October 9, 2020

Case Summary : Mylan Health Pty Ltd v Sun Pharma ANZ Pty Ltd

The successful grant of patent rights in Australia (as in most countries) requires the claimed invention to be novel and to comprise an inventive step over what is known from the prior art base.

In one of the most important decisions to be handed down by the Australian Federal Court in the last year (Mylan Health Pty Ltd v Sun Pharma ANZ Pty Ltd [2020] FCAFC 116) the Full Federal Court considered one aspect of the novelty test which may have substantial implications for biotechnology and pharma patent applicants entering Australia. The decision also has severe implications on claims to second medical uses of biologics. In findings that are seemingly at odds with the real world, the manufacture of the claimed medicament deliberately for use in the patented method must be evident for infringement to be found.

An enlarged bench of the Full Federal Court of Australia was appointed to clarify the previous finding of the Federal Court that a prior art suggestion or speculation of a claimed invention is “not necessarily fatal to a novelty argument” (see, Merk & Co Inc v Arrow Pharmaceuticals Ltd [2006] FCAFC 91 at [110]).

In brief, Mylan was the exclusive licensee of a granted Australian patent (AU2006313711), directed to the use of fenofibrate (and its derivatives) for the treatment of retinopathy. Since 2015, Mylan’s fenofibrate therapeutic product (LIPIDIL) was the only one of its type in the Australian market.

On first instance the Federal Court found all the claims to lack novelty, due to a protocol for a prior clinical trial that hypothesised that the administration of fenofibrate will reduce the rate of development or progression of diabetic retinopathy. On appeal, Mylan argued that this prior art could not be novelty destroying because, at best, it discloses only a hypothesis that required testing and such documents do not constitute a “clear and unmistakeable directions” to perform the claimed method for clinical use.

Deviating from the U.K. Courts which generally hold that to impact on novelty prior art must disclose actual achievement of the relevant therapeutic effect (see, for example Regeneron Pharmaceuticals Inc v Genentech Inc [2012] EWHC 657 (Pat); and Hospira UK Limited v Genentech Inc [2015] EWHC 1796 (Pat)), the Australian Full Court found that, in assessing novelty, one must consider whether the prior art discloses information sufficiently specific and complete to be equal to the claimed invention. If so, even a protocol for a trial to test the claimed composition/method would be novelty destroying.

“It is important to stress that validation of the ACCORD Protocol’s hypothesis was certainly not required in order to achieve the equality of disclosure referred to in Hill v Evans. Looked at from a different perspective, it is not a requirement for a patentable invention that the invention, as claimed, be based on scientific proof or substantiation… What is required is that the prior document discloses that which is subsequently claimed as an invention. If that is disclosed, the invention cannot be new.”

This aspect of the decision has substantial implications for patent applicants entering Australia. It is typically somewhat unknown as to whether a candidate drug will succeed in treating or preventing the indication when a protocol for a clinical trial is designed. At that stage, there is a significant chance that the candidate will be ineffective and/or unsafe. While the Full Court acknowledged that the specific nature and extent of prior published clinical trial protocols will be critical, it also held that unproven hypotheses, ideas and speculations will impact on the novelty of claims to a method that the patentee subsequently shows to be efficacious and safe.

New challenges to show infringement of Swiss-style claims

This Full Federal Court also made significant findings with respect to the infringement of Swiss-style claims in Australia. Swiss-style claims are relatively commonplace in patents for medical treatments that involve the use of a known substance for a new therapeutic treatment. Typically, Swiss-style claims are of the form:

The use of [Compound X] in the manufacture of a medicament for the treatment of [Condition Y].

This claim type was originally developed as a means to obtain allowable claims in jurisdictions where methods of medical treatment are not considered patentable. Swiss-style claims are directly infringed by the manufacturer of the defined medicines for the treatment of the indicated condition. Notably, however, in Australia allows patents to be granted with claims directed to methods of medical treatment, and therefore Swiss-style claims have been used to direct target pharmaceutical manufacturers, as opposed to relying solely on the indirect infringement of method of treatment claims (that are directly infringed by medical practitioners) under section 117 of the Australian Patents Act 1990 (Cth).

On making their decision on infringement, the enlarged bench unanimously overturned the decision of the trial judge and heldthat infringement of a Swiss-style claim concerns: “what the allegedly infringing manufacturer has done, not what it intended to do” (at ¶ 222). The Full Court concluded that manufacture will only infringe a Swiss-style claim if it can be clearly shown that a product was made specifically for use to treat the claimed indication(s) – thereby introducing a subjective element to the infringement enquiry.

Strikingly, the Full Court found that the subsequent use of the manufactured medicament for the patented purpose simply being “reasonably foreseeable” was insufficient to show infringement. In terms of proving that subjective element, the Full Court observed that the manufacturer’s reasons for manufacturing a product would typically be evidenced by any associated drug information, however, consideration may also be given to things such as the characteristics of the medicament as it emerges from the manufacturing process (including formulation and dosage); packaging and labelling; and patient information.

In Mylan’s case, the conditions listed on Sun Pharma’s product were confined to the approved indications outside the conditions within the scope of the patent (a practice known as “skinny labelling”). As such, no infringement was found as the Full Court held that Mylan had not shown that Sun Pharma’s product was manufactured “for” treating the conditions encompassed by the patented Swiss-type claims.

This decision of the Full Federal Court seems vastly at odds with real world practices, and how Swiss-style claims are construed in other jurisdictions. Certainly, in Australia the threshold for evidencing infringement of a Swiss-style claim appears to have been raised. Whilst a manufacturer may not infringe a Swiss-style claim if it cannot be shown that it was specifically manufactured for the patented use, such use may still infringe a method of treatment claim.

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