How inevitable must a result be to destroy novelty? Is inevitability relevant to obviousness? When
These questions were recently considered by the Full Federal Court (Besanko, Jagot and Nicholas JJ) in Bristol-Myers Squibb Company and Otsuka Pharmaceutical Co Ltd v Apotex Pty Ltd  FCAFC 2 (23 January 2015). The Full Court’s decision makes it clear that:
- new polymorphic forms of pharmaceutical compounds (and processes for producing them) can be patentable in Australia;
- to establish anticipation by a prior art method, it is necessary to establish that that method was more likely than not to be carried out in preference to other available methods;
- in determining whether an invention was obvious, evidence as to what an expert was instructed to do and the results obtained cannot necessarily satisfy the modified Cripps question; and
- patent licences that are intended by the parties to be “exclusive” and, more particularly, to give to the licensee standing to sue for infringement in Australia, should be reviewed to ensure that no rights within the definition of “exploit” in the Patents Act 1990 have been retained by the patentee. If any such rights have been retained by the patentee, the licence is not “exclusive” and the licensee has no standing to sue for infringement.
The primary decision (patent valid: licence not exclusive)
The patent in suit in this matter relates to the atypical antipsychotic agent, aripiprazole, which is useful for the treatment of schizophrenia. More particularly, the patent discloses a particular crystalline form (or polymorph) of aripiprazole (which overcomes the problems associated with its hygroscopicity) and processes for its production.
The primary judge (Yates J) held that the patent was both novel and not obvious. He also held that the agreement between the patentee, Otsuka Pharmaceutical Co. Ltd, and its licensee, Bristol-Myers Squibb Company, did not constitute an exclusive licence and that BMS accordingly did not have the right to commence or prosecute infringement proceedings against Apotex Pty Ltd. (For the decisions appealed from, see Bristol-Myers Squibb Company and Otsuka Pharmaceutical Co Ltd v Apotex Pty Ltd (No 5)  FCA 1114 and Bristol-Myers Squibb Company and Otsuka Pharmaceutical Co Ltd v Apotex Pty Ltd (No 6)  FCA 1235.)
Decision on appeal (appeals dismissed)
On appeal, the Full Court agreed, dismissing the appeals by each party in the matter.
Validity – Construction issues
At the heart of Apotex’s case on appeal was the issue of inherency and whether disclosure of aripiprazole in the prior art necessarily led to disclosure of its characteristics and, more particularly, how to overcome the problems associated with its hygroscopicity.
The issue was thus whether the patent, properly construed, claimed as the invention
a particular crystalline form of aripiprazole – Crystals B” that would have inevitably have a given hygroscopicity” (Apotex’ construction) or, as the primary judge found, “crystalline aripiprazole having certain physico-chemical characteristics” including low hygroscopicity in the specific sense identified.
The Full Court found that the terms of the complete specification supported the primary judge’s characterization of the invention and that the weight of the evidence before the primary judge was that hygroscopicity is determined not just by the crystalline form but also by characteristics such as crystal size, surface area and subtle surface phenomena.
Validity – anticipation – likelihood that following prior art will produce something within claims of patent
A further issue on appeal was whether three documents publicly available before the priority date anticipated the invention claimed in the patent in suit.
The 141 Application
One of these documents (the 141 Application) disclosed a method of producing anhydrous aripiprazole crystals, but not all of the steps (including any drying option) to produce them in their free base form. The evidence of the expert witnesses showed there was a broad range of drying conditions by which ethanol could be removed from the crystals obtained from following the directions in the 141 Application. However, whilst the expert evidence showed that Crystals B might have been obtained serendipitously when following those directions, it was equally possible that the person skilled in the art would have obtained conventional anhydrous aripiprazole with unacceptably high hygroscopicity.
Apotex argued that the prior art may disclose more than one thing and, if one of those things has as its inevitable result the production of something within the claims of the patent in suit, that is enough to establish lack of novelty. That is, Apotex argued that it should not be required to negative every conceivable possibility to make good its case for lack of novelty
The Full Court disagreed, pointing out that Apotex bore the burden of proving on the balance of probabilities that carrying out the directions in the 141 Application would inevitably result in infringement of the claims of the patent. It held that the evidence showed that whilst the directions in the 141 Application were capable of being carried out in a manner which would infringe the patent, the evidence also established the existence of many other methods and did not establish that the infringing method was more likely than not to be carried out in preference to the other available methods, and that therefore Apotex had not proved anticipation.
The Aoki article and poster
The other two documents publicly available before the priority date (Dr Aoki’s article and poster) were held by the primary judge to disclose the existence, amongst other things, of type 1 crystals having the same crystalline form as Crystals B. However, consistent with his earlier reasoning, the primary judge rejected Apotex’ argument that a given crystalline form of aripiprazole will also inevitably disclose the compound’s hygroscopicity in that form. The Full Court agreed with the primary judge.
Inventive Step – whether results obtained by expert instructed to carry out experiment can satisfy modified Cripps question
Apotex’s argument in connection with inventive step also proceeded on its central contention (rejected by the primary judge) that a given crystalline form of aripiprazole will inevitably have a given hygroscopicity. That is, its argument assumed that a person skilled in the art would be motivated to follow the directions in the 141 Application and, if the person did so, then, like one of the Apotex experts, that person would obtain Crystals B by routine steps.
The Full Court noted that, faced with the 141 Application that says nothing about hygroscopicity, there was nothing to suggest that the person skilled in the art would be motivated to do anything at all. It also pointed out that the primary judge’s observation that one of Apotex’s experts had been instructed to follow the directions in the 141 Application and happened to obtain Crystals B by one of an equally likely number of drying methods, one of which had been proved would result in Crystals B, did not impose a requirement of inevitability onto obviousness. To the contrary, it was to recognise that the evidence as to what that Apotex expert did, and the results he obtained, could not satisfy the modified Cripps question. That is, even armed with the 141 Application, it did not prove that such a person would be led directly as a matter of course to take the steps that produce Crystals B in the expectation that those steps might well produce those crystals.
Did the “exclusive” licence give BMS standing to sue?
The licence agreement between Otsuka and BMS reserved to Otsuka the right to manufacture aripiprazole in its various forms, with BMS being granted an “exclusive” licence to advertise, market, promote, sell and distribute aripiprazole in its various forms.
BMS accepted that it did not have the right to undertake all of the activities identified in the definition of “exploit” in the Patents Act 1990 but submitted that that fact was not fatal to a conclusion that it is an exclusive licensee. That is, it pointed to the use of the word “or” in the list of activities comprised in the definition of “exploit” and submitted that an exclusive licence in respect of one or more (but not all) of the activities was sufficient for it to be an exclusive licensee.
The Full Court disagreed, preferring the primary judge’s reasoning that the exclusive “right to exploit” an invention conferred by s.13(1) of the Patents Act 1990 on the patentee is a single indivisible right. In this respect, the primary judge held that the word “exploit” is used in the 1990 Act as a hypernym to cover a range of activities, any one of which, if undertaken, would amount to an exercise of the right to exploit. The Full Court agreed, holding that
the definition of the term “exploit” in the Patents Act 1990 “describes the content of a right and is not intended to create separate rights in relation to each of the identified activities.
As the right to manufacture remained with Otsuka, BMS was not the exclusive licensee and, consequently, it did not have standing to commence or prosecute its claims for infringement against Apotex.
No further appeal
Neither party has sought special leave to appeal the Full Court’s decision to the High Court.