January 2015

1. General

Australia

Deceptively Bio-Equivalent?
In GlaxoSmithKline Australia Pty Ltd v Pharmacor Pty Ltd the Federal Court considered whether claims of bio-equivalence contravened Australian Consumer Law.
Pharmacor had obtained approval for its Osteomol 665 Paracetamol products from the Therapeutic Goods Administration (TGA), who found that they were bio-equivalent to GSK’s modified release paracetamol products that included Panadol Osteo.
GSK submitted that the bio-equivalence claim could contravene consumer law as it would amount to misleading or deceptive conduct by omission or silence in concealing the differences between the products. The Judge held that GSK had not sufficiently demonstrated that the products were not bio-equivalent and that there was no material omission in Pharmacor’s application to the TGA.
However, the Judge noted that there is an inherent imprecision in the TGA’s concept of bioequivalence as it can be satisfied by a 90% confidence interval. The Judge noted that satisfaction of the confidence interval test does not guarantee that all consumers will experience the same clinical and therapeutic effects.
This imprecision in conjunction with the finding that Pharmacor’s product does not fall within claim 1 of GSK’s patent were sufficient for the Judge to hold that GSK established a reasonable belief that the products may have different clinical effects. The Judge upheld GSK’s consumer law argument on this basis. End users may assume that bioequivocal means interchangeability or substitutability as they may not appreciate that there is any imprecision in the TGA’s use of that concept.
The Judge held that GSK was entitled to preliminary discovery concerning the proposed promotion and supply of the Pharmacor Products to pharmacists or consumers to establish whether it amount to misleading or deceptive conduct by omission or silence.

2. Patents

Europe

Creating Patentable Subject Matter - Genetic Engineering Style
In International Stem Cell Corp v Comptroller General of Patents the European Court of Justice (ECJ) considered the following question:
Are unfertilised human ova whose division and further development have been stimulated by parthenogenesis, and which, in contrast to fertilised ova, contain only pluripotent cells and are incapable of developing into human beings, included in the term ‘human embryos’ in Article 6(2)(c) of Directive 98/44?
Parthenogenesis in its widest sense is a form of asexual reproduction in which the growth and development of embryos occurs without fertilization. It is naturally occurring in many species, but not in mammals. However, it can be induced in mammals by electrical or chemical stimulation.
In its 2011 judgement Brustle v Greenpeace eV one of the ECJ’s findings was that:
“any human ovum after fertilisation, any non-fertilised human ovum into which the cell nucleus from a mature human cell has been transplanted and any non-fertilised human ovum whose division and further development have been stimulated by parthenogenesis constitute a ‘human embryo’ within the meaning of Article 6(2)(c) of the Directive.”
International Stem Cell Corp (ISCC) claimed that in the Brüstle judgement the Court sought to exclude from patentability only organisms capable of commencing the process of development which leads to a human being. ISCC argued that given that the organisms which are the subject of its applications cannot undergo such a development process they should be patentable.
The ECJ found that its earlier Brüstle judgement held that in so far as a non-fertilised human ovum is capable of commencing the process of development of a human being it must be classified as a ‘human embryo’.
However, subsequent to the Brüstle judgement, accepted scientific understanding on the field changed. While it can be induced in mammals by electrical or chemical stimulation, the scientific consensus is now that it cannot complete the full development in many mammals, including humans.
Consequently, the ECJ has now refined the position stated in its Brüstle judgement. In particular, it has now held that where a non-fertilised human ovum does not have the inherent capacity of developing into a human being, the mere fact that that organism commences a process of development is not sufficient for it to be regarded as a ‘human embryo’.
On the basis of ISCC’s amending of its application to exclude the prospect of further genetic manipulation the ECJ essentially held that the application was for patentable subject matter. However, the final decision on this was for the referring national court to make, after making a determination on the current state of relevant scientific knowledge.

