Does importation of products manufactured overseas infringe a Swiss claim in Australia?

A recent decision of the Federal Court of Australia has highlighted the importance of including Swiss claims in Australian patent applications.

Swiss claims were originally allowed by the Swiss Intellectual Property Office to provide protection for a second use of a known medicament where claims to methods of medical treatment were not allowable. Swiss claims are generally in the form:

The use of [known compound X] for the manufacture of a medicament for the treatment of [new therapeutic use]]

The claims remain a common feature in Australian patent applications for pharmaceuticals, despite method of treatment claims being allowable in Australia.

In Apotex Pty Ltd v Warner-Lambert Company LLC (No 2) [2016] FCA 1238, Nicholas J in the Federal Court of Australia found that the Swiss claims of Warner-Lambert’s patent were infringed by a product made overseas and then imported into Australia.

The Decision

Australian Standard Patent 714980 entitled “Isobutylgaba and its Derivatives for the Treatment of Pain” relates to the use of certain compounds for the treatment of pain and in the manufacture of medicaments for the treatment of pain.

The compounds include pregabalin which is marketed and sold in Australia by Pfizer Australia under the brand name Lyrica. Patents from the same family have also been the subject of litigation in the UK, for example, most recently in Warner-Lambert Company LLC v Generics (UK) Ltd (t/a Mylan) & Ors [2016] EWCA Civ 1006.

The Australian proceeding was a consolidation of two separate proceedings by Pfizer (Warner-Lambert) alleging that Apotex and Generic Partners each threatened to infringe the claims of the patent, and Pfizer sought an injunction accordingly.

Apotex and Generic Partners counterclaimed for revocation of the patent. Apotex conceded that, if claims 1-15 and 31 were valid, then it threatened to infringe them, but asserted that it did not threaten to infringe the various Swiss claims, submitting that that the importation and sale in Australia of medicaments made outside the patent area cannot infringe a Swiss claim.

In order to determine infringement of the Swiss claims Nicholas J had to consider the scope of the definition of “exploit” from Schedule 1 of the Patents Act 1990 to determine whether the activities of Apotex and Generic Partners fell within this:

The term “exploit” is defined in Schedule 1 to include:

“(a) where the invention is a product–make, hire, sell or otherwise dispose of the product, offer to make, sell, hire or otherwise dispose of it, use or import it, or keep it for the purpose of doing any of those things; or

(b) where the invention is a method or process–use the method or process or do any act mentioned in paragraph (a) in respect of a product resulting from such use.”

Apotex submitted that paragraph (a) of the definition should be interpreted as though it referred to a product made in the patent area (Australia and territorial areas) and that paragraph (b) should be given a corresponding interpretation so that “any act mentioned in paragraph (a)” will be taken to refer to an act that is done in respect of a product resulting from the use of a patented method in the patent area as defined above.

On Apotex’s construction, paragraph (b) would include a sale of a product made by a patented method in Australia but not a sale of a product made by the patented method in another country. In support of this construction, Apotex relied in part upon Lindgren J’s reasoning in Alphapharm Pty Ltd v H Lundbeck A/S [2008] FCA 559.

Nicholas J did not agree with this construction on the basis that the definition of “exploit” makes no reference to the patent area. The judge further stated that there is therefore no reason to read down the words of either paragraph (a) or (b) of the definition of “exploit” to found any territorial limitation. This is because the Act expressly provides in section 12 that a patent only has effect in the patent area.

Paragraph (b) of the definition of “exploit” refers to the doing of an act referred to in paragraph (a) which includes to make or import a product. The patentee’s exclusive rights are infringed (subject to available defences) if another person does any such act within the patent area.

The fact that the patented method is performed outside the patent area does not avoid infringement of a method claim (including a Swiss claim) if the product imported and sold in Australia was made using the patented method because the acts of importation and sale occur within the patent area.

Importantly, Nicholas J concluded that the relevant act of infringement is not the use of the method outside the patent area, but the exploitation (by importation and sale) in Australia of a product made using the patented method.

Implications in New Zealand?

Although a decision of the Federal Court of Australia, the decision also highlights the importance of Swiss claims in New Zealand and importantly, how these may be deemed infringed.

Swiss claims were first recognised judicially in New Zealand in Pharmaceutical Management Agency Ltd v Commissioner of Patents [2000] 2 NZLR 529. Swiss claims are typically used in place of method of treatment claims for any pharmaceutical product having a particular use, as the use itself cannot be claimed.

Due to the near identity of the definition of “exploit” in Schedule 1 of the Australian Patents Act 1990 and section 18(2) of the New Zealand Patents Act 2013, it is possible that a New Zealand Court would take a similar opinion to Nicholas J in Apotex regarding infringement of a Swiss claim, requiring a plaintiff to prove only factual importation of an infringing product made overseas.

However, because method of treatment claims are excluded from patentability in both the UK and New Zealand, in contrast to Australia, it is more likely that the interpretation of, and approach to infringement of, Swiss claims taken in the UK Court of Appeal in Warner-Lambert v Generics would be preferred by a New Zealand Court. The UK approach instead requires an analysis of the manufacturer’s intention in order to determine infringement and therefore could be considered as more stringent.

Further decision

Following the decision outlined above, a subsequent decision of Nicholas J on the same matter (Apotex v Warner-Lambert (No 3)), further highlights the difference in construction between method of treatment and Swiss claims in Australia, and the respective scope of potentially infringing activities.

In determining whether or not the infringers’ activities constituted an “offer to sell” from the definition of “exploit” as provided above, Nicholas J commented on the scope of method of treatment claims vs. Swiss claims at paragraphs 20, 21, 27 and 28.

The Judge’s comments clearly illustrate that the scope of method of treatment and Swiss claims are different, and highlight the value of each as a distinct form of protection.

Particularly, the value of Swiss claims is demonstrated in that a Swiss claim will exclude others undertaking any activities within paragraph a) of the definition of exploit, with respect to any product produced by the use claimed in the Swiss claim by virtue of paragraph b). This allows broad protection, particularly to cover infringing manufacturers, distinct from the complementary ambit of the method of treatment claims, which typically protect use of the end product by a party other than the manufacturer.

Jesse Strafford - February 2017

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