28 March 2012

Australian Federal Court Blocks Generic ABILIFY (Aripiprazole)

Otsuka Pharmaceutical Co., Ltd v Generic Health Pty Ltd [2012] FCA 239 (16 March 2012)

Interlocutory injunctionprima facie case of infringement – strength of invalidity case – balance of convenience – Infringement – meaning of ‘exploit’ in Patents Act 1990 – interpretation of ‘Swiss-style’ claims – infringement of ‘method of treatment’ claims by supply of product – consideration of ‘Gillette defence’ and whether a discrete defence in Australian patent law

AbilifyEven while the CRESTOR injunction saga continues (see Generics Unsuccessful in CRESTOR Injunction Challenges and Preliminary Injunction for CRESTOR—Not All ‘Tablets’ are Equal), the Federal Court of Australia has granted yet another preliminary injunction barring a generic product from the market pending a full trial on infringement and validity of relevant patents.  This time the drug in question is ‘atypical’ antipsychotic aripiprazole, marketed by Bristol-Meyers Squibb (BMS) as ABILIFY, under license from the patentee Otsuka Pharmaceutical Co., Ltd.

The recurring theme in these pharmaceutical cases is that the ‘balance of convenience’ will often favour the patentee and original drug manufacturer, as a result of the operation of the Australian Pharmaceutical Benefits Scheme (PBS).  Under the PBS, various approved drugs are subsidised by the government to improve availability and affordability.  In exchange for these subsidies (which undeniably increase levels of prescription, sale and use) the government exercises a degree of price control to ensure that taxpayers are not unduly burdened by the cost of patented drugs. 

One of the consequences of these price controls is that the entry of a generic product onto the market results in an immediate, and irreversible, 16% drop in the price that the government will pay for the drug.  A manufacturer can apply to charge a ‘brand price premium’, however if this is granted the additional cost is paid by the patient, not by the government, meaning that the generic product will be cheaper to the end user.

There are, however, some additional factors which set the ABILIFY case apart from the recent CRESTOR decisions – in particular the court’s discussion of the meaning of ‘exploit’ in the Patents Act 1990, its interpretation of ‘Swiss-style’ claims, and its consideration of the applicability of the so-called ‘Gillette defence’.


Since the Full Federal Court decision in Samsung Electronics Co. Limited v Apple Inc. [2011] FCAFC 156 (see Samsung v Apple – A Closer Look at the Appeal Decision), primary judges considering applications for interlocutory injunctions in these cases have been careful to conduct a full analysis to determine whether an interlocutory injunction is appropriate.  In particular, it is necessary to consider the strength of the patentee’s infringement case, the likely merits of any invalidity case put forward by the alleged infringer, and in light of these considerations to assess the ‘balance of convenience’ to the parties in the event that an injunction either is, or is not, granted.

In the CRESTOR and ABILIFY cases that have come before various judges of the Federal Court in the past months, the prima facie existence of infringement has been fairly clear-cut, since in each instance the generic manufacturer has been proposing to introduce a directly competing product, containing the same active ingredient, as approved for inclusion of the Australian Register of Therapeutic Goods (ARTG)

Typically, the merits of an invalidity case are hard to assess at a preliminary stage, in the absence of complete evidence and the ability to cross-examine expert witnesses. 

And with the irreversible and difficult-to-quantify impact of even the temporary entry of a generic competitor to a drug listed under the PBS, the balance of convenience has been repeatedly found to favour the grant of a preliminary injunction.


Otsuka is the proprietor of two patents relevant to these proceedings, identified as ‘the 772 patent’ (Australian Patent No. 2005201772) and ‘the 752 patent’ (Australian Patent No. 2002226752) respectively.

The 772 patent includes ‘Swiss-style’ claims, and method-of-treatment claims.

The ‘Swiss-style’ claims are directed to the use of a specified compound (aripiprozole) ‘for the production of a medicament’ effective in the treatment of disorders ‘selected from cognitive impairment caused by treatment-resistant schizophrenia, cognitive impairment caused by inveterate schizophrenia, or cognitive impairment caused by chronic schizophrenia’ which fails to respond to ‘antipsychotic drugs selected from chlorpromazine, haloperidol, sulpiride, fluphenazine, perphenazine, thioridazine, pimozide, zotepine, risperidone, olanzapine, quetiapine, or amisulpride’.

The method-of-treatment claims are directed to treating a patient having one of the aforementioned schizophrenia disorders, which has failed to respond to any of the specified antipsychotic drugs, by treating the patient with a ‘therapeutically-effective amount’ of the specified compound (aripiprozole).

The 752 patent also includes ‘Swiss-style’ and method-of-treatment claims, distinguished from the 772 patent claims in that the disorder that is treated by the specified compound (aripiprozole) is ‘selected from depression; cognitive impairment caused by Alzheimer’s disease or Parkinson’s disease; autism; Down’s syndrome; attention deficit hyperactivity disorder (ADHD); Alzheimer’s disease; Parkinson’s disease; panic; obsessive compulsive disorder (OCD); sleep disorders; sexual dysfunction; alcohol abuse; drug addiction; emesis; motion sickness; obesity; and migraine.’

The claims of both patents have in common that the disorders to be treated are associated with the 5-HT1A serotonin receptor subtype in the human brain.  Invention is said to reside in the newly-discovered therapeutic effects of aripiprozole set out in the claims of the patents.


Under the Australian Patents Act, a patent affords the patentee the exclusive right to ‘exploit’ the claimed invention.  It is therefore an infringement for somebody else to ‘exploit’ the invention without authority from the patentee.

The word ‘exploit’ is defined in the Dictionary in Schedule 1 of the Patents Act, which says that the term includes:

(a) 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
(b) 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.

