Federal Court Rules That Overseas Manufacture Will Not Avoid Infringement Of Australian Swiss Claims

The patent in suit in Pregabalin contained numerous Swiss claims directed to the use of a compound (including the compound known as Pregabalin) in the manufacture of a medicament for the treatment of pain. Whilst method of treatment claims are patentable subject matter under Australian law, it is also common practice for patentees to include Swiss claims as well.

The Australian Courts have not previously delivered a binding decision on the operation of the Patents Act 1990 (Cth) in respect of using a method overseas and then importing the product into Australia. This path to an infringement finding is dependent on the construction of the definition of "exploit" in the Patents Act 1990 (Cth).

In this regard, in Australia, a patent gives the patentee the exclusive rights, during the term of the patent, to "exploit" the invention and to authorise another person to "exploit" the invention (section 13).

"Exploit" is then defined in the legislation to mean:

(a) where the invention is a product–make, hire, sell or otherwise dispose of the product, offer to make, sell, hire or otherwise dispose of it, use or import it, or keep it for the purpose of doing any of those things; or

(b) where the invention is a method or process–use the method or process or do any act mentioned in paragraph (a) in respect of a product resulting from such use.

Swiss claims are properly characterised as method or process claims and the court considered infringement by reference to paragraph (b) of the definition of "exploit" (and this accords with the decision in Otsuka Pharmaceutical Co Ltd v Generic Health Pty Ltd (No 4) [2015] FCA 634).

However, the alleged infringers contended that the definition of "exploit" should be read so that the product resulting from the use of a method or process, should be one that results from the use of a method or process in Australia.

The definition of "exploit" was previously considered by Lindgren J in Alphapharm Pty Ltd v H Lundbeck A/S [2008] FCA 559 (Alphapharm). Despite somewhat different constructions of "exploit" in Alpharpharm and Pregabalin the ultimate effect of these two decisions is the same – a product manufactured overseas and imported for sale will infringe a Swiss claim of an Australian patent.

In Alphapharm, Lindgren J had interpreted "exploit" to mean:

exploit, in relation to an invention includes:

(a) where the invention is a product — [in Australia, or more accurately, in the patent area] make, hire, sell or otherwise dispose of the product, offer to make, sell, hire or otherwise dispose of it, use or import it, or keep it for the purpose of doing any of those things; or

(b) where the invention is a method or process — [in Australia, or more accurately, in the patent area] use the method or process or do any act mentioned in paragraph (a) in respect of a product resulting from [the use, anywhere, of the method or process].

After considering Lindgren J's approach in Alphapharm, his Honour found that there was no justification for reading any territorial limitation (such as the words in bold above) into the definition of "exploit" at all. This is because this limitation is already reflected elsewhere in the language of the Patents Act.

His Honour found that infringement will occur in circumstances where a product is imported and sold in Australia, where the product was made using a patented method overseas because the acts of importation and sale occur within Australia.

It remains to be seen if the Pregabalin decision will be the subject of an appeal. 

This article is part of the International Life Sciences and Healthcare update for January 2017