CRESTOR Catch-Up

Apotex Pty Ltd v AstraZeneca AB [2011] FCA 1520 (14 December 2011)
Apotex Pty Ltd v AstraZeneca AB (No 2) [2012] FCA 142 (28 February 2012)
Watson Pharma Pty Ltd v AstraZeneca AB [2012] FCA 200 (9 March 2012)
Apotex Pty Ltd v AstraZeneca AB (No 3) [2012] FCA 265 (23 March 2012)

AstraZenenca’s cholesterol drug CRESTOR will remain without generic competition in the Australian market for the foreseeable future, following a series of interlocutory decisions in which injunction were granted against three rival pharmaceutical manufacturers.

Back in March we wrote about a number of ongoing cases between original manufacturer AstraZeneca AB, and generic pharmaceutical companies Apotex Pty Ltd, Watson Pharma Pty Ltd and Ascent Pharma Pty Ltd, over cholesterol drug rosuvastatin, marketed in Australian by AstraZeneca as CRESTOR.  (See Preliminary Injunction for CRESTOR—Not All ‘Tablets’ are Equal and Generics Unsuccessful in CRESTOR Injunction Challenges.)

In a series of three interlocutory decisions reported in our earlier articles, Federal Court judges Rares, Emmett and Jagot determined that all of the relevant factors supported the grant of injunctions barring the sale of generic versions of rosuvastatin pending a full hearing on the validity and infringement of three AstraZeneca patents:

1. the ‘051 patent’, or ‘dosage patent’ (no. 2000023051), which relates to the treatment of hypercholesterolemia using a daily oral dosage of 5-10 mg of rosuvastatin;
2. the ‘842 patent’ or ‘composition patent’ (no. 2000051842), which relates to a formulation (e.g. a tablet) in which rosuvastatin is present in combination with a specified inorganic salt (which serves to stabilise the active ingredient); and
3. the ‘165 patent’, or ‘generic patent’ (no. 2002214165), relating to the use of rosuvastatin for treatment of heterozygous familial hypercholesterolemia.

Apotex’s efforts to circumvent the injunction against it were not yet over.  At a further hearing held on 16-17 March 2012, Justice Jagot was asked to determine whether changes in the coating of its generic rosuvastatin product were be sufficient to avoid the reach of AstraZeneca’s patents.

However, Apotex’s last-ditch effort has been dismissed, maintaining the status quo and excluding generic competition to CRESTOR pending a final determination on the issues of infringement and validity of the patents.

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Tags: Australia, Interlocutory injunction, Pharmaceuticals

Manager’s Salary Safe From Claim for Account of Profits

Polyaire Pty Ltd v K-Aire Pty Ltd & Ors [2012] SASC 75 (10 May 2012)

Infringement – remedies – account of profits – whether managing director of infringing company is required to account for salary paid during period of infringing conduct

In the latest episode in a case that has been running since 1996, the Supreme Court of South Australia has ruled that a successful plaintiff in a design infringement case cannot claim a portion of a company director’s salary after electing to receive compensation in the form of an ‘account of profits’.

This decision arises out of two recurring features of intellectual property litigation in Australia, and the reasoning and outcome are presumably applicable to patent, trade mark and copyright cases, as well as to cases – such as this – involving infringement of registered designs.

The two relevant factors are:

1. a successful plaintiff in an IP infringement action is generally entitled to elect compensation in the form of damages or an account of profits, but not both; and
2. it is common for a plaintiff to bring proceedings not only against a company that may have been providing infringing products or services, but also against any company managers or directors who may be deemed to have controlled the activities of the company.

Damages are calculated based upon the harm done to the rights-holder, e.g. due to lost sales and/or other commercial opportunity.  An account of profits, on the other hand, is based upon the benefits accruing to the respondent as a result of the infringing activities.  Damages are likely to be the preferred option where an infringer has, for example, eroded the market share of the rights-holder by undercutting on price, such that the losses of the plaintiff exceed the profits made by the infringer for the same sales.  An account of profits would be preferred where the infringer has, for example, developed a market and made sales that would not have been made by the plaintiff.

When an account of profits is elected, the infringing company is clearly liable for all sales of infringing products or services.  But what about a company director?  Are there ‘profits’ accruing to an individual as a result of the infringement which must be accounted in addition to the company’s profits on sales?  Here, the South Australian court has said ‘no’.

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Tags: Account of profits, Designs, Infringement, Remedies

Bickering About Software Patents Misses the Point About Innovation

On Thursday 16 May 2012, IP Australia held an ‘IP Forum’ event in Sydney, on the subject of ‘software patents’.

