	Home \| Databases \| WorldLII \| Search \| Feedback Court of Appeal of New Zealand

Home | Databases | WorldLII | Search | Feedback

Court of Appeal of New Zealand

You are here: NZLII >> Databases >> Court of Appeal of New Zealand >> 2005 >> [2005] NZCA 311

Pfizer Ireland Pharmaceuticals & Anor v Eli Lilly and Company & Anor [2005] NZCA 311 (8 December 2005)

Last Updated: 14 December 2005

IN THE COURT OF APPEAL OF NEW ZEALAND

CA8/05

BETWEEN PFIZER IRELAND PHARMACEUTICALS
First Appellant

AND PFIZER NEW ZEALAND LIMITED
Second Appellant

AND ELI LILLY AND COMPANY
First Respondent

AND ELI LILLY AND COMPANY (NEW ZEALAND) LIMITED
Second Respondent

Hearing: 5 August 2005

Court: Anderson P, William Young, Chambers, O'Regan and Robertson JJ

Counsel: D Shavin QC and A H Brown QC for Appellants
R J Katz QC, J L Land and S Wheeldon for Respondents

Judgment: 8 December 2005

JUDGMENT OF THE COURT

A The appeal against the High Court judgment delivered on 3 December 2004 and the application for leave to appeal against the High Court judgment delivered on 21 November 2003 are dismissed.
B The cross-appeal against the High Court judgment delivered on 3 December 2004 is dismissed.
C The appellants are to pay the respondents costs of $10,000 together with usual disbursements.
D There is a certificate for one extra counsel.

REASONS

(Given by William Young J)

Table of Contents

Para No

Introduction [1]
The traditional approach to the pleadings required of a [5]
patentee in revocation proceedings
The Ancare case [14]
The relevant interlocutory judgments of Potter J
The 2003 judgment [19]
The 2004 judgment [22]
The issues in this Court [27]
Does Ancare state the law correctly? [29]
Should we grant leave to appeal against the 2003 [35]
judgment?
Should we allow the appeal against the 2004 judgment? [40]
Should we allow the cross-appeal? [44]
Result [47]

Introduction

[1] We are required to deal with pleading points which arise in patent litigation between the appellants ("Pfizer") and the respondents ("Eli Lilly"). Pfizer alleges that Eli Lilly has contravened patents associated with Viagra. Eli Lilly denies infringement but, by way of counterclaim, asserts that the Pfizer patents are invalid on the grounds set out in accompanying (and subsequently amended) particulars of objection to validity. In issue is the extent to which Pfizer must respond to the now amended particulars of objection.
[2] In judgments delivered on 21 November 2003 and 3 December 2004, Potter J required Pfizer to plead in detail to what are now amended particulars of objection. In her 21 November 2003 judgment, Potter J applied the decision of this Court in Ancare New Zealand Limited v Ciba Geigy New Zealand Ltd (1997) 11 PRNZ 398.
[3] An appeal by Pfizer, confined to the 3 December 2004 judgment and a cross-appeal by Eli Lilly against the same judgment were listed before a bench of three Judges on 22 June 2005. It soon became apparent that the appeal was, in substantial part, a challenge to the prior decision of this Court in Ancare. Consequently the hearing was adjourned and argued before a full Court. In the meantime, Pfizer applied for leave to appeal out of time against the 21 November 2003 judgment. We heard the appeal and cross-appeal in relation to the 3 December 2004 judgment and the application for leave to appeal at the same time and all are addressed in this judgment.
[4] We note that Pfizer and Eli Lilly are involved (or have been involved) in similar disputes in other jurisdictions, including Australia.

The traditional approach to the pleadings required of a patentee in revocation proceedings

[5] Section 41 of the Patents Act 1953 provides for the revocation of patents by Court order. Proceedings in which the plaintiff seeks such revocation are brought by originating application, see r 725ZF of the High Court Rules. In this case the claim for revocation is made by Eli Lilly by way of counterclaim, a procedure which is recognised by s 70.
[6] The High Court Rules relevantly provide:

725ZG Respondent in revocation proceedings to begin
(1) The respondent to an application under section 41 of the Patents Act 1953 for the revocation of a patent--

(a) Shall be entitled to begin and give evidence in support of the patent; and
(b) If the applicant gives evidence impeaching the validity of the patent, shall be entitled to reply.

