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23 Jul 2020

Full Federal Court shines light on infringement of Swiss style claims

By Richard Hoad and Caitlin McCrum

The Full Federal Court has clarified the law regarding the enforcement of Swiss claims in Australia. Whether a Swiss claim has been infringed depends on whether the medicament is for the specified therapeutic purpose. This question is directed to the characteristics of the manufactured medicament, having regard to all the circumstances of the case, and does not require direct evidence of the manufacturer’s actual intentions.

There has been uncertainty in Australia about what a patentee must show when arguing infringement of a Swiss style claim, since the Mylan decision last year. That uncertainty has been dispelled by a unanimous decision from an expanded five judge bench of the Full Federal Court (Mylan Health Pty Ltd v Sun Pharma ANZ Pty Ltd [2020] FCAFC 116).

What are Swiss style claims?

Swiss style claims are a form of claim common in patents for medical treatments that involve the use of a known substance for a new therapeutic treatment. A standard form of Swiss claim is:

"The use of (relevant substance) in the manufacture of a medicament for the therapeutic treatment of (medical condition)".

Swiss claims originated in Europe as a way of circumventing the fact that method of medical treatment claims were not patentable. In contrast, it has been clear that methods of medical treatment are patentable in Australia since the Full Federal Court decision in BMS v Faulding in 2000 (and this was later confirmed by the High Court in 2013 in Apotex v Sanofi-Aventis).

Nonetheless, there are advantages in seeking to enforce Swiss claims in Australia in addition to method of treatment claims. In particular, a Swiss claim can be enforced directly against the manufacturer of the allegedly infringing product, whereas the primary infringer of a method of treatment claim is the medical practitioner performing the method (though indirect infringement can be alleged against the manufacturer, for example under section 117 of the Patents Act).

Mylan's Swiss style claims for fenofibrate

Mylan Health Pty Ltd was the exclusive licensee of Australian patent no. 2006313711 (the 711 Patent) relating to the use of fenofibrate for preventing diabetic retinopathy. The patentee was a related company and, for convenience, we will refer to both companies as “Mylan”. The 711 Patent included several Swiss claims relating to the use of fenofibrate for the manufacture of a medicament for the prevention and/or treatment of retinopathy, in particular diabetic retinopathy.

Since 2015, Mylan had marketed and sold the drug Lipidil, which at the time was the only fenofibrate product on the Australian market.

In 2016, Mylan sued Sun Pharma ANZ Pty Ltd for threatened infringement of the 711 Patent (and two other patents) after Sun Pharma obtained entry on the Australian Register of Therapeutic Goods of certain fenofibrate film-coated tablets, which it proposed to market and supply in Australia (the Ranbaxy Products).

First instance: intention is crucial to establish actual or threatened infringement

Mylan was unsuccessful at first instance, with Justice Nicholas finding that the relevant claims were invalid for lack of novelty and inventive step.

Even if the claims had been valid, Justice Nicholas said, Mylan had not established that Sun Pharma was threatening to infringe the Swiss claims. He observed:

“Suitability for use cannot be determinative of the question of infringement of a Swiss-style claim. If it were, it would render a person liable for infringement who manufactured a medicament for the purpose of using it to treat an indication which it had been used to treat before the priority date of the Swiss-style claim merely because the medicament might also be used for the purpose of treating a second indication that provided the novelty-conferring subject matter of the claim. If the applicants’ submission is correct, there would be an infringement even if the manufacturer took steps to ensure that the product was not used to treat the designated condition, and had no reason to believe that it would be so used. I do not think there is any doubt that this would be an absurd result, and contrary to the policy behind modern patent legislation.”

Justice Nicholas considered that the manufacturer’s intentions were the critical factor in determining whether a Swiss claim has been infringed. The Full Court summarised Justice Nicholas's findings on this point as follows:

"In essence, his Honour found that claims in this form imported a purposive element which, in order to establish infringement or threatened infringement, require proof of the manufacturer’s intention when making the medicament." [emphasis added]

On the facts, Justice Nicholas held that Mylan had not proved that the intended use of the Ranbaxy Products was for the prevention or treatment of diabetic retinopathy.

Full Court: Swiss style claims do not import a purposive element

On appeal, the Full Court rejected any suggestion that infringement of a Swiss claim requires a finding that the manufacturer of the allegedly infringing product made it with the intention that it be used in the treatment of the condition specified in the claim. In other words, Swiss claims do not add a further essential feature to an invention, being the manufacturer's intention.

It is axiomatic that infringement of a patent claim (in whatever form the claim takes) is established where the infringer has taken each of the essential features of the invention as claimed. Accordingly, in the context of a Swiss claim, infringement is concerned with what the allegedly infringing manufacturer has done, not what it intended to do.