Regrettably, being located in Melbourne, Patentology was unable to attend in person.  However, past events have been recorded and made available via YouTube, so we are hopeful that this will also be the case for the software patent forum.  Especially because, by all accounts, it was a fairly spirited occasion.

In the pro-software-patent corner was Australian inventor Ric Richardson, whose company Uniloc has recently reached a substantial settlement with Microsoft over Richardson’s patent covering anti-piracy technology, including Microsoft’s online activation system.  The history of Uniloc’s battle with Microsoft has been covered by two episodes of the ABC television program Australian Story: ‘A Done Deal’ in April 2012, and ‘The Big Deal’ in August 2009.

For the anti-software-patent side, IP Australia invited Ben Sturmfels, principal of free software developer Sturm.  Sturmfels is also the Melbourne discussion group organiser for the Australian Free Software Association, which in 2010 gathered over 1000 signatures on a letter to (then) Innovation Minister Senator Kim Carr calling for the abolition of software patents in Australia.

IP Australia was represented by Deputy Commissioner Phil Spann, who is perhaps not especially averse to software patents, unless they happen to involve ‘business methods’.  His most recent decisions as a Hearing Officer include Network Solutions, First Principles, Iowa Lottery, and Invention Pathways.

So the stage was certainly set for a lively discussion.  But is all this energy really being well-directed?  What actual impact are software patents having on innovation?  And is the question of whether of not software should be patentable really the most important issue to which we should be drawing politicians’ attention, or are there greater barriers to the successful commercialisation of innovative technologies on which to be focussing?

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Tags: Business processes, Computer programs, Economics, Innovation policy, Law reform, Patentable subject matter, Politics

Appeals Tribunal Preserves Confidentiality as LEXAPRO Saga Extends

Aspen Pharma Pty Ltd and Commissioner of Patents [2012] AATA 281 (10 May 2012)

Practice and procedure – application for leave to rely on confidential documents – obligations of confidence – competing public interests in ensuring the proper administration of justice and in ensuring that contractual provisions as to confidentiality are duly enforced

In an interim decision relating to the ongoing efforts of Lundbeck A/S to obtain an extension of term of its patent no. 623,144 – which covers the S- or (+)-enantiomer of the antidepressant compound citalopram, marketed in Australia as LEXAPRO – the Administrative Appeals Tribunal (AAT) has ruled to preserve confidentiality in a prior agreement between Lundbeck  and Sandoz Pty Ltd by which earlier court proceedings seeking revocation of the patent were settled.

The issue before the Tribunal was this:

When information pertinent to a decision exists in a confidential document (such as a confidential settlement agreement), is it appropriate – and, if so, in what circumstances – to grant leave for the confidential document to be used as evidence in the proceedings, thereby effectively breaking the original confidence?

In this case the Tribunal found that breaking confidence was not justified, at least in-part because there is other evidence in the ongoing proceeding which will allow the same issues to be raised.

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Tags: AAT practice, Confidential information, Evidence

Gene Patent Opponents Take the Fight Back to Australian Parliament

It was less than eight months ago that the most recent attempt to legislate against so-called ‘gene patents’, the Patent Amendment (Human Genes and Biological Materials) Bill 2010, was effectively killed by a Senate Committee report containing just one recommendation: ‘the Committee recommends that the Senate should not pass the Bill.’  (See Divided Senate Committee Urges Rejection of Gene Patents Bill).

Since then, the Intellectual Property Amendment (Raising the Bar) Act 2012 has been passed into law, providing (amongst much else) a new defence to infringement for research uses of a patented invention, and elevated standards for utility and inventive step which should go some way towards preventing the grant of patents covering isolated genes obtained by non-inventive techniques, or which are not limited by some specific practical application.

Yet opponents of gene patents remain unsatisfied.  On Monday 14 May 2012, the ABC television program Lateline ran a report on a new push to ban the patenting of genes, this time via a private members bill to be introduced by Labor government backbench MP Melissa Parke (the member for Fremantle, in Western Australia).  The report was followed by an interview with Ms Parke, and Liberal Party Senator Bill Heffernan (who was the driving force behind the previous gene patents bill).

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Tags: Australia, Genetic technology, Patent law, Patentable subject matter

IP Australia Fee Increases Coming, From 1 July 2012

In handing down the 2012 Budget last week, the Australian Government has approved the changes to IP Australia’s fees, which were foreshadowed back in December 2011 (see IP Australia Proposes – Mostly – Modest Fee Increases).

The majority of the fees changes will apply from 1 July 2012. with the exception of increases to application filing fees, commencing on 1 October 2012.

