Overview

The year 2023 saw a number of key decisions in pharmaceuticals and life sciences IP litigation in Australia, which will have a significant impact in the coming years. The Full Federal Court provided welcome guidance on the post “Raising the Bar” (RTB) patent law, particularly in relation to the ground of lack of sufficiency. The pre-RTB law still applies to older patents (for which examination was sought before 15 April 2013), and care must be taken with the specific requirements under that regime (such as “ascertaining” a prior art document for inventive step, as discussed below). In the Botox case, the High Court of Australia put to rest the contentious question of whether a trade mark’s reputation is relevant when deciding if it has been infringed by deceptive similarity. Conversely, the High Court’s split decision on the question of the patentability of computer-implemented inventions in 2022 left a distinct lack of clarity in its wake for the medtech sector in 2023.

Market Developments

The pharmaceuticals and life sciences sector continued to see significant growth in Australia in 2023. Investment by the Australian government is driving innovation in the sector, with the Medical Research Future Fund (MRFF) disbursing its total available budget of AUD650 million to support medical research under a range of initiatives. One of the initiatives is the MRFF’s new AUD50 million BioMedTech Incubator which provides grants of up to AUD5 million for emerging biomedical and digital health companies to support the development of new drugs and healthcare services. In addition, the Federal Labor Government elected in 2022 has brought about several new policy changes in relation to the Pharmaceutical Benefits Scheme (PBS). Notably, on 1 January 2023, the maximum cost of general prescriptions under the PBS fell for the first time in its 75-year history and, from 1 September 2023, medical practitioners prescribing certain PBS medicines have been able to provide 60-day prescriptions, doubling the previous limit of 30 days.

The Full Federal Court Affirms (and Extends) the Correct Approach Under the “Raising the Bar” Regime

The RTB regime introduced higher standards for the validity of patents in Australia, with the intention of more closely aligning Australian law with that in the UK, Europe and the US.

Under the “old” law of sufficiency in Australia, a claim will be sufficient where the disclosure of the specification enables the skilled addressee, armed with the common general knowledge, to produce “something” within the claim “without inventions or additions or prolonged study of matters presenting initial difficulty”. That is, for a product claim, the skilled addressee need only be able to produce a single embodiment.

Under the “new” law of sufficiency in Australia, a specification must provide a “clear enough and complete enough disclosure”. This requires the skilled addressee to be able to perform the invention across the full scope of the claim without undue burden.

Jusand Nominees Pty Ltd v Rattlejack Innovations Pty Ltd [2023] FCAFC 178 (Jusand (FCAFC)) is the first appellate judgment of the Australian Federal Court to decide on the validity of a patent under the “new” law of sufficiency.

The lead judgment was given by Perram J, with whom Nicholas and McElwaine JJ agreed. The main point of contention between the parties centred on the application of a proposition stated by Lord Briggs of the UK Supreme Court in Regeneron Pharmaceuticals Ltd v Kymab Ltd [2020] UKSC 27, namely that “the requirement to show enablement across the whole scope of the claim applies only across a relevant range. Put broadly, the range will be relevant if it is denominated by reference to a variable which significantly affects the value or utility of the product in achieving the purpose for which it is to be made”. 

In considering this proposition, Perram J referred to the decision by Birss J in Illumina Cambridge Ltd v Latvia MGI Tech SIA [2021] EWHC 57 (Pat). Like Birss J, Perram J considered that Lord Briggs’ proposition, while couched in terms of products, could also be applied to processes.

Perram J considered that the starting point to determine a “relevant range” is with the invention as claimed, although such an inquiry can, where appropriate, extend to consideration of the invention’s “essence or core”.  The “essence or core” of the invention is distinct from the invention but is “closely related to the technical contribution and/or the inventive concept”.  Perram J found that although Jusand had correctly identified what makes the invention – a “Safety System” for protection against falling drill rods in underground mining – inventive, it had failed to take into account the technical contribution to the art. His Honour considered that once the technical contribution is taken into account, it can be accepted that the range of materials from which the Safety System may be made is part of its essence or core. In applying Lord Briggs' proposition in Regeneron, as explained by Birss J in Illumina, Perram J considered the range of materials from which the Safety System may be made to be a relevant range. The specification only disclosed how to construct the Safety System using steel but the claimed invention was not confined to any particular materials. The evidence was that once a material other than steel was selected, the skilled addressee “would basically need to invent the Safety System from scratch”. Thus, his Honour found the claims invalid for lack of sufficiency.

It follows from Jusand (FCAFC) that the Full Court not only affirmed the approach to assessing sufficiency set out by Burley J in Cytec Industries Inc v Nalco Company [2021] FCA 970, but also imported into Australian patent law from the UK the principle of a relevant range. The decision highlights the regard the Australian Federal Court can be expected to have for UK authority under the new law and presents another step forward in harmonising Australia’s patent law with that in the UK (and Europe).

There is likely to be further development of the Australian approach to sufficiency in 2024 in light of Jusand (FCAFC).

