Intellectual Property

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Focus: Appeal decision shows new approach to 'fair basis'

4 November 2011

In brief: A recent decision of the Full Court of the Federal Court will have a major flow-on in relation to the issue of patent validity in Australia. Partner Richard Hamer (view CV) , Senior Associate Louise Brunero and Law Graduate Claire Agius report on the successful appeal by Alphapharm, Generic Health and Sigma that will open the market to products in competition with Pfizer's highly successful anti-depressant, Efexor XR (venlafaxine hydrochloride).

How does it affect you?

  • The court has adopted a highly literal approach to 'fair basis', suggesting that a patentee must be careful to identify the matter disclosed as part of the invention.
  • It has issued a further warning against the use of broad consistory clauses and has reaffirmed that such statements will be read in context of the broader specification.
  • The decision provides a useful reminder that when amending patent claims, a patentee should be vigilant to ensure that the claims are fairly based on the patent specification and any priority document.


Justices Bennett, Nicholas and Yates delivered three separate judgments but were in agreement that the key claims of Wyeth's patent were invalid because they were not fairly based on the priority document or the patent specification, and were not novel at the later priority date.1 The court otherwise upheld Justice Jagot's conclusions at first instance.


The patent in dispute claims a long-release form of venlafaxine hydrochloride that is marketed as Efexor XR. Efexor XR was a Wyeth product, but is now manufactured and distributed by Pfizer, following the merger of the two companies.

The patent was filed in October 2003 and claims priority from a US patent with the priority date of March 1996. The patent was substantially amended in 2006. The original patent had claimed an encapsulated extended release formulation of venlafaxine. The amended patent claims a method for providing a therapeutic blood plasma concentration of venlafaxine over a 24-hour period by a single dosing formulation that provides a certain blood plasma level profile.

In 2009, Wyeth was granted an interlocutory injunction to restrain Sigma from importing Evelexa-XR, an extended release formulation of venlafaxine hydrochloride.2

In Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth,3 Justice Jagot held that the relevant claims of the amended patent were valid, and that the applicants were threatening to infringe these claims by the importation, marketing and supply of a suite of products, including Evelexa XR.

In reaching this decision, Justice Jagot concluded that the priority document disclosed two inventions:

  • an encapsulated formulation; and
  • a method for obtaining a certain drug to plasma relationship, over time yielding a 'tighter plasma therapeutic control' than multiple daily dosing.

Based on this construction of the priority document, her Honour found that the claims of the amended patent, which claimed a method for providing a therapeutic result, were fairly based on the priority document. The encapsulated formulation was just one example of the broader invention. At the 1996 priority date, the patent was novel when compared with the prior art.

Priority not fairly based

On appeal, Justices Bennett, Nicholas and Yates disagreed with Justice Jagot's reading of the priority document. In their view, the specification only disclosed an encapsulated formulation that obtained a certain drug to plasma relationship over time.

Justice Bennett explained:

The formulation achieved is central to the invention and it is the administration of the formulation that achieves the results as set out in the method. The method is dependent on the formulation. It is not a separate and independent invention.4


Justice Yates agreed, saying that 'There is nothing in the Priority Document to suggest that these results are not formulation-dependent.'5

Given that the amended patent claimed methods of treatment 'untrammelled by reference to any specific kind of formulation of venlafaxine',6 the amended patent was not fairly based on the priority document.

In reaching this conclusion, Justice Bennett warned against confusing parameters of success, or a 'wish list',7 with the invention:

The invention is not the discovery of a new method with any formulation. The method disclosed is the use of the invention ... [The blood plasma profiles] are the parameters by which the success of the formulation is measured. They are the parameters of the method which is the goal: a therapeutic dosage, measured by the plasma level of the drug, delivered over 24 hours. The goal is not the patentable invention. The invention is the means of achieving the goal.8


As a result of the conclusion that the amended patent was not fairly based on the priority document, the priority date of the amended patent was shifted from 1996 to 2006. At the revised priority date, the amended patent was clearly anticipated by Wyeth's own products.

Lack of internal fair basis

Their Honours also held that the relevant claims of the amended patent were invalid because they were not fairly based on the amended patent specification.

Justices Bennett, Nicholas and Yates all cited the leading case of Lockwood v Doric, which established that fair basis requires a 'real and reasonably clear disclosure' of the claimed invention in the body of the specification.9 In Lockwood, the High Court had also explained that a broad consistory clause must be read down to be consistent with the patent specification.10  

Justices Bennett, Nicholas and Yates agreed that the consistory clause in the amended patent had to be read down in light of the specification. Their Honours concluded that the claims extend beyond, and are not fairly based on, the patent specification because they claimed hydrogel tablet technology, a form of technology expressly excluded in the specification.

Justices Bennett and Yates also held that the claims lacked fair basis, insofar as they claimed the application of the formulation outside of treatment for depression.

Affirming the position on false suggestion

Their Honours affirmed some aspects of the decision at first instance: significantly, Justice Jagot's analysis of false suggestion and entitlement. Their Honours agreed that the failure to name all inventors on a patent would only be a false suggestion if Wyeth were not entitled to the patent. Justice Yates also noted that it was open for Wyeth to rely on assignments on their face and that there was no need for the patentee to prove positively their chain of title.11

A new approach to fair basis?

Analysis of the decision reveals the court has adopted a highly literal approach to fair basis.

For example, the priority document contained the following reference:

Through administration of the venlafaxine formulation of this invention there is provided a method for obtaining a flattened drug plasma concentration ...

The court held that this passage did not disclose the method of treatment (using a flattened drug plasma concentration) 'as part of the invention'. It held that the formulation was the invention and the method of treatment was disclosed only as a goal.

The general principle in Australia has been that a priority document need only disclose a subsequently claimed invention broadly and in general terms. A patentee has not been required to identify the invention in claims or in an express statement of invention. Claims have been permitted based on matter contained only in descriptions of the preferred embodiment or even based on matter apparent to the skilled reader from the drawings.

The emphasis in this decision on whether or not the patentee has expressly identified the matter disclosed 'as part of the invention' has the potential to have significant flow-on effects in relation to patent validity in Australia.

Pfizer has said that it is intending to seek special leave to appeal the Full Court's decision. It is yet to be seen whether the High Court is prepared to hear argument on the validity of the amended patent.

  1. Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth [2011] FCAFC 132.
  2. Please see our Intellectual Property Bulletin, for a discussion of this decision.
  3. [2010] FCA 1211.
  4. Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth [2011] FCAFC 132, [34].
  5. Ibid, [195] (Justice Yates).
  6. Ibid, [44] (Justice Bennett).
  7. Ibid, [61] (Justice Bennett).
  8. Ibid, [59] (Justice Bennett).
  9. Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [2004] HCA 58, [69].
  10. Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth [2011] FCAFC 132, [89].
  11. Ibid, [287] – [288].

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