Intellectual Property – Patent Law Update: Section 117, authorisation and “Swiss-style” claims, liability not avoided - but where to on damages?

Intellectual Property
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M Marcus
C Cunliffe 2
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Surkis Amy Headshot

Neurim Pharmaceuticals (1991) Ltd v Generic Partners Pty Ltd (No 5) [2024] FCA 360

Neurim was the owner of an Australian Patent titled “Method for treating primary insomnia”, which expired on 12 August 2022.

Some years ago Neurim commenced infringement proceedings against Generic Partners and Apotex (together, the Respondents) for infringement of claims 1-7 of the Patent. Independent claim 1 was a “Swiss-style” claim and independent claim 4 was a method of treatment claim. The method related to the use of melatonin for treating a patient suffering primary insomnia characterised by non-restorative sleep and improving the restorative quality of sleep in the patient. Broadly, the Swiss-style claims were for the use of melatonin in the manufacture of a drug for treating the same condition.

Neurim’s commercial embodiment of the medicament the subject of the Swiss-style claims and used in the method of treatment claims is registered under the product name CIRCADIN for monotherapy for the short term treatment of primary insomnia characterized by poor quality of sleep in patients who are aged 55 or over.

In April 2017, Generic Partners registered products containing 2 mg of the pharmaceutical compound melatonin in prolonged release form for the same indication as CIRCADIN. In July 2018, Generic Partners transferred sponsorship of some of its products to Apotex (Apotex Products), but remained the sponsor of MELOTIN, which it supplied to Apotex from March 2020. From April 2020, Apotex undertook marketing activities, supplied MELOTIN with instructions for its indicated use, and authorised medical practitioners to prescribe MELOTIN for its indicated use.

The Respondents cross-claimed for revocation of the Patent claims asserted against them on the basis that: the invention lacked novelty and did not involve an inventive step, the claims did not fully describe the invention (s 40(2)(a)) and the claims were not fairly based or clear (s 40(3)).

The Patents Act 1990 prior to the amendments made by the Raising the Bar amendment Act applied.

The skilled addressee and the field

The “skilled addressee” is a hypothetical person (or team) who is an uninventive worker in the field of, and with a practical interest in, the subject matter of the patent.

Often, parties to patent litigation debate who the skilled addressee (or person skilled in the art) of the patent in suit is. This is because the characterisation of the skilled addressee affects the skills brought to bear by the skilled addressee to questions of claim construction, obviousness and sufficiency (among other matters). Parties also debate these matters in an attempt to sideline the opposing party’s expert as not being a skilled addressee. There is also a debate as to whether the skilled person can be different for the purposes of assessing obviousness (which ought not have the benefit of the patent and invention disclosed) and sufficiency (where the starting point is the patent itself).

In the present case, the parties were at loggerheads over who the skilled addressee was and whether their respective experts were qualified to give evidence. Justice Nicholas’ approach to those issues illuminates how the Court can address these questions pragmatically and also is instructive as to red flags for solicitors assisting experts in the drafting of reports.

Neurim led evidence from two psychiatrists (Dr Behi and Dr Karapivensky), and a Professor of Sleep Medicine (Professor Roth). The Respondents led evidence from a Professor of Respiratory and Sleep Medicine (Professor Wheatley), a psychiatrist (Professor Glozier), a general practitioner (Associate Professor Rawlin), a searcher (Mr Jennings) and a pharmacist (Mr Manuel).

His Honour observed that he had approached the written evidence of Dr Krapivensky, Dr Behi and Professor Roth with caution because parts were overstated, tendentious and argumentative, and the parts of their written evidence commenting on the evidence of Professor Wheatley were disrespectful and dismissive. The authors commend that part of the reasons for judgment to solicitors preparing expert witness evidence as it offers an insight into how argumentative evidence drafting can come unstuck.

