Alphapharm Pty Ltd v H Lundbeck A/S & Anor [2009] HCATrans 324 (11 December 2009)

Last Updated: 16 December 2009

[2009] HCATrans 324

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S135 of 2009

B e t w e e n -

ALPHAPHARM PTY LTD

Applicant

and

H LUNDBECK A/S

First Respondent

LUNDBECK AUSTRALIA PTY LTD

Second Respondent

Office of the Registry
Sydney No S151 of 2009

B e t w e e n -

ARROW PHARMACEUTICALS PTY LTD (ACN 003144170)

Applicant

and

H LUNDBECK A/S

Respondent

Office of the Registry
Sydney No S164 of 2009

B e t w e e n -

H LUNDBECK A/S

First Applicant

LUNDBECK AUSTRALIA PTY LTD (ACN 070 094 290)

Second Applicant

and

ALPHAPHARM PTY LTD (ACN 002 359 739)

Respondent

Office of the Registry
Sydney No S165 of 2009

B e t w e e n -

H LUNDBECK A/S

Applicant

and

ARROW PHARMACEUTICALS PTY LTD (ACN 003 144 170)

Respondent

Office of the Registry
Sydney No S166 of 2009

B e t w e e n -

H LUNDBECK A/S

Applicant

and

COMMISSIONER OF PATENTS

First Respondent

ALPHAPHARM PTY LTD (ACN 002 359 739)

Second Respondent

Applications for special leave to appeal

FRENCH CJ
GUMMOW J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 11 DECEMBER 2009, AT 11.04 AM

Copyright in the High Court of Australia

__________________

MR D.K. CATTERNS, QC: May it please the Court, I appear with my learned friend, MR S.C.G. BURLEY, SC, for Alphapharm. We are the applicants in the first matter, the respondents in the third, and the second respondent in the fifth. (instructed by Mallesons Stephen Jaques)

MR D. SHAVIN, QC: May it please the Court, I appear with my learned friend, MS K.J. HOWARD, SC, for H. Lundbeck A/S and Lundbeck Australia Proprietary Limited. We are respondents in the first two matters and applicants in the next three. (instructed by Corrs Chambers Westgarth)

MR C. DIMITRIADIS: May it please the Court, I appear with my learned friend, MR P.A. MADDIGAN, for Arrow Pharmaceuticals Proprietary Limited, which is the applicant in the second matter and the respondent in the fourth matter. (instructed by Blake Dawson)

FRENCH CJ: I note there is a submitting appearance for the Commissioner of Patents. Yes, Mr Catterns.

MR CATTERNS: May it please the Court. Of course it is a matter for the Court’s convenience, but as we see it there are two separate matters. One is the construction matter - - -

FRENCH CJ: Yes, there is the construction question and then the construction question.

MR CATTERNS: Yes, relating to patent extension.

FRENCH CJ: Yes.

MR CATTERNS: For our part, if the Court is not inconvenienced, my learned friend, Mr Burley, was going to deal with the patent extension point and I was going to deal with the construction point. As to that, your Honours – and that is the first matter, and my learned friend, Mr Dimitriadis, is on our side in that same matter – in his second matter – your Honours, we respectfully - - -

GUMMOW J: You seem to have challenged novelty of claims 1 and 3, is that right?

MR CATTERNS: Yes, your Honour, and 5.

GUMMOW J: I was wondering about that. Mr Dimitriadis clearly challenges 5.

MR CATTERNS: Yes, well, your Honour, claim 5 has been revoked for inutility.

GUMMOW J: I see.

MR CATTERNS: So that is why we focused on 1 and 3.

FRENCH CJ: The two claims raise the same constructional point.

MR CATTERNS: Precisely, your Honour. The point is a short one. We respectfully submit that the centrepiece of our patent law, section 40(2)(b), is that the claims define the invention, and the High Court recently in the Kimberly-Clark Case said that:

the plain and unambiguous meaning of a claim cannot be varied or qualified by reference to the body of the specification –

citing the well-known Welch Perrin Case. In short, your Honours, it is not legitimate to expand or confine the boundaries of monopoly by a gloss drawn from the specification, and we say that is precisely what the Court - the majority - - -

FRENCH CJ: It may sound a terribly simplistic question, but why, if I read a claim that defines an invention by reference to a particular class of molecule, should I read some other molecules into it?

MR CATTERNS: Well, your Honour, we are not asking the Court to read other molecules in.

FRENCH CJ: Well, surrounding substances.

MR CATTERNS: Well, we say the proper construction is (+)-Citalopram means a molecule of a particular chemical formula and three-dimensional shape, and it is infringed and also anticipated wherever it is found, irrespective of what is there around it, and you have to read words in, you have to read a gloss in, to exclude the other environments, in particular, the racemic mixture where there is an equal amount of its mirror image. Your Honours, we submit there is just no question here, that what his Honour Justice Lindgren did and what the Full Court did, although in different ways, is read in an integer. What her Honour Justice Bennett read in is (+)-Citalopram, separated or isolated or pure (+)-Citalopram - - -

FRENCH CJ: Does it not reduce as a matter of logic to (+)-Citalopram and nothing else? Is that an integer?