The Full Court found that when considering an alleged infringement of a Swiss claim, a single factual question needs to be asked: as the product of the claimed method or process, is the medicament for the specified therapeutic purpose? This question is directed to the characteristics of the manufactured medicament, having regard to all the circumstances of the case.

So how do you prove infringement of a Swiss claim?

Importantly, while the Full Court did not consider the manufacturer's intention to be an essential feature of a Swiss claim, it did observe that direct evidence of a manufacturer's actual intention in making a medicament may nevertheless still be relevant as one of the “circumstances of the case”.

Further, the Full Court noted that the reasonably foreseeable use or uses of a manufactured product may also be relevant. However, the Full Court agreed with Justice Nicholas that where a product would be used extensively for purposes that fall outside the monopoly of a Swiss claim, the fact that it is reasonably foreseeable, or indeed likely, that a substantial portion of the manufactured product would also be used for the claimed therapeutic purpose will not be determinative of infringement. As the Full Court observed, "it might be reasonably foreseeable that a product might be put to a particular use, but it does not necessarily follow that the product, as manufactured, is for that use." [emphasis added]

Applying these principles, the Full Court found that, had the Swiss claims been valid, Sun Pharma would not have not infringed them. While the product information referred to the products as bioequivalent to Lipidil, this statement was made in the context of reference to clinical studies. The product information also stated the indications for which the allegedly infringing products were registered, and those indications did not include retinopathy or diabetic retinopathy.

Interestingly, the Full Court noted that the product information did not need to expressly exclude the use of the Ranbaxy Products for the treatment of retinopathy. However, a disclaimer could be used to bolster a defence to an infringement claim. The practice of taking a minimal approach to describing indications on product information – the so-called "skinny label" – may become more common.

Method of treatment claims should always be included

While Justice Nicholas found that Sun Pharma had not threatened to infringe the Swiss claims, he held that Sun Pharma had threatened to infringe the method of treatment claims. The Full Federal Court took the same view, observing that the findings were not inconsistent.

This demonstrates the benefits of asserting infringement of both Swiss claims and method of treatment claims. While a product may not infringe a Swiss claim because it cannot be shown that it was manufactured for that use, it may still infringe a method of treatment claim, by operation of section 117 of the Patents Act.

Is a hypothesis sufficient to anticipate a claimed invention?

At first instance, Justice Nicholas found that the claims of the 711 Patent were invalid for lack of novelty. This was because the Protocol for a prior clinical trial had hypothesised that the administration of a fibrate will reduce the rate of development or progression of diabetic retinopathy.

On appeal, Mylan argued the Protocol could not anticipate the invention as claimed in the 711 Patent because it advanced no more than a reasoned hypothesis for treatment, not a method of treatment as such. Mylan argued that the disclosure of a reasoned hypothesis that is yet to be evaluated does not constitute "clear and unmistakable directions" to perform the method or otherwise "teach" the invention.

The Full Court dismissed Mylan's submissions on this point, holding that a documentary disclosure containing a hypothesis can deprive an invention of novelty. The Full Court stated:

"It is important to stress that validation of the ACCORD Protocol's hypothesis was certainly not required in order to achieve the equality of disclosure referred to in Hill v Evans. Looked at from a different perspective, it is not a requirement for a patentable invention that the invention, as claimed, be based on scientific proof or substantiation… What is required is that the prior document discloses that which is subsequently claimed as an invention. If that is disclosed, the invention cannot be new."

This differs from the approach taken in the United Kingdom, where the novelty of a Swiss claim will not be destroyed merely because a prior disclosure hypothesises that a pharmaceutical compound might have the claimed therapeutic effect. The UK approach is built upon the principle that actual achievement of the therapeutic effect is a functional technical feature of a Swiss claim – rather than a mere statement of purpose. As we have seen, the approach taken in Australia is quite different.

Key takeaways

There are three key points arising from the Full Court’s decision.

First, patentees can rest assured that Swiss claims do not require proof of a manufacturer's intention to establish actual or threatened patent infringement. However, the use of a disclaimer or a “skinny label” may make it difficult to prove infringement. As the Full Federal Court observed, whether a disclaimer or skinny label is effective will depend on all of the circumstances of the case.

Second, this case demonstrates the value for patentees of including (and seeking to enforce) both method of treatment claims and Swiss style claims in Australia.

Finally, unlike the position in the UK, in Australia a hypothesis can be relied upon as anticipating a Swiss claim, even where a stated hypothesis has not yet been tested.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.