01 March 2015

Patentee Punished for Failing to Heed Attorney’s Recommendation

SadnessA judge of the Federal Court of Australia has denied a request by patentee Les Laboratoires Servier (‘Servier’) to amend a patent in order to avoid cancellation for failure to disclose the best method of performing the claimed invention solely because it opted not to follow a recommendation made by its Australian patent attorneys during examination of the original application back in 2004: Apotex Pty Ltd v Les Laboratoires Servier (No 4) [2015] FCA 104.

Just be absolutely clear here, the court found that the requested amendment was allowable in principle (i.e. was not precluded by any provision of the Patents Act 1990), and that in all other respects Servier had acted promptly and appropriately, such that the court would otherwise have exercised its discretion to allow the amendment.  The one and only reason given for refusing the amendment request was that the patent attorneys had suggested that a similar amendment might be made prior to grant of the patent, but that the responsible person within Servier was of the opinion that the disclosure within the patent specification was adequate, and that the amendment was therefore not necessary.  The court bluntly describes this as ‘an error on her part’ (at [180]).

I find this decision frankly extraordinary, and I fully expect that it will be appealed.  The patent in question covers the compound perindopril arginine, which is the active ingredient in the brand name drug COVERSYL, which is used to treat hypertension (i.e. high blood pressure).  This patent, and foreign counterparts, have been extensively litigated in Australia and overseas.  It is clear that there is a great deal at stake in this case, and Servier is unlikely to abandon its efforts to save a patent that has been found, in all other respects, to be valid.

I should say, at this point, that the patent attorney firm in question here was Watermark, where I work.  However, Watermark no longer acts for Servier in relation to this matter, and nothing that I shall say in this article is based on anything other than publicly available information.  Opinions, as always, are my own, and should not be taken as representing the views of Watermark, its Principals, management, other employees or clients (past or present).

Background to Amendment Request

Servier’s application to amend its patent arose as a result of an earlier decision of the Federal Court which found that while the claimed invention was novel, inventive, and that the specification otherwise met the requirements of the Patents Act 1990, it failed to ‘disclose the best method known to the applicant of performing the invention’.  I wrote about that decision back in January 2014: see Patent Fails to Disclose ‘Best Method’, But Will It Be Revoked?

As I explained in my earlier article, the patent specification described a method for making the claimed invention, i.e. the compound perindopril arginine, in sufficient detail to enable the relevant skilled person to put the invention into effect.  In particular, a passage covering about a page of the specification describes ‘preparing perindopril arginine from L-arginine and perindopril according to a classical method of salification of organic chemistry’.  It was not in dispute that this generally described the methods actually used by Servier’s chemists to prepare the component, nor that the description was sufficient to enable other chemists to achieve the same result.

At the time, the court indicated that it would hear further submissions on whether or not this finding should result in the patent being revoked.  I therefore wondered what basis there could possibly be for not revoking the patent, having found that it failed to satisfy the ‘best method’ requirement, however Servier pre-empted any further hearing on this point by applying to amend the patent to include a disclosure of the best method.

Amending to Include ‘Best Method’ Disclosure

You might suppose that it would not be permissible, years after the patent had been granted, to amend the specification in order to add information that should have been present at filing.  In fact, it no longer is – for patents to which the reforms in the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 apply, section 102 prohibits any amendment that would result in the specification claiming or disclosing any matter that was not present in the relevant original documents.

However, for patents subject to the law as it was prior to 15 April 2013, a more permissive rule applies, according to which any amendment can be made so long as it does not result in any added matter being claimed.  In Servier’s case, the specification contained all of the detail necessary to support the claims.  Adding further description corresponding with what the court found to be the ‘best method’ of performing the invention would not result in anything new being claimed.

Nonetheless, Apotex attempted to argue that Servier should not be permitted to amend the specification to add a disclosure of the best method after filing or, at the very latest, grant of the patent.  The court rejected this argument, noting that it would extend the range of amendments that were not allowable beyond those that the Parliament specifically identified in section 102, and restrict the power to grant amendments conferred on the court by section 105 of the Patents Act (at [138]).

In any event, the court found that the requested amendment was, in principle, allowable under the Act.  The only question, therefore, was whether it should exercise the discretion inherent in section 105 actually to permit the amendment to be made.

