2017/18 was an intriguing 12 months in the Australian patent landscape, with Courts being called upon to deliver decisions in relation to a number of issues that have not previously been judicially considered. The judgments delivered in this period have dealt with the patentability of methods claims deploying genetic information, patent term extensions for “Swiss-style” claims and whether applying to list a product on the Pharmaceutical Benefits Scheme constitutes an act of patent infringement.
In the case Seiko Epson Corporation v Calidad Pty Ltd  FCA 1403 (29 November 2017), Seiko sold various Epson inkjet printer cartridges for use with its printers. Ninestar collected used cartridges in Malaysia, made modifications to facilitate their reuse, and refilled them with ink. Calidad purchased the cartridges in Malaysia from Ninestar, then imported and sold them in Australia.
Seiko sued Calidad for infringement of two patents for printer cartridges. Calidad defended the claim on the basis that an implied licence ran with the cartridges, alternatively Seiko’s patent rights had been exhausted when Seiko first put the cartridges on the market.
Ninestar modified some cartridges more than others in order to make them suitable for re-use. Justice Burley found that the defence was available in some cases but not others. It was a question of degree, but the Judge considered that in some cases Ninestar so materially altered the cartridges that “the licence implied by a sale without restriction of the original Epson cartridge does not apply”.
On February 1, 2017, in Shire Development, LLC v. Watson Pharmaceuticals, Inc., the U.S. Court of Appeals for the Federal Circuit held that Watson’s proposed generic version of Shire’s LIALDA® did not infringe claims 1 and 3 of Shire’s U.S. Patent No. 6,773,720 (the “’720 patent”). In reversing the district court, the Federal Circuit determined that Shire’s claim to an outer layer “consisting of” a list of specific elements closes the universe of elements for infringement purposes, and Watson’s addition of an ingredient (“magnesium stearate”) to the outer layer of its accused product created non-infringement because it was outside the claimed list of elements. The Federal Circuit’s opinion rests on a strict reading of the Markush groups within the ’720 patent and a rejection of the district court’s broad reading of the Federal Circuit’s opinion in Norian Corp. v. Stryker Corp.
A Markush-type claim (also known as a Markush group) allows a patent drafter to capture independent, related claim elements in a single limitation. The claim is characterized by the form “selected from the group consisting of A, B and C.” The “consisting of” language closes the group from including other members, such as “D.” “Consisting of” limits an element to only the named members of the group, and an element selected from outside that group will not be covered by the claim. In contrast, patent drafters frequently use an alternative preamble “comprising” to keep the claims open to additional, unrecited elements.
Here, Shire sued Watson for infringing claims 1 and 3 of the ’720 patent by filing an Abbreviated New Drug Application (“ANDA”) with the Food and Drug Administration seeking to market a generic version of Shire’s drug LIALDA®. The ’720 patent is directed to a controlled-release oral composition of mesalamine (5-amino-salicylic acid) used to treat Crohn’s disease and ulcerative colitis. The claimed composition includes the mesalamine active ingredient; an inner, lipophilic matrix that “resists dissolving in water”; an outer, hydrophilic matrix that “readily dissolves in” water; and other optional excipients.
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