European amendments in April 2008.  Their reasons for not doing so, either then or for more than 18 months thereafter, is that they were reasonably entitled to await the outcome of their two European requests.  This is, of course, a justification now advanced by the applicants for their inaction.  There is no (at least documentary) evidence that this reflected the applicants’ actual thinking at the time. There is no evidence, for example, that the applicants sought or took professional advice on the timing of any amendment application in Australia, nor upon the relevance of the course followed in Europe to that question. (At [84.])
...the applicants did not merely await the Preliminary Opinion of the Opposition Division: on 10 March 2009 they commenced the present proceeding, in which they alleged that the respondents had infringed the unamended patent.  That was, in my view, to take unfair advantage of the patent .... The applicants, even then, might have accompanied their proceeding with an application under s 105. They took no such course. They were content for the present proceeding to be determined by reference to a claim which they had found it necessary to amend elsewhere, and for which they offered no real defence in the European Opposition proceedings less than 12 months previously. And there is no suggestion in the evidence that the applicants sought professional advice on the appropriateness of the course which they then followed. (At [87].)

In other words, Jessup J was satisfied, on the evidence, that CSL had good reason to believe that its patent claims were invalid, but commenced infringement proceedings anyway, on the basis of those claims, and delayed an application to amend until a substantially later date.  When expressed in this manner, this does not sound like the kind of conduct that is worthy of the court's sympathy!


It seems self-serving for a patent attorney to draw attention to Justice Jessup's comments in relation to obtaining 'professional advice', but the inferences are unavoidable.  The court was clearly looking for evidence that – at any stage – CSL had sought advice as to the most appropriate course of action in Australia, in view of the events in the EPO opposition proceedings.

If CSL had been able to produce advice stating that (for example, due to differences in the law in Australia and Europe) it would have been premature to amend the Australian patent ahead of the issue of a decision in Europe, the outcome may have been different.

In the event, it seems that CSL not only took no action in response to the European opposition, but they were unable to produce any advice to support their inaction, and then they commenced infringement proceedings on the basis of claims that were subsequently invalidated in Europe.


It is increasingly clear that any patentee coming to the Federal Court seeking to amend a granted patent had best do so with squeaky clean hands!  The present strict approach appears to have its origins in Apotex Pty Ltd v Les Laboratoires Servier (No 2) [2009] FCA 1019, which was recently upheld on appeal to the Full Federal Court (as reported here earlier this week).

We have previously recommended amending early, and amending often (if necessary).  Amendments may be requested before the Patent Office under section 104 of the Patents Act 1990, or before the Court during the course of proceedings under section 105.  There are potential disadvantages to requesting amendment under section 104, including the fact that an application to amend must be advertised, and can be opposed.  But thus does not excuse a failure to apply for amendment under section 105 at the time of filing infringement proceedings, rather than six or seven months later.

In summary, if your patent needs amending, then do so.  At the earliest reasonable opportunity, and on the basis of sound professional advice.


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