08 September 2005

Balance of Convenience Tips Against Roche

On 31 August 2005, the Federal Court of Australia handed down Hexal Australia Pty Ltd v Roche Therapeutics [2005] FCA 1218.

This matter concerned Australian patent no. 702106 entitled: "Use of Carbazole Compounds for the Treatment of Congestive Heart Failure". The patent is owned by Roche. The case is effectively two proceedings. Since the isues are similar in both, the parties agreed that the issues could be dealt with together. In the first proceedings, Hexal claimed that the patent is invalid. Roche filed a cross claim alleging that Hexal intended to apply for a listing of a product known as Carvehexal on the Australian pharmaceutical benefits scheme ("PBS"). Roche alleged that would constitute an infringement of the patent. This particular matter arose when Roche filed a notice of motion seeking interlocutory relief to restrain Hexal from making the application to list the product in the PBS. In the second proceedings, Roche claimed that Alphapharm intended to apply for the listing of a product known as Dilol on the PBS. Roche also sought interlocutory relief against Alphapharm.

The patent contains both manufacture and method claims. The manufacture claims include independent claim 1 which reads:

"The use of carvedilol for the manufacture of a medicament for decreasing mortality resulting from congestive heart failure in mammals, alone or in conjunction with one or more other therapeutic agents, said agents selected from the group consisting of an angiotensin converting enzyme inhibitor, a diuretic and a cardiac glycoside."

The method claims include independent claim 14 which reads:

"A method for decreasing mortality resulting from congestive heart failure in mammals comprising the administration of carvedilol, alone or in conjunction with one or more other therapeutic agents, said agents selected from the group consisting of an angiotensin converting enzyme inhibitor, a diuretic and a cardiac glycoside, to a subject in need thereof."

Carvedilol is a beta-blocker compound.

Interlocutory relief appears to have been sought by Roche because of a 1 September 2005 deadline for lodgment of applications for listing on the PBS. Roche operated under the assumption that Hexal and Alphapharm were intending to apply on that date.

The grounds for interlocutory relief are well established. Roche needed to demonstrate:

1. There is a serious question to be tried or a prima facie case such that there is a probability that at a final hearing Roche would be entitled to relief.

2. That Roche would suffer irreparable harm for which damages will not be adequate unless an injunction is granted.

3. That the balance of convenience favours the granting of an injunction.

Stone J. mentioned that while each of the elements does need to be satisfied, the strength, or otherwise, of Roche's case for infringement can effect the balance of convenience. Her honour also pointed out that the onus is on the party asserting invalidity to show that the assertion is a triable issue. However, an interlocutory application is not an appropriate forum to carry out an effective preliminary trial.

In its application, Roche submitted that if Hexal or Alphapharm manufactured their respective products in Australia, there would be an infringement of claim 1. However, there was no probative evidence of any intended manufacture in Australia by Hexal. Her honour thus held that there was no serious question to be tried in relation to manufacture by Hexal. Counsel for Roche attempted to base an assertion that Alphapharm would manufacture on the basis of Alphapharm's manufacturing licence in Australia. However, her honour was not convinced.

Roche's primary assertion of infringement was that of claim 14. Counsel for Roche relied on section 117 of the Patents Act. This section deals with infringement by supply. In short, if the use of a product would infringe a patent, the supply of the product is an infringement, subject to a number of provisos. One of the provisos is that if the product is not a "staple commercial product" any use of the product would be an infringement if the supplier had reason to believe that the person would put it to such use. It appeared that there was no judicial precedent to assist with the definition of "staple commercial product". In any event, her honour held that this was not the forum to decide questions of law such as that. However, she did hold that there was a serious issue to be tried in relation to infringement, subject to her opinion on the validity of the patent.

Hexal and Alphapharm contended that the patent was invalid. In support of this, they relied on an article by one David T Kelly. The article concluded that "Carvedilol may have beneficial effects in patients with chronic heart failure secondary to coronary heart disease". Hexal and Alphapharm did not provide evidence that was sufficient to show that the Kelly article was available before the priority date of the patent. In any event, her honour considered the evidence of one Dr Keogh which diminished the importance of the Kelly article. Dr Keogh testified that she would not have been led to use Carvedilol in the treatment of congestive heart failure even if she had been aware of the Kelly article before the priority date. The prevailing view at that time was that beta blockers were contraindicated for congestive heart failure. Thus, her honour held that she could not conclude that a skilled person would be directed by the Kelly article, as a matter of course, to try the claimed invention in the expectation that it would produce a useful or desired result. In support of this, she referred to The Welcome Foundation Ltd v VR Laboratories (Aust) Pty Ltd (1981) 148 CLR 262. However, she did hold that there was a serious question to be tried in relation to novelty and obviousness.

Roche failed to show that it would suffer irreparable harm unless an injunction were granted. Her honour held that if Hexal and Alphapharm failed to have the patent revoked and were found to have infringed the patent, any dilution of the investment made by Roche would be essentially negligible as Roche would regain the monopoly on the market.

In refusing interlocutory relief, her honour held that the case involved serious questions to be tried both in respect of infringement and in respect of invalidity, but that the concerns about invalidity had more weight. She took into account the comparatively long delay to Hexal's and Alphapharm's plans, the fact that loss caused by interference with those plans was difficult to assess and the fact that any loss to Roche would be easy to quantify.

Bazpat will keep an eye out for the main decision.

1 comment:

  1. TWO British soldiers who died when a roadside bomb exploded in southern Iraq were named by the...
    TWO British soldiers who died when a roadside bomb exploded in southern Iraq were named by the Ministry of Defence last night.
    Hey, you have a great blog here! I'm definitely going to bookmark you!

    I have a ##prayer## site/blog. It pretty much covers ##Katrina## related stuff.

    Come and check it out if you get time :-)

    ReplyDelete