...
725ZH Particulars of objections where validity of patent disputed
Particulars of objections as to the validity of a patent--

(a) Shall be delivered--

(i) With an application for revocation under section 41 of the Patents Act 1953; or

(ii) With the defence in a proceeding for infringement of a patent; or
(iii) With a counterclaim for revocation under section 70 of the Patents Act 1953; and

(b) Shall state every ground upon which the validity of the patent is disputed; and
(c) Shall include such particulars as will clearly define every issue which it is intended to raise.

725ZI Particulars where want of novelty alleged
(1) If one of the objections taken in the particulars of objections as to the validity of a patent is want of novelty, the particulars shall state the time and place of the previous knowledge, publication, or user alleged.
(2) If it is alleged that the invention has been used prior to the date of the patent, the particulars shall also--

(a) Specify the name and address of the person who is alleged to have made the prior user and the place of the prior user; and

(b) Specify whether the prior user is alleged to have continued down to the date of the patent, and, if not, the earliest and latest dates on which the prior user is alleged to have taken place; and
(c) Contain a description (accompanied by drawings, if necessary) sufficient to identify the alleged prior user; and
(d) If the user relates to any machinery or apparatus, specify whether it is in existence and where it can be inspected.

(3) No evidence as to any machinery or apparatus which is alleged to have been used prior to the date of the patent and which is in existence at the date of the delivery of the particulars shall be receivable unless it is proved that the party relying on the prior user has (if the machinery or apparatus is in that party’s own possession) offered inspection of it, or (if it is not in that party’s own possession) has used best endeavours to obtain the inspection of it for the other parties to the proceeding.
...

725ZM Evidence restricted to particulars delivered
Except by leave of the Court, which may be granted on such terms as the Court thinks just, no person shall be heard or adduce evidence in support of any alleged infringement or objection or defence as regards any matters which are not specified in or are at variance with the particulars that person has delivered.
725ZN Amendment of particulars
(1) Particulars filed in the Court under these rules may from time to time be amended by leave of the Court upon such terms as the Court thinks just.
(2) Further and better particulars may at any time be ordered by the Court.
...

[7] Noticeably missing from the rules is any explicit requirement for a patentee to respond to the particulars of objection required by r 725ZH. In this respect, the current rules are consistent with their precursors, the Patent Rules 1956 (SR 1956/183) which were made pursuant to the Patents Act 1953 and were closely modelled on the corresponding rules which then applied in England and Wales.
[8] Under the 1956 Rules, revocation proceedings came before the Court in one or other of the following ways:

(a) Where a plaintiff was seeking revocation of a patent, the plaintiff made an application for revocation under s 41 of the Patents Act. That application was made by way of originating motion: see Patents Rules, r 4. Particulars of objections as to the validity of the patent were to be delivered with the application: r 20.
(b) If it was a defendant seeking revocation, the application was to be made by way of counterclaim under s 70. The counterclaim was in very brief form. It was accompanied by (in a separate document) the particulars of objections to which r 20 refers.

In neither case did the rules require a patentee to plead to the particulars of objection.

[9] The absence of such a requirement is a feature of comparable rules in both England and Wales and Australia.
[10] The general practice of the English courts has been not to require patentees to plead in a detailed way to particulars of objection (or like pleadings), see for instance Re Polaroid Corporation’s Patent [1977] FSR 243 (CA) at 250 per Buckley LJ, at 251 - 252 per Scarman LJ and at 254 per Goff LJ, Halcon International Inc v The Shell Transport and Trading Co [1977] FSR 458 (HC), Re Riker Laboratories Inc’s Patents [1997] FSR 714 (HC). We will refer to this practice as the traditional approach.
[11] The traditional approach is consistent with the scheme of the applicable rules. It is not, however, in the nature of a jurisdictional rule, and, on occasion patentees have been required to provide particulars (as in Polaroid). Indeed, in the related litigation in Australia between Pfizer and Eli Lilly, particulars were ordered by consent in relation to the inventive step claimed by Pfizer in response to Eli Lilly’s assertion of obviousness.
[12] Leaving aside the perhaps not inconsequential consideration of conformity with the rules, policy reasons justifying the traditional approach are not entirely easy to discern (cf the comments of Laddie J in Riker Laboratories at 714). It cannot be justified by the onus of proof which rests on a party seeking revocation, as, in civil proceedings, one or other party is usually subject to an onus of proof. In part, the premise may be that the patentee’s position should be apparent from the patent. As well, what is often sought of patentees, but denied by the courts, are not true particulars but rather are in nature of requests for the patentee to construe its patent (as in Halcon) or for the patentee to disclose its evidence or otherwise set out its case.
[13] Rule 130 of the High Court Rules provides:

130 Requirements as to statement of defence
(1) The statement of defence shall either admit or deny the allegations of fact in the statement of claim but no defendant shall be required to plead to an allegation that does not affect him.
(2) Where the defendant denies any allegation of fact in the statement of claim he must not do so evasively but must answer the point in substance. Thus, if it is alleged that the defendant received a sum of money, it shall not be sufficient to deny receipt of the particular amount, but he must deny that he received that sum or any part thereof, or set out how much he received; and when a matter is alleged with circumstances it shall not be sufficient to deny it as alleged with those circumstances, but a fair and substantial answer must be given.
(3) Every allegation not denied shall be deemed to be admitted.
(4) Where an affirmative defence is intended, it shall be pleaded.
(5) The statement of defence shall give such particulars of time, place, amounts, names of persons, nature and dates of instruments, and other circumstances as may suffice to inform the Court, the plaintiff, and any other parties of the defendant's defence.

As will become apparent, Potter J has, in effect, required Pfizer to respond to Eli Lilly’s particulars of objection as if it (ie Pfizer) were subject to r 130 in respect of those particulars. Pfizer would be subject to r 130 if a claim seeking revocation were required to be pleaded and particularised in a statement of claim or statement of counterclaim. The strength of Pfizer’s argument in this Court is that the rules which address revocation proceedings are not structured in that way.

The Ancare case

[14] In holding that Pfizer was subject to the requirements of r 130 when responding to Eli Lilly’s particulars of objection Potter J followed and applied Ancare. This case involved an application under s 41 of the Patents Act 1953 for revocation of a patent. In apparent contravention of r 725ZF the proceedings were commenced by way of statement of claim which set out particulars in support of the claim for revocation in regard to each of the pleaded grounds.
[15] At first instance, Smellie J ordered the patentee to provide particulars of defence to the claim for revocation.
[16] Ancare appealed to this Court and, in an oral judgment delivered by McGechan J at the conclusion of the argument, the appeal was dismissed. In the course of that judgment, McGechan J observed:

We intend to approach the issues raised in this present appeal simply, and in principle, bearing in mind the policy underlying modern procedure to define issues adequately in advance, thus avoiding surprise, and indeed the requirements of r 4 as to the construction of the High Court Rules.
The plaintiff in the Court below, and present respondent, has filed a statement of claim which is, in our view, a reasonably detailed document. It makes out a comprehensible pleaded case to which a reply can be made as it stands. It is not, in our view, vague or general.
The statement of defence, as it stands at present, contains a series of bare denials. That is not a practice which is acceptable under principles of modern pleading. It is, in this respect, contrary to a r 130 pleading which gives fair notice of what the patentee really says in response to the claim made. Indeed, it is admitted, and understandably, that the defendant will need to give further particulars before actual trial.

[17] The Court rejected an argument that the statement of claim was vague and general and found that r 725ZG of the High Court Rules did not affect the underlying position. The Court noted:

The rule [725ZG] has its difficulties. Its history is traced, at least to some extent in the case of Ryan v Lum (1989) 16 NSWLR 518, to which we were referred in written submissions. Its implications may, perhaps, be more difficult through being placed straight after r 725ZF which, on its face, directs proceedings, such as the present, be commenced by originating application. The present proceeding is not, in observance of what is thought to be required practice in the Commercial List. We do not propose to give any further or abstract commentary on the implications of this rule, which can await the acid test of application on particular facts in a particular case when that point arrives. The point which is presently relevant is that r 725ZG does not dilute, in any way, the basic obligation to plead so that issues are known adequately before hearing. In the end, appellants did not press for any greater role than illustration of the importance of pleading procedures in the present case. The patentee’s entitlement to begin and reply does not mean that patentee need not plead adequately and properly in an orthodox fashion beforehand so as to define issues from pleadings.
We do not see this requirement as, in any way, involving a shifting of the burden of proof, whether regarded in the sense of legal burden or evidential burden. It is a matter of pleading, not a matter of proof.

[18] In effect Ancare stands for the proposition that the usual pleading rules now apply in patent revocation cases.

The relevant interlocutory judgments of Potter J

The 2003 judgment

[19] Pfizer’s initial response to Eli Lilly’s claim for revocation was succinct and unparticularised and Eli Lilly invited Potter J to direct Pfizer to file a full statement of defence to its particulars of objection. Its application to this end was addressed by Potter J in a reserved judgment delivered on 21 November 2003 in which she held, at [82]:

The defendants’ respective applications that the plaintiff file and serve a more explicit statement of defence to their respective statements of counterclaim which should include full particulars of Pfizer’s defence to the counterclaim, including fully particularised answers to each and every allegation in the particulars of objection referred to in the statement of defence and counterclaim, are granted.

