Full Court finds Swiss-style claims invalid – hypothesis as prior art and obviousness of invention
By Ben Miller & Sophie Vo• 19 November 2020 • 8 min read
Earlier this month the High Court of Australia refused an application by Mylan Health Pty Ltd (Mylan) for special leave to appeal the Full Court’s decision in Mylan Health Pty Ltd v Sun Pharma ANZ Pty Ltd  FCAFC 116 (Mylan Health), leaving that decision to govern the law in Australia regarding “Swiss-style” claims.
In Mylan Health an enlarged bench of the Full Court of the Federal Court ruled that:
- a published hypothesis does not need to be validated or scientifically substantiated to be novelty-defeating;
- the assessment of inventive step does not require a percentage-based analysis for the expectation of success (e.g. better than “fifty-fifty”); and
- the assessment of infringement of Swiss-style claims is an objective one directed to what the product is for, not what the alleged infringer intended to do, having regard to all the circumstances.
Fenofibrate was a known compound used in the treatment of elevated lipid levels (hyperlipidaemia). The proceeding concerned three patents. Two of these claimed certain formulations of fenofibrate. A third claimed a second medical use for fenofibrate, namely for the treatment of diabetic retinopathy, a long-term complication of diabetes which may lead to vision loss (the Patent).
The Patent included both method of treatment claims as well as Swiss-style claims, being claims to “the use of fenofibrate or a derivative thereof for the manufacture of the medicament for the prevention and/or treatment of retinopathy”.
Since August 2006, Lipidil was the only fenofibrate product on the Australian market, and was marketed and sold by Mylan, the exclusive licensee of the Patent, since February 2015. On 29 February 2016, Sun Pharma registered a number of fenofibrate film-coated tablets on the Australian Register of Therapeutic Goods (the Ranbaxy Products) and applied for their PBS listing. Mylan then commenced proceedings against Sun Pharma in the Federal Court of Australia for threatened patent infringement.
Invalidity of the Patent
Novelty – Publication of a reasoned hypothesis is sufficient to invalidate a patent
The primary judge, Nicholas J, found that the Patent was invalid on the ground that the invention, as claimed, was not novel. A clinical study on cardiovascular disease in patients with type 2 diabetes involved the assessment of an hypothesis that the administration of fenofibrate would reduce the rate of the development or progression of diabetic retinopathy compared to a strategy that only used a statin. The details of this clinical study, which provided an instruction to administer fenofibrate with a statin, was published in the ACCORD Eye Study Protocol, Version January 2004 (ACCORD Protocol) which was key to his Honour’s finding of invalidity.
On appeal, Mylan submitted that the ACCORD Protocol could not anticipate the invention as claimed because it advanced no more than a reasoned hypothesis for treatment, not a method of treatment as such.
The Full Court held that for a claim of a patent to lack novelty, what is required is that the prior document discloses what is claimed as the invention, whether or not that disclosure concerns an unvalidated hypothesis, or a scientifically substantiated one. The ACCORD Protocol, containing the hypothesis, proposed the clinical study and essentially instructed practitioners involved in the study to deliberately administer fenofibrate with a statin, the aim of which was to prevent or treat diabetic retinopathy. It therefore disclosed the method of treatment claimed in the Patent.
In coming to its conclusion, the Full Court distinguished Australian law from UK authorities such as Regeneron Pharmaceuticals Inc v Genentech Inc  EWHC 657 (Pat) and Hospira UK Limited v Genentech Inc  EWHC 1796 (Pat). These authorities, applying the law of the Boards of Appeal of the European Patent Office, required that the prior art document disclose the actual achievement of the therapeutic effect. In Australia, however, the Full Court has made clear that the element of “established efficacy” is not a requirement for a patentable invention. Nor is it required for a prior publication to invalidate a method of treatment patent.
Inventive step – Obviousness is an evaluative judgement, not assisted by a percentage-based analysis
At first instance, Nicholas J held that the Patent lacked inventive step in light of the Early Treatment Diabetic Retinopathy Study Report 22 (ETDRS 22). ETDRS was an observational study, as part of a larger clinical trial, that found that increased total cholesterol and triglyceride levels were associated with a more rapid onset of obvious retinal hard exudate.
