On Your Marks

08 Apr 2009

Pre-Emptive Measures in Patent Disputes – Declarations of non-infringement

The High Court has recently issued a decision regarding a little known and rarely used provision of the Patents Act 1953. 

Section 75 of the Patents Act 1953

Under section 75 of the Act, a person who fears that the use of an article or process may result in an infringement action, but who believes that it ought not do so, can apply to the Court for a declaration that the use by the applicant of the article or process does not (or would not) infringe the patent. Such a declaration may be made by the Court if it is shown that:

1. the applicant has applied in writing to the patentee or licensee for a written acknowledgment to the effect of the declaration claimed, and has furnished the patentee or licensee with full particulars in writing of the process or article in question;
2. the applicant has undertaken to pay a reasonable sum for expenses of the patentee or licensee in obtaining advice in respect of the declaration sought; and
3. the patentee or licensee has refused or neglected to give such an acknowledgment.

Arrow Pharmaceuticals (NZ) Ltd v Sanofi-Aventis

The applicant in this matter was Arrow Pharmaceuticals (NZ) Ltd (Arrow), who had entered into an agreement with Pharmac for the supply of a product known as Arrow-Clopidogrel, the active ingredient of which is clopidogrel. 

Clopidogrel is known to exist in at least two forms - Form 1 and Form 2. Sanofi-Aventis holds a New Zealand patent (no. 507914) which relates to clopidogrel Form 2, but does not cover Form 1.

The product which Arrow wished to make utilised clopidogrel Form 1. It therefore applied to the Court under section 75 for a declaration 'that the making, use or sale by any person of the applicant's oral pharmaceutical product containing clopidogrel hydrogen sulphate Form 1 ("the Arrow Product"), does not or would not, constitute an infringement of any claim of New Zealand Letters Patent No. 507914'.

Sanofi-Aventis opposed the making of the declaration on the grounds that:

• Arrow had failed to show that the product it proposed making and selling would not infringe its patent; and
• Arrow had failed to provide Sanofi-Aventis particulars of the product in accordance with the statutory requirements.

The first ground

Arrow filed evidence that its product contained Form 1 of clopidogrel. In response, Sanofi-Aventis filed evidence that the process of making the applicant's tablet was capable of inducing changes in the polymorphic form of clopidogrel, such that transformations between forms could occur. As a result, the Arrow tablet could contain Form 2 (although the sample tablets, when tested, contained no detectable amounts of Form 2).

The court stated that the question is not whether the product to be manufactured might infringe, but whether a product which corresponds with the description provided of that article would infringe. Only an article containing clopidogrel Form 2 would infringe the patent. An article containing clopidogrel Form 1 as its active ingredient would not infringe. Arrow proposed to sell an article conforming to the latter description. 

The fact that it had yet to manufacture it in commercial quantities and the possibility that the process of making the tablet could lead to the presence of clopidogrel Form 2 was not sufficient to disentitle Arrow to a declaration, the Court held. The pertinent consideration was whether the written description embraced processes which would or might involve infringement. A declaration which conformed to the description would not protect Arrow unless the article contained only clopidogrel Form 1.

While the current declaration was deficient, as it did not exclude the possibility that the product could contain additional ingredients (including clopidogrel Form 2), the Court regarded this as unintended and easily remedied. Thus, the Court amended the declaration to provide that the applicant's product, 'containing only clopidogrel sulphate Form 1 as an active pharmaceutical ingredient does not or would not constitute an infringement' (emphasis added).

The second ground

Sanofi-Aventis argued that when Arrow applied to the patentee for the written acknowledgement to the effect of the declaration, it failed to provide particulars of the process or article in question and on that ground alone was disentitled to the declaration. It also argued that even if the prescribed steps were not prerequisites to issuing proceedings, full particulars of the article were never provided.

The Court found that there was nothing in the wording of section 75 which suggested that the conditions set out at (a), (b) and (c) above must be satisfied before proceedings are issued. The wording states that a declaration may be made 'if it is shown' that the conditions have been met. The Court decided that the wording can only mean that it must be shown at the hearing that the conditions have been fulfilled, otherwise additional qualifying words would have been added.

Although the particulars provided to Sanofi-Aventis by Arrow before proceedings were issued (simply a sample of the active pharmaceutical ingredient) were inadequate, when supplemented after proceedings were issued with a sample of the proposed product and disclosure of the process by which it would be manufactured, the particulars were sufficiently clear and precise.

Significance of this decision

The declaration of non-infringement provided for in section 75 is a useful pre-emptive measure to counter allegations of patent infringement, particularly where a product has yet to be manufactured in commercial quantities. As such, the discussion of this section in Arrow Pharmaceuticals - particularly its decision that the statutory conditions of section 75 are not prerequisites to the bringing of proceedings (as some had supposed they were), but conditions that must be fulfilled by the time of the hearing - has provided much needed clarification (and publicity) to a pragmatic, albeit often overlooked, section. 

As noted, however, there is a real risk that Arrow has not achieved its goal of freeing its product from an infringement action. Sanofi-Aventis will inevitably scrutinise the Arrow tablet as mass produced and marketed to determine whether it in fact also contains Form 2 of clopidogrel.

Authors

Earl Gray

Partner - Intellectual Property

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John Shackleton

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Richard Watts

Partner - Intellectual Property

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Tracey Walker

Partner - Dispute Resolution

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Sarah Chapman

Senior Associate - Intellectual Property

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Claire Foggo

Senior Associate - Intellectual Property

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