Two expert conclaves were held prior to the hearing to produce expert reports, leading to two concurrent sessions (“hot-tubs”) of expert evidence at the hearing. The first hot-tub included the psychiatrists and professors of sleep medicine. The second hot-tub included the professors of sleep medicine, and one psychiatrist, Professor Glozier. It is not entirely clear to the authors why two conclaves were held. A/Prof Rawlin and Mr Manuel did not participate in the conclaves or contribute to the joint expert reports. A/Prof Rawlin and Mr Jennings were not cross-examined.

The experts who participated in the first hot-tub agreed that the skilled addressee would have knowledge and experience in taking a history of sleep disturbances and identifying causes and associations of such disturbances in the course of making a diagnosis of primary insomnia; experience, knowledge or a research interest in the psychopharmacology of sleep and its disorders; and an ability to understand the diagnosis of primary insomnia in relation to DSM-IV. By way of background, a document described as DSM-IV was incorporated into the Patent by reference. Another document, ICD-10, was also incorporated in the Patent by reference. A further document, called the International Classification of Sleep Disorders (ICSD), was discussed in DSM-IV (at pages 556-557) but was not incorporated into the Patent by reference.

The experts did not agree on the role of other classification systems, and specifically the extent to which ICSD was translatable to the diagnosis of primary insomnia in the context of the Patent. The main area of disagreement was whether a person familiar with ICSD but not DSM-IV would be a skilled addressee of the Patent. Neurim’s witnesses considered that where a person did not recognise or understand the concept of non-restorative sleep in the context of DSM-IV, they could not be a skilled addressee. The Respondents’ witnesses considered that a person who understood the relevant diagnoses in ICSD would be a skilled addressee.

The point of this squabble concerned Professor Wheatley who did not use DCM-IV or ICD-10 in his clinical practice for the diagnosis and management of sleep disorders and was not familiar with the term or concept of non-restorative sleep. As a result, Neurim submitted that Professor Wheatley’s evidence should be “wholly disregarded” and the Respondents contended otherwise.

In response, Nicholas J noted that the chapter on primary insomnia in what the parties accepted was the leading sleep medicine textbook was written around the classification of sleep disorders used by Professor Wheatley. He accepted Professor Wheatley’s evidence that as at the priority date, the field of insomnia was in flux with respect to the three nosologies (a nosology is a branch of medical science dealing with the classification of diseases which is often identified in a particular text, for example DSM-IV, ICD-10 and ICSD). His Honour found that there was no requirement to use any one nosology over the other for the diagnosis of insomnia and primary insomnia.

Justice Nicholas concluded that, in Australia in August 2001, sleep physicians were unlikely to use DSM-IV, and that psychiatrists were more likely to use DSM-IV than ICSD to diagnose and treat insomnia. However, that did not mean that psychiatrists and sleep physicians were practicing in separate fields: they were working in the field of sleep medicine and both were qualified to diagnose and treat primary insomnia. Most clinicians who practiced in the area of sleep (including psychiatrists, psychologists and sleep physicians) were familiar with and use ICSD, which was designed to be used and referenced by those with different clinical backgrounds who practice in the area of sleep.

Accordingly, Nicholas J concluded that a clinician’s expertise in sleep medicine, in 2013 and at the priority date, did not depend on their familiarity with DSM-IV. His Honour did not accept that determining whether a patient was experiencing non-restorative sleep required the skills and experience of a psychiatrist rather than those of a respiratory and sleep physician such as Professor Wheatley. His Honour concluded that the field of sleep medicine in Australia in 2001 included clinicians with quite different backgrounds, including those with experience in sleep medicine (such as Professor Wheatley and Dr Schachter) and those with experience in psychiatry (such as Dr Behi, Dr Krapivensky and Professor Glozier).

His Honour considered that the field of the Patent was the diagnosis and treatment of sleeping disorders, including primary insomnia and this did not require the skilled addressee of the Patent to be familiar with the content of DSM-IV and ICD-10. His Honour accepted that sleep physicians would be able to understand and perform the invention. Relatedly, his Honour considered that Professor Wheatley’s lack of familiarity with DSM-IV and ICD-10 and the concept of “non-restorative sleep” did not mean that he was not a skilled addressee.