The Judge’s reference to "defendants" is because, at this stage of the litigation, Bayer New Zealand Ltd and Bayer AG were joined as defendants and involved in the counterclaim against Pfizer. The Bayer companies are no longer involved in the litigation.

[20] In reaching this conclusion, Potter J followed and applied Ancare. However her analysis of the underlying principles was not confined to Ancare. For instance, she referred to and relied on Polaroid. She considered that many of the bare denials by Pfizer of negative assertions pleaded by Eli Lilly concealed "positive averments" which, in accordance with orthodox pleading practice, require particularisation. She was of the firm view that Pfizer would not face any real difficulties in providing the particulars sought.
[21] Potter J indicated that if Pfizer wished to appeal it should pursue the appeal process diligently. Pfizer, however, initially elected not to challenge this judgment and an application for leave to appeal was not filed until July 2005.

The 2004 judgment

[22] Eli Lilly, filed amended particulars of objection on 2 April 2004. Pfizer responded with a seven page answer to amended particulars of objection on 12 May 2004.
[23] Unhappy with the economy of detail provided by Pfizer in that answer, Eli Lilly sought a more detailed pleading. This resulted in a further judgment of Potter J which she delivered on 3 December 2004.
[24] In that decision at [16] the Judge noted that:

Pfizer did not appeal the [21 November 2003] judgment and is bound by it, as counsel for Pfizer accepted.

At [17] she recorded that the answers given by Pfizer to the April 2004 amended particulars did not meet the "clear spirit and intent" of the earlier judgment and in many respects were "an attempt effectively to circumvent that judgment". Indeed Pfizer’s primary challenge to the application under consideration in the 2004 judgment was to the correctness of the 2003 judgment, a challenge which understandably left Potter J unmoved. The Judge’s apparent view that Pfizer was not acting reasonably receives some support from Pfizer’s resistance to giving particulars as to inventive step despite having consented in the Australian proceedings to the provision of such particulars.

[25] In the result, after a careful analysis of the particulars sought and the objections of Pfizer, Potter J directed further particulars be provided, largely, but by no means entirely, as sought by Eli Lilly.
[26] As a result, Pfizer appealed against the orders made requiring it to provide further particulars and Eli Lilly cross-appealed in relation to particulars which it requested but which the Judge declined to direct Pfizer to give.

The issues in this Court

[27] As is apparent from what we have said, Potter J’s 2004 judgment implements her 2003 judgment which was not the subject of a timely appeal. Recognising that the challenge to the 2004 judgment necessarily involved a challenge to the 2003 judgment, Pfizer belatedly sought leave to appeal out of time against the earlier judgment; hence the application which was filed in July this year.
[28] We propose to address the issues raised by the case under the following headings:

(a) Does Ancare state the law correctly?
(b) Should we grant leave to appeal against the 2003 judgment?
(c) Should we allow the appeal against the 2004 judgment?
(d) Should we allow the cross-appeal?

Does Ancare state the law correctly?

[29] Ancare stands for the proposition that the normal pleading rules (including r 130) apply in revocation proceedings.
[30] As we have already noted, the way in which the revocation rules are structured requires the elements of a claim for revocation to be set out not in a statement of claim or counterclaim but rather in particulars of objection. Further, there is no explicit requirement on a patentee to plead to particulars of objection. Standing by themselves, these considerations are not necessarily conclusive, as it might be arguable that at least where the revocation is sought by counterclaim, the effect of r 149 (which requires statements of defence to counterclaims) and r 130 are to require a particularised response by the patentee. But once allowance is made for the authorities which support what we have described as the traditional approach (see [10] – [11] above), it is clear that Ancare (particularly as to the applicability of r 130) does not reflect the scheme of the rules. Accordingly we consider that Ancare does not state the law correctly.
[31] The difference between the course taken in Ancare and the traditional approach is not necessarily insignificant but it would be unwise to place too much weight upon it. The English courts have, on occasion, ordered particulars of patentees (as for instance in Polaroid). More importantly, in the last 15 years or so, there have been major developments in case management.
[32] It may be that the former r 437 of the High Court Rules (which was in force in on 21 November 2003) would have permitted Potter J to give directions along the lines of the orders made in her judgment of that date. That rule provided:

437 Directions before setting down
(1) At any time before a proceeding has been set down for trial, any party may file an interlocutory application for directions regarding the proceeding.
...
(6) Upon any application for directions, the Court may make such orders and give such directions as it thinks fit with a view to facilitating and expediting preparation for trial and overcoming delay by any party, whether or not any such order or direction has been sought by any party.
(7) In particular, but without limiting the powers of the Court under this rule, the Court may--

(a) Make any order that it is empowered to make upon any interlocutory application for a specific order; or
(b) Give such directions as it thinks fit as to the future course of the proceeding as may best secure the just, expeditious, and economical disposal thereof;

...