Trade Mark Infringement When Presenting a Product as an “Alternative” to a Competitor’s

The High Court heard a seminal appeal in the context of comparative advertising in October 2022, and delivered its judgment on 15 March 2023.

The proceedings concerned a dispute between Allergan, the owner of BOTOX trade mark registrations, and Self Care, who marketed a range of anti-wrinkle skincare products under the umbrella brand name “Freezeframe”. The Freezeframe line of products includes:

• “PROTOX”, a skincare product advertised as an injection-free solution to “prolong the look of Botox”; and
• “Inhibox”, a skincare product advertised to be an “instant Botox® alternative”.

Under Section 120(1) of the Trade Marks Act, “[a] person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered”.

The primary judge found that consumers were unlikely to mistake PROTOX for BOTOX in light of the ubiquitous reputation of the BOTOX marks. Furthermore, “Botox” was not being used as a badge of origin, but as a descriptive word. The court said that any possible conclusion that there was an association or approval by Allergan of the “Botox” brand was dispelled by the use of the word “alternative”.

This decision was overturned by the Full Court. The Full Court held that the trade mark PROTOX was deceptively similar to BOTOX because even though consumers might not mistake PROTOX for BOTOX, consumers might be confused as to the source of the products.

Furthermore, the Full Court disagreed with the primary judge that Self Care’s use of the mark in referencing a “Botox® alternative” was descriptive and so not in “use as a trade mark”. Even though the word “alternative” implied the two products were different, the phrase did not necessarily imply that the trade source was different. The Full Court held that the phrase was being used by Self Care to denote a trade source connection with Allergan’s products.

Self Care sought and obtained special leave to appeal to the High Court of Australia.

One of the key issues on appeal was the extent to which the reputation of the BOTOX mark is relevant to the question of infringement by reason of deceptive similarity.

The High Court clarified that reputation should not be taken into account when assessing deceptive similarity under Section 120(1), in light of “the structure and purpose of, and the fundamental principles underpinning, the [Trade Marks] Act”. The High Court gave a number of reasons for this:

• Inspection of the Register should enable a person to assess the likelihood of infringement.
• Assessing reputation is a complex exercise and would distract from what is otherwise a straightforward test for infringement.
• Reputation is expressly referred to elsewhere in the Act as a relevant consideration in other contexts, reflecting the balance struck between various commercial and public interests.

The High Court found that there was no “real, tangible danger” of confusion or deception in relation to Self Care’s use of PROTOX. Their Honours pointed to the following factors:

• the words PROTOX and BOTOX are sufficiently different that the notional buyer would not confuse the marks or the products they denote, even allowing for an imperfect recollection of BOTOX;
• consumers are used to seeing one trader’s product used to enhance another trader’s product without there being any suggestion of affiliation; and
• the PROTOX mark was almost always used in proximity to the FREEZEFRAME mark.

There was no evidence of actual confusion. As to the phrase “instant Botox® alternative”, the High Court held that this was not used to indicate the origin of goods in Self Care for reasons including that:

• the phrase was used in inconsistent sizes and fonts and in varying arrangements of the words;
• the phrase appeared alongside two clear badges of origin, FREEZEFRAME and INHIBOX; and
• FREEZEFRAME and INHIBOX were both distinctive and stylised signs.

The High Court noted that while a sign can be both descriptive and serve as a badge of origin, that was not the case here. The High Court concluded that there was no infringement of the BOTOX mark by Self Care’s use of the phrase “instant Botox® alternative”.

The High Court’s judgment is particularly significant in that it effectively overrules a number of Federal Court authorities on the relevance of reputation in assessing trade mark infringement. There is now an even clearer distinction between, on the one hand, actions for trade mark infringement and, on the other, actions for passing off or breach of Section 18 of the Australian Consumer Law, which require the trade mark owner to establish reputation and/or goodwill.

Ascertainment of Prior Art for Inventive Step

Under the current form of the Patents Act following the RTB reforms, the only requirement for a prior art document to be considered for lack of inventive step is that the document was publicly available before the priority date of the relevant claim.

However, under the “old” law, which still applies to patents for which examination was sought before 15 April 2013, there was the additional requirement that the skilled addressee could, before the priority date, be reasonably expected to have ascertained, understood and regarded the document as relevant.

The recent decision of Sandoz AG v Bayer Intellectual Property GmbH [2023] FCA 1321 demonstrates the potential perils of the ascertainment requirement. Sandoz sought to rely upon a prior published patent, “WO 919”, in relation to lack of inventive step. In doing so, Sandoz led evidence from a pharmaceutical scientist regarding the types of literature searches that they would have undertaken as part of a research team to find information about a target drug. Sandoz did not replicate any of those searches but instead gave the expert WO 919 and asked what information, if any, WO 919 disclosed that they considered relevant to the task. Sandoz then gave the expert a 71-page spreadsheet of search results containing limited bibliographic information. That search was not a type of search identified by the expert, being limited to patents using a single database rather than covering patents and peer-reviewed literature using multiple databases. The expert was asked to identify which results they considered to be relevant. Unsurprisingly, WO 919 fell in this category.