His Honour observed:

[…] the concept of the notional skilled addressee is a legal fiction and a tool of analysis. There will be some fields of scientific knowledge where those with a practical interest in the subject matter of the invention may come from a variety of different backgrounds. One way in which patent law has accommodated this possibility is to recognise that the skilled addressee may be a team. However, another approach involves recognising that the notional person skilled in the relevant art has expertise and experience drawn from different backgrounds, even though in the real world, those working in the field may have been differently trained and, therefore, possess different background knowledge. […]

In the present case, the claims do not cover what I would regard as a wide field. However, they do cover a field in which clinicians from different backgrounds work. Each has a practical interest in the subject matter of the invention even though not all of them use a nosology that is incorporated by reference into the Patent or approach the diagnosis and treatment of insomnia in precisely the same way that a psychiatrist would. In determining which clinicians would have had a practical interest in the subject matter of the Patent and practical knowledge and experience in the area in which the invention was intended to be used, it is necessary to focus not on the particular nosology which was used by them (DSM-IV, ICD-10 or ICSD), but on the area in which they trained and worked. On this basis the skilled addressee might be either a sleep physician or a psychiatrist.

Professor Roth was a psychologist with expertise in sleep medicine, not a psychiatrist or a sleep physician. He was not licensed to prescribe medications in Australia or elsewhere. Nonetheless, Nicholas J concluded that Professor Roth was a skilled addressee. Indeed, he concluded that he was one of the world’s leading researchers in the field. However, Nicholas J accepted Professor Roth may be “overqualified”, on the basis that his knowledge and experience in sleep medicine would exceed that of clinicians diagnosing and treating sleep disorders in Australia at the priority date, which might affect the weight to be given to some of his evidence.

Common General Knowledge (CGK)

His Honour observed that difficulties arose in relation to the determination of the CGK due to the way each side conducted its case.

In its written submissions, Neurim contended that Sleep Medicine was the leading textbook in the field and reflected the CGK. The Respondents agreed the textbook was CGK. Curiously, there was no evidence to indicate that any of the psychiatrists who gave evidence were familiar with Sleep Medicine at the priority date. However, the case was conducted by both parties on the basis that Sleep Medicine was CGK at the priority date, and Justice Nicholas decided the case on that footing.

Justice Nicholas found that the CGK included a knowledge of the existence of each of DSM-IV, ICD-10 and ICSD and some understanding of the manner in which these nosologies classified different types of insomnia, together with a detailed familiarity of the particular nosology that they used in the course of their clinical work (which would differ for psychiatrists and sleep physicians). However, whether DSM-IV or ICD-10 was CGK was of little significance to construction of the Patent because the relevant parts of those documents were referred to in the Patent and incorporated by reference. Accordingly, the skilled addressee’s knowledge and understanding of the invention and some of the terminology used, was assisted by those documents, regardless of whether they were CGK.

Professors Roth, Glozier and Wheatley agreed that, as at the relevant date, being August 2001:

  • primary insomnia was diagnosed in clinical practice in Australia by taking a thorough clinical history including a detailed sleep history, arranging any appropriate clinical examination and organising any necessary diagnostic tests to exclude alternative diagnoses;
  • there was no objective clinical test that could diagnose insomnia in its broadest sense or “primary insomnia characterised by non-restorative sleep” in its specific sense; and
  • the extent of knowledge in Australia regarding the potential use of melatonin was as a chronobiotic for treatment of circadian rhythm disorders.

Justice Nicholas found that the bulk of persons working in the field of sleep medicine would have accepted that there was insufficient evidence at the priority date to show that melatonin was an effective treatment for insomnia.


Two issues arose in relation to the use of the term “non-restorative sleep” in the claims. The first concerned the meaning of that term, and the second concerned what the Respondents submitted was the lack of clarity of the phrase “primary insomnia characterised by non-restorative sleep”.

