Pharma Dynamics (Proprietary) Limited v Bayer Pharma AG (Formerly Bayer Schering Pharma AG)

• Jurisdiction: South Africa
• Judge: Brand JA, Cachalia JA, Wallis JA, Mbha JA and Mathopo AJA
• Judgment Date: 19 September 2014
• Docket Number: 468/2013
• Court: Supreme Court of Appeal
• Hearing Date: 28 August 2014
• Citation: 2014 JDR 1887 (SCA)

Brand JA (Cachalia, Wallis, Mbha JJA et Mathopo AJA concurring):

[1]

This is an appeal against the judgment and order of Pretorius J sitting as the Commissioner of Patents. The first respondent, Bayer Pharma Aktiengesellschaft, formerly known as Schering AG, is the patentee of South African Patent No 2004/4083 for an invention entitled 'Pharmaceutical combination of ethinylestradiol [EE] and drospirenone [DSP] for use as a contraceptive' (the 2004 patent). The second respondent, Bayer (Pty) Ltd, has been licenced to use the invention in South Africa. They will jointly be referred to as 'Bayer'. The appellant, Pharma Dynamics (Pty) Ltd (Pharma) is a local distributor of generic pharmaceuticals.

[2]

As predicted by the concise description in its title, the 2004 patent concerns a female combination oral contraceptive containing the active pharmaceutical ingredients, DSP and EE. It was filed in 2004 in terms of s 37 of the Patents Act 57 of 1978 (the Act) as a so-called 'divisional patent', based on patent 2002/1668, as its 'parent patent'. By virtue of the provisions of s 37, the priority date of the 2004 patent was ante-dated to 31 August 1999, which is the priority date of its 2002 parent patent.

[3]

In March 2011, Pharma obtained approval from the Medical Control Council to import and sell an oral contraceptive called Ruby. This product is the generic equivalent of the Yasmin product sold by Bayer under the 2004 patent. Alleging that

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the sale of Ruby constituted an infringement of claim 1 of the 2004 patent, Bayer approached the court a quo for an interdict and ancillary relief. Pharma denied that Ruby infringed the patent. It also denied that the 2004 patent was valid and counterclaimed for its revocation. The court a quo held, however, that the 2004 patent was valid and that Ruby infringed it. In consequence it granted the relief claimed by Bayer and dismissed Pharma's counterclaim, in both instances, with costs of suit. The present appeal against that order is with the leave of the court a quo.

[4]

The case for Pharma on appeal is that, properly interpreted, claim 1 of the patent in suit – which is the only claim relevant – does not include within its scope the allegedly infringing Ruby product. For its attack on the validity of the patent, Pharma relied firstly on the ground that the invention claimed in the specification of the patent lacks an inventive step, or, in patent parlance, it relied on the basis of obviousness. Secondly, Pharma contended that, in any event, the 2004 patent is invalid on the ground that it is not a true 'divisional' of the 2002 parent patent. In consequence, so Pharma's contention went, the 2002 patent lacked novelty in the light of the disclosures in the 2002 patent. Since all these contentions are largely dependent on an interpretation of the specification and especially claim 1 of the 2004 patent, I find it appropriate to reflect on the broad principles of patent interpretation as established by authority.

Foreign judgments

[5]

However, before doing so, there is the matter of foreign judgments, which attracted a fair deal of debate during argument before us. It appears that the patent in suit had been the subject of litigation in various jurisdictions. Unsurprisingly Bayer referred us to judgments in the United Kingdom by the high court in Gedeon Richter plc v Bayer Schering Pharma AG [2011] EWHC 583 (Pat) and the Court of Appeal in Gedeon Richter plc v Bayer Pharma AG [2012] EWCA Civ 235 and in Australia by the Federal Court of Australia General Division in Generic Health (Pty) Ltd v Bayer Pharma AG [2014] FCAFC 73 where the patent in suit survived an attack based on

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the premise that it lacked an inventive step. Pharma, on the other hand, referred us to the judgment of the Technical Board of Appeal of the European Patent Office in Bayer Pharma AG v Teva Pharmaceutical Industries Ltd (Case No 0598/12) where the application for the revocation of the patent was upheld. But as I see it, we must decide the matter on the evidence before us. Helpful as these foreign cases may be on matters of law, we can derive no guidance from them on issues of fact.

Approach to Interpretation

[6]

This brings me back to the principles of interpretation. To begin with, there is the tenet of patent construction which is encapsulated in the oft quoted statement by Trollip JA in Gentiruco AG v Firestone SA (Pty) Ltd 1972 (1) SA 589 (A) at 614B-H that:

'. . . [T]he rule of interpretation is to ascertain, not what the inventor or patentee may have had in mind, but what the language used in the specification means, ie, what his intention was as conveyed by the specification, properly construed . . . since he is presumed to have intended what his language means. To ascertain that meaning the words used must be read grammatically and in their ordinary sense . . . The specification like any other document must be read as a whole.'

(See also Cipla Medpro (Pty) Ltd v Aventis Pharma SA and Related Appeal 2013 (4) SA 579 (SCA) para 14.)

[7]

Yet, established authority also reveals that the reference to 'the ordinary meaning of words' must not be understood as an exercise in focusing on each word in isolation, but by viewing them in the context of the patent as a whole (see eg Aktiebolaget Hässle & another v Triomed (Pty) Ltd 2003 (1) SA 155 (SCA) para 8). Essentially the same principle was expressed with admirable clarity in the following statement by Lord Diplock in Catnic Components Ltd & another v Hill & Smith Ltd [1982] RPC 182 (HL) at 242 – referred to with approval in the many judgments of this court cited in Aktiebolaget Hässle (para 8):

'. . . A patent specification should be given a purposive construction rather than a purely literal one derived from applying to it the kind of meticulous verbal analysis in which lawyers are too often tempted by their training to indulge. The question in each case is: whether

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persons with practical knowledge and experience of the kind of work in which the invention was intended to be used, would understand that strict compliance with a particular descriptive word or phrase appearing in a claim was intended by the patentee to be an essential requirement of the invention so that any variant would fall outside the monopoly claimed, even though it could have no material effect upon the way the invention worked.'

[8]

Or, in the words of Corbett JA in Multotec Manufacturing (Pty) Ltd v Screenex Wire Weaving Manufacturers (Pty) Ltd 1983 (1) SA 709 (A) at 721C-E:

'. . . The Court should always guard against too "textual" an approach in the interpretation of claims in a patent specification. It is true that it is in the claims that a patentee stakes out and defines his monopoly; and that the claims must be looked at in order to determine whether an infringement has taken place. But by peering too closely at the language of a claim the Court may overlook an infringement which takes the substance of the invention.'

[9]

Finally, with regard to interpretation, I start out from the well-established premise, that a patent specification is a statement by the patentee, addressed to those 'skilled in the art', in which he informs them of what he or she claims to be the essential features of the invention for which a monopoly is claimed. Consequently, a patent specification must be construed with reference to the state of knowledge of those skilled in the art at the time of the priority date of the patent in issue. Accordingly, in order to enable the court to construe the specification properly, it must be instructed by expert witnesses as to the state of the art in the field of the invention in order to place the court as near as may be possible to the position of those skilled members of the public to whom it is addressed, as at the relevant date (see eg Sappi Fine Papers (Pty) Ltd v ICI Canada Inc (Formerly CIL INC) 1992 (3) SA 306 (A) at 318I-319E).

Background

[10]

For that purpose, two experts in the field were called to give evidence at the trial, namely, Prof Martyn Davies on behalf of Bayer and Dr Peter Rue on behalf of Pharma. They were largely in agreement that the addressees of the patent would be a broad interdisciplinary product formulation team of a pharmaceutical company, led

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by an experienced scientist and including biological pharmacologists, toxicologists, clinicians and so forth. For the sake of brevity, these addressees of the patent in suit were referred to at the trial and in argument as 'the skilled formulator'. I propose to follow that example. Broadly speaking, the two experts were also in agreement as to the state of the knowledge of that skilled formulator as at the priority date, ie 31 August 1999. In this way the following background had been established.

[11]

An active pharmaceutical ingredient (API) administered to humans orally, passes down the gastro-intestinal tract and is absorbed into the bloodstream. For present purposes we can concentrate on two parts of that tract, to wit, the stomach and the small intestine. The stomach is highly acidic with a generally accepted pH range of between 1 and 3. The stomach lining is not designed for absorption. The primary purpose of the stomach is after all not to absorb, but to digest the ingested food. By contrast, the small intestine is less acidic – generally accepted as ranging from pH 5 to 7 – and primarily designed for absorption into the bloodstream. The API can only be absorbed into the bloodstream once it is in solution, ie once it has been dissolved. The quantity of API absorbed into the bloodstream and eventually becoming available at the point of the human body where it is required for treatment of the individual, is said to be bioavailable. Bioavailability therefore describes the quantity of the drug...