In a unanimous decision the New Zealand Court of Appeal in Pharmaceutical Management Agency Limited v Commissioner of Patents & Ors ('Pharmac') has endorsed the New Zealand Patent Office practice of allowing “Swiss claims” in respect of second or subsequent medical uses of pharmaceutical compounds.
As a precursor to determining allowability of “Swiss claims”, the court noted that the patentability of methods of medical treatment had previously been considered by the New Zealand Court of Appeal in the case of The Wellcome Foundation Ltd v Commissioner of Patents ([1983] NZLR 385) (“Wellcome”). In that case the Court of Appeal overturned the decision of the trial judge and held that methods of treatment of humans did not constitute a patentable invention. The basis provided for that decision was that “[i]f the practice of not granting patents for methods of treating human illness or disease is to be altered or modified, it is best left to Parliament”.
On 22 March 1990 the Commissioner of Patents had issued a practice note in relation to claims of the form:
“The use of [known compounds] for the production of pharmaceutical compositions for the treatment of [a particular medical condition]”.
Claims of this form were said to be allowable only in the case where the compound itself and/or its use in pharmaceutical compositions was new; that is, when the use being claimed was a first pharmaceutical use.
This position led to a number of curiosities identified by the court in the Pharmac case, including the following:
- methods of treatment of humans would not be accepted by the Patent Office although methods of veterinary treatment were;
- whereas methods of medical treatment could not be the subject of an accepted claim, it was possible to obtain the grant of claims directed to methods of human diagnosis, cosmetic treatment, elective treatment (eg. contraception, reduction of desire to smoke), improving hygiene and indirect treatment (eg. removing hair lice, killing bacteria on body surfaces);
- “Swiss claims” were allowable if directed to a first medical use, but not to a second or subsequent medical use of a pharmaceutical compound.
In response to the movement towards international harmonisation, the Commissioner of Patents issued a further practice note on 7 July 1997 which announced a change to the effect that “Swiss Claims” would generally be allowed. In this practice note the Commissioner advised the Patent Office practice would allow grant of “Swiss claims” of the following general form:
“The use, in the manufacture of a medicament, of [the active compound] as an active ingredient in a [the newly invented activity] composition in admixture with an inert carrier”.
The effect of this practice was that claims directed to second or subsequent medical uses of pharmaceutical compounds would be accepted, assuming of course that the second or subsequent use met the normal requirements of novelty and inventive step.
The New Zealand Pharmaceutical Management Agency Limited (Pharmac) applied to the High Court for judicial review. Pharmac is the body responsible for management of pharmaceutical subsidies in New Zealand. In commencing the present proceedings Pharmac alleged that the proposed change in practice of the Commissioner would have an adverse effect upon pharmaceutical competition and pricing. Pharmac was unsuccessful at first instance and appealed the decision of the trial judge to the Court of Appeal. The Commissioner was joined as a defendant in the proceedings by three separate groups of research based pharmaceutical companies. These companies provided evidence of the expense involved in obtaining marketing approval in respect of second or subsequent medical uses of known pharmaceutical compounds. Their argument was that pharmaceutical companies deserved adequate recompense in return for their significant investment, brought about largely by the necessity to meet strict marketing approval standards.
In its decision the Court of Appeal rejected the notion that methods of medical treatment could not constitute an “invention”, and instead commented that “exclusion from patentability of methods of medical treatment rests on policy (moral) grounds”. The particular moral concern was “that medical practitioners are not subject to restraint when treating patients”.
In reaching its finding the court placed considerable weight on New Zealand's obligations as a signatory to the TRIPS Agreement, and particularly to the Part II (s. 5) article 27(1) undertaking to make patents available “for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application”. Although articles 27(2) and (3) of TRIPS allow signatory countries to exclude from patentability “diagnostic, therapeutic and surgical methods for the treatment of humans or animals” and “inventions… the commercial exploitation of which is necessary…..to protect human….life”, the court commented that the obligations of article 27(1) should not be “set aside on grounds based on circumstances of convenience such as the comparatively low level of medical research undertaken in this country [New Zealand] or the particular method by which medicines are funded”.
In its judgment the court considered the appropriate construction of “Swiss claims” and concluded, based upon the decision of the Enlarged Board of Appeal of the European Patent Office in Eisai Co Ltd ([1985] Official Journal EPO 64), that the correct approach is to acknowledge that “novelty and inventiveness resides in the newly discovered purpose for which the medicament is to be used”. In this way the active ingredient or process for its formulation into a pharmaceutical composition need not be novel or inventive, and the claim is considered to claim a process. A difficulty arises, however, in relation to enforcement as it may be necessary to prove the intent of an alleged infringer in order to demonstrate infringement.
Although not strictly confined to the issue in dispute, the court briefly commented that a similar outcome to allowing “Swiss claims” could be achieved by allowing method of human treatment claims with the proviso that the patentee provide a disclaimer of any right to sue a medical practitioner for infringement under the patent. This obiter dictum may in future give rise to the patentability of method of human treatment claims where the appropriate disclaimer is made. At this stage, however, the New Zealand Patent Office practice has not been modified to allow this possibility.
Not only is this decision on the allowability and appropriate construction of “Swiss claims” of obvious importance for patent practice in New Zealand, it may also be of significance in other jurisdictions, notably Australia. While the Australian Federal Court has recently acknowledged the patentability of methods of medical treatment (see above), the Australian courts are yet to address the patentability of “Swiss claims”. Since issuing a practice note on the subject in July 1998 the Australian Patent Office has accepted applications that include “Swiss claims”. When validity and infringement of such claims are tested in the Australian courts, this decision of the New Zealand Court of Appeal may well be referred to for guidance.