Landmark decision for Australian patent law: AB Hassle v. Alphapharm

Landmark decision for Australian patent law: AB Hassle v. Alphapharm

The recent High Court decision in AB Hassle v. Alphapharm is of major importance to all patentees, not only those in the pharmaceutical field. It disposes, for the time being at least, of the "obvious to try" test as a touchstone of obviousness in cases where the inventor is faced with a multiplicity of choices.

In Hassle v. Alphapharm the order of the Federal Court for the revocation of the AstraZeneca's Australian Patent for the formulation of omeprazole was reviewed by the High Court. The High Court overturned the Federal Court's finding that the invention was obvious and involved only the application of routine steps which were "obvious to try". The Court rejected the "obvious to try" approach of the Federal Court and preferred the decisions of the U.S. Court of Appeals of the Federal Circuit to that of the English Courts. The Court also reaffirmed its decision in Minnesota Mining and Manufacturing Co v. Beiersdorf (Aust) Ltd, limiting prior art material relevant to obviousness to that forming part of the common general knowledge in Australia.

The High Court of Australia is Australia's highest court and ultimate court of appeal. Its decision in Aktiebolaget Hassle v. Alphapharm Pty Ltd, ([2062] HCA 59 {12 December 2002} – not yet reported) in which, by a majority of 5 to 2 it upheld Hassle's Appeal, is therefore of great interest and importance. It is probably the most important decision handed down by the Court on the question of obviousness and inventive step since the decision of that Court in Minnesota Mining & Manufacturing Co, v. Beiersdorf (Aust) Ltd. (44 CLR 253) in 1980. Its significance may however be lessened by the fact that it was governed by the provisions of the Act of 1952, not the current Act of 1990. Hassle is a member of the Swedish Astra Pharmaceuticals Group (now AstraZeneca), and was the patentee of omeprazole, a compound useful in the treatment of gastric and duodenal ulcers by the inhibition of gastric fluid secretion.

The patent in suit ("the formulation patent") related to a method of formulating omeprazole in a form which enabled the compound to be delivered to the small intestine without degradation by the acidic gastric juices as it passed through the stomach. A recognised method of overcoming the problem of such degradation was to form a core containing the active material and to apply to that core a protective enteric coating. For omeprazole, however, that was not enough. Addition of alkaline material to the core was required to provide stability and an intermediate protective coating was required to prevent reaction between the core and the enteric coat and diffusion of gastric juices into the core.

The patent, in its broadest form, is directed to a tablet having a core containing omeprazole and an alkaline reacting compound, an inert watersoluble subcoating around the core and an outer enteric coating surrounding the sub-coat.

Tablets containing omeprazole and formulated in accordance with the patent in suit provided a highly effective treatment for gastric disorders and were widely prescribed in Australia and elsewhere. In 1998, prior to the expiry in 1999 of the basic omeprazole compound patent, Alphapharm took steps to import and sell in Australia tablets containing omeprazole. Hassle sued for infringement and the trial judge, Lehane J, held that such tablets would infringe the formulation patent. However, he upheld Alphapharm's counter-claim for revocation of the patent on the ground that the invention claimed was obvious and did not involve an inventive step having regard to what was known or used in Australia at the priority date (30 April, 1986).

In the counter-claim, evidence was presented from the named inventors that the establishment of the satisfactory formulation claimed in the patent was not readily apparent and had taken a number of years of trial and experimentation to achieve.

Included among the Alphapharm witnesses was Dr Marshall, a distinguished gastroenterologist and researcher in the field. Dr Marshall was not provided with a copy of the patent, but was asked, in a series of instructions from Alphapharm's solicitors, to come up with answers leading to a satisfactory formulation for the delivery of omeprazole. He made a number of attempts, but failed to come up with the formulation claimed in the patent.

Lehane J's finding of obviousness raised two important contentious issues. Firstly, he found on the evidence that:

" … considered at the commencement of a hypothetical attempt, immediately before the priority date, to formulate omeprazole, the combination claimed in the patent was not obvious",

and that the process which would then have been followed by a hypothetical formulator having tried an enteric coating, was one which:

" … would have been a complex, detailed and laborious one, involving a good deal of trial and error, dead ends and the retracing of steps".

