This decision is interesting as it deals with four pertinent topics – (1) the best method requirement (2) patent amendment applications (3) cost orders in patent litigation and (4) the lifting of an interlocutory injunction.
Apotex opposed Servier's patent on a number of grounds at trial, but was only successful on the typically minor ground of 'lack of best method'. The section applicable to this litigation (section 40(2)(a) of the Patents Act 1990 (Cth)) required the specification of the patent to 'describe the invention fully, including the best method known to the applicant of performing the invention'. The first part of that section is known as the 'sufficiency' requirement and the latter part is the 'best method' requirement.
The Full Court upheld Justice Rares' first instance decision that Servier's patent did not disclose the 'best method' because the specification referred to an 'umbrella' technique and did not provide detail of the best techniques known to Servier. The relevant issues and findings are summarised below
Click here to view table.
After the first instance decision, Servier sought to amend its patent to insert detailed methods for making perindopril arginine (and thus satisfy the 'best method' requirement). The amendment application was opposed by both Apotex and Actavis (the latter was not involved in the substantive dispute).
The Full Court did not allow the amendment. The Court was persuaded primarily by a letter from Servier's Australian patent attorney to the patent director at Servier during the prosecution of the patent. This letter recommended the inclusion of a certain method of manufacture in the specification. The Full Court upheld the primary judge's finding that the patent director's decision to ignore the advice of her Australian patent attorney was not reasonable.
Further, in obiter, the Full Court suggested that Servier's delay in seeking to amend its patent after judgment, rather than at trial, was a relevant factor to take into account in the exercise of discretion.
Despite the trial judge's decision that the patent was invalid and the amendment not allowed, his Honour ordered Apotex and Actavis to pay Server's costs of the proceedings (66.67%) and of the amendment application (60%). This decision is at odds with general practice. In fact, Justice Rares acknowledged in his costs decision that no judge had previously ordered that the successful party should bear a portion of the unsuccessful party's costs. However, Justice Rares' order was imposed on the basis that Apotex ran a large number of arguments and was only successful on discrete issues.
The Full Court decisively overturned this finding and awarded, in respect of the proceeding, that Servier pay 40% of Apotex's costs, and in respect of the amendment application, that Servier pay 75% of Apotex and Actavis’ costs. With respect to the costs of the proceeding, the Full Court held that the primary judge:
- acted on the wrong principle in awarding costs on the basis of success as to the issues, and not starting from the position that the successful party is entitled to its costs;
- failed to consider the extent to which there was a common substratum of fact in respect of issues on which Apotex succeeded and failed; and
- awarded costs on the success of the issues raised without full consideration as to whether the raising of those issues was justified.
With respect to the amendment application, the Full Court stated that it has long been accepted that amendment to a patent is an indulgence to the patentee who should therefore pay the costs.
Lifting of the interlocutory injunction
In an interesting turn of events, despite Apotex and Actavis' convincing win in the Full Court, the interlocutory injunction restraining their entry to the market is still in place.
The orders discharging the interlocutory injunction were initially stayed for seven days to enable Servier to consider whether to apply for special leave to appeal to the High Court. Servier then filed an application for a further stay of these orders pending determination of its application to the High Court. The hearing of that stay application has been set down for 30 March 2016. Accordingly, the interlocutory injunction will remain in place at least until 30 March 2016.