The key issue on appeal was the significance of the EDTRS 22 from the point of view of a person skilled in the art, and whether that person would have been “directly led as a matter of course” to try fenofibrate as a medicament for the prevention or treatment of diabetic retinopathy, with the expectation that it would be successful in that use.
Mylan submitted that Nicholas J erred in concluding that a percentage-based analysis to the question of “obviousness” is not useful. The Full Court disagreed with Mylan, stating that in coming to the conclusion, Nicholas J did not mistakenly rely on the existence of “mere possibilities”, nor did the his Honour err in concluding that a percentage-based analysis to the question of “obviousness” is not useful. The Full Court ultimately agreed with the conclusion that the claims in the Patent were invalid for lack of inventive step, as there was a “substantial basis” for concluding that the notional team, being the person skilled in the art, would have been directly led by the EDTRS 22 to try fenofibrate for the treatment as described in the Patent.
Infringement of Swiss-style claims
In determining whether a Swiss-style claim is infringed, at first instance Nicholas J found that the manufacturer’s objective intention regarding the use of the medicament in the treatment of a specified condition was crucial. His Honour held that Mylan had not proved Sun Pharma’s intention that the Ranbaxy Products be used for the prevention or treatment of diabetic retinopathy, and thus dismissed Mylan’s infringement case.
On appeal, the Full Court disagreed with Nicholas J’s approach, stating that:
“Infringement arises from the taking of the essential features of the invention as claimed. Therefore, infringement of a Swiss type claim is concerned with what the allegedly infringing manufacturer has done, not what it intended to do.”
The Full Court held that having regard to all the circumstances of the case, one must ask whether the medicament in issue is for the therapeutic purpose that is specified by the patent. The relevant circumstances in determining the therapeutic purpose of the medicament include:
- the physical characteristics of the medicament as it emerges as a product of the manufacturing process, including its formulation and dosage, packaging and labelling, and its patient information;
- direct evidence of the manufacturer’s actual intention in making the medicament (which is not an essential feature of the invention, and not itself determinative); and
- the reasonably foreseeable use or uses to which the medicament would be put after manufacture (where such reasonable foreseeability or likelihood of use for the claimed therapeutic purpose would not be determinative of infringement).
The Full Court addressed the relevant circumstances regarding the Ranbaxy Products as follows:
- The product information for the Ranbaxy Products states that it is bioequivalent to Lipidil and Lipidil’s product information states that it is indicated for the reduction in the progression of diabetic retinopathy – this does not equate to the Ranbaxy Products being medicaments for the therapeutic purpose specified in the Patent, especially since it refers to “bioequivalence” only.
- The Ranbaxy Products do not contain a disclaimer of use for the specified therapeutic purpose in the Patent – this does not prove that, as manufactured, the medicament is for a therapeutic use that has not been disclaimed.
- The Therapeutic Goods Administration declined Sun Pharma’s application to amend the product information to add an express disclaimer regarding the indication of the Ranbaxy Products for retinopathy – this was not an “elaborate feint” on Sun Pharma’s part.
Based on the facts of the case, the Full Court was not convinced that the Ranbaxy Products, as manufactured, are medicaments for the treatment of retinopathy, in particular diabetic retinopathy. The Full Court held, therefore, that the supply of the Ranbaxy Products would not infringe the Swiss style claims, even if they had been valid.
- Publication of clinical trial protocols – The Full Court’s decision follows a line of cases in Australia to the effect that the earlier publication of a hypothesis that a known drug has a second medical use may be enough to invalidate a later patent for that use. Where clinical trials are conducted by Government agencies and trial protocols are published, sponsors of pharmaceuticals and medical devices will face difficulty obtaining valid patent protection for trial outcomes in Australia.
- Timing of patent applications – For patentability in Australia, sponsors should consider filing patent applications before clinical trial protocols are published. However different requirements in Europe for sufficiency of disclosure to support second medical use claims may lead to invalidity there.
- Labelling and packaging – Methods of medical treatment are patentable in Australia, and although Swiss style claims are not necessary, they remain common practice. The Full Court’s decision makes clear that a “skinny label” strategy may avoid infringement of Swiss style claims in appropriate cases.
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