MR CATTERNS: Well, your Honour, if her Honour reads it that way and - - -

FRENCH CJ: That is what it amounts to, is it not, a matter of logic?

MR CATTERNS: Did you mean – I beg your pardon - - -

FRENCH CJ: Yes, as her Honour read it.

MR CATTERNS: Yes, your Honour, and that, of course, gives many problems with the word “pure”, if it just means 100 per cent, because that might mean it is never infringed. His Honour Justice Middleton did not use the word “pure”, he just said “separated or isolated”. Your Honours, we respectfully submit that by reading those words in their Honours have imported an integer. In the US - - -

GUMMOW J: Justice Bennett said at paragraph 138 – last sentence at paragraph 138 of her reasons – she accepted the submission, it was not adding a limitation, but construing it as a skilled addressee would construe it.

MR CATTERNS: Yes, your Honour, but the skilled addressee cannot, I submit, construe it in a way that reads in an additional integer, but if your Honours would not mind going to - - -

GUMMOW J: We are back in the debate you were just having with the Chief Justice, I think.

MR CATTERNS: Well, yes, your Honour, that is the one point on the construction argument. Your Honours, I submit that what is happened is the UK approach in the Kirin-Amgen Case – which I will mention in a minute – has been followed, and there is just no question whatsoever that the UK approach has now diverged from ours whereby we no longer have the Welch Perrin or Kimberly-Clark approach which says you cannot read in extra integers because in the UK by Article 69 of the European Convention and the protocol for interpretation of that the claims are to be interpreted in light of the specification.

Now, your Honours, we submit where the claim is unambiguous you cannot go to the specification to add the integer. If your Honours would not mind going to 149 where we submit her Honour Justice Bennett does this. Her Honour does not just derive this from the skilled addressee’s reading because the skilled addressee knows that (+)-Citalopram means the molecule of a particular three-dimensional structure.

Your Honours can see from 149 that her Honour relies on the title of the specification, “The Patent is entitled” that, “The Patent discloses a method for” separating them. “The invention is said to relate to the two novel enantiomers . . . also said to be concerned with a method to resolve” them. “While the specification refers to the enantiomers, in the plural, it is in the context of their separate identity.” Then her Honour, with respect, leaps to a conclusion. Her Honour says:

The primary judge was entitled to accept the evidence that the skilled addressee would read claim 1 as referring to the isolated (+)-enantiomer.

Your Honour, that was a finding of his Honour as a matter of construction, not a reference to the evidence, as we read it. Then her Honour goes on:

In the context of the whole of the specification, this was in contrast to the (+)-enantiomer as present in the racemate . . .

That is, claim 1 is to be separated or isolated or pure (+)-enantiomer.

So, your Honours, we submit that that is to read in an integer, claim 1 is to the separated or isolated or pure enantiomer. Now, your Honours, ironically, one cannot rely on the title, and the illustration that it is a bad guide and we say impermissible can be seen at page 3 of the application book, because the title was originally not (+)-enantiomer but the plural “NEW ENANTIOMERS AND THEIR ISOLATION”, and your Honours see that at page 3 about a third of the way down. Your Honours, at page 7 the body of the specification says:

The present invention relates to the two novel enantiomers . . . and to the use of these enantiomers -

It then, of course, focuses on the (+)-enantiomer as being the one that is active, relevantly in relation to depression. So, your Honours, that is the stark question, we submit, that is placed by the appeal.

What their Honours have done is read in that integer of separated or isolated or pure. Your Honours, that is based, we submit, on tenets of construction which are inconsistent. At page 320 of the book her Honour cites, as now is common in the Federal Court, a list of propositions and a well-known list of cases, including Welch Perrin and Kimberly-Clark, but then her Honour goes on to refer to the exposition of claims, the construction by Lord Hoffman in Kirin-Amgen, and our respectful submission is that those two strands of authority cannot stand together.

Lord Hoffman in Kirin-Amgen is at pains to draw a distinction between the old UK law, which we submit matches our law, and the new UK law as it is mandated by the European Patent Convention. So, your Honours, we submit that that leads to this error of reading in an integer that is not there. Your Honours, Justice Middleton does the same thing – if your Honours would not mind going to page 357.

GUMMOW J: Paragraph?

MR CATTERNS: Beginning at 250, your Honour. His Honour there agrees with her Honour Justice Bennett, and then he says:

In my respectful view, the primary judge did not impermissibly add integers . . .

Claim 1 simply identifies the substance (+)-enantiomer. The construction I prefer does not involve reading into claim 1 a limitation of “independently existing” . . . The mere reference to (+)-enantiomer in claim 1 without more indicates that it is the separated or the isolated enantiomer that is claimed. In other words,

it is implicit in the way claim 1 is worded, where the Patent is entitled “(+)-Enantiomer –

So, your Honours, we respectfully submit that again – and in these admittedly brief reasons – his Honour is having regard to the specification, in particular the title, to read this integer in. I do not need to take your Honours to Justice Emmett’s reasoning on the point, but we respectfully submit his Honour was right in holding that there was no need to read in the additional integer.