United Kingdom

Supreme Court Rules Patent Infringement Not a Public Interest Illegality
In Les Laboratoires Servier v Apotex Inc the Supreme Court unanimously held that the defence of illegality did not prevent a claim on a patentee’s cross-undertaking in damages that was given in order to obtain an interim injunction.
Servier had patent protection for the compound perindopril erbumine, which is used for treating hypertension and cardiac insufficiency. In Europe, Servier’s patents for the compound expired in 2003, although they still have a UK patent for a specific crystalline form of the compound. However, the corresponding Canadian patent for the compound expires in 2018.
In 2006, after obtaining marketing authorisation, Apotex began marketing generic perindopril in the UK (which it manufactured in Canada), and Servier promptly began infringement proceedings on the basis of the UK patent. Servier obtained an interlocutory injunction restraining Apotex’s importation and sale of generic perindopril erbumine in the UK. In substantive proceedings in July 2007 the UK patent was held to be infringed, but invalid, and this finding was also upheld by the Court of Appeal in April 2008. Apotex claimed damages against the interim injunction it was subject to.
In July 2008 the Canadian patent was held to be valid and infringed, which was upheld by the Federal Court of Appeal in June 2009. Servier used this to argue that Apotex should not be able to recover damages for being prevented from selling a product whose manufacture in Canada would have been illegal there as an infringement of Servier’s Canadian patent.
Following earlier High Court and Court of Appeal decisions the Supreme Court had three issues to decide.
(1) Does the infringement of foreign patent rights constitute a relevant illegality (“turpitude”) for the purpose of the defence?
(2) If so, is Apotex seeking to found its claim on it?
(3) Is Servier entitled to take the public policy point having given an undertaking in damages?
The Supreme Court was critical of the Court of Appeal’s application of the illegality defence, which used fact based evaluations of the effects on the parties of applying general rules of law. The Supreme Court noted that the illegality defence is a long standing rule of law and not a mere discretionary power. It is a principle that arises in the public interest, irrespective of the interests or rights of the parties.
Although noting that patents are a public grant of the state, the Supreme Court held that it does not follow that a breach of a patentee’s rights engages the public interest. Grant effectively only gives rise to private rights and the availability of damages is a sufficient remedy for infringement thereof. Any such damages can be offset against Apotex’s claim for recovery from Servier’s undertaking in the United Kingdom.
Hence, the Supreme Court held that Apotex’s infringement of the Canadian patent rights is not a relevant illegality for the purpose of the defence. Consequently, the second and third issues do not need to be considered.

3. Trade Marks

New Zealand

Close to the LINE is FINE
In Virbac SA v Merial the Court of Appeal partially allowed Virbac’s appeal, holding that FIPROLINE could be registered – although only for goods containing fipronil.
The earlier High Court decision held that there are sufficient visual and phonetic similarities between Merial’s FRONTLINE and Virbac’s FIPROLINE marks to make confusion likely where there is imperfect recollection or non-discerning or incautious purchasers.
The Judge also held that the market awareness of the active ingredient fipronil together with the unusual and distinctive sound of the shared prefix for fipronil and FIPROLINE would make it likely that the purchasing public expects FIPROLINE to contain fipronil. The Judge considered the brand and the ingredient to be visually, phonetically and conceptually similar and that it would likely cause confusion in the relevant market if FIPROLINE is used to sell products that do not contain fipronil.
The Court of Appeal agreed with the High Court Judge in rejecting the Assistant Commissioner’s finding that all of the purchasing public could be considered discerning and cautious. However, the Court of Appeal nonetheless preferred the Assistant Commissioner’s view that FRONTLINE and FIPROLINE are dissimilar and unlikely to be confused. The former has an identifiable meaning and contains two syllables, whereas the latter is an invented word containing three syllables, and the common suffix merely invokes the neutral idea of a range of products.
The Court of Appeal agreed with the Judge’s finding that FIPROLINE and fipronil are visually, phonetically and conceptually similar and that it would likely cause confusion in the relevant market if FIPROLINE is used to sell products that do not contain fipronil. Consequently, the Judge allowed FIPROLINE to proceed to registration with a suitably restricted goods specification.