The Respondents led evidence that the term “non-restorative sleep” at the priority date was a controversial topic and that the skilled addressee could readily differentiate between a patient suffering from primary insomnia and other insomniacs, but not patients suffering from primary insomnia characterised by non-restorative sleep from other primary insomnia sufferers with certainty, consistency and predictability. Nicholas J rejected this challenge. He considered that the concept was sufficiently well defined to enable a skilled addressee to determine whether a patient was complaining of non-restorative sleep.

As to the meaning of the words “characterised by” in the context of the phrase “primary insomnia characterised by non-restorative sleep”, Nicholas J concluded that the words were to be understood as meaning that non-restorative sleep was a diagnosed characteristic (or symptom) of the patient’s primary insomnia, not that it had to be the sole or dominant symptom. It needed to be a clinically meaningful element in the diagnosis of primary insomnia.


Neurim alleged that the Respondents were liable for infringement of the method of treatment claims 4 to 7 under ss 117(2)(b) and 117(2)(c) of the Act, the Swiss-style claims 1 to 3 under s 13(1) of the Act, and that the Respondents infringed the same claims by authorisation and common design.

The Respondents made admissions that the Generic Partners Products had 2 mg melatonin, were in unit dosage form, were adapted for oral administration, were a prolonged release formulation, contained at least one pharmaceutically acceptable excipient and that each was indicated as monotherapy for the short term treatment of primary insomnia characterised by poor quality of sleep in patients who are aged 55 years or over.

Justice Nicholas noted that the claims of the Patent were purpose limited by the requirement that the medicament or method be manufactured or used for the purpose of treating a patient suffering from primary insomnia characterised by non-restorative sleep. In the case of the method of treatment claims, there would only be direct infringement where the patient was diagnosed with primary insomnia characterised by non-restorative sleep and the method was used for improving the restorative quality of the patient’s sleep.

His Honour observed that the claims were not infringed by a medical practitioner who prescribed melatonin as a treatment for some more generalised complaint of lack of sleep, as opposed to unrefreshing quality of sleep.

Whether or not melatonin had been prescribed or recommended on the basis of a diagnosis of primary insomnia characterised by non-restorative sleep had to be determined as a matter of substance.

All the experts agreed that they either would, or did, prescribe CIRCADIN in clinical practice for the TGA approved indication, as a monotherapy for the short-term treatment of primary insomnia characterised by poor quality of sleep, in patients aged 55 or over. Some psychiatrists also prescribed CIRCADIN for its hypnotic effect to assist patients getting to sleep, or in the treatment of circadian rhythm disorders, or to treat children suffering from insomnia associated with neurodevelopmental disorders. The evidence also established that CIRCADIN was prescribed for people with any kind of insomnia, whether primary or not, and as a cheaper way of obtaining melatonin.

Justice Nicholas was cautious about accepting Neurim’s experts’ evidence that they regularly prescribed CIRCADIN to treat primary insomnia characterised by non-restorative sleep and concluded that a diagnosis of primary insomnia that singles out non-restorative sleep (as opposed to difficulty initiating or maintaining sleep) was relatively uncommon. The evidence suggested that general practitioners frequently prescribed CIRCADIN to promote sleepiness and sleep initiation, and to assist patients with specific issues related to sleep patterns, all of which was outside the scope of the method of treatment claims.

Section 117(2)(b)

Section 117 of the Act provides for infringement of a patent by the supply of a product, the use of which will infringe a claim of the patent in suit. Section 117(2) deems types of uses which will be considered use that will infringe. Section 117(2)(b) deems such a use to be “if the product is not a staple commercial product - any use of the product, if the supplier had reason to believe that the person would put it to that use”.

The Respondents argued that melatonin was a “staple commercial product” because that phrase refers to a product that is supplied commercially for a substantial non-infringing use or uses. They submitted that: (a) the statutory words should not be given a narrow meaning, because they are used within a provision that confers liability upon a supplier of a product where the act of supply could not otherwise constitute an infringement; and (b) it is the variety of uses for which that product can, and is supplied commercially, that will determine whether a product is a staple commercial product.