While most of the changes are simply relatively modest adjustments to existing fees, three more significant developments are worth noting:

1. a number of fees will be structured to provide an incentive, i.e. a reduced charge, for payment to be made via the ‘approved form’ of transaction (typically via an online channel, such as the new eServices portal);
2. annual renewals on standard patents and pending applications will become payable a year earlier than is presently the case, i.e. on the fourth anniversary of filing; and
3. the fee for an International Search under the Patent Cooperation Treaty (PCT) will rise from A$1900 to A$2200, while the fee for an International Type Search (ITS) conducted on a provisional application, which is currently A$1400, will rise to the same level, i.e. and increase of A$800.

The only completely new fee will be for the preliminary search and opinion service for patents, which is introduced by the Raising the Bar Act 2012. This service and its associated fee will come into effect on 15 April 2013.

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Tags: Australia, News, Official fees, Patent Office

Federal Court Conducts Markman-Style Hearing in Hot Tub

Britax Childcare Pty Ltd v Infa-Secure Pty Ltd [2012] FCA 467 (9 May 2012)

Claim construction – role of expert evidence – practice and procedure – concurrent testimony

Justice Middleton has issued a 413 paragraph (104 pages, not including Annexures) decision in a patent case involving child safety seats.  Not that there is anything unusual about lengthy decisions issuing from the Federal Court of Australia – this one is a minnow compared to the 1619 paragraphs penned by Justice French in the case of University of Western Australia v Gray (No 20) [2008] FCA 498.  Furthermore, the actual findings in this case will most likely be of interest only to those actually involved in the proceedings.

However, two things are notable about Justice Middleton’s decision.  Firstly, it addresses only one preliminary issue, namely ‘claim construction’, i.e. the question of how the patent claims asserted by the patent owner Britax Childcare should properly be interpreted.  Secondly, the hearing involved a rare instance of ‘hot-tubbing’ expert witnesses – which sounds entirely inappropriate, but actually is not, although it is a practice not without its critics.

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Tags: Claim construction, Evidence, Federal Court practice

Dual Failures in Patent Office Decision on Inventive Step?

In re: application by Paul Andrew Cronk [2012] APO 28 (21 March 2012)

Inventive step – assessment on ‘balance of probabilities’ – relevant law applying to application filed on 26 February 2003

A patent hearing officer has upheld an examiner’s finding that claims directed to a ‘mushroom stud and keyhole’ arrangement for assembling a lighting unit (‘luminaire’) are obvious and lacking inventive step, despite provision by the applicant of evidence arguably supporting a contrary view.

Interestingly, however, examination of the application seems to have proceeded on the basis that it would not be permissible to combine the teachings of two prior art documents in order to establish obviousness of the claimed invention.  This was indeed the case under the Australian law of inventive step prior to 1 April 2002.  But we are not sure that it was the appropriate law to apply the case of this application. 

Australian patent application no. 2008229901 in the name of Paul Andrew Cronk is for ‘A Luminaire Reflector Locating Arrangement’, and derives (as a divisional) from an earlier application having an effective filing date of 26 February 2003.

We are inclined to question a finding of a lack of inventive step which is not supported by the only actual evidence presented at the hearing.  But unless we are missing something here, the bigger question is why the examiner, and the hearing officer, apparently failed to apply the post-2002 law in this case.  This is especially perplexing, when the amended law substantially favours the Patent Office position that the claims are not inventive!

It is possible that we will ultimately get a definitive answer to both questions, because on 11 April 2012, Cronk filed a Notice of Appeal against the decision in the Federal Court of Australia (no. NSD532/2012).

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Tags: Australia, Examination, Obviousness, Patent Office

IP Australia Launches eServices Portal

As anticipated last month (see A Sneak Peek at IP Australia’s New Online Services Portal) IP Australia officially announced the launch of its new eServices portal on 30 April 2012.


An email from IP Australia announcing the launch explains:

eServices is a secure electronic business portal that allows you to register, login and conduct selected transactions when and where it is convenient for you.

In the first release of eServices customers can renew all IP rights and submit trademark registrations electronically, and pay for them online using VISA or MasterCard. You can also access new features such as the option to save your requests, access your eServices transaction history and update your details.

In fact, IP Australia has released two digital transaction portals.  eServices is intended for low-volume customers, i.e. individuals and companies who conduct occasional business in relation to Australian patents, trade marks, designs and/or plant breeder’s rights.  A high-volume service, called Business 2 Business (B2B), will be used by organisations such as patent attorney firms and large corporation, which have a regular need to conduct bulk transactions with IP Australia.

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Tags: Australia, Patent Office