Scintilla – a flash, a spark, an iota. Shorthand for creativity and an indicator of inventiveness under Australian law.

Tuesday, July 8, 2014

Yasmin sees off Isabelle (and Yelena):

Full Court refuses evidence of experiment

by Clare Young, Managing Associate
Last year we reported on Generic Health's failure to comply with the Federal Court Rules relating to the conduct of experiments in patent cases. Here’s the next (and last?) instalment.

In short, Generic Health wanted to do an experiment which, according to Generic Health, would prove that Bayer's patent for a contraceptive pill lacked novelty. Generic Health's experiment involved the manufacture of tablets in accordance with a process in the prior art and the subsequent dissolution testing of those tablets. The latter dissolution tests were the subject of directions under rule 34.50 of the Federal Court Rules, but Bayer said that Generic Health also needed to comply with rule 34.50 in relation to the manufacture of the tablets.

Rule 34.50 requires that if a party wishes to rely on experimental proof of a fact, it must apply to the Court for an order about, amongst other things, the time and place where the experiment will be conducted and who will be permitted to attend.

Generic Health disagreed and went ahead with the manufacture, warning Bayer in a letter that it was going to do so but failing to disclose when it would happen (which turned out to be the very next day). On the day before the trial started, Generic Health applied for leave to rely upon the evidence about the manufacture of the tablets (the affidavit of Mr Burgess, who observed the manufacture). Justice Jagot refused leave, which led to Generic Health not pressing its novelty attack on Bayer's patent.

Generic Health's other grounds of attack on the validity of the Bayer patent failed and, as Justice Jagot found that Generic Health's ISABELLE pill infringed Bayer's patent, Generic Health was restrained from further selling its product and held liable to compensate Bayer.

Generic Health appealed not only Justice Jagot's judgment on the validity of the Bayer patent, but Her Honour's decision not to admit the evidence of Generic Health's experiment. Bayer challenged Generic Health's ability to appeal the decision about the admissibility of the experiment evidence – dated 11 March 2013 – on the basis that Generic Health was out of time. Ordinarily, a notice of appeal must be filed within 21 days after the date on which the judgment appealed from was given. Generic Health's notice of appeal was filed in June 2013, along with its appeal against Justice Jagot's judgment on the substantive infringement and validity case.

The Full Court did not agree with Bayer that Generic Health was out of time on the basis that the correctness of a final judgment may be challenged on the ground that an interlocutory decision was wrong, if that interlocutory decision affected the final result, an obvious example of which is a ruling on the evidence to be admitted at trial. Justices Besanko, Middleton and Nicholas said that Justice Jagot's decision on 11 March 2013 was sufficiently analogous to a ruling on evidence, given the wording of rule 34.50 and the fact that Generic Health could have made another application at trial to tender the Burgess affidavit.
Their Honours considered whether the manufacture of the tablets for the purpose of the dissolution testing was 'experimental proof of a fact' falling within rule 34.50. Generic Health argued that it was not, in the same way that the manufacture of a piece of equipment or a standard product used in an experiment is not part of the experiment itself.

The Full Court did not accept Generic Health's argument: the tablets were not a 'standard product' used in the course of an experiment, but rather they were part of the experiment and manufactured in accordance with the instructions of an expert. As Justice Jagot's decision was made in the exercise of a discretion, the Full Court would only interfere with that discretion if there had been some error of the type identified in House v The King (being that the judge acted on the wrong principle, allowed extraneous or irrelevant material to affect her, mistook the facts or did not take into account some material consideration).
Justice Jagot had taken into account that Generic Health had made it impossible for Bayer to attend the manufacture in India (by giving inadequate notice of the manufacture), and that Generic Health's evidence was not from the two persons actually involved in making the tablets, but by the person who had observed the manufacture, which meant that Bayer could not cross-examine those people who made the tablets. The Full Court found that Justice Jagot was correct to take those matters into account, and therefore did not interfere with Her Honour's discretion.

Generic Health also failed in its appeal against the substantive judgment on the validity of the Bayer patent.
And for those of you wondering who Yelena is: in a separate proceeding, Bayer claimed that Apotex's contraceptive pill product (called, amongst other less-girly names, Yelena) infringed its patent. A few months before the Bayer v Generic Health trial, Apotex and Bayer agreed that the Generic Health result would apply in their proceeding. There must be a contraceptive pill-related pun in there somewhere….Apotex should not have put all its eggs in Generic Health's basket…..Apotex is left holding the baby……

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