In patent litigation, it is common practice to either amend the patent in anticipation of the commencement of proceedings or during the course of the litigation itself in order to bolster the patentee’s chance of success. Whilst this practice is widely followed, the decision in Bayer Pharma Aktiengesellschaft v Generic Health Pty Ltd [2017] FCA 250 demonstrates that this course of action carries risks regarding the date from which damages can be claimed.

History of the case

In February 2012, Bayer launched proceedings against Generic Health for infringement of a patent and also applied for an amendment of the patent. On 14 December 2012, Yates J allowed the amendment. Bayer was successful in the infringement proceedings which found that Generic Health had infringed claims 3 and 11 of the patent in suit and awarded Bayer damages of $25,751,336, plus interest.

Whilst the decisions in the case had all favoured the patentee, the amendment had opened the door for a further challenge by Generic Health at least in respect of the date from which damages were payable and hence the amount of damages to be paid.

In challenging the damages assessment, Generic Health referred to section 115(1)(a) which states:

(1) Where a complete specification is amended after becoming open to public inspection, damages shall not be awarded, and an order shall not be made for an account of profits, in respect of any infringement of the patent before the date of the decision or order allowing or directing the amendment:

(a) unless the court is satisfied that the specification without the amendment was framed in good faith and with reasonable skill and knowledge.

In attempting to reduce the damages claim, Generic Health argued that Bayer had not satisfied the court that its original specification was framed in good faith and with reasonable skill and knowledge as required by the act, and therefore was not entitled to any damages before14 December 2012 (the date on which the patent amendment was allowed).

The nature of the amendments

The amendments to the claims of the patent were to include three limitations:

(a) limit the dosage of drospirenone to 3 mg (the 3 mg feature);

(b) confine the composition or preparation to a tablet form (the tablet feature);and

(c) specify that the stated dissolution test is performed in 900 ml of water (the 900 ml feature).

By way of example the amendments to claim 3 are shown below:

3. A pharmaceutical composition in oral dosage form comprising:

3 mg drospirenone and 0.01 mg to 0.05 mg of ethinylestradiol, together with one or more pharmaceutically acceptable carriers or excipients, wherein the oral dosage form is a tablet, and wherein at least 70% of said drospirenone is dissolved from said composition within 30 minutes, as determined by USP XXIII Paddle Method II using 900 ml of water at 37°C as the dissolution media and 50 rpm as the stirring rate.

Assessment of the issue

In assessing whether the specification before amendment had been framed in good faith and with reasonable skill and knowledge, the court was of the opinion that the onus is on the patentee to demonstrate this when challenged. In coming to this conclusion, the court specifically rejected Bayer’s submission that as a principle of general application, good faith and reasonable skill and knowledge ‘is to be assumed in the patentee’s favour in the absence of internal or external evidence to the contrary’.

In considering the situation, the court adopted a number of general principles put forward by Generic Health regarding what constituted the good faith and reasonable skill and knowledge requirements as follows:

Good faith In relation to good faith, the court was of the opinion that:

(a) In order to establish the good faith requirement, the plaintiff must prove that the specification was framed honestly with a view to obtaining a monopoly to which, on the material known to him or her, he or she believed he or she was entitled.

(b) The inclusion of something known by the framers of the patent specification to be detrimental to it may be evidence of a lack of good faith.

(c) The patentee has to establish that in the original specification it ‘meant and intended to claim that which [it] had invented and no more’.

Reasonable skill and knowledge

In relation to reasonable skill and knowledge the court stated:

(a) The words ‘reasonable skill and knowledge’ require the specification as framed to be in the form in which a person, with reasonable skill in drafting patent specifications and a knowledge of the relevant law and practice, would produce given the patentee’s knowledge of the invention.

(b) Where the draftsperson was not properly instructed, the ‘patentee cannot be in a better position than the patentee who properly instructs the draftsman’.

(c) Any mistake must be considered in the context of the whole specification, making allowance for any difficulty the drafter had and the importance of the passage containing the mistake.

(d) The relevant knowledge must encompass the knowledge of the person that formed the basis of the information in the specification. Thus, where a specification contained an obvious mistake due to work done by a contractor, however skilled, the patentee had to shoulder the burden of establishing that the specification was framed with reasonable skill and knowledge.

Application to the present case

Much of the argument regarding good faith and skill and knowledge was based around the amendment to limit the amount of drospirenone from the previously claimed range of 2 to 4 mg to the amended 3 mg.

In particular, submissions were put forward by Generic Health that the evidence did not demonstrate that Bayer had tested any dosages higher than 3 mg for the purpose of formulating the patent specification. There was no evidence that the framers of the patent specification had been advised by Bayer (either directly or indirectly) that the therapeutically effective range was 2 to 4 mg or that the relevant Bayer personnel had formed a state of mind that there was a reasonable ground to believe that this was the preferred dosage range. In addition, documents identified during discovery suggested not only that there was some doubt whether side effects could be avoided at a dosage of 4 mg and also doubts as to whether dosages of 2 mg would be clinically effective.

In order to overcome these allegations by Generic Health, Bayer was required to submit significant expert testimony from Bayer employees who were familiar with the process leading to the drafting of the original patent specification, as well as expert evidence from external third party experts. Indeed the principal declarant in the case was required to provide expert testimony in relation to events that occurred sixteen years ago!

The evidence lead by Bayer was sufficient to satisfy the court that the specification was framed in good faith and with reasonable skill and knowledge. Nevertheless, the case demonstrates the potential mischief that can occur in cases of this type where a significant burden can be placed on a patentee to discharge their onus.

Perhaps in order to forestall this becoming the norm, the judge agreed with the patentee that ‘a party putting good faith in issue ought to be made to particularise its contentions so that the patentee is protected from any suggestion that it should in evidence first raise up and then exorcise the ghost of every possible defect in the unamended claims’.

Key learnings

Once the claims of a patent specification are amended after publication, it opens the door for any infringer to challenge the date from which damages are payable under the provisions of section 115. As this case demonstrates, there is a significant evidentiary burden on a patentee to show that the specification was framed in good faith and with reasonable skill and knowledge. In meeting this burden, the patentee may have to expend significant resources in both executive time and effort, which can be onerous. As such, in considering amendments to a patent specification in contemplation of litigation, the patentee should only consider amendments if they are necessary to ensure the validity of the patent claim in question.