18 August 2017

Extensions of Term for ‘Swiss-Style’ Claims Involving Recombinant DNA Technology? Federal Court Says ‘No’!

Matterhorn SunsetA Full Bench of three judges of the Federal Court of Australia has overturned an earlier decision of the Administrative Appeals Tribunal, and has ruled that extensions of patent term are not available for second and subsequent medical uses of pharmaceutical substances that are produced by recombinant DNA technology: Commissioner of Patents v AbbVie Biotechnology Ltd [2017] FCAFC 129 (AbbVie).  In particular, the court found that so-called ‘Swiss-style’ claims are not directed to pharmaceutical substances, and therefore cannot be the subject of a term extension, even if they involve the use of pharmaceutical substances that have been ‘produced by a process that involves the use of recombinant DNA technology’ (to use the terminology of section 70(2)(b) of the Patents Act 1990).

In Australia, the normal maximum term of a patent, i.e. 20 years from its original filing date, can be extended by up to five years in the case of certain pharmaceutical products, to compensate for the time that is typically required to complete trials and obtain the regulatory approvals necessary to actually commence marketing of a commercial drug.  Generally, extensions are available only for patents covering the pharmaceutical substances themselves – patents on methods of making or using the substances are not extendible (section 70(2)(a)).  The one exception to this rule relates to the use of recombinant DNA technology in the production of a pharmaceutical substance (section 70(2)(b)).

The term ‘recombinant DNA’ (rDNA) refers to a process of bringing together genetic material from multiple sources to create gene sequences that are not present in nature.  One well-established medical application of rDNA technology is the production of human insulin for the treatment of diabetes.  By inserting the human insulin gene into a bacterium (such as E. coli) or yeast, the resulting organism becomes a biological insulin factory.  Insulin produced in this way has almost completely replaced the use of insulin from animal sources, such as pigs and cattle. 

The Australian extension of term provisions implement a policy under which even though a pharmaceutical substance (such as insulin) may already be known, a patent directed to the (known) substance when made by a new process involving the use of rDNA technology can nonetheless be awarded an extension of term.  This provides an additional patent incentive for companies to invest in research and development of recombinant techniques for production of medications.

AbbVie Biotechnology Ltd (‘AbbVie’) owns a number of Australian patents relating to a pharmaceutical substance known as adalimumab, marketed under the name HUMIRA, which is produced by a process of rDNA technology.  The drug was originally approved in Australia in 2003, for treatment of rheumatoid arthritis.  It was subsequently demonstrated to be effective for the treatment of rheumatoid spondylitis, Crohn’s disease and ulcerative colitis, and was approved for use in treating these further conditions in 2006, 2007 and 2013, respectively.  AbbVie has patents covering these further medical uses of HUMIRA, each of which includes ‘Swiss-style’ claims.

AbbVie applied to the Australian Patent Office to extend the terms of its three further medical use patents, however a Deputy Commissioner of Patents determined that they were not eligible for extensions of term under section 70(2)(b).  AbbVie appealed to the Administrative Appeals Tribunal of Australia (‘Tribunal’), which reversed this aspect of the Deputy Commissioner’s findings, deciding that Swiss-style claims can form the basis for an extension of patent term.  Nonetheless, AbbVie’s applications for extension of term were still rejected, because the Tribunal agreed with the Deputy Commissioner that they had not been filed within the applicable time limits.

The Commissioner of Patents appealed the Tribunal’s findings in relation to the eligibility of Swiss-style claims to the Federal Court, which has allowed the appeal, and affirmed the Deputy Commissioner’s original decision.  This does not surprise me greatly – when I wrote about the Tribunal’s decision last year, I said that I believed it to be wrong, and that I thought it quite likely that the Commissioner would appeal.

Preliminary Issues

Two interesting aspects of the appeal by the Commissioner are, firstly, that AbbVie elected to take no active part in the proceedings and, secondly, that there was no challenge to the Tribunal’s finding that the applications for term extension had not been filed within the applicable time limits.

As a result of AbbVie’s decision not to participate, there was no contradictor at the appeal hearing to argue against the Commissioner’s case.  In view of this, the court directed the Commissioner to notify the President of the Institute of Patent and Trade Mark Attorneys of Australia of the appeal in the hope that someone may step up to take on the role of contradictor, but nobody did.

Furthermore, with the finding that AbbVie’s applications were out-of-time being uncontested, the court’s determination on the question of eligibility would make no difference to the ultimate outcome, i.e. refusal of the applications.  The raised a question of jurisdiction (at [37]):

Does the fact that the Tribunal came to a different view on the meaning and application of s 70(2)(b) of the Patents Act entitle the Commissioner to appeal on that question, even though the outcome of the review before the Tribunal remained the same as the outcome of the proceeding before the Deputy Commissioner?

Fortunately for the Commissioner (and for the rest of us who prefer to see the law maintained in a sensible and coherent state) the court concluded that the appeal was competent, noting (at [45]) that the decision of the Tribunal:

… involved, in the event, the discrete exercise of power … to three different but nevertheless connected decisions concerning the respondent’s extension of term applications. Each decision by the Tribunal can be seen as an ultimate decision in the review. Significantly, the Tribunal did not make a composite decision that either “affirmed” or “refused” any of the applications in suit even though, as we have said, the Deputy Commissioner’s refusal to extend the terms of the patents remained undisturbed.