Your Honours, we respectfully submit this is an important matter and one where the majority in the Full Court plainly got it wrong. His Honour Justice Lindgren had yet another construction whereby his Honour held it was separated or pure and then gave a meaning to “pure”, namely, of greater than 95 per cent purity. Now, that was rejected by Justices Bennett and Middleton, but as I submit, to do that is to add a second integer.

So we respectfully submit that the safe approach is to just look at what the claim says. It says (+)-Citalopram, indifferent as to where it is found, and one only excludes places where it is found by reading impermissibly in a further integer. Your Honours, if we are right on that construction, it is common ground that the patent would be anticipated. May it please the Court.

FRENCH CJ: Thank you, Mr Catterns. Mr Burley.

MR BURLEY: Your Honour, I was going to address on the section 70 point.

FRENCH CJ: Yes, I understand that.

MR BURLEY: Your Honours, in our respectful submission, there is no point of principle that arises from the special leave application that our friends bring in relation to the extension of term. It is a question of orthodox statutory construction in which the Full Court’s reasons reflect no error, decided on the particular facts of the case.

GUMMOW J: Now, the patent expired on 13 June this year - - -

MR BURLEY: Yes, your Honour.

GUMMOW J: - - - but the extension would carry it to 9 December 2012?

MR BURLEY: Yes, your Honour, it would carry it – there are two alternative extension periods.

FRENCH CJ: It depends on whether the relevant registration with Therapeutic Goods was 1997 or 2003.

MR BURLEY: Yes, your Honour, the Cipramil date, which was the date on – the product which was first put on the Australian Therapeutic Goods Register, was in 1997. Lexapro, which was the alternative contention, was for the racemic product which was the later date.

FRENCH CJ: The problem is that the (+)-enantiomer was a component of the Cipramil.

MR BURLEY: That was a problem, as we submitted below, and which the Full Court found – was indeed on the plain reading of section 70 the correct first regulatory approval date, and one can see that from the structure of section 70, if your Honours might turn briefly to that? Section 70 has two components, the first acknowledging that it is an application to the Commissioner for Patents who determines the outcome of extension terms subject to appeals. Pausing there, that of course, is a change from the 1952 Act where there was a rather more complicated process where the adequacy of remuneration was considered in the question of extensions of term.

Then subsection (2) deals first with looking at what patent it is that is to be extended, and subsection (2)(a), the first of the conditions and the one that was relevant here:

one or more pharmaceutical substances per se must in substance be disclosed in the complete specification of the patent and in substance fall within the scope of the claim or claims of that specification -

There was no doubt at all that the patent in suit was a patent which satisfied those characteristics, and that within claim 1, the substance falling in claim 1, was the (+)-enantiomer, (+)-Citalopram. Furthermore, his Honour Justice Lindgren found that the active ingredient of Citalopram was the (+)-enantiomer. That is relevant for the second component, which now turns away from the patent and looks to the state of the ARTG, the Australian Register of Therapeutic Goods:

Both of the following conditions must be satisfied in relation to at least one of those pharmaceutical substances:

(a) goods containing, or consisting of, the substance must be included in the Australian Register of Therapeutic Goods -

Now, the question that came down to one which we say is of orthodox statutory construction is whether or not the Citalopram patent – sorry, I withdraw that - the product Cipramil was a product or goods containing (+)-Citalopram. There is no doubt that the racemate is a racemic mixture in equal proportions of both enantiomers. As I said a moment ago, the finding of his Honour Justice Lindgren, which is referred to and repeated by our friends in their outline of submissions, was that both are within the substance, but more particularly that it is the (+)-enantiomer which delivers the therapeutic effect of the racemate.

Then the next component, which gave rise to the factual concerns in the dispute below, was what the first regulatory approval date was as set out in subparagraph (3)(b). That is determined on section 70(5):

the first regulatory approval date . . . is:

(a) if no pre-TGA marketing approval was given –

which it was not –

the date of commencement of the first inclusion in the Australian Register of Therapeutic Goods of goods that contain, or consist of, the substance -

So again one goes to the question, what are the goods that contain the substance? This is a different question to the question of the novelty of the patent, although our friends contend otherwise. The question is purely one of fact, is there a good that contains the relevant substance? In that regard, in our respectful submission, the propositions found by his Honour the learned primary judge were completely unexceptionable.

So if your Honours turn to application book page 172, his Honour Justice Lindgren is first dealing with – and we would say in a completely orthodox way – what the word “contain” means:

The word “contain” is an ordinary English word and its meaning is plain. In its conjunction with the alternative “consist of”, “contain” means, according to the New Shorter Oxford English Dictionary, “include as a part . . . of its substance of content” or “have inside itself”.

In s 70(5)(a) it is “goods” that are to contain or are to consist of the pharmaceutical substance in question. In this context, “contain” signifies a physical relationship that is something less than “consist of”. If goods A consist of B and C, they may be seen to contain B and to contain C, but not to consist of either alone. B and C will also be goods, although they need not be recognised as continuing to have a separate existence.

Then at application book page 167 his Honour Justice Lindgren found – and this is a finding that has not been challenged – in paragraph 512, reading from the second sentence:

Both (+)-citalopram and racemic citalopram are for a therapeutic use which is of the same kind in each case. Indeed, the therapeutic benefit of citalopram comes from the presence in it of (+)-citalopram.