The Discretion to Allow or Refuse a Request to Amend

I have written previously about the court’s discretion to allow or refuse amendments under section 105 (see, for example, A Tale of Four Amendment Requests, from way back in August 2010, when this blog was just two months old).  Exercise of the discretion is guided by equitable considerations, and the guidelines that have been developed by the courts may be summarised as follows:
  1. the court is not hostile or antipathetic to amendment, but the onus lies with the patentee to satisfy the court that the requested amendments should be allowed;
  2. it is the conduct of the patentee that is at issue, not the merit of the invention;
  3. the patentee has an obligation to disclose to the court all relevant matters relating to the requested amendments;
  4. the patentee should not have sought to obtain unfair advantage from the unamended patent;
  5. there should not have been unreasonable delay by the patentee in seeking the amendments;
  6. nonetheless ‘mere’ delay in itself does not warrant refusal, if there is a reasonable explanation;
  7. a patentee aware that its claims are of undue breadth must act promptly to amend them;
  8. the court should consider any other circumstances that may arise that may lead it to refuse the amendment; and
  9. none of the above principles are fixed rules, and they must be accommodated to the facts of each case.
In this case, the court had no real issue with Servier’s conduct.  It accepted that Servier had only become aware of the need to amend its specification as a result of the litigation, and that there had been no undue or unexplained delay in making the application to amend.  It did not find that there had been any bad faith on Servier’s part, or that it had failed to provide a sufficient explanation of its reasons for the amendment, or that it had failed to disclose all relevant matters.

Why Was the Amendment Request Refused?

In essence, the court found simply that the responsible person at Servier made an error of judgment after receiving a letter from Watermark after the patent application was initially examined, which included the following recommendation:

…we recommend that a method for manufacture of the arginine salt of perindopril be inserted into the description, even if the manufacturing method is well known in the art, to satisfy the written description requirements.

The response from Servier included the following instructions in relation to this recommendation:

Concerning the manufacture of the arginine salt of perindopril, we have mentioned in the description page 3, lines 22-23 that this salt is prepared according to a classical method of salification of organic chemistry: we do not think it is necessary to add more detail for the moment: we will see later.

The court did not doubt that Servier’s beliefs on this matter were genuinely held (at [180]):

I accept that [the Servier employee] did not think that such a disclosure was necessary …, but that was an error on her part. [The attorney’s] recommendation was clear. [Servier] chose not to amend the complete specification to add a description of either of the 1986 or 1991 methods that Servier knew, at 27 February 2003, would enable a skilled addressee to make a form of salt that could be used in pharmaceutical compositions.

The court’s decision not to exercise the discretion to allow the amendment therefore had nothing to do with any questionable conduct on Servier’s part.  Ultimately, the court considered that the Patents Act requires a disclosure of the best method known to the applicant of performing the invention, and the public is therefore entitled to expect that this will be provided and may be disadvantaged if it is not (see [181]-[182]).  The judge therefore concluded (at [183]):

I am of opinion [sic] that the damage to the public interest involved in Servier’s failure to disclose the 1986 and 1991 methods in the complete specification, even after [the attorney’s] recommendation, was not reasonable and outweighs the proprietorial interest of Servier in being able to save the patent from revocation…

Conclusion – A Surprising and Disturbing Result?

I am surprised by this decision.  I am particularly surprised (and a little disturbed) by the fact that it ultimately came down to the fact that a patent attorney had provided a recommendation, and the applicant had considered the recommendation but declined to follow it on the basis that the applicant genuinely believed that the existing disclosure in the specification was adequate.

This surprises me because the attorney’s recommendation does not seem to me to be as unequivocal as the court appears to have regarded it.  A patent attorney is not, in fact, usually in a position to know for certain whether or not there is an adequate disclosure in a specification.  By definition, the specification is addressed to the person skilled in the art, which in this case would be a highly qualified pharmaceutical chemist.  The applicant would be in a better position to know how much detail is necessary to teach such a person how to perform the ‘best method’ of the invention. 

Here, a recommendation was provided, it was considered, and a decision was made.  The court did not find that there was anything untoward in that process except that, as it turned out as a result of litigation a decade later with the full benefit of hindsight, the decision was erroneous.  Furthermore, the court was provided with affidavit evidence and testimony in cross-examination from a senior member of the patent attorney profession, which indicated that differences of opinion regarding the scope of the best method requirement existed in the profession, i.e. that a different advisor might have provided a different recommendation.

What I find disturbing is that the court’s reasoning suggests that it may have been better for the patentee if the attorney had not made any recommendation at all.  It is not clear to me how the communications between Servier and its patent attorneys came to be in evidence in the first place, given that they would presumably have been covered by the attorney-client privilege established by section 200 of the Patents Act.  However this came about, a decision that might discourage attorneys from giving advice, or clients from seeking it, seems to me to be generally a bad thing.  It is, after all, the primary reason for the existence of privilege.

The law has been changed so that, in the future, the kinds of amendment sought by Servier will not be allowable.  But the reforms to the Patents Act are not, and should not be, retrospective.  Servier’s patent is subject to the former law, and the requested amendment is not prohibited by that law.  The court nonetheless has a discretion as to whether or not to allow the amendment, but having found no fault with Servier’s conduct, and there being no evidence of any actual detriment to the public interest having occurred, I do not believe that the court should have exercised its discretion to refuse an allowable amendment.

My hope is therefore that the decision will be appealed, and that the appeal will be successful.


Unknown said...

i absolutely enjoyed reading this, and as an IP law student, your article clarifies so many things for me. I agree with you.

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