The global practice of “evergreening” of Patents is common in the pharmaceutical field. Patentees often seek to extend the period of patent protection for a successful commercial product by filing further patents for derivative inventions, such as new pharmaceutical salts, polymorphs, or stereoisomers.

In an effort to distinguish derivative inventions over the successful commercial product, considered as prior art of the derivative invention, it is not unusual for Patentees to dwell as much as possible on any minor difference or advantage of the new invention. Typically, statements describing the “surprising” and “unexpected” advantages of the derivative invention are included in the Specification, sometimes in an exaggerated form, describing the problem sought to be solved as well as the applications of the claimed invention.

Do such technical statements of the advantages and applications of the claimed invention render an Australian Patent invalid for fraud, false suggestion, or misrepresentation? In a word, no.

In a recent Federal Court Decision handed down on 24 December 2014, Apotex Pty Ltd v Servier Laboratories Pty Ltd (“the Case”), the Federal Court held that as long as the invention actually produces the substantive result asserted by the Patentee in the Specification, then the inclusion of statements relating to the purpose of invention will not ordinarily amount to false suggestion.

Summary of the Case

Apotex Pty Ltd (“Apotex”) initiated Revocation Proceedings in the Australian Federal Court to invalidate Australian Patent No. 2003200700 (“the Patent”), owned by Les Laboratoires Servier, and exclusively licenced by Servier Laboratoires (Aust) Pty Ltd (“Servier”).

The Patent claims a new salt of the compound Perindopril, called Perindopril Arginine. Servier was the owner of an earlier Patent for Perindopril Erbumine, a hypertension drug marketed under the brand name Coversyl®.

Apotex sought to revoke the Patent, so that it could enter the market with a generic version of Perindopril Arginine. The validity of the Patent was challenged on the grounds of lack of novelty, lack of an inventive step, lack of fair basis, lack of best method, and false suggestion.

Apotex succeeded in establishing that the Patent failed to describe the best method of performing the invention known to the Applicant. However, the other challenges to the validity of the Patent, which took up the bulk of the evidence at the Hearing, all failed. The Court held that this failure should be reflected in a costs order against Apotex.

The False Suggestion Issues in the Dispute

An interesting aspect of the Case is how the Court dealt with the false suggestion allegations brought under Section 138(3)(d) of the Patents Act 1990 and how this Section applies in Australia.

Section 138(3)(d) provides that, after hearing the Application for Revocation, the Court may, by order, revoke the Patent, either wholly or insofar as it relates to a Claim, on the ground that the Patent was obtained by fraud, false suggestion or misrepresentation.

Apotex unsuccessfully pleaded 10 instances of alleged false suggestions or misrepresentations made by Servier, relying on the cumulative effect of various statements made in the Specification.

The allegedly false statements in the Specification related to the problem that the Patent addressed, the solution it provided, the shelf-life and the storage temperature for Perindopril Erbumine, the cost-savings offered by the invention, and the nature and presentation of the results of the study. It was asserted that these representations, when taken together, were material to the Commissioner’s decision to allow the Application to proceed through to grant.

The Court rejected Apotex’s arguments.

An incorrect Technical Statement in the Specification does not necessarily constitute a misrepresentation

In considering Apotex’s arguments, the Court had regard to the Full Federal Court judgment in Prestige Group (Australia) Pty Ltd v Dart Industries (1990) (“Prestige”), in which Lockhart J confirmed that the rationale for the ground of false suggestion as:

[Patent protection] is purchased by the promise of results. It does not, and ought not to, survive the proved failure of the promise to produce the results.”

The Court distinguished this promise from any incorrect assertions by the Applicant of one or more useful purposes to which the result obtained by the invention could be applied.

Section 138(3)(d) was construed as being a discretionary power of the Court, the application of which is limited to a representation that is of such a nature that the Commissioner is found to have been deceived by it, and materially induced into granting the Patent.

The Court also took note of another of the Judges, Gummow J’s, observation in Prestige that it would be a most unusual case were the alleged false suggestion or misrepresentation to be relied upon as having been made only in the Specification.

Take Home Message

This case illustrates how a false suggestion allegation, which is brought in terms of Section 138(3)(d) of the Patents Act 1990 in Revocation Proceedings, applies in Australia.

As long as the invention actually produces the results promised in the Specification, any incorrect or overstated representations relating to additional purposes, embodiments or examples will not ordinarily be considered as amounting to misrepresentations.