So confronted with those basic facts, in our respectful submission, his Honour Justice Lindgren was justified in finding that the goods on the Australian Register of Therapeutic Goods did in fact contain the (+)-enantiomer because as a matter of scientific reality each of the plus and the minus enantiomers were present in the same product.

FRENCH CJ: This is, of course, a question of statutory construction.

MR BURLEY: Yes.

FRENCH CJ: As to which, I suppose, there might be different views, and it suggests that it is a matter of general importance. Your contention is simply that Justice Lindgren got it right.

MR BURLEY: Yes, and the Full Court, your Honour. Of course, every statutory question has its intrinsic importance, but there is no particular suggestion that this is something which would raise it above the category of every statutory dispute as to the construction, it is a section in the Patents Act, which will be construed from time to time. In our submission, apart from that point, we embrace the proposition that there is no reasonable prospect that this is an incorrect construction given the plain meaning of the words.

There was no doubt about the principles of construction relevant to this, and really our friend’s submission as to the grant of special leave distils to the fact that it is said that there is a presumption in favour based on the secondary materials that there be some sort of minimum term of 15 years for a pharmaceutical patent. Well, that is plainly not what the sections are directed towards. There is to be a maximum extension of five years on given statutory provisions, but there is not a proviso that the owner of a pharmaceutical patent is entitled to a 15-year term.

This is seen from the way that our friends – or the construction point is seen from the way that our friends put their case below, and if your Honours turn to page 351 of the application book one can see that the way that it was expressed below was to – our friends put forward three propositions in relation to the construction of section 70, the third of which is, in our respectful submission, one which was plainly wrong and rightly rejected:

(a) First, identify the “pharmaceutical substance”, which is the pharmaceutical substance per se of s 70(2)(a). Plainly, that substance is (+)-citalopram, not part of a racemate.

No problem with that –

(b) Secondly, identify “the pharmaceutical substance” contained in the relevant goods which are included in the ARTG.

Again, no problem with that, Cipramil, and that is the statutory inquiry –

(c) Thirdly, ask whether they are each the same “pharmaceutical substance”. If they are the same, the first ARTG listing of the goods can be relied upon as the foundation of any extension of term. If they are different, the first ARTG listing of the goods cannot be relied upon as the foundation for an extension of term because it cannot be said that the goods contain the pharmaceutical substance per se of s 70(2)(a).

That is to read in the words “per se” in the section and to ignore the broader question as far as the goods are concerned of what are the goods containing. They do not have to consist of – in fact, quite deliberately the draftsman included the words “containing” or “consisting of” – and so, in our respectful submission, that includes a combination of ingredients, if one likes, in the way that Justice Lindgren, in our submission, correctly construed it.

The Full Court dealt with those submissions in the following paragraphs. In paragraph 233 of application book page 352, it was said:

The next level of inquiry is under s 70(3) where one asks: are there goods on the ARTG that contain (+)-citalopram, the (+)-enantiomer?

Justice Bennett says:

This raised the other aspect of the semantic argument –

the first one being the per se argument –

referred to by the primary judge, the meaning of “contain” in s 70(3)(a). The question was whether Cipramil, the racemate, was a good that contained the pharmaceutical substance (+)-citalopram. The primary judge recognised that the racemate is not one and the same thing as the enantiomer, and that the racemate and enantiomer are involved in different physico-chemical interactions manifested in different pharmacodynamics and pharmacokinetics.

The reference there to paragraph 530 demonstrates that in fact her Honour Justice Bennett is being a little generous to our friends, because in fact at paragraph 530 of Justice Lindgren’s reasoning he did not make a finding as to the different physico-chemical and pharmacokinetics of the reactions, but rather recorded our learned friend’s submissions at that point, and that is a matter that I might need to return to if my learned friend raises it. Her Honour went on:

However, his Honour held that the word “contain” is a word of plain meaning –

and we say plainly it is a question of as to contain. Then at the conclusion of the next paragraph, paragraph 235, her Honour says:

The racemate is made up of equal parts of the (+) and (-) enantiomers and (+)-citalopram is the major, if not the only, active ingredient in Cipramil. I do not propose to repeat all of his Honour’s reasons -

So if one comes to the question of construction, divorcing it, as one probably should, from the question of the validity of the patent, one is faced with the question, claim 1 is for (+)-Citalopram, its chemical formula is put out. The only question that the legislation is asking, and asking the administrator who has to decide, that being the Commissioner of Patents, has to decide whether an extension should be granted, is whether or not that is part of the goods on the ARTG, and as a matter of fact, there was no doubt about that whatsoever.

Our learned friend’s submissions endeavour to make much of what is said to be an inconsistency between the finding as to novelty and the application of section 70 of the Act. We would respectfully submit that that is a drift away from the words of the section of the Act and towards a desired outcome, which imputes the fact that various adjectives might be applied to the construction of the claim for the purpose of determining whether the prior art patent, the Cipramil patent as it is called, was a disclosure of the (+)-enantiomer.