The Respondents also submitted that Crennan J in Northern Territory of Australia v Collins (2008) 235 CLR 619 rejected a construction of “staple” as being confined to raw materials, favouring instead a “significant non-infringing uses” analysis, and that Hayne J’s analysis was essentially to the same effect. They submitted that the Full Court’s reasoning in AstraZeneca AB v Apotex Pty Ltd (2014) 226 FCR 324 at [431] was inconsistent with Crennan J’s and Hayne J’s analysis and that the Full Court’s conclusion that “the uses to which rosuvastatin may be put … appear to be limited to the prevention or treatment of cardiovascular disease and its associated risk factors” considered the question of multiple uses at too high a level of abstraction. They said that it is necessary to focus on the extent to which the product is used for non-infringing purposes.

Notwithstanding the fact that the evidence suggested that general practitioners frequently prescribed CIRCADIN in a manner outside the scope of the method of treatment claims, his Honour observed that the question is not whether the product has non-infringing uses, but whether it is a staple commercial product, which involves asking whether it is a product supplied commercially for various uses. He did not accept the Respondents’ submission that the Full Court’s characterisation in AstraZeneca AB of the uses to which rosuvastatin could be put was overly broad or otherwise inappropriate, nor that the reasoning in that case was in any respect inconsistent with what Crennan J or Hayne J said in Collins.

His Honour observed that Collins was concerned with a species of timber commonly used for a wide variety of purposes (including in the production of mulch, potting mix and firewood, and as a constituent element in poles, fence posts, flooring). By contrast, he observed that melatonin’s principal, if not sole, use was as a therapeutic treatment for sleep disorders of various kinds, and that the range of purposes for which the product is used was quite narrow.

With respect, these authors consider that there was some force to the Respondents’ submission that the High Court seemed to contemplate that any product with substantial non-infringing uses was a staple commercial product, and, in light of that, it seems arguable that melatonin fit that description (even if those uses were all pharmaceutical).

In relation to the “reason to believe” element of section 117(2)(b), his Honour observed that it should be inferred that a generic supplier of prescription medicines in Australia seeking to obtain ARTG approval for a generic prescription medicine on the basis of an existing ARTG approval of an originator’s product would be familiar with the indication for which the product is to be prescribed, and any Australian Public Assessment Record (AusPar) relating to the approved product. Although melatonin was used to treat a variety of sleep related disorders, CIRCADIN was approved for use in Australia by the TGA in accordance with the approved indication only. The TGA approval obtained for MELOTIN was for precisely the same indication as CIRCADIN. Primary insomnia was, at the time Neurim’s TGA approval was granted, a medical condition identified in both DSM-IV and ICD-10. Both included diagnostic criteria that distinguished between complaints of difficulty initiating or maintaining sleep and complaints of non-restorative sleep (defined to mean restless, light, or poor quality sleep). His Honour concluded that a reasonable person seeking approval for a prescription medication to be used in the treatment of primary insomnia characterised by poor quality sleep would be aware that it was likely that the medication would be prescribed by psychiatrists as a method of treating primary insomnia characterised by non-restorative sleep, in accordance with DSM-IV. A later DSM, DSM-5 still provides for a diagnosis of a sleep disorder which would include primary insomnia in which the patient complains of poor quality sleep in the sense of non-restorative or unrefreshing sleep.

In those circumstances, Neurim’s infringement case based on s 117(2)(b) succeeded. However, it may be observed that the “reason to believe” would only be in respect of a portion of the uses of the product – as the evidence was that much of the prescribing would fall outside the claims. As noted below, this would likely have had an effect on whether any injunction would flow (had the patent still been on foot) and may have an effect on pecuniary relief.

Section 117(2)(c)

Section 117(2)(c) of the Act deems an infringing use of the product supplied to another to include “the use of the product in accordance with any instructions for the use of the product, or any inducement to use the product, given to the person by the supplier or contained in an advertisement published by or with the authority of the supplier”.