Notwithstanding this, his Honour concluded that the invention could have been arrived at by the application of routine steps, and that the combination claimed in the patent did not, having regard to the common general knowledge at the priority date, involve an inventive step, and ordered revocation of the relevant claims of the patent.

The second contentious issue arising out of the approach of Lehane J, is that he appeared to rely upon a number of prior publications, including manufacturers' literature, which a hypothetical formulator might, at the priority date, have found in a literature search. He did so notwithstanding his finding that there was no evidence that those documents, or the teachings which they contained, formed part of "the common general knowledge" in the art, thus, offending the rule established by the High Court in 3M, and affirmed in Wellcome Foundation Ltd v. V.R. Laboratories (Aust) Pty Ltd (148 CLR 262) that on the question of obviousness the question to be asked is whether at the priority date the invention would have been obvious to the noninventive skilled worker possessed of the common general knowledge but "without regard to documents in existence but not part of (such) common general knowledge".

Not surprisingly, Hassle appealed to the Full Court of the Federal Court, but in a unanimous decision, Wilcox, Merkel and Emmett JJ, dismissed the appeal. They rejected submissions by Counsel for Hassle that the question of obviousness was precluded by the trial judge's finding that the claimed formulation was not obvious at the outset, and stated, as a matter of law, and on the authority of the English Court of Appeal in Beecham Group Ltd's (Amoxycilin) Application ([1980] RPC 61) that:

"The law does not require that it be apparent, at the outset, to the non-inventive skilled worker, that a particular combination of integers will succeed in obtaining the desired result. It is enough that it be apparent to such a worker that it would be worthwhile to try each of the integers that was ultimately successfully used."

The Full Court embarked upon its own analysis of the evidence but accepted Lehane J's findings quoted above. They also accepted the characterization by Hassle witness, Dr Rees, of the inventor's "inventive journey" and successful negotiation of a "maze of possibilities and choices", but they said, at para 140, he did not claim any particular inventive step and "Negotiation of a maze is not invention".

On the question of the reliance by the Trial Judge upon documents not shown to be part of the common general knowledge, the Full Court affirmed that what might be found by a diligent searcher is not to be equated with what is the common general knowledge. However, they concluded that the case does not turn on the question of whether the material in question was part of the common general knowledge, and assumed, for the purposes of the appeal, that the hypothetical formulator should be assumed not to have had access to the material.

Hassle sought, and was granted, special leave to appeal to the High Court. It should be noted that in patent cases the High Court will grant special leave to appeal only in cases where there are serious unresolved questions of law to be decided, or errors in law to be corrected.

In the High Court the majority, in a joint judgment by Gleeson CJ, Gaudron, Gummow and Hayne JJ, held that the decision of the Trial Judge and of the Full Court was infected by several such errors of law. Having warned against the intrusion into decisions, such as this one, under the 1952 Act, of considerations based on the 1990 Act, and the misuse of hindsight, the majority addressed the issue of the meaning of the word "obvious".

They referred to the passage from the General Tyre & Rubber Company v. Firestone Tyre & Rubber Co. Ltd ([1972] RPC 479), where the English Court of Appeal said, at page 498, "Obvious is, after all a much used word. It does not seem to us that there is any need to go beyond the primary dictionary meaning of 'very plain'". They contrasted these words with Alphapharm's reliance upon, and the Full Court's acceptance of, terms such as "worthwhile to try". They rejected an approach to the question of obviousness which confined it to a "problem and solution" approach and specifically rejected the proposition, expressed by Lord Hoffman in Biogen Inc v. Medeva plc ([1997] RPC 1), that "A proper statement of the inventive concept needs to include some express or implied reference to the problem which it required invention to overcome". They said that this approach may reflect an approach which is apparently mandated by the European Patent Convention.

