The High Court of Australia rarely considers patent cases, handing down only two decisions in the past  seven years. This year, however, we saw two patent decisions from the nation's top Court. So, in celebration of the High Court's renewed attention on patent law, we revisit eight of the key developments in patents this year.

1.        Manner of manufacture

The manner of manufacture requirement determines whether or not an invention is patentable subject matter in Australia. The previous test for manner of manufacture, set down by the High Court in  1959, required that a claimed invention must result in an artificially created state of affairs, in a field of economic utility. This was followed for the next five decades, until the High Court handed down its much-awaited decision in D'Arcy v Myriad Genetics Inc (October 2015) this year.

To refresh your memory, this case concerned whether the claims of Myriad Genetics' patent relating to isolated gene sequences, including mutations in the BRCA1 gene, are patentable subject matter. The trial judge said they were patentable, and on appeal a five-judge Full Court bench agreed. The High Court unanimously disagreed with the lower courts, finding that the claims were not patentable subject matter as they do not meet the manner of manufacture test.

The High Court's decision may, however, have far-reaching consequences beyond these types of claims. In particular, the judgment of the plurality (including the Chief Justice) significantly expanded the existing two-limb test to include four further factors relevant to assessing manner of manufacture. The additional factors would allow the court to take into account policy-based considerations such as the effect of patentability on innovation and consistency with other countries' patent laws.

IP Australia is in the process of publicly evaluating its examination practice in light of this decision. The proposed examination guidelines released by the Commissioner apply the decision strictly, to claims to isolated nucleic acids that merely represent information coding for a natural polypeptide. This is in contrast to the position in the United States, where the US Patent Office guidelines traversed well beyond the facts in Myriad and proposed a generic procedure to follow when assessing all claims involving laws of nature, natural phenomena and/or natural products.

2.        Inventive s tep

At trial and on appeal in the Federal Court, the Crestor litigation between patentee AstraZeneca and a number of generic pharmaceutical companies considered almost every facet of patent law. The High Court's decision handed down in September 2015 brought to an end the dispute regarding one of Australia's most-prescribed drugs, and in so doing resolved any ambiguity as to the test for obviousness in Australia.

A five-member High Court bench unanimously (although four separate judgments were delivered) dismissed an appeal by AstraZeneca asserting that the Full Court had misapplied the inventive step test. The High Court held that, once an expert witness has identified the prior art document/s relevant to inventive step, the combination of any such document with the common general knowledge to assess obviousness is an entirely separate step.

The Court agreed with the generic parties' submission that it is irrelevant that the skilled person may have had to look through multiple documents to find the chosen prior art document/s relied upon. Further, it does not affect a conclusion of obviousness if the single document relied upon in conjunction with the common general knowledge teaches towards the invention, while one or more other relevant prior art documents would lead away from it.

Because the High Court unanimously dismissed AstraZeneca's inventive step argument, it was not necessary for the Judges to consider AstraZeneca's second ground of appeal regarding entitlement, nor any of the issues raised by the generic parties in a notice of contention, including the "starting point" issue which also arises when considering inventive step. This leaves untouched the Full Court's findings on "starting point", namely that the problem identified by the patentee as being addressed by the patent is irrelevant to the question of inventive step unless it was either part of the common general knowledge at the priority date, or was found in a prior art document.

3.        Prior use

Damorgold v JAI Products concerned the question of prior use and saw four of the Federal Court's leading patent judges split 2-2 over whether the facts of the case amounted to an enabling disclosure sufficient to destroy novelty. It was accepted by the patentee that its product called RolaShades, which possessed all of the features of the patent in suit, was displayed in a public showroom without any confidentiality obligations before the priority date of the patent. However, there was no evidence that anyone actually inspected the internal workings of the product and thus discerned all the  features of the relevant claims.

On appeal, a majority of the Full Court (comprising Justices Bennett and Yates) held that there was no anticipation. They considered that the information given to the public, ie the mere display of RolaShades but not its internal workings, did not enable the public to work the invention. Thus the patent was not invalidated by this prior use. However, Justice Jessup in dissent agreed with the trial Judge, Justice Middleton, that the necessary information regarding its internal workings was available to the customers, even if they did not avail themselves of that opportunity.

4.        Swiss  and omnibus  claims

The Swiss-type claim, that is, a claim to the "Use of [a pharmaceutical] in the manufacture of a medicament for the treatment of an [indication]", is a relic of the European Patent Office's former prohibition on the claiming of a known substance for a second or later medical use. What a Swiss claim actually does, and how it is infringed, is a matter of some debate in the EU.