Claiming ‘Swiss-Style’

The ‘general’ form of a Swiss-style claim is ‘the use of a compound [X] for the preparation of a medicament [Y] for treatment of a disease/condition [Z]’.  I have explained previously that the primary purpose of such claims is to enable the discovery of new medical uses for known compounds to be rewarded with some form of patent protection, even if patenting methods of medical treatment is prohibited in a particular jurisdiction (although there is no such restriction in Australia).  Generally, Swiss-style claims are treated as if they cover any and every method of making a medicament of any kind that includes the compound as an active ingredient, and with the intention of it being used to treat the new condition.  The validity of such claims depends upon a ‘legal fiction’ that the required novelty and inventiveness can be attributed to the discovery of the compound’s activity in relation to the new condition, even though there may otherwise be nothing new in manufacturing medicines including the known compound.

The validity and scope of Swiss-style claims has received only limited judicial attention in Australia.  In Otsuka Pharmaceutical Co., Ltd v Generic Health Pty Ltd (No 4) [2015] FCA 634, a single judge of the Federal Court of Australia confirmed (at [120]) that ‘an invention defined by a Swiss type claim is appropriately characterised as method or process’ of manufacturing a medicament, and not as a claim to the product itself.  The Full Federal Court in AbbVie (at [15]) now appears to have approved the interpretation of Swiss-style claims from Otsuka.

Extension Provisions Concerned with Products, Not Processes

Section 70(2) of the Australian Patents Act 1990 provides for two (and only two) circumstances in which a patent relating to a pharmaceutical substance may have its term extended by up to five years, assuming that all other requirements are also satisfied.  These are that:

        (a)  one or more pharmaceutical substances per se must in substance be disclosed in the complete specification of the patent and in substance fall within the scope of the claim or claims of that specification;
        (b)  one or more pharmaceutical substances when produced by a process that involves the use of recombinant DNA technology, must in substance be disclosed in the complete specification of the patent and in substance fall within the scope of the claim or claims of that specification.

In considering this provision, the Full Court stated, at [49], that:

Both s 70(2)(a) and s 70(2)(b) concern pharmaceutical substances, as defined. The cases dealing with s 70(2)(a) recognise that it is the character of pharmaceutical substances as products that gives meaning to the “scope of the claim or claims” referred to in that provision (emphasis added). This understanding has been assisted by the provision’s use of the expression “per se” in the composite expression “one or more pharmaceutical substances per se”. Put simply, the cases have recognised that the provision’s concern is with inventions that are products, not inventions that are methods or processes.

After reviewing relevant authorities, the court further noted, at [55], that:

…s 70(2)(a) and s 70(2)(b) address the same concern—extensions of term in relation to claims directed to pharmaceutical substances, not methods or processes involving pharmaceutical substances. The only exception is the one specifically acknowledged by s 70(2)(b), where pharmaceutical substances can be produced by a process that involves recombinant DNA technology. But, even so, the matter claimed must be the pharmaceutical substance or substances so produced, not other methods or processes involving those substances.

The court also commented, at [57], that this construction of the provision is consistent with the Explanatory Memorandum for the Intellectual Property Laws Amendment Bill 1997, which inserted the current s 70 into the Patents Act.

Swiss-Style Claims Cannot Support an Extension of Patent Term

From the court’s observations regarding the interpretation of Swiss-style claims, and the purpose of section 70(2) of the Patents Act, it follows that the Tribunal got it wrong.  As the court stated, at [58]-[59]:
The first and critical matter to note about Swiss type claims is that they are not claims to pharmaceutical substances at all. They are method or process claims which, in this connection, exhibit a dual character. First, they are directed to a method or process in which a substance is used to produce a medicament. Secondly, they have an additional method or process element constituted by a specific purpose to which the medication is to be used. Thus, the scope of Swiss type claims is fundamentally different to the scope of the claims addressed by s 70(2) of the Patents Act.

With specific reference to the present case, adalimumab is a pharmaceutical substance produced by a process that involves recombinant DNA technology. However, the claims in suit are not directed to adalimumab produced by recombinant DNA technology. They are directed to different subject matter. First, they are directed to a method or process in which adalimumab is used to produce a medicament. Secondly, they are directed to a medicament containing adalimumab that is to be used for specific therapeutic purposes…. These claims do not meet the requirements of s 70(2)(b). In our respectful view, the Tribunal erred in concluding otherwise.
The court thus concluded, at [63], that the Commissioner’s appeal should be allowed, and that the original decision of the Deputy Commissioner – that, in each case, the applications for extension do not comply with section 70(2)(b) – should be affirmed.

Conclusion – rDNA and ‘Product-by-Process’

First and foremost, the take-home message from this decision is that a patent for a second or subsequent medical use of a pharmaceutical compound, whether produced using rDNA technology or not, and whether claimed as a method of treatment or using the Swiss style of claim, can never be the subject of a term extension.

A further message I take out of it (and this is probably something of which attorneys who work in the pharmaceutical space are already well-aware) is that a patent that discloses and claims a new method for producing a pharmaceutical substance through the use of rDNA technology should include ‘product-by-process’ claims, i.e. claims expressly directed to the (known) product itself when produced by the (novel, rDNA) process.  The Full Court’s statement, at [55], seems quite clear: to enliven section 70(2)(b), the matter claimed must be the pharmaceutical substance or substances produced using the rDNA technology, not other methods or processes involving those substances.

Now, it may be that a claim to a method of making a product using rDNA technology has a sufficient nexus with the product itself that the substance in question can be considered to be within the scope of the ‘matter claimed’.  From a policy perspective, I would like to think so.  After all, whether claimed as a process, or as a product of the process, the inventors’ substantive contribution, i.e. a new method of making a pharmaceutical substance involving rDNA technology, is just the same.  However, a product-by-process claim far more clearly and directly satisfies the criteria set out by the court in this decision, and it would therefore seem wise to ensure that all applications directed to inventions in this field include such claims.


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