[33] For the sake of completeness we should also refer to the new case management rules which came into effect on 24 November 2003 (just after Potter J’s first judgment). Under r 425(a) of the new rules the Court may by interlocutory order:

(a) give directions to secure the just, speedy, and inexpensive determination of a proceeding: ...

Rule 429(2) and the Schedule 5 to the High Court Rules permit the Court to order further particulars of the claim or defence.

[34] As well, it is now (and has for many years) been customary for the parties to litigation to be required, well in advance of trial, to:

(a) File and serve briefs of evidence of the witnesses they propose to call;
(b) Set out in detail the full nature of the cases they propose to advance; and
(c) Identify the issues to be determined at trial.

Should we grant leave to appeal against the 2003 judgment?

[35] In her 2003 judgment Potter J understandably applied (as she was required to) the approach taken in Ancare. She thus treated Pfizer as subject to r 130 in relation to the particulars of objections.
[36] In this respect, she proceeded on a view of the law which we have now found was not correct. But, that does not mean that the outcome she reached was necessarily wrong. A factor in favour of ordering Pfizer to provide particulars of its defence to the revocation counterclaim is the relative ease for Pfizer in doing so; this given the related litigation between the parties which has occurred in other jurisdictions and particularly in Australia. In her judgment Potter J concluded that there was no prejudice to Pfizer in providing the particulars requested. Further, while Eli Lilly presumably is in a position to anticipate (at least generally) the case which Pfizer will run in support of the validity of its patents, it will be of assistance to the trial Judge to have the areas of controversy defined well in advance of trial. A sensible way of achieving this definition is for Pfizer to respond to the particulars of objection. The result which Potter J reached could thus be justified on the basis of orthodox case management practice.
[37] Had there been a timely appeal to this Court following delivery of the November 2003 judgment, it is possible that it may have been dismissed on the basis that the directions in issue were justifiable on case management grounds. Even if the appeal had been allowed, it would have been open to Eli Lilly to revert to the Judge with a request for case management directions as to the identification of issues not elucidated by Pfizer’s cryptic responses to the original and now amended particulars of objection. It is likely enough that such directions would have been given.
[38] In those circumstances we see no reason why Pfizer should not be held to the election it made after delivery of the 21 November 2003 judgment not to appeal that judgment. To allow leave to appeal and to set aside that judgment (with the result that the case would require a further hearing before, and judgment from, Potter J with the possibility of a further appeal to this Court) would involve risks of considerable prejudice to Eli Lilly. This is all the more so given that we anticipate that Potter J would be likely to seek, by case management direction, to achieve substantially what she thought she had achieved in her two judgments.
[39] Accordingly, we dismiss the application for leave to appeal against the 21 November 2003 judgment.

Should we allow the appeal against the 2004 judgment?

[40] The decision of Potter J of 3 December 2004 largely involved the implementation of the 21 November 2003 judgment. With that judgment now past the point at which it can be successfully challenged, its appropriate implementation was very much a matter for Potter J.
[41] Mr Shavin QC for Pfizer criticised some of the particulars of objection provided by Eli Lilly and he challenged the Judge’s categorisation of a number Pfizer’s denials of negative assertions as being "pregnant negatives" (ie concealing positive assertions). His position was that a patentee is entitled to put a party seeking revocation to proof. His primary complaints about the specific orders made by Potter J involved contentions to the effect that the orders inverted the onus of proof, required Pfizer to construe its own patents and/or would require Pfizer to disclose in advance what would be its closing submissions and/or evidence to be called.
[42] If Pfizer wished to challenge the particulars of objection, it should have done so directly. In any event, all of Mr Shavin’s arguments ought to have been addressed to the 21 November 2003 judgment. Further, in a case management context, his complaints are unconvincing. There is no reason why a party to litigation should not identify the substance of the case to be advanced and this is so irrespective of where the onus of proof lies and whether such identification requires the party to address issues of construction, law or evidence.
[43] The appeal is accordingly dismissed. Pfizer must now comply with the orders made by Potter J.

Should we allow the cross-appeal?