Thankfully, after Justice Yates' comprehensive analysis of Swiss claims in his decision in Otsuka Pharmaceutical v Generic Health (June 2015), the law in Australia is much more straightforward. According to Justice Yates, a Swiss claim is a method or process claim. As such, it can only be directly infringed by manufacturing a medicament that has the therapeutic use defined in the claim. Questions of indirect infringement, which have occupied judges in the UK, are not relevant here.

2015 also saw the judicial spotlight directed towards omnibus claims. These types of claims are directed to material in the drawings and/or examples of the specification, and are usually of the form "substantially as described with reference to the drawings and/or examples". Historically, they have been the patentee's fail-safe mechanism if the preceding claims were found to be too broad or too unclear. However, previous decisions of the Federal Court suggested that omnibus claims may themselves be invalid for lack of clarity. In May 2015, Justice Rares clarified and expanded the operation of omnibus claims, by finding that the word "substantially" means that these claims extend to the substantial idea disclosed by the patent, and are not limited to the exact illustration or expression of that idea in the patent (Reckitt Benckiser Healthcare v GSK). Note that since the Raising the Bar amendments came into effect in April 2013, new patent filings cannot use omnibus claims unless the invention can only be defined by reference to detail in the specification.

5.        E xclus ive licens ees

In Bristol-Myers Squibb Company v Apotex (January 2015), the Full Court held that a patentee's right to exploit their invention is a single indivisible right. As such, to be an exclusive licensee of a patent, you must hold all of the rights to exploit the invention. This is problematic if the patentee keeps, for example, a right to manufacture the patented product, as it means that the licensee cannot hold an exclusive licence (even if the licensee possesses every other right of commercialisation).

6.        Springboard  relief

The Federal Court confirmed that "springboard" relief is available in patent infringement cases in Australia, consistent with UK authority (Streetworx v Artcraft Urban Group, March 2015). "Springboard" relief is designed to deprive an infringer of an unwarranted advantage that may have resulted from a prior infringing act. That is, where an infringer has attempted to obtain a "springboard" into the market by an infringing act, the Court may step in by imposing an injunction to restrain otherwise lawful acts, or later requiring the infringer to pay damages in respect of that otherwise lawful conduct.

7.        Competitive conduct

In February 2015, the Federal Court handed down judgment in the Australian Competition and Consumer Commission v Pfizer dispute, finding that Pfizer's conduct shortly before patent expiry did not constitute anticompetitive conduct (in particular, misuse of market power or exclusive dealing). The allegations related to Pfizer's blockbuster product Lipitor and a range of strategies that Pfizer put in place before patent expiry in order to remain competitive in the market. The ACCC has appealed the decision.

8.        Policy and legis lative developments

Outside the Courts, there is presently significant activity in the policy and legislative reform sphere which may impact on patent law in Australia. As well as IP Australia's consultation on the Patent Office's response to the Myriad decision, discussed above, other developments include:

  • The Productivity Commission is currently undertaking a broad-brush inquiry into Australia's intellectual property system. The inquiry will focus on the interaction between Australia's current intellectual property regime and its effect on investment, competition, trade, innovation and consumer welfare. In relation to patents, the Commission's inquiry will consider, for example, the balance of costs and benefits from patent protection across industries and technologies, the diffusion of patent information, and the criteria for patentability under the current Patents Act.An issues paper was released on 7 October 2015 and a draft report is expected to be released in early 2016.
  • Following its report on the Review of the Innovation Patent System published on 16 June 2014, the Advisory Council on Intellectual Property (which was itself abolished in April 2015) recommended that the innovation patent system be abolished. A public consultation paper on this recommendation was released by IP Australia in August 2015 and government consideration is currently underway.
  • The Trans-Pacific Partnership Agreement was signed in October 2015 by 12 Pacific nations, including Australia. The intellectual property chapter of the agreement establishes a common set of rules on IP protection and enforcement for the signatories. In relation to biologics, the chapter sets a data exclusivity period of eight years, however some countries (including Australia) have committed to a maximum of five years.
  • In late March 2015, the Harper Review, concerned about the lack of an overarching IP policy framework in negotiating international trade agreements, recommended incorporating IP provisions in the rules for negotiation of international trade agreements. This recommendation was rejected by the Commonwealth Government in its response in November 2015.