The majority reaffirmed the rejection in 3M of the formation of mosaics and stated that obviousness was not to be determined by asking whether a diligent searcher might have selected the elements of the claimed invention by taking pieces from prior art publications and putting them together.

They identified a divergence of the law in Australia since 3M and the law in the United Kingdom since the U.K. Act of 1977, and referred in particular to the provision of s.2(2) of the U.K. Patents Act 1977, that the state of the art is to be taken to comprise all matter which has been made available to the public at any time before the priority date. They rejected the Full Court's approach in considering each integer separately, and in particular, the Full Court's statement that it was enough that it would be apparent to a non-inventive skilled worker that it would be worthwhile to try each of the integers that was ultimately successfully used. Specifically they rejected, at para 72, the statement of the Full Court that:

"Each of the integers was at least worthwhile trying; therefore the combination itself was "obvious" in the sense that that word is used in this area of the law".

They said in relation to the provisions of Section 100(1)(e) of the 1952 Act, that:

"The paragraph does not fix upon the direction to be taken in making efforts or attempts to reach the particular solution to the problem identified in the patent. Nor does it direct an enquiry respecting each integer of the claimed combination." The paragraph asks whether: "the invention…. as claimed, – here the combination, was obvious, not each of its integers".

The majority referred to a number of cases decided in the U.S. Court of Appeal of the Federal Circuit in which the notion of "obvious to try" has been rejected. They stated that:

"The reasoning in these and other United States authorities should be accepted in preference to the path apparently taken in the English decisions particularly after the 1977 U.K. Act".

In a separate concurring opinion, Callinan J. placed much reliance on the uncontroverted evidence of Alphapharm's own witness, Dr Marshall, and his failure to come up with the patented solution, stating at para 192 that:

"Here, a skilled practitioner, Dr Marshall, armed with suggestions from the Respondent and with the desired result identified for him, was unable to replicate the Appellant's invention".

McHugh J, in dissent, stated that he would dismiss the Appeal on the ground that obviousness is a question of fact and there are concurrent findings of fact by Lehane J, and by the Full Court, and that should not be disturbed on the Appeal. Their findings were open to them on the evidence and were not in his opinion flawed by any legal error.

In contrast to the judgment of McHugh J, that of Kirby J, was far from brief. He emphasises that the question of obviousness is a question of fact, and rejects the view of the majority that there is now a substantial divergence between the approach to the question in the United Kingdom and the approach in Australia. He approves the reasoning of Laddie J, in the corresponding proceedings in England (Cairnstores Ltd v. A/B Hassle [2002] EWHC 309 (ch)) and in particular, his adoption of the "obvious route to try" test. In contrast to the decision of the majority, and in particular that of the concurring opinion of Callinan J, he finds in the evidence of Dr Marshall strong evidence of obviousness; notwithstanding that it is fairly clear from the evidence that the six reports submitted by Dr Marshall failed to result in the claimed solution, and in particular, failed to propose the use of a watersoluble subcoat. He spends much of his time criticising the "unnecessary decisional verbiage" of some of the cited decisions and the "forest of verbal elaboration" and the entanglement of the judges "in a web of horrible verbal formulae" which, he says burdens this field of law. His judgment however, suggests that he is far from free from such distractions himself.

Kirby J, adopts with approval the problem/solution approach of Lord Hoffman in Biogen and characterises as surreal the "notion that reference cannot be made to industry literature and other readily available data found on a routine search of the literature". He states that the view of Williams J, in HPM Industries Pty Ltd v. Gerrard Industries Ltd (98 CLR 424), may be preferable to that in 3M, and that it may be more consistent with international developments in patent law.

The decision in Hassle appears to dispose, for the time being at least, of the "obvious to try" test as a touchstone of obviousness in cases where the inventor is faced with a "multiplicity of possibilities", and to reinforce the position taken by the High Court in 3M and Wellcome. It is perhaps unfortunate that the majority did not specifically deal with the suggestion in the decision of the Full Federal Court that there should be an identifiable "particular inventive step". It appears however, inherent in the reasoning of the majority that they would reject such a proposition. Nor is any such approach evident in the dissent of Kirby J.