[44] We recognise that some of the Judge’s refusals to direct particulars sought by Eli Lilly appear to be not entirely consistent with her overall approach. We have in mind the particulars which were sought and declined as to best method, false suggestion or representation and disconformity. On balance, however, we are satisfied that it would not be right to allow the cross-appeal.
[45] We have dismissed Pfizer’s application for leave to appeal against the November 2003 judgment for reasons which are primarily associated with Pfizer’s election not to appeal against that judgment. We have dismissed Pfizer’s appeal against the December 2004 judgment largely because, as a result of our decision on the leave application, the November 2003 judgment is past the point of challenge and the December 2004 judgment simply involved its implementation. But the fact remains that the Judge, in reliance on Ancare, set out on a false trail, and we are not prepared to go any further along it.
[46] If Pfizer is to be required to provide the particulars still in issue on the cross-appeal, we consider that this should be by way of properly considered case management directions focused on what is truly necessary (or appropriate) to identify what will be at issue in trial. This underlying assessments in this regard are best made by the Judge in the High Court.

Result

[47] Accordingly the application for leave to appeal against the 21 November 2003 judgment is dismissed as is the appeal against the 3 December 2004 judgment. The cross-appeal also dismissed.
[48] The appeal initially came on for hearing on 22 June 2005. Allowing for that and for the belated application for leave to appeal against the 21 November 2003 judgment, we see $10,000 as the appropriate figure for costs together with usual disbursements which the appellants are, accordingly, ordered to pay. We certify for one extra counsel.

Solicitors:
Russell McVeagh, Auckland for Appellants
Kensington Swan, Auckland for Respondents

NZLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback
URL: http://www.nzlii.org/nz/cases/NZCA/2005/311.html

[1]	We are required to deal with pleading points which arise in patent litigation between the appellants ("Pfizer") and the respondents ("Eli Lilly"). Pfizer alleges that Eli Lilly has contravened patents associated with Viagra. Eli Lilly denies infringement but, by way of counterclaim, asserts that the Pfizer patents are invalid on the grounds set out in accompanying (and subsequently amended) particulars of objection to validity. In issue is the extent to which Pfizer must respond to the now amended particulars of objection.
[2]	In judgments delivered on 21 November 2003 and 3 December 2004, Potter J required Pfizer to plead in detail to what are now amended particulars of objection. In her 21 November 2003 judgment, Potter J applied the decision of this Court in Ancare New Zealand Limited v Ciba Geigy New Zealand Ltd (1997) 11 PRNZ 398.
[3]	An appeal by Pfizer, confined to the 3 December 2004 judgment and a cross-appeal by Eli Lilly against the same judgment were listed before a bench of three Judges on 22 June 2005. It soon became apparent that the appeal was, in substantial part, a challenge to the prior decision of this Court in Ancare. Consequently the hearing was adjourned and argued before a full Court. In the meantime, Pfizer applied for leave to appeal out of time against the 21 November 2003 judgment. We heard the appeal and cross-appeal in relation to the 3 December 2004 judgment and the application for leave to appeal at the same time and all are addressed in this judgment.
[4]	We note that Pfizer and Eli Lilly are involved (or have been involved) in similar disputes in other jurisdictions, including Australia.

[5]	Section 41 of the Patents Act 1953 provides for the revocation of patents by Court order. Proceedings in which the plaintiff seeks such revocation are brought by originating application, see r 725ZF of the High Court Rules. In this case the claim for revocation is made by Eli Lilly by way of counterclaim, a procedure which is recognised by s 70.
[6]	The High Court Rules relevantly provide:

(ii)	With the defence in a proceeding for infringement of a patent; or
(iii)	With a counterclaim for revocation under section 70 of the Patents Act 1953; and

[7]	Noticeably missing from the rules is any explicit requirement for a patentee to respond to the particulars of objection required by r 725ZH. In this respect, the current rules are consistent with their precursors, the Patent Rules 1956 (SR 1956/183) which were made pursuant to the Patents Act 1953 and were closely modelled on the corresponding rules which then applied in England and Wales.
[8]	Under the 1956 Rules, revocation proceedings came before the Court in one or other of the following ways:

[9]	The absence of such a requirement is a feature of comparable rules in both England and Wales and Australia.
[10]	The general practice of the English courts has been not to require patentees to plead in a detailed way to particulars of objection (or like pleadings), see for instance Re Polaroid Corporation’s Patent [1977] FSR 243 (CA) at 250 per Buckley LJ, at 251 - 252 per Scarman LJ and at 254 per Goff LJ, Halcon International Inc v The Shell Transport and Trading Co [1977] FSR 458 (HC), Re Riker Laboratories Inc’s Patents [1997] FSR 714 (HC). We will refer to this practice as the traditional approach.
[11]	The traditional approach is consistent with the scheme of the applicable rules. It is not, however, in the nature of a jurisdictional rule, and, on occasion patentees have been required to provide particulars (as in Polaroid). Indeed, in the related litigation in Australia between Pfizer and Eli Lilly, particulars were ordered by consent in relation to the inventive step claimed by Pfizer in response to Eli Lilly’s assertion of obviousness.
[12]	Leaving aside the perhaps not inconsequential consideration of conformity with the rules, policy reasons justifying the traditional approach are not entirely easy to discern (cf the comments of Laddie J in Riker Laboratories at 714). It cannot be justified by the onus of proof which rests on a party seeking revocation, as, in civil proceedings, one or other party is usually subject to an onus of proof. In part, the premise may be that the patentee’s position should be apparent from the patent. As well, what is often sought of patentees, but denied by the courts, are not true particulars but rather are in nature of requests for the patentee to construe its patent (as in Halcon) or for the patentee to disclose its evidence or otherwise set out its case.
[13]	Rule 130 of the High Court Rules provides:

[14]	In holding that Pfizer was subject to the requirements of r 130 when responding to Eli Lilly’s particulars of objection Potter J followed and applied Ancare. This case involved an application under s 41 of the Patents Act 1953 for revocation of a patent. In apparent contravention of r 725ZF the proceedings were commenced by way of statement of claim which set out particulars in support of the claim for revocation in regard to each of the pleaded grounds.
[15]	At first instance, Smellie J ordered the patentee to provide particulars of defence to the claim for revocation.
[16]	Ancare appealed to this Court and, in an oral judgment delivered by McGechan J at the conclusion of the argument, the appeal was dismissed. In the course of that judgment, McGechan J observed:

[22]	Eli Lilly, filed amended particulars of objection on 2 April 2004. Pfizer responded with a seven page answer to amended particulars of objection on 12 May 2004.
[23]	Unhappy with the economy of detail provided by Pfizer in that answer, Eli Lilly sought a more detailed pleading. This resulted in a further judgment of Potter J which she delivered on 3 December 2004.
[24]	In that decision at [16] the Judge noted that:

[25]	In the result, after a careful analysis of the particulars sought and the objections of Pfizer, Potter J directed further particulars be provided, largely, but by no means entirely, as sought by Eli Lilly.
[26]	As a result, Pfizer appealed against the orders made requiring it to provide further particulars and Eli Lilly cross-appealed in relation to particulars which it requested but which the Judge declined to direct Pfizer to give.

[27]	As is apparent from what we have said, Potter J’s 2004 judgment implements her 2003 judgment which was not the subject of a timely appeal. Recognising that the challenge to the 2004 judgment necessarily involved a challenge to the 2003 judgment, Pfizer belatedly sought leave to appeal out of time against the earlier judgment; hence the application which was filed in July this year.
[28]	We propose to address the issues raised by the case under the following headings:

[29]	Ancare stands for the proposition that the normal pleading rules (including r 130) apply in revocation proceedings.
[30]	As we have already noted, the way in which the revocation rules are structured requires the elements of a claim for revocation to be set out not in a statement of claim or counterclaim but rather in particulars of objection. Further, there is no explicit requirement on a patentee to plead to particulars of objection. Standing by themselves, these considerations are not necessarily conclusive, as it might be arguable that at least where the revocation is sought by counterclaim, the effect of r 149 (which requires statements of defence to counterclaims) and r 130 are to require a particularised response by the patentee. But once allowance is made for the authorities which support what we have described as the traditional approach (see [10] – [11] above), it is clear that Ancare (particularly as to the applicability of r 130) does not reflect the scheme of the rules. Accordingly we consider that Ancare does not state the law correctly.
[31]	The difference between the course taken in Ancare and the traditional approach is not necessarily insignificant but it would be unwise to place too much weight upon it. The English courts have, on occasion, ordered particulars of patentees (as for instance in Polaroid). More importantly, in the last 15 years or so, there have been major developments in case management.
[32]	It may be that the former r 437 of the High Court Rules (which was in force in on 21 November 2003) would have permitted Potter J to give directions along the lines of the orders made in her judgment of that date. That rule provided:

[35]	In her 2003 judgment Potter J understandably applied (as she was required to) the approach taken in Ancare. She thus treated Pfizer as subject to r 130 in relation to the particulars of objections.
[36]	In this respect, she proceeded on a view of the law which we have now found was not correct. But, that does not mean that the outcome she reached was necessarily wrong. A factor in favour of ordering Pfizer to provide particulars of its defence to the revocation counterclaim is the relative ease for Pfizer in doing so; this given the related litigation between the parties which has occurred in other jurisdictions and particularly in Australia. In her judgment Potter J concluded that there was no prejudice to Pfizer in providing the particulars requested. Further, while Eli Lilly presumably is in a position to anticipate (at least generally) the case which Pfizer will run in support of the validity of its patents, it will be of assistance to the trial Judge to have the areas of controversy defined well in advance of trial. A sensible way of achieving this definition is for Pfizer to respond to the particulars of objection. The result which Potter J reached could thus be justified on the basis of orthodox case management practice.
[37]	Had there been a timely appeal to this Court following delivery of the November 2003 judgment, it is possible that it may have been dismissed on the basis that the directions in issue were justifiable on case management grounds. Even if the appeal had been allowed, it would have been open to Eli Lilly to revert to the Judge with a request for case management directions as to the identification of issues not elucidated by Pfizer’s cryptic responses to the original and now amended particulars of objection. It is likely enough that such directions would have been given.
[38]	In those circumstances we see no reason why Pfizer should not be held to the election it made after delivery of the 21 November 2003 judgment not to appeal that judgment. To allow leave to appeal and to set aside that judgment (with the result that the case would require a further hearing before, and judgment from, Potter J with the possibility of a further appeal to this Court) would involve risks of considerable prejudice to Eli Lilly. This is all the more so given that we anticipate that Potter J would be likely to seek, by case management direction, to achieve substantially what she thought she had achieved in her two judgments.
[39]	Accordingly, we dismiss the application for leave to appeal against the 21 November 2003 judgment.

[40]	The decision of Potter J of 3 December 2004 largely involved the implementation of the 21 November 2003 judgment. With that judgment now past the point at which it can be successfully challenged, its appropriate implementation was very much a matter for Potter J.
[41]	Mr Shavin QC for Pfizer criticised some of the particulars of objection provided by Eli Lilly and he challenged the Judge’s categorisation of a number Pfizer’s denials of negative assertions as being "pregnant negatives" (ie concealing positive assertions). His position was that a patentee is entitled to put a party seeking revocation to proof. His primary complaints about the specific orders made by Potter J involved contentions to the effect that the orders inverted the onus of proof, required Pfizer to construe its own patents and/or would require Pfizer to disclose in advance what would be its closing submissions and/or evidence to be called.
[42]	If Pfizer wished to challenge the particulars of objection, it should have done so directly. In any event, all of Mr Shavin’s arguments ought to have been addressed to the 21 November 2003 judgment. Further, in a case management context, his complaints are unconvincing. There is no reason why a party to litigation should not identify the substance of the case to be advanced and this is so irrespective of where the onus of proof lies and whether such identification requires the party to address issues of construction, law or evidence.
[43]	The appeal is accordingly dismissed. Pfizer must now comply with the orders made by Potter J.

[44]	We recognise that some of the Judge’s refusals to direct particulars sought by Eli Lilly appear to be not entirely consistent with her overall approach. We have in mind the particulars which were sought and declined as to best method, false suggestion or representation and disconformity. On balance, however, we are satisfied that it would not be right to allow the cross-appeal.
[45]	We have dismissed Pfizer’s application for leave to appeal against the November 2003 judgment for reasons which are primarily associated with Pfizer’s election not to appeal against that judgment. We have dismissed Pfizer’s appeal against the December 2004 judgment largely because, as a result of our decision on the leave application, the November 2003 judgment is past the point of challenge and the December 2004 judgment simply involved its implementation. But the fact remains that the Judge, in reliance on Ancare, set out on a false trail, and we are not prepared to go any further along it.
[46]	If Pfizer is to be required to provide the particulars still in issue on the cross-appeal, we consider that this should be by way of properly considered case management directions focused on what is truly necessary (or appropriate) to identify what will be at issue in trial. This underlying assessments in this regard are best made by the Judge in the High Court.

[47]	Accordingly the application for leave to appeal against the 21 November 2003 judgment is dismissed as is the appeal against the 3 December 2004 judgment. The cross-appeal also dismissed.
[48]	The appeal initially came on for hearing on 22 June 2005. Allowing for that and for the belated application for leave to appeal against the 21 November 2003 judgment, we see $10,000 as the appropriate figure for costs together with usual disbursements which the appellants are, accordingly, ordered to pay. We certify for one extra counsel.