Justice Nicholas observed that neither the Product Information (PI) for the Respondents’ melatonin product, nor the approved indication, made any reference to DSM-IV or “non-restorative sleep”. Furthermore, where the various clinical studies summarised in the PI investigated various aspects of sleep quality, neither the PI nor the approved indication could be said to provide any instruction or inducement to use melatonin as a treatment for primary insomnia characterised by non-restorative sleep (as required by the Patent claims). Accordingly, his Honour found no infringement by way of section 117(2)(c)

These authors consider there is some tension between the finding of infringement pursuant to s 117(2)(b) and non-infringement pursuant to s 117(2)(c). If the Respondents were taken to be aware that primary insomnia characterised by poor quality sleep included non-restorative sleep for the purpose of establishing that they had a reason to believe the product would be used in an infringing way, it may have been reasonable to conclude that the physicians and psychiatrists who prescribed the drug would read an indication for the treatment of primary insomnia characterised by poor quality sleep in the same way. It is true that the broader indication captured substantial non-infringing uses, but on Nicholas J’s reasoning, it also covered infringing uses, and the label did not suggest MELOTIN should not be used for these purposes.

Swiss-style claims

Each of the Swiss-style claims were for the use of melatonin in the manufacture of a medicament for treating a patient suffering from primary insomnia characterised by non-restorative sleep.

Justice Nicholas observed that there are various uses for the Respondents’ MELOTIN product that are outside the scope of the Swiss-style claims. The fact that MELOTIN is bioequivalent to CIRCADIN and therefore suitable for use as a treatment for primary insomnia characterised by non-restorative sleep was not determinative of the infringement question. He considered the PI and approved indication were of greater significance.

Justice Nicholas noted the approved indication was not the same as the patented indication because quality of sleep in the approved indication is broader than “non-restorative sleep” in the claims. His Honour also considered that neither the PI nor the approved indication provides any instruction or inducement to use MELOTIN to treat primary insomnia characterised by non-restorative sleep. Nor did the AusPar for the drug establish that the approved indication was limited to primary insomnia characterised by non-restorative sleep.

Although it was reasonably foreseeable that MELOTIN would be used by some clinicians for the therapeutic purpose specified in the Swiss-style claims, it was also reasonably foreseeable, and highly likely, that MELOTIN would mostly be used for other therapeutic purposes related to its postulated hypnotic effect and the regulation of circadian rhythms.

Weighing that evidence, his Honour was not persuaded that MELOTIN was a medicament manufactured for the therapeutic purpose specified in Swiss-style claims.


Neurim alleged that the respondents authorised, procured, induced or joined in a common design with persons treating primary insomnia characterised by poor quality sleep to use MELOTIN for that purpose and thereby infringed the method treatment claims under s 13(1) of the Act.

Justice Nicholas held that the Respondents had authorised the use of their products by medical practitioners, who the Respondents had reason to believe would use the respondents’ products as a treatment for primary insomnia characterised by non-restorative sleep and to improve the restorative quality of sleep in patients aged 55 and over. On that basis, his Honour held that authorisation infringement was established.

Observations on infringement

The authors note that his Honour’s reasons demonstrate that s 117(2)(b) and authorisation may be far more potent tools for patentees than s 117(2)(c) or an argument based on Swiss style claims. This decision suggests that in the latter two species of infringement, absent express instructions or inducement to use the product in an infringing way, the mere fact that a product can be put to an infringing use will not be sufficient to establish infringement. In the context of s 117(2)(b), the existence of non-infringing uses, even substantial ones, may not be enough to avoid liability under s 117(2)(b) or authorisation.

As set out above, the authors have some sympathy for the Respondent’s submissions on s 117(2)(b) (and for an argument that authorisation should not apply where a product has various uses, some of which infringe and others which do not), but on the current state of the law, patentees of pharmaceutical products are well advised to include a claims under s 117(2)(b) and s 13(1).

