Claim amendments allowable but refused

The importance of considering whether a patent should be amended prior to any Court proceedings being commenced has been reinforced by the decision of Bennett J in Apotex Pty Ltd v Les Laboratoires Servier (No 2)[2009] FCA 1019.

Servier had initially applied to amend its then patent application under section 104. The amendments were allowed and an opposition to the amendment by Apotex was unsuccessful. Apotex appealed that decision to the AAT, however before resolution of the appeal, Servier had its patent sealed without incorporation of the section 104 amendment. Shortly thereafter Apotex commenced proceedings for revocation of the sealed patent. In response, Servier applied to the Court under section 105, seeking amendments identical to the previous abandoned section 104 amendments.

Apotex opposed the application to amend contending that the amendments were not allowable pursuant to section 102 and that even if allowable, should not be ordered on discretionary grounds. Bennett J found that none of the grounds raised by Apotex were made out and that the amendments were allowable. Her honour then considered whether the Court should exercise its discretion to allow the amendments.

Bennett J noted that “The Court does not approach the exercise of its discretion in a manner hostile or antipathetic to amendment. However, the onus is on the patentee to satisfy the Court that the amendments should be allowed.” One factor relevant to the exercise of discretion is whether there has been a full disclosure of all matters relevant to the amendment.

Servier sought to explain the reasons for the amendment via two affidavits from its solicitor. The first identified the reason for the amendment as being a recognition that the specification disclosed matter which could properly be the subject of additional claims. In cross-examination this was admitted to be an incomplete explanation. The second affidavit identified a further reason for the amendment as being to reduce the risk of the patent being invalid by adding narrower claims.

Apotex argued that neither of the explanations for the amendment set out in these affidavits was consistent with the reason set out in correspondence between Servier and its solicitors which had been produced following a waiver of privilege. This correspondence identified the amendments as being designed to overcome potential validity issues raised in related UK proceedings.

Bennett J concluded that the Court should not exercises its discretion to allow the amendments in light of the failure by Servier to provide full and frank disclosure of its reasons for seeking to amend, stating:

Servier should have given its reason for the amendments voluntarily and at the time it sought the amendments. It knew the grounds of Apotex’s opposition to the amendments and it knew of Apotex’s challenge to the validity of the corresponding patent in the UK and its defence to infringement. That clearly raised the scope of the claims and the reasons to amend them … Servier had ample opportunity to amend the AC Patent application if it was of the view that it contained additional claimable matter. It litigated the unamended patent in the UK and pursued the grant of the unamended patent in Australia, abandoning the s 104 amendments. Servier has not sufficiently explained why it took this course. At the time of abandoning the s 104 amendments, Servier was aware of the first instance decision in the UK. Servier’s conduct in relation to the amendments disentitles it from presently amending the AC Patent in circumstances where litigation over the validity of that patent with Apotex was in clear prospect and the contest over the patent had already commenced. The lack of forthrightness in providing Servier’s reasons to amend reinforces that conclusion.

Had Servier pursued the amendment application under section 104, no issue of discretion would have arisen. While any decision regarding amendment must be carefully considered, this decision highlights the difficulties which can arise if amendment is delayed until after the commencement of court proceedings.