In this scheme, Swiss-style claims raise the question of whether they are covered by paragraph (a) or (b) of the definition.

The standard form of a Swiss-style claim is the use of a compound X in the manufacture of a medicament Y for treatment of a condition Z.  This is generally understood to cover the manufacture of the medicament, and sale with direction (express or implied) for its use to treat the specified condition.  As the court here pointed out (at [67]) Swiss-style claims were originally devised to enable newly-discovered therapeutic effects to be protected in those jurisdictions where corresponding method-of-treatment claims are not permitted.  In Australia, method-of-treatment claims are allowed in these circumstances, so Swiss-style claims are not strictly necessary.  However they have the benefit that they are directed to activities of the manufacturer, rather than the end-user of the drug.

Notably, the Swiss-style claim has the general form of a method (X is used to make Y), but does not actually specify any particular method steps.  It does not state, with any specificity, precisely what acts will infringe.  On this basis, the defendant Generic Health Pty Ltd (GH) argued that the Swiss-style claims were not covered by the definition of ‘exploit’ and thus, in effect, could not be infringed by GH.

The judge was reluctant to address this issue at the interlocutory stage, however his comments (at [87]-[88] suggest that it could provide some interest in a final decision:

The reach of the definition of “exploit” is a matter that is open to debate. I am not persuaded that, at this stage, I should seek to determine that debate, particularly as it concerns a difficult question about the construction of “Swiss-style” claims. The nature of claims in that form has received little judicial attention in this country, although it has been the subject of some significant debate in other jurisdictions.

There are, however, two matters that should be noted at the present time. First, the definition of “exploit” … is expressed inclusively, leaving room for argument that the exclusive rights … are not confined to the specific acts identified in the definition. Secondly, it is by no means clear that the “use” referred to in [the Swiss-style claims] is not a method or process for the purpose of the definition. In my view it is at least arguable that the intended acts of the respondent with respect to the GH products will be with respect to a product resulting from the use of a method or process of the kind covered by the definition.

In the event this did not prevent the grant of an injunction, because the judge was satisfied that supply of the drug by GH would constitute an indirect infringement under section 117 of the Act (at [99]).


The so-called ‘Gillette defence’ derives its name from Gillette Safety Razor Company v Anglo-American Trading Company Ltd (1913) 30 RPC 465.  This is a very old case, and the scheme of the UK Act at the time was very different to that of the current Australian Patents Act.

Nonetheless, the general principle of the ‘defence’ is compelling.  If the accused infringer can establish that they are doing no more than is taught in some item of prior art information, then one of two possible outcomes must follow: either
  1. the accused acts infringe the claims, but then the patent must be invalid for want of novelty; or
  2. the accused acts do not infringe, though the patent may be valid.
The court in 1913 found this argument attractive, because it obviated the need to consider all of the various infringement and validity issues before coming to a final conclusion – that no valid claim is infringed – which was was essentially predetermined by the fact that the defendant was merely practising the prior art.

The Gillette defence hardly seems appropriate in this case, since GH cited six items of prior art (listed at [115]), seemingly without establishing that it makes the accused product simply by following the directions in one of these documents.  The judge expressed some doubt as to whether the Gillette defence has any application under the current Australian law (at [118]):

In my view there is a real doubt that, under Australian patent law, the “Gillette defence” is a discrete defence existing independently of the ground of invalidity provided by s 138(3)(b) of the Act, read in conjunction with s 18(1)(b)(i) and s 7(1) and the definitions of “prior art base” and “prior art information” in Schedule 1 to the Act. In Woodbridge Foam Corporation v AFCO Automotive Foam Components Pty Ltd [2002] FCA 883 Finkelstein J thought that it might be a discrete defence, and refused to strike-out a pleading raising it. On the other hand, there is much to be said for the view that Lord Moulton’s observations should now been seen as reflecting no more than a process of reasoning that reinforces the counterpoint between infringement and the requirement of a valid claim supporting that infringement. Certainly the emphatic language of s 138(3) of the Act (“… the court may… revoke the patent … on one or more of the following grounds, but on no other ground …”) makes clear that any challenge to validity must be confined to the grounds of invalidity identified in that provision.

The judge therefore elected to deal with GH’s ‘defence’ as if it were essentially a challenge to validity on the basis that the invention is not novel in light of the cited prior art, considered separately (at [119]).  He found that this was not established on the basis of the evidence available to him (at [132]).


This decision is a further example of the fact that it is not difficult to obtain a preliminary injunction in a case involving pharmaceuticals that are covered by the PBS.  The significant and irreversible impact of government regulations on the price at which the patented drugs can be sold has been found repeatedly to tip the balance of convenience in favour of the patentee.

Furthermore, a prima facie case of infringement is generally straightforward to establish in the case of regulated pharmaceuticals, while the defendant will not often be in any better position than the average accused infringer in establishing a prima facie case of invalidity.

Interestingly, it seems that the status of Swiss-style claims under the current Australian patent law may receive some scrutiny if this case proceeds to a final determination, as may the existence of the ‘Gillette defence’ as a discrete defence to accusations of patent infringement.


Unknown said...

Hi Mark. You sound like you have read alot of books and have a good grasp on English but my working class mind could not figure out what the hell you were talking about. Just wanted to tell you that something strange is going on if the government and its courts allow for 1 company to have a monopoly on a drug that in many cases is forced onto the patient who has no choice but to consume it or face inprisonment. This is what I call exploitation of the most evil kind. This drug dose absolutely nothing, except for making the patient feel sick and make the drug company rich at the expense of the patient. Why not let another company get in on the action chemical elements are nothing new.

Unknown said...

Very informative post. Thanks for sharing


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