April 14, 2021

Case Summary: Juno Pharmaceuticals v Celgene Corporation

There is often a desire in patent cases for parties to simplify the case so that it can progress as quickly as possible. This is especially so when the defendant plans to launch a new product which the patent is blocking, such as a generic pharmaceutical. There are a range of options available to litigants but most commonly they will apply to strike out parts of the case pleaded against them. However, the recent case of Juno Pharmaceuticals Pty Ltd v Celgene Corporation [2021] FCA 236 serves as a salutary warning that the task is not easy and, in doing so, they will likely face an uphill battle.

Juno Pharmaceuticals challenged the validity of Australian Patent No. 715779 (AU’779) in order to clear the path to launch a generic pharmaceutical product. The patent protected a series of compounds that could reduce levels of tumor necrosis factor α, which can lead to negative consequences to animals and humans. The patent owner, Celgene, responded with infringement proceedings against Juno Pharmaceuticals in regard to AU’779 and seven other granted patents.

As well as pleading lack of inventive step, Juno Pharmaceuticals alleged that AU’779 was invalid due to a failure to disclose the best method, and that it was obtained by false suggestion or misrepresentation. Celgene applied to have these two grounds summarily dismissed.

The Court began (at [24]) by reiterating the principles of summary dismissal for patent infringement cases first set out in Unpaid Systems Ltd v Telstra Corporation Ltd [2016] FCAFC 158. There, the Full Court of the Australian Federal Court had noted that while patent infringement cases were not immune from summary dismissal orders, it was likely to be less appropriate where the technology in question was complex. At [25], the Court confirmed that this principle was no different for applications to dismiss parts of a patent invalidity case.

After reviewing the pleaded case on best method, the Court observed (at [50]) that Juno Pharmaceuticals was “in difficulty with this asserted ground of invalidity” in part because its position was based “on a problematic construction of the claims” (at [52]). Notwithstanding the strength of Celgene’s position as the patentee however, the Court still declined to order a summary dismissal of the ground. The Court noted that its initial assessment was “not definitive” and that it could not yet be said that the ground “had no reasonable prospect of success” (at [81]). The Court also noted the practical consideration that it would be taking evidence on the patent in the substantive hearing in order to consider and rule on inventive step. The Court was wary of the possibility that it might find itself receiving evidence on claim construction and the scope of the invention that might contradict an earlier finding in the summary dismissal action as to how the claims should be construed (at [84]-[85]).

Similarly, the Court noted at [92] that while Celgene’s submissions on summarily dismissing the ground of false suggestion had “some force”, the discretion to strike out the ground would not be exercised because discovery might lead to the ground being further clarified.

Consistently however, the Court also dismissed Juno Pharmaceutical’s strike-out applications against the cross-claims of infringement. Juno Pharmaceutical had argued that since it had not yet launched its generic product, the cross-claims were hypothetical. The Court disagreed, saying at [184] that while the “cross-claim is in some respects hypothetical” it was not “sufficiently hypothetical to warrant summary disposition.” This was because it was clear that Juno Pharmaceutical had an intention to launch its product within the lifetime of the asserted patents.

This case clearly highlights how difficult it can be to have parts of a patent case summarily dismissed or struck-out, especially where the technology in question is complex, or where issues of claim interpretation and scope arise. However Juno Pharmaceutical did succeed in its request to have the trial on the validity of AU’779 expedited in advance of the other seven patents asserted by Celegne. Celgene argued that this was inappropriate and that all the patents should be heard together. The Court disagreed since the legal issues against AU’779 were distinct from the seven others.  As a matter of pragmatics the Court also noted that if Juno Pharmaceutical lost in regard to its validity challenge against AU’779 it would not proceed with its launch rendering the subsequent infringement claim against the other seven asserted patents nugatory, so there was real benefit having that issue expedited.

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