Establishing infringement of representative batches may be insufficient to establish liability

Pharmacia LLC v Juno Pharmaceuticals Pty Ltd [2022] FCA 92
Pharmacia LLC v Juno Pharmaceuticals Pty Ltd (No 2) [2022] FCA 369
Pharmacia LLC v Juno Pharmaceuticals Pty Ltd [2022] FCAFC 176

15 February 2022, 11 April 2022

Federal Court of Australia

Burley J

29 September 2022

Full Court of the Federal Court of Australia

Jagot, Yates, Downes JJ

Background

Pharmacia’s patent relates to lyophilised (that is, ‘freeze-dried’) formulations of parecoxib, a prodrug of the selective COX-2 inhibitor valdecoxib used to treat pain.  Parecoxib is water-soluble but converts to valdecoxib, which is less soluble, on exposure to water.   The invention the subject of the patent was directed to minimising the presence of certain excipients (specifically water and bulking agents such as mannitol) to overcome this, while enabling an acceptable dissolution profile for reconstitution prior to administration.

Pharmacia commenced infringement proceedings in 2019 against Juno and its distributor Neo Health (Australia) Pty Ltd.  The asserted claims incorporated limitations as to the total amount of the active pharmaceutical ingredient (API) and excipients, for example “constituting about 30% to about 90% by weight” of the API. Ultimately the parties agreed that the infringement issues could be decided with respect to six product batches (representative batches), in light of certain admissions made by Juno.  Juno filed a cross-claim asserting invalidity of the patent, but also amended its defence to infringement to state that the representative batches were not sold, supplied or imported into Australia.

On 15 February 2022 Justice Burley issued his judgment on the merits, concluding that three of the six representative batches fell within the scope of the asserted claims, and that the validity challenge failed.   There was no dispute that it was common general knowledge before the priority date to formulate active pharmaceutical ingredients in lyophilised (or freeze-dried) form if they were unstable in aqueous solutions, for reconstitution in water immediately prior to administration.  However his Honour found that Juno had failed to establish that the notional research group would have taken several of the steps in the purported development pathway necessary to arrive at the invention, illustrating the high burden in Australia on a patent challenger relying on obviousness.

By the time of Burley J’s second judgment regarding the appropriate form of orders to give effect to his first judgment, the patent had in fact expired and so no injunction was ordered.  Both parties subsequently appealed aspects of the decisions on infringement and validity to the Full Court of the Federal Court.

Key Issues

Infringement – construction, calculations

At first instance Justice Burley held, consistent with Juno’s submissions, that the term ‘about’ should be interpreted to permit a small amount of variance from the ranges specified in the claims, limited to rounding to the nearest whole percentage point, so that for example “about 90%” would include amounts up to 90.49%. The Full Court agreed with him that ‘about’ is not a term of art and should be given its ordinary meaning, being ‘near, close to’, and therefore not permitting a 5% variation as argued by Pharmacia.

A key issue with respect to the calculations for the claimed ranges of API/excipients was the fact that although the process of lyophilisation is designed to remove all water from the composition, some residual water will remain, and the amount may vary.  At first instance Justice Burley held that the residual water must be taken into account with respect to most claims when calculating the relative amounts of the components by weight.  The Full Court found no basis to depart from this reasoning, despite Juno’s arguments that this was unworkable, as the amount of water is an uncontrolled variable.  The Full Court found that the use of the term ‘comprising’ in the claims was understood to allow for the presence of other integers not specifically identified in the claims, that this approach was consistent with the teaching in the specification that a powder composition will normally contain some water.  Because of variation in water content, only some of the representative batches were held to fall within the claims.

Conversely, the primary judge and Full Court both held that pH adjusters, which were described in batch records as being added ‘q.s.’, that is, in sufficient quantities to achieve a specified pH, were not to be taken into account in making the relevant calculations, largely relying on expert evidence that the quantity added would be limited and immaterial to the calculations.

Practicalities of establishing obviousness and the role of the PSA

Obviousness is assessed by reference to the knowledge and actions of the hypothetical PSA.  The PSA need not be limited to an individual person, but may comprise a team of individuals with a range of experience and qualifications.

The identification of team members comprising the PSA was critical because Pharmacia’s formulation experts and Juno’s clinical expert took different approaches to literature searching.  Under the Patents Act 1990 (Cth) (Act) as it stood pre-Raising the Bar, prior art can only be relied upon for inventive step purposes if the skilled person could be reasonably expected to have ascertained the document, understood it and regarded it as relevant.  (This requirement has now been removed for post-Raising the Bar patents.)  Typically this requirement is proven by expert evidence outlining the document searching strategy that the expert would employ to carry out a hypothetical task to solve the problem which led to the invention.  In this case, the search strategy used by Juno’s expert located the key prior art documents, whereas that of Pharmacia’s experts did not.  Ultimately Justice Burley applied a practical approach, finding that there was a “logical connection” between the task and the searches proposed by Juno’s expert.  The Full Court did not revisit this argument on appeal, because it agreed with the primary judge that Juno’s obviousness argument failed in other respects.

At first instance His Honour also addressed (and rejected) an interesting argument by Pharmacia on inventive step – that the PSA had insufficient time from the date the prior art was ascertainable until the patent priority date to carry out the steps that Juno argued would have led to the claimed invention.  Juno’s inventive step case was that the skilled addressee would have followed a ‘development pathway’ comprising eight steps, including ascertaining two pieces of prior art, obtaining the active ingredient parecoxib sodium, and formulating the lyophilised composition (as opposed to a solution formulation) without mannitol.  The “MeSH” terms which identified the first prior art document were only added to the PubMed database about a week before the priority date, and Pharmacia argued that the skilled addressee would not have had time to follow this development pathway and reach the invention by the priority date, particularly if that person had to synthesise parecoxib sodium.  Justice Burley rejected this argument, noting that ‘the person skilled in the art is not an avatar for expert witnesses’, but rather ‘a tool for analysis’, and that the obviousness test under the Act involves no temporal element.   On appeal, the Full Federal Court agreed that the PSA is a hypothetical construct, finding that the legal argument does not involve assessment of ‘factual contingencies’ such as access to starting materials unless there is a factual dispute between the parties.

Ultimately Burley J was not satisfied that the POSA would have been directly led as a matter of course to a lyophilised powder formulation with excipients amounts in the claimed ranges, and in particular considered that it would likely add a bulking agent, taking it outside the scope of the claims.  In short, while lyophilisation is considered routine, departing from routine lyophilisation steps is not.  The Full Court found no basis to depart from this conclusion.

Outcome

The Full Court found that neither party had met the burden of establishing that the primary judge had erred or that any aspect of his decision should be reversed.  The practical effect is that some of the Juno representative batches have been found to fall within the scope of valid claims, but those batches may not be determinative of liability.

Implications

Patentees would be well advised to take care when relying on representative batches or products to determine infringement without a watertight admission that they can be used to establish infringement of batches or products actually imported or sold.  This is a particular danger where the patent claims relate to features with respect to which there is likely to be variability across batches or products.  The patent having expired, the proceedings are expected now to move to the remedies phase, at which point the true commercial implications of the case are likely to become clearer.

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