Having said the above, success on section 117(2)(b) or authorisation might not be sufficient to warrant the granting of an injunction if a substantial amount of the use of the impugned product will not in fact be infringing conduct. Since the Patent had expired, it was not necessary for his Honour to express any view as to whether it would have been appropriate to grant an injunction (and, if so, in what terms). However, Nicholas J observed that, given his findings about the extent to which the respondents’ products were likely to be used for non-infringing purposes, this was not a case in which it would have been appropriate to grant an injunction in general terms restraining the respondents from supplying their products.

Depending on whether this case proceeds to judgment on pecuniary relief, this case may for (probably) the first time, identify how “partial” infringing conduct affects the pecuniary relief to be awarded. For example, if only 10% of the infringer’s products will be used in an infringing manner, should it have to pay damages as if all of its sales were infringing? How does a patentee prove its loss where there is substantial non-infringing use? How would any claim of additional damages (if sought) be determined in circumstances where an inseparable part of the conduct is non-infringing?

Validity: Novelty

The Respondents relied on prior art including an earlier melatonin product, a webpage for it, a study of elderly insomnia sufferers, and an earlier Neurim patent.

The Court considered whether the prior art anticipated the claims for the use of melatonin for treating a patient suffering from primary insomnia characterised by non-restorative sleep and improving the restorative quality of sleep in such a patient.

The respondents accepted that none of the prior art expressly disclosed a diagnosis of “primary insomnia characterized by non-restorative”, or “improvement in the restorative quality of sleep” in those terms.

In closing oral submissions, the Respondents submitted that the use of melatonin as a method of treatment of primary insomnia characterised by non-restorative sleep to improve the restorative quality of sleep, merely claims a narrower use of an old product, which fits within the broader use for that product already described in the prior art. This was because the information made available by each of the disclosures relied upon was that prolonged release melatonin within the claimed dose range can treat insomnia (primary or secondary) and improve the restfulness of sleep and/or sleep quality: Otsuka Pharmaceutical Co Ltd v Generic Health Pty Ltd (No 2) (2016) 120 IPR 431 at [176]. The Respondents argued that the Patent’s overlaying of the additional parameter characterised by non-restful sleep as a diagnostic qualification, and “improvement in the restorative quality of sleep” as a treatment effect, merely constituted an attempt to re-patent the prior art.

His Honour concluded that each of the relevant features of the claims asserted by the Respondents to amount to mere parameterisation had a technical effect and were not arbitrary integers. He accepted Neurim’s submission that at the priority date, melatonin was known as a chronobiotic that could be used to improve insomnia secondary to a circadian rhythm disorder through regulation of the sleep-wake cycle, but that it was a new and surprising result that melatonin could, additionally, be used to improve the restorative quality of sleep, and that it was not an inevitable result of the prior use of melatonin that it had been or would be used as such a treatment.

Validity: Inventive Step

Section 7(3)

Section 7(3) of the Act (prior to Raising the Bar) provides that, for inventive step, it is possible to add to the CGK information in a document (or combination of documents) that a skilled person could have reasonably ascertained, understood and regarded as relevant.

The Respondents did not advance any obviousness case based on the CGK alone. However, they said that the invention as claimed was obvious at the priority date in light of the CGK together with three prior art documents (7(3) documents), each considered separately, and three combinations.

Justice Nicholas considered whether the skilled addressee could be reasonably expected to have ascertained, understood and regarded each of the 7(3) documents as relevant to treating a patient with primary insomnia characterised by non-restorative sleep and improving the restorative quality of sleep in such patient. He found that the Respondent had not proven that the documents would be so ascertained.

The Respondents relied on the evidence of Professor Wheatley concerning a hypothetical research exercise (Task) he undertook with the assistance of a researcher, Mr Jennings, to prove that the skilled addressee could reasonably be expected to have ascertained each of the 7(3) documents in response to a Task.