The question of disclosure under novelty is, of course, quite different to the question of science and fact as to whether a good contains an enantiomer. As far as that question of fact is concerned, there is no doubt at all, in our submission, and no contention to suggest that that is wrong, that

the (+)-enantiomer is contained within the racemic mix. Her Honour Justice Bennett dealt with that at appeal book page 354, paragraph 244 of her reasons. Her Honour says:

I have concluded, as a matter of construction, that the subject matter of claim 1 of the Patent is the separated or purified or isolated (+)-enantiomer, (+)-citalopram. I have also concluded that the claim is not anticipated by the racemate. Lundbeck submits that such a conclusion is inconsistent with a finding that the racemate “contains” the (+)-enantiomer. However, the pharmaceutical substance per se is the molecule, the (+)-enantiomer. The racemic mixture is a solution that contains both –

In our respectful submission, that is plainly right. So reverting to the question posed by the Chief Justice at the outset, we would submit that this is a question of the ordinary construction of the section of the Act. The approach taken by the Full Court and the learned primary judge, and the delegate for that matter, was unexceptionable. Applying the broad word “contains” in its ordinary English meaning, and there is no basis for what we would respectfully submit would be a distortion of the words of that section in order to accommodate the fact that our learned friends chose to apply for an extension on the basis of a later in time inclusion in the ARTG for Lexapro rather than Cipramil. The fact is that they did not, and the consequence is that their extension ought not to be granted.

FRENCH CJ: Yes, thank you, Mr Burley.

MR BURLEY: If it please, your Honour.

FRENCH CJ: Mr Dimitriadis, do you have anything to add to what has been said?

MR DIMITRIADIS: Your Honours, could I add one very brief point in relation to the novelty construction of the patent question? It relates to the issue of precisely what is meant by the construction that was given by the majority of the Full Court to claim 1 as in it being to the separated or isolated or pure enantiomer. Could I take your Honours to page 330 of the application book and paragraph 150 of her Honour Justice Bennett’s reasons? Your Honours will see there – this is the paragraph where her Honour refers to the evidence that:

The primary judge was entitled to accept the evidence that the skilled addressee would read claim 1 as referring to the isolated (+)-enantiomer. In the context of the whole of the specification, this was in contrast to the (+)-enantiomer as present in the racemate or in a mixture with the (-)-enantiomer.

Now, what that suggests is that the reasoning her Honour is adopting is not that the claim is to the (+)-enantiomer on its own in the sense of being free from any other kind of substance, but rather just excluding the (-)-enantiomer - excluding the other enantiomer. That indeed is what Justice Lindgren did in his reasons for judgment. I will not take your Honours to it, but at paragraph 117 he referred to the (+)-enantiomer having an “existence independent of that of the racemate”, or being not “merely as part of the unresolved racemate”.

That reading is confirmed when one goes to paragraph 152 of Justice Bennett’s reasons where her Honour refers to the decision of Dr Barker in the Emory University Case. Your Honours will see at about line 5 of that paragraph her Honour refers to Dr Barker considering whether, in another claim to an enantiomer, such a claim should represent a disclaimer of:

‘in admixture with the (+)-enantiomer’.

Then her Honour continues on and refers to another case. In the last four lines of that paragraph her Honour notes that:

Dr Barker concluded that, as the specification was concerned with separated enantiomers or, at least, enantiomerically enriched material, the claims to the (-)-enantiomer should be understood as referring to the (-)-enantiomer substantially free of the (+)-enantiomer.

Now, in our respectful submission, that kind of approach is reading in a limitation that is not present in the claim, it is not merely construing the claim as being to a substance on its own, the substance referred to on its own, but rather the substance, the (+)-enantiomer, specifically excluding one kind of other substance, being the (-)-enantiomer, and that is a specific kind of limitation which is not supported by any language which is present in the claim, in our respectful submission.

FRENCH CJ: Thank you, Mr Dimitriadis. Mr Shavin, we will only need to hear from you on your application for special leave in relation to the extension question.

MR SHAVIN: If the Court pleases. Our application raises a simple but very important issue of construction of section 70 on which each of the judges below have, we say with respect, fallen into error. The issue is easily stated. Section 70(2) requires as a condition for the grant of an extension of term of standard patents relating to pharmaceutical substances that:

one or more pharmaceutical substances per se must in substance be disclosed in the complete specification of the patent and –

and we emphasise the word “and” –

in substance fall within the scope of the claim or claims of that specification -

The patent is to the (+)-enantiomer of Citalopram which is known as Escitalopram and is an antidepressant. The findings below were that it was not just the molecule but it was the separated or isolated enantiomer, as Justice Lindgren had found was the evidence of the addressees at paragraph 129.

FRENCH CJ: Well, that is just the molecule.

MR SHAVIN: No, with respect - - -

FRENCH CJ: Well, as a matter of fact it is, is it not?

MR SHAVIN: Yes, could I perhaps just refresh the Court’s memory as to what Justice Lindgren found was the evidence of the addressees at 129, which is on application book page 76? In the third sentence his Honour said:

Professors Banwell –

and Professor Banwell was called by Alphapharm –

and Davies –

who was called by Lundbeck –

agreed that –

the chemical name –

denotes a specific single enantiomeric form of the compound and not the racemate.

