Astellas Pharma Incorporated v Medpro Pharmaceutica (Pty) Ltd and Others (2023/021642) [2024] ZACCP 1 (26 June 2024)

Latest amended version 21 August 2024.

IN THE COURT OF THE COMMISSIONER OF PATENTS

FOR THE REPUBLIC OF SOUTH AFRICA

Patent No. 2011/02406

GDP Case No. 2023/021642

(1) REPORTABLE: YES/NO

(2) OF INTEREST TO OTHERS JUDGES: YES/NO

(3) REVISED

DATE: 26 JUNE 2024

SIGNATURE

In the matter between:

ASTELLAS PHARMA INCORPORATED Applicant and MEDPRO PHARMACEUTICA (PTY) LTD First Respondent CIPLA MEDPRO (PTY) LTD Second Respondent THE REGISTRAR OF PATENTS Third Respondent This judgment is prepared and authored by the Judge whose name is reflected as such and is handed down electronically by circulation

to the parties / their legal representatives by email and by uploading it to the electronic file of this matter on CaseLines.

The date for handing down is deemed to be 26 June 2024.

JUDGMENT

RETIEF J

INTRODUCTION

[1] The applicant, Astellas Pharma Incorporated [Astellas] is a Japanese corporation and the proprietor of South African patent number 2011/02406, the formulation patent [the patent in suit]. Astellas seeks to amend the patent in suit in terms of section 51(9) of the Patents Act, 57 of 1978 [Patent Act]. The application for amendment was instituted in March 2023, a date after the first respondent [Medpro] instituted revocation proceedings. Astellas in its relief seeks the stay of the revocation application pending the final determination of the amendment application.

[2] The patent in suit relates to a modified formulation of mirabegron. The compound patent claimed the use of mirabegron, a drug used in the treatment of overactive bladder syndrome, accompanied by urinary urgency, urinary incontinence and urinary frequency and is sold as a modified release formulation, the patent in suit. The commercial embodiment of mirabegron is Betmiga®. Betmiga® is sold in South Africa by Astellas.

[3] Medpro is the holder of registrations 54/18.10/0030 and 54/18.10/0031 issued by the South African Health Products Regulatory Authority for 25mg and 50mg products [Urton] which contain the active ingredient mirabegron. Both Medpro and the second respondent are subsidiaries of a holding company called Cipla Medpro South Africa (Pty) Ltd.

[4] Medpro and the second respondent collectively [collectively Cipla] seek to import, sell and/or distribute mirabegron containing medicament, Urton. Urton is the generic equivalent of Betmiga®.

[5] The compound patent expired on 4 November 2023, as a result Cipla is now, for the first time, not precluded from entering the market with the generic equivalent, Urton. In so doing, Cipla now in the revocation application places the lack of novelty and lack of inventive step of the patent in suit in issue for the first time.

[6] Astellas contends that it is for this reason that it now wishes to amend the patent in suit thereby removing any debate concerning the issues raised in the revocation proceeding including allegations of invalidity whilst at the same time ensuring that the claims, as amended, still cover the commercially important embodiments of the invention. Astellas wishes to better define the invention of the patent in suit by narrowing the scope of its applicability. Astellas in its papers contends that the patent in suit is and has always been valid.

[7] Cipla on the other hand contends that Astellas has known for some time that the patent in suit was invalid and that, in truth, the amendment is being sought because the validity of the patent has been challenged and without such amendment Astellas is constrained from its ability to enforce the patent in suit. Bound up in Astellas’ concession that it can’t enforce the patent in suit without the determination of this amendment, is an admission that the patent in suit is invalid without the amendment.

[8] Cipla’s contention introduces its objections to the proposed amendment. It is therefore convenient to introduce the objections raised in terms of section 51(3) of the Patent Act.

CONTINUING INVALIDITY

[9] On the papers Cipla raised continuing invalidity contending that even after the amendment, the patent in suit will remain invalid, culpable delay and reprehensible conduct. Cipla, although raising continuing invalidity in the papers now, in argument, expressly disavowed its intention to do so and as such, will and can’t[1] raise it as a substantive objection. Furthermore, Cipla’s decision not to advance continuing invalidity, further advances

granting Astellas relief to stay the revocation application till the final determination of this amendment. Cipla arguing that its reliance on continuing invalidity should negate Astellas stay relief. Having disavowed itself its own reliance diluted.

[10] Notwithstanding, Cipla’s Counsel made it abundantly clear in argument that Cipla’s contention of continuing invalidity remains contentious notwithstanding the decision not to persist with it as a ground of objection. He advanced, it has not been abandoned and will be determined in the pending revocation application. Cipla arguing that continuing invalidity rather to be regarded as a factor in determining whether a punitive cost order should be granted against Astellas.

[11] To consider it as a factor and as contended by Cipla is doubtful. To regard it as a factor would be to apply certain weight to it in circumstances when it is now not before this Court. Furthermore, it is as if Cipla appears to suggest that the amendment, if granted, will serve no purpose. Why would this Court then persist in an exercise of futility? What purpose would be served then by the amendment? To not persist in circumstances when authority exists for the proposition that any ground for revocation of the patent may be advanced in opposition to a proposed amendment of the patent.[2] Cipla’s failure to do so dilutes any suggestion that an adverse consequence of costs should flow, dilutes any suggestion that for this Court to consider the amendment is an exercise of folly and conversely imports the possibility now that the amendment is not sought to amend invalid claims.

[12] The consideration of Cipla’s tactical decision is summed up by considering what Van Dijkhorst J in the Denton matter[3] reasoned regarding the debate of the viability of a patent after an amendment when he stated that “-it would prima facie be folly to introduce it as an issue in the amendment proceedings when it is not specifically pertinent to the amendment itself but only generally. It would tangentially multiply the issues. Amendment proceedings should be relatively simple.” The issue of continuing invalidity therefore not specifically pertinent to the amendment sought.

[13] Applying the rationale that amendment proceedings of a patent should be relatively simple and that a Court may deal with the amendment “as it thinks fit” subject only to the provisions of subsection 51(5), (6) and (7) of the Patent Act, it is common cause that sections 51(6) to 51(7) of the Patent Act are not in issue and that subsection (5) is not relevant. In consequence, Astellas does not need to prove compliance with the statutory prerequisites and Cipla concedes that it is to prove the substantial grounds of the objections it has raised.[4]

[14] Before being able to deal with the objections, this Court considers the patent in suit and the proposed amendment.

THE PATENT IN SUIT AND THE NATURE OF THE AMENDMENT

[15] As mentioned, the patent in suit relates to a modified release formulation of mirabegron. The modified formulation is stated to be capable of reducing the food effects which are observed in a conventional immediate release (IR) formulation of mirabegron. The modified release is achieved by combining mirabegron with specific ingredients and additives which help control the dissolution and release rate of mirabegron in patients. To control the release is to target its effectiveness from a clinical perspective, in particular the effect of foods during the absorption process.

[16] The modified release formulation as in claim 1 of the patent in suit, is an independent claim which comprises of three elements, being mirabegron, one additive ensuring the penetration of water into the pharmaceutical compound and hydrogel-forming polymer. Astellas wishes to amend the patent by introducing various features into claim 1, the remaining amendments appear to be the deletion of other independent claims 17, 20 and 35 which now become obsolete as a result of the proposed amendment to claim 1 and consequential amendments of dependent claims as a direct result of the amendment to claim 1.

[17] The amendment sought in terms of claim introduces various features, including now:

17.1. to limit the dosage of mirabegron in the formulation to a specific range (10 to 200mg);

17.2. to introduce an upper limit of the molecular weight of the hydrogel-forming polymer (of 5,000,000) and an upper limit on its viscosity (of 7,500 mPA in a 1% aqueous solution at 25 degrees Celsius);

17.3. to specify at least one additive which ensures penetration of water into the pharmaceutical composition is one compound, or two or more compounds selected from the group consisting of polyethylene glycol, polyvinylpyrrolidone, D-mannitol, lactose, sucrose, sodium chloride, and polyoxyethylene, polyoxypropylene glycol;

17.4. to specify that the hydrogel-forming polymer is one compound, two or more compounds selected from the group consisting of polyethylene oxide, hydroxypropyl methylcellulose and hydroxypropyl cellulose;

17.5. to specify a dissolution rate for the pharmaceutical composition, and the manner in which it is determined the drug dissolution rate from the pharmaceutical composition is 75% or less after 1.5 hours and at least 75% after 7 hours from the beginning of the dissolution test.

[18] Astellas contends that the proposed amendment is brought to review the patent in suit, to narrow the scope of the applied amendment by redefining specific features now sought to be introduced by way of the amendment of claim 1:

18.1. The inclusion of the dissolution rate together with the other features of the claim will more clearly distinguish the invention of the patent in suit over the prior art cited by Medpro in revocation proceedings as well as to include a dose range of mirabegron in order to better define the invention;

18.2. Over and above the redefining of the invention, Astellas alleges that it also decided to make further amendments to claim 1 to conform to the claims of those that were allowed by the European Patent Office following substantive examination in relation to the corresponding European Patent Application (EP2345410B1). The proposed new claims 2 and 3 having included for consistency as these claims form part of the set allowed by the European Patent Office.

[19] Astellas maintains that the proposed amendment is not brought to cure invalidity. Conversely, Cipla argues that Astellas had actual or constructive knowledge[5] that the unamended claims were invalid, because certain narrowing amendments were made to claims of the same scope in other jurisdictions, Japan and Europe and/or because an examiner expressed a particular view about the validity of the claims of that scope in another jurisdiction. Astellas chose to maintain the claims in an unacceptable wide form for an unacceptable long period, such delay culpable and further that the Astellas’ conduct is reprehensible.

OBJECTIONS

[20] It is trite law that the onus rests on Cipla to show on a balance of probabilities that Astellas is not entitled to the amendment of the patent and further that such onus only arises if there is a dispute of fact. The dispute, the validity of the pre-amendment patent in suit and Astellas knowledge thereof.[6]

CUPABLE DELAY

[21] Nicolas AJA in South African Druggists Ltd v Bayer AG[7] reaffirmed the requirements of culpable delay as considered in a number of cases. Such requirements to be a deliberate intention to delay, knowing full well that some of the claims are invalid can in some circumstances be a bar to amendment and that mere delay without actual or potential prejudice is unlikely to result in an amendment being refused.

[22] The requirement of knowledge of invalidity is often inferred from the proven or admitted facts and in certain circumstances due to the difficulty of proving knowledge our Courts have regarded ‘constructive knowledge’ as sufficient to establish

knowledge.[8]

[23] The requirement of invalid claims was revisited by Harms J (as he then was), in the Barmac Associates matter[9] where he stated that it was essential to the ground of culpable delay that the patent in suit in its unamended form must in fact be invalid by proffering evidence or argument to show that the unamended patent is in fact invalid. It then flows that invalidity is a prerequisite and that knowledge, albeit constructive knowledge, thereof can be a bar in certain circumstances and that delay without prejudice or potential prejudice is unlikely to result in the refusal of an amendment.

[24] If invalidity is not established, then this ground of objection should fail.

Is the patent in suit invalid?

[25] Cipla does not wish to pursue the objection of continuing invalidity, nor does it rely on its expert’s opinion, that of Mr R B Walker [Mr Walker], or any other expert opinion for that matter to substantiate a finding that the patent in suit in its pre-amendment form is invalid. It is at this point, that Cipla’s reason to disavow its objection of continuing invalidity is understood. This is because such objection could not be sustained on the papers before this Court. Astellas’ Counsel in written argument demonstrated that Cipla’s expert, Mr Walker, did not even consider the validity of the patent in suit when he proffered his opinion, stating “I have not considered the validity, or lack thereof”. No expert opinion proving invalidity exists. This too explains why this Court was directed by both Astellas and Cipla not to consider the expert opinions in the adjudication of the amendment.

[26] Mr Walker’s failure of considering validity or lack thereof, does not preclude him, in the revocation application, to consider the validity aspect and proffer an opinion to assist another Court make a proper determination on the evidence. However, this Court is in a very different position and is left to consider Cipla’s onus on inferences drawn and left to dissect Astellas’ prosecution history of the patent in suit in foreign jurisdictions through the lens of Cipla’s attorney only to determine whether invalidity has been established.

[27] Cipla’s attempts to rely on an inference to be drawn from the successful procedural step taken by Astellas in February 2023, when it sought to enforce interdictory relief [relief] against Cipla regarding the importation and distribution of Urton is not compelling. The inference to be drawn is the fact that Astellas relied on the compound patent as the basis for the relief and not on the patent in suit, which infers invalidity. The absurdity is apparent why could the compound patent be used as a basis at that time? It obtained the desired effect, namely an undertaking from Cipla. This decision by Astellas does not establish an inference to be drawn on the proven facts. The compound patent, which had not expired at the relevant time, could suitably be used as a basis to seek the relief. The inference to be drawn must fail.

[28] Astellas also did not admit the fact that the patent in suit was invalid at that material time. This is bolstered by the affidavit of Mr McKay in support of the relief, when he stated at paragraph 8.2 that: “(I understand that the applicant’s (Astellas - own emphasis) have another patent which protects the formulation of Betmiga® and that, if infringed, the formulation patent (patent in suit-own emphasis) may serve to prevent the launch of Urton even after the expiry of the current patent (compound patent - own emphasis.-)”, invalidity based on inference has not been established as advanced.

[29] Relying on indicators of invalidity by taking cognisance of the prosecution history of the patent in suit as will be demonstrated too is not a compelling argument. Astellas is the only party who can truly answer the question posed of why it sought the amendments it did in the foreign jurisdictions at the material times. Astellas states that there are many reasons why a patentee would wish to amend its patent during the prosecution process in other foreign examining jurisdictions. A reason is to expedite the prosecution process without abandoning previously claimed subject matter. This it contends it did in Japan and Europe and, in Europe, subsequently filed a “divisional application” which included the original broader claims. Another reason contended was to ascertain an overview of potential prior art and the type of validity issues that it may encounter when entering the national phase (the PCT application, the examination, and the reports). Yet a further reason is, in certain circumstances like in Japan, to overcome objections raised by examiners as soon as possible. None of which were made in the belief that the patent’s original claims were invalid.

[30] In amplification, in 2012 when the South Africa amendment was affected before grant, Astellas contended that it only added the claims as granted in the Japanese patent application no. 2010-531838 and retained claims 1-19. What would the purpose of the amendment be if Astellas retained claims 1-19 if it thought, at that time, that such claims were invalid? Logically there would be no point.

[31] Astellas argues further that notwithstanding adverse opinions by examiners in foreign jurisdictions questioning the lack novelty and lack inventive step, it has always maintained that the patent in suit is valid. It expanded its argument by illustrating that the inventive step lies in overcoming the food effect problem observed (“the effects by food are reduced”) in the immediate release formulation, the compound patent. To overcome the immediate release means to introduce the dissolution

rate more clearly, the dosage and specific additives. All of which are to achieve a controlled release and addresses food effects to optimise absorption, thus producing an unexpected effect. The unexpected effect, a factor affirming inventive step. The purpose of the patent in suit is to address the food effect on the absorption of mirabegron or the pharmacokinetics characteristics thereof. The weight and effect of the amendment, if granted to be considered in the revocation application.

[32] Astellas contends that the amendment sought will therefore better define and more clearly distinguish the patent in suit over prior art cited in the revocation proceedings, namely the compound patent, the preparation patent and the Alza patent. Astellas contending that such prior art only deals with an immediate release of mirabegron or either do not disclose mirabegron at all or do not address the food effects for optimal absorption. This is despite foreign examiners’ opinions.

[33] Cipla has not provided proof or any compelling argument to show that the unamended patent in suit is in fact invalid nor that Astellas ever maintained that they were invalid and has therefore not discharged its onus on this ground of objection.

[34] In any event, that any delay in launching this amendment by Astellas can be held to be culpable and that Cipla suffered prejudice or that potential prejudice as a result thereof has not been established. This is simply so on the facts. It is a fact that the compound patent has prevented Urton from being launched, at least up and until November 2023. This means that for as long as the compound patent remained in force, it was an absolute impediment to any firm to launch Urton. This is why Cipla agreed not to launch Urton before the expiry of the compound patent and withdrew the revocation application as against the compound patent. In consequence, it cannot be said that it was the patent in suit which prevented Cipla from launch Urton, but the compound patent. Astellas maintaining the patent in suit in its pre-amendment form conferred no advantage to Astellas as argued by Cipla.

[35] Furthermore, no evidence exists that Astellas procedurally, as a fact, relied on the patent in suit in its current form. What is clear on the papers is that Astellas did not need to do so because of the compound patent. Fine tuning the inventive step to optimise protection does not, in the absence of a statutory challenge in terms of section 51(6)-(7) of the Patent Act nor amidst a withdrawal of an objection of continued invalidity, equate to an attempt to resurrect a patent which was invalid to start with.

[36] Invalidity not established and this ground must fail.

REPREHENSIBLE CONDUCT

[37] The above reasoning also deals with Cipla’s ground of reprehensible conduct in that Cipla relies on Astellas knowledge of invalidity of the patent in suit as a result