Rofe J considered that the absence of evidence concerning the nature of any hypothetical literature search is not necessarily fatal for ascertainment. For example, where the prior art document in question is a journal article in a high impact premier journal read by all those in the field wanting to keep up to date with the latest developments, such searches are likely only to spawn an enquiry that adds unnecessary expense and argument to the case.

However, unlike an article in a widely reviewed and highly regarded journal, a patent “must be found”. Furthermore, there was no evidence that the patentee, Bayer, was known to be actively researching and developing the drug referred to in the claims, let alone a drug of the relevant class. Indeed, the evidence was that at least one other class of drug was considered to be promising at the relevant time. As such, Rofe J considered that the hypothetical task put to the expert, which focused only on the class of drugs relevant to the claims and ignored another class, was narrower than the problem to be found in the common general knowledge and, hence, involved a narrower search than would actually have been carried out by a person skilled in the art. In addition, the 71-page spreadsheet was not the direct result of a search, but rather, had been derived from a search which produced 1,200 pages of results; however, no details were provided as to how the 1,200 pages were narrowed to 71.

In the circumstances, Rofe J did not consider the evidence to establish that it would be reasonable for the skilled addressee to have undertaken a search of the kind described by the expert and to have found WO 919.

This decision demonstrates how a peculiarity of Australian patent law can be fatal to a challenge for lack of inventive step which is reliant upon an obscure or difficult-to-find prior art document.

Medtech Inventions Post Aristocrat

Whether computer-implemented inventions are patentable subject matter (a “manner of manufacture”) remains a highly contentious issue under Australian law. While many computer programs, at least at face value, could arguably satisfy the fundamental requirement of resulting in an “artificially created state of affairs” of economic utility, computer-implemented inventions are at risk of being classed as mere schemes or ideas.

As reported in the 2023 Australian Trends & Developments report in this guide, it was hoped that the High Court decision in Aristocrat v Commissioner of Patents [2022] HCA 29 (Aristocrat) would deliver some much-awaited clarity on this issue. However, the judgment was split 3:3, resulting in no binding precedent.

Subsequently, in early 2023, the Australian Patent Office (APO) was faced with a series of computer-implemented technologies in the medical technology space. Delegates were required to make decisions as to patentability before receiving any guidance from the Federal Court as to the application of Aristocrat. 

The patent applications in The Regents of The University of California [2022] APO 77; Alistair Mann v Electronic Pain Assessment Technologies (epat) Pty Ltd [2023] APO 1; and CareFusion 303, Inc [2023] APO 17, related to, respectively:

• a method of reducing cognitive decline through the use of a computer-implemented training system;
• a method and system for determining the effect of pain medication on a patient using automated, objective criteria; and
• a system for managing the preparation and distribution of medications from a pharmacy.

Although the parties involved in these proceedings made various submissions as to the application of Aristocrat, the APO did not engage in any detailed analysis of the issues. Nonetheless, each decision noted that particular earlier Full Court decisions regarding computer-implemented inventions have been affirmed and that Aristocrat appears to have confirmed that an advance in computer technology is not a useful test for patentability.

In each case, the APO concluded that the claims of the patent application were overly general, and related to a system or method merely requiring generic computer implementation. The patent applications were all found to be invalid on the basis of lack of manner of manufacture.

Subsequently, the Federal Court considered Aristocrat in Motorola Solutions, Inc v Hytera Communications Corporation Ltd (Liability) [2022] FCA 1585, in the context of patents relating to computer-implemented inventions in the field of telecommunications. Perram J confirmed that the split decision in Aristocrat has no ratio decidendi “and stands only for the proposition that the Full Court’s decision stands”. Perram J noted that while the approach to be taken by a single judge of the Federal Court is clear, the question of the Full Federal Court’s approach remains open.

In September 2023, the APO considered the patentability of another invention in the field of medical technology, a method/system for performing quality control relating to digital pathology images, in Paige.AI, Inc [2023] APO 44. The delegate approached the Aristocrat decision in much the same way as the earlier decisions of the APO mentioned above – the delegate referred to the High Court’s split judgment and noted that both the Full Federal Court and High Court decisions indicate that “an inquiry as to whether there is an advance in computer technology is not a useful test for patentability.”

In a similar vein to the earlier APO decisions, the delegate in Paige.AI concluded that at the level at which the invention is described in the patent application, its substance is merely using a computer to perform an administrative quality assurance process. Therefore the claimed invention was found not to comprise patentable subject matter.

As these decisions highlight, inventions in the medical technology space can give rise to complex questions of patentable subject matter. Such technologies tend to be largely comprised of software, which can render patents vulnerable in light of the present uncertainty surrounding computer-implemented inventions. While the ambiguity following Aristocrat will persist for the time being, it remains clear that the relevant enquiry is always as to the substance of the claimed invention, not its form.