So it is different to that enantiomer which forms part of the racemate, and that is because of the (+) sign. If there had been a (+) over a (-) sign that would be the way a chemist would refer to the racemic mix, but where you have either the (+) sign alone or the (-) sign alone there is a reference only to the enantiomer separate from the racemate. It is just the single molecule that rotates the right, though in a standard solution.

So it is not disputed that the separated or isolated (+)-enantiomer is a pharmaceutical substance per se is disclosed in a complete specification and is within the scope of the claims. Now, section 70(3) then provides that:

Both of the following conditions must be satisfied in relation to at least one of those pharmaceutical substances -

Now, when one looks at those pharmaceutical substances one has to go back to subsection (2), and it is either a pharmaceutical substance per se disclosed and falling “within the scope of the claim”, or it is a pharmaceutical substance “when produced by a process that involves the use of recombinant DNA”. So one can see immediately why the words “per se” does not appear in subsection (3) because it is picking up one of the two types of substances in subsection (2).

Then, looking, as we are here, only at (2)(a) it must be a reference to “one or more pharmaceutical substances per se” and “in substance fall within the scope of the claim or claims”. Only the first condition of section 70(3) is relevant, that is we are only looking at (3)(a), we are not looking at (3)(b). The error below is that the courts have determined that the substance which the goods must contain or consist of under section 70(3) can be different from the substance that in substance falls “within the scope of the claim” under 70(2)(a), that is, a substance other than one of those pharmaceutical substances.

The claim has been construed as the separated or isolated (+)-enantiomer; that is the single enantiomer rather than the racemate. The racemate comprising two enantiomers does not fall within the scope of the claims of the patent. In the present case the court held that although the patent claimed to separate it enantiomer, goods that contain the racemate were the relevant goods, that is, the substance in the claim is different from the substance in the goods.

Now, the error can best be seen, we would say with respect, at paragraph 244 of her Honour Justice Bennett’s reasons in the court below, and that the Court will find at page 354 of the application book. It is worthwhile, if I could take the Court’s time, to work through this paragraph because the error can be seen clearly. Her Honour starts:

I have concluded, as a matter of construction, that the subject matter of claim 1 of the Patent is the separated or purified or isolated (+)-enantiomer, (+)-citalopram. I have also concluded that the claim is not anticipated by the racemate.

May I interpose there? That is clearly a finding that the racemate is not in substance within the scope of the claim –

Lundbeck submits that such a conclusion is inconsistent with a finding that the racemate “contains” the (+)-enantiomer. However, the pharmaceutical substance per se is the molecule, the (+)-enantiomer –

We interpose. What her Honour neglects to do is that she neglects to look at the second criteria in section 70(2)(a) - - -

FRENCH CJ: Criterion.

MR SHAVIN: Criterion. I apologise, your Honour.

FRENCH CJ: That is all right.

MR SHAVIN: It is modern education, I am sorry, your Honour. The second criterion is that “in substance fall within the scope of the claim”. Her Honour completely omits that because she then having decided that there is a pharmaceutical substance per se proceeds:

The racemic mixture is a solution that contains both (+) and (-) enantiomers in equal portions.

Of course, the pharmaceutical substance per se that falls within the scope her Honour has already found is the separated, isolated or pure, that is, the enantiomer other than in the racemate. Her Honour then goes on a frolic, we would say with respect:

The (+)-enantiomer molecule per se fulfils the requirements of s 70(2). It is the molecule that “works” –

That has nothing to do with the section. What her Honour has done is, having started correctly – by correctly, we would say with respect, construing the claim as the separated or isolated enantiomer, determining it is that that falls within the scope of the claim. When it has come to section 70(3) her Honour has fallen into the trap of looking only at a pharmaceutical substance per se and holding that in section 70(3) the substance of which the goods must consist or which they must contain can be a different substance, namely, a substance that does not “fall within the scope of the claim”, of the patent.

In our respectful submission, that is a significant error, it is one that each of the four judges below has fallen into, and it goes fundamentally, contrary, to the plain meaning of the scheme of section 70. This is not a case where her Honour has deviated from the approaches in Australia in this Court. Rather, what her Honour has done has simply been to misconstrue the section, and it has therefore destroyed a large portion of the work of the section.

What the section is designed to do on its face as a matter of plain reading is to say there are two criterion that have to be adhered to if one is to fall within (2)(a). You must be a pharmaceutical substance per se, that is, it cannot be a formulation patent or a tableting patent or a packaging patent, it has to be a pharmaceutical substance per se, and it has to, “in substance fall within the scope of the claim”. That substance is the substance which the goods must contain or consist of and be included on the ARTG.

Now, Cipramil is to the racemate by definition as a matter of construction. Her Honour Justice Middleton and Justice Lindgren all found that that which is claimed in claims 1 and 3 is the (+)-enantiomer other than in the racemate, so the racemate cannot fall within the scope of the claim, so the racemate cannot be a substance which is one of the substances referred to in section 70(2). So that a good which contains the racemate cannot be the relevant good registered on the ARTG within the meaning of section 70(3)(a).

FRENCH CJ: Can I just ask, what role, if any, does the definition of “pharmaceutical substance” play in this as appears in the dictionary?