The way in which the Task was formulated was broad enough to include potential treatments for primary insomnia that were solely directed to improving sleep initiation or maintenance rather than restorative quality of sleep, prompting Professor Wheatley to consider new treatments which assisted in sleep initiation and maintenance regardless of whether such treatments might also contribute to any improvement in a patient’s non-restorative (or unrefreshing) sleep. Justice Nicholas did not consider that the Task was directed to a similar problem to that addressed by the Patent. The authors note that the Respondents may equally have been in a difficult position in posing a task that was more directed to the problem addressed by the Patent – such a task may have been criticised for including within it some of the invention claimed (by way of a non-CGK problem or part of the solution).

Professor Wheatley’s evidence was that he had understood from his instructions that he was being asked to identify any additional treatments to the existing treatments he would have used. Justice Nicholas considered that it would be logical for a clinician such as Professor Wheatley who was presented with the Task to explore the range of treatments that were available in Australia as at August 2001 for the purpose of determining whether they might alleviate the patient’s primary insomnia. However, the manner in which Professor Wheatley was asked to address the Task effectively excluded consideration of these drugs and that he was directed to “new drugs”. Melatonin was the only new drug that he was aware of that he thought might be useful in insomnia management.

Further, Nicholas J considered Professor Wheatley’s evidence was affected by hindsight (although his Honour conceded that it was difficult to see how that problem could have been avoided).

In the circumstances, his Honour was not persuaded that a sleep physician such as Professor Wheatley would have, as at the priority date, been led directly to try melatonin as a treatment for primary insomnia characterised by non-restorative sleep in the expectation it may well provide an effective treatment, and therefore rejected the s 7(3) argument.

These authors consider that the question of whether Professor Wheatley would have ascertained documents relating to melatonin as a treatment should not have turned on whether he would have been directly led to try melatonin. The question ought to have been whether he would have conducted a search that led to him ascertaining the documents and finding them relevant to a proper CGK problem. Having said that, it appears that his Honour did not consider that, in his search, Professor Wheatley was in fact addressing a relevant (or allowable) task or problem.

Inventive step

Even if the 7(3) documents were available, Justice Nicholas considered that none of the prior art, alone or in combination (even though he also rejected that they would be combined) suggested that the restorative quality of the patients’ sleep may be improved by administration of melatonin.

His Honour observed that what was known about the mechanism of action of melatonin at the priority date suggested that due to either its effect on circadian rhythms and the sleep-wake cycle, or its potential hypnotic effect, melatonin may assist a patient suffering from insomnia to initiate or maintain sleep.

Assuming that the person skilled in the art would have considered melatonin as worth trying as a treatment for primary insomnia in the case of patients who experienced difficulty initiating or maintaining sleep, and also assuming that they would have done so in the expectation that it may well provide a useful treatment for such patients (which Justice Nicholas considered justified on the evidence), he did not think the person skilled in the art would have reason to think that the treatment would (or may well) improve the restorative quality of a patient’s sleep. Accordingly, his Honour was not persuaded that the invention did not involve an inventive step.

Lack of Fair Basis

The Respondents asserted that the claims were not fairly based on the disclosure in the Patent. The Respondents referred to the different effects of the invention as claimed in patients below the age of 55 from those in patients above the age of 55. In Example 3 of the Patent, the increase in perceived quality of sleep and daytime alertness in those aged less than 55 given melatonin was less than the increase reported for those given the placebo. Because the claims were not qualified by reference to the age of the patients to be treated, the Respondents said the claims were not fairly based.

However, his Honour observed that there were a number of disclosures in the Patent that made it clear that the invention was not limited to the treatment of patients aged 55 or over. Accordingly, the fair basis attack failed.

  • Tom Cordiner Headshot

    Tom Cordiner KC holds the dual qualification of barrister and registered patents and trade mark attorney

  • M Marcus

    Melissa Marcus practises in defamation law and all aspects of intellectual property

  • C Cunliffe 2

    Clare Cunliffe practises in intellectual property and general commercial litigation

  • Marcus Fleming Headshot 1

    Marcus Fleming has a significant practice in commercial litigation with a particular focus on intellectual property law.

  • Surkis Amy Headshot

    Amy Surkis is a general commercial litigator with a scientific background and over 10 years' experience.

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