MR SHAVIN: We would say that what this shows is that in fact the racemate and the (+)-enantiomer are different pharmaceutical substances. If I could take the Court to - - -

FRENCH CJ: The core of it is:

a substance . . . for therapeutic use whose application . . . involves:

(a) a chemical interaction –

et cetera. All right.

MR SHAVIN: Yes.

FRENCH CJ: So that both the – what was the first one – Cipramil was the first drug that was lodged in 1997.

MR SHAVIN: That includes the racemate - - -

FRENCH CJ: I understand that, yes.

MR SHAVIN: That is a pharmaceutical substance, we accept that.

FRENCH CJ: That is a pharmaceutical substance. What do you say is the proper construction of the words “pharmaceutical substances per se”?

MR SHAVIN: We would say, with respect, that each of the racemate and the separated or isolated (+)-enantiomer are pharmaceutical substances and the findings of fact are that they are different.

FRENCH CJ: Yes.

MR SHAVIN: That finding of fact is clearly spelt out by Justice Lindgren at 529.

GUMMOW J: Now, what do you say, Mr Shavin, about paragraphs 24 and 25 of Mr Dimitriadis’ written submissions at page 472? He is saying, in effect, you tripped yourselves up by not applying at the right time.

MR SHAVIN: We would say, with respect, no, your Honour. What we had in 1997 was a registration of a pharmaceutical substance. There was then an invention, an invention which was found to satisfy all the requirements of the Act for isolating from that racemate the separated or isolated enantiomer. We say that that separated or isolated enantiomer is a different pharmaceutical substance from the racemate. That is why the patent is valid. We only get to section 70, as your Honour will have appreciated, once one has a valid patent. As it is a different pharmaceutical substance in the second patent it is that pharmaceutical substance which falls within the scope of the claims of that patent. The racemate does not.

So we would say, with respect, that the error in which our friends have fallen and that into which the courts below fell was to truncate their discussion of the product which is claimed in the second patent from the separated and isolated enantiomer to simply a (+)-enantiomer wherever occurring. What has been found below is that what has been claimed is not simply the molecule, the (+)-enantiomer, wherever occurring, but the separated or isolated one. So, with respect, we would say that paragraphs 24 and 25 do not answer the construction that we have advanced to the Court.

In circumstances of policy what the evidence showed below was that there was a research program over a period of eight years, not fulltime but extending over a period of eight years, by which Lundbeck managed to find a way of resolving the racemate. There were various technical problems which made it a very complex task. It was that task which enabled the trial judge to find that challenges of obviousness and manner of manufacture were not made out, and that finding of inventive step was not challenged on appeal; it was accepted by our friends.

So that what one looks at here is not the quality of invention; one does not look at what is the therapeutic effect. With respect, one starts with a valid patent. You look at the two criteria in 70(2)(a). You say, is there a substance that satisfies those two criteria within a good that is already on the ARTG? If there is, that is the relevant date. If there is not, then you look at the good which is the subject of the second patent.

Now, with respect, it seems to us that there is no other construction open of section 70, it simply does not leave open the possibility that the substance contained in the goods in section 70(3)(a) can be different from the substance in 70(2). If one is looking at section 70(2)(a) it simply cannot be that you can have a substance that is relevantly contained in a good in 70(3)(a) which does not “fall within the scope of the claim”.

The Court has not asked me to address on the construction side, I am simply assuming that the construction is the separated and isolated enantiomer, or in other words, the enantiomer apart from the racemate which was the evidence found by the trial judge to have been given by both of the experts as a matter of chemistry, as a matter of chemical understanding of a chemical term.

It is in those circumstances that we say, with respect, that there is a clear error below, a clear error by both the Full Court and the trial judge, so four judges of the court below - even though Justice Emmett found against us on other grounds, he accepted the reasoning. So that unless this Court corrects that error it will be perpetuated, and in our submissions we have shown that this is in fact a matter that goes far beyond the bounds of this patent and Lundbeck’s interest because it has the effect that any patent for a single enantiomer where a product is the subject of an application for listing on the ARTG where there is a prior listing of a racemate will mean that the second patent can never get an extension. That is why there is a short affidavit which simply goes to the point that other competitive pharmaceutical suppliers are saying this is not a matter that affects only Lundbeck, it affects the whole industry.

So, if the Court pleases, in our respectful submission, what we have is we have a clear error of construction of section 70 by a determination that you can have a different substance contained in the goods under 70(3)(a) to that which is in 70(2)(a), which involves both matters going to the administration of justice in terms of the justice of the case for Lundbeck and

which has a much wider application as a matter of general importance. In those circumstances, in our respectful submission, this is a matter that is appropriate for the grant of special leave.

I have been reminded that there is one further matter that I ought to draw to the Court’s attention. The consequence of the approach that has been adopted below is this, that relevant goods that Lundbeck says are included in the ARTG are those known as Lexapro, which contains the isolated or separated enantiomer.

FRENCH CJ: Well, that is the later registration.

MR SHAVIN: The later registration. If the court below is correct, the effect is that Lundbeck would have been entitled to an extension of the patent in suit based upon the inclusion in the ARTG of Cipramil regardless of whether it ever sought to market Lexapro, and that cannot be right. Where they are different substances – and that was accepted by Justice Bennett, the finding at 529 is accepted by Justice Bennett at 150 – no, I apologise, at 234, I am sorry - her Honour Justice Bennett accepted that they were different substances at 234.

Once one accepts that the substances are different, it is clear that the object of the section is that the legislation is seeking to compensate a pharmaceutical manufacturer who has created a new pharmaceutical substance for the consequences of the delay between the invention and getting marketing approval. So that there must be a link between the application for marketing approval of that substance and that invention, and it makes no sense to say, well, you could have got an extension based upon a different substance rather than the substance in suit. It is a contrary outcome. In our respectful submission, it does not follow if in fact the section is properly construed.

FRENCH CJ: Thank you, Mr Shavin. We will hear a reply in relation to the extension question.

MR BURLEY: Your Honours, some short points.

GUMMOW J: What do you say in particular about what Mr Shavin has been putting to us as to the contrary outcome?

MR BURLEY: In our respectful submission, there is nothing contrary about it. The election of our friends as to the difference between Lexapro and Cipramil is one which was calculated to ensure the longest potential term. Had they applied for that during the term, at the correct moment, they would have in fact achieved an extension of term. In fact, they chose the wrong one.

The consequence of that was that had they chosen the correct term for Cipramil, or the correct first ARTG approval, they would have got an extension of term, but they were way out of time, some many years out of time, to make their application on that. There was no application for an extension of time in which to make that application in these proceedings, and as a consequence Justice Lindgren found that their application for extension should be rejected altogether, or rather the extension should be removed from the register. That deals I think with your Honour’s question.

As to some short construction points, the fact is that under section 70(2) the question is what is a pharmaceutical substance per se? That question is answered and asked in relation to the patent. It is then put to one side when one comes to the question under section 70(3). The question then is, is the physical thing, the molecule, contained in goods on the ARTG, and the search required on the part of the Commissioner is to find what goods contain that substance.

GUMMOW J: Mr Shavin fixes upon the word “those” in the second line of subsection (3).

MR BURLEY: Yes, that concerns the fact that there might be plural substances because there may be one or more substances per se picked up in section 70(2), but that does not require that there be only the substance; what effect would the word “containing” have otherwise? What is clearly contemplated within subsection (3)(a) is that the goods can contain – not consist of – the substance.

In our respectful submission, that physical question is the one that needs to be answered. My learned friend’s submission as to per se is one which was considered and answered by the Full Court and by the learned primary judge at page 352 of the application book where her Honour Justice Bennett quotes Justice Lindgren’s reasons. This is described as a semantic argument because really it is trying to say, read into subsection (3) the words “per se” in the quoted paragraph:

I do not accept this submission either. Both (+)-citalopram and racemic citalopram are for a therapeutic use which is of the same kind in each case.

I am sorry, your Honour, I misspoke - the correct reference is at page 350 of the application book. This refers to the per se submission. The quoted passage there:

The “substance” or “pharmaceutical substances” referred to in ss 70(3)(a) - - -

GUMMOW J: We can read that.

MR BURLEY: Yes. Really the point that his Honour Justice Lindgren has said was the words “per se” have done their work after subsection (2) is dealt with. “Per se” means of itself. It is to distinguish a claim for a pharmaceutical substance plus a device, for instance a Ventolin inhaler or something of that nature. Those words appear in later sections, including section 77 and 71(2)(a), but they do not appear in section 70(3) for a very deliberate reason, because it was intended that the scope of what was extended would be limited to the first use of the pharmaceutical substance.

What my learned friend does in his paraphrase of the subsection is to reverse the order and suggest that one looks first of all to the substance per se and to see whether that is contained, but that is, in our submission, not consistent with the actual words on the page. The definition of “pharmaceutical substance” contemplates that mixtures might be a pharmaceutical substance, and of course, that quite plainly must be the case for pharmaceutical substances. So, in our submission, goods being on the ARTG, including a pharmaceutical substance, can include a mixture.

In our submission, our learned friend has blurred the definition, the distinction, between the novelty analysis and simple construction under section 70. He has referred to an affidavit that has been supplied. It does not speak specifically of enantiomer patents. This is a peculiar factual situation arising, in our submission. My learned friend made a point arising out of paragraph 234 of her Honour’s reasons - - -

FRENCH CJ: I think your time is up actually, Mr Burley.

MR BURLEY: Thank you, your Honour.

FRENCH CJ: In S135/2009, without endorsing in its entirety the approach to construction taken by the majority in the Full Court, the construction of claim 1 adopted is, on the face of it, correct. The prospects of success on an appeal are insufficient to warrant the grant of special leave. It follows in S151/2009 that the application which turns on the same question of construction as S135 would lead to the refusal of special leave.

In S164/2009, the Lundbeck application in relation to the rectification of the register to remove the extension, the construction of the relevant provisions of Part 3 of Chapter 6 of the Patents Act 1990 adopted by the Full Court was, in our opinion, not attended with sufficient doubt to warrant the grant of special leave. This leads to the refusal of special leave also in relation to S165/2009 and S166/2009.

In each case special leave will be refused with costs.

AT 12.01 PM THE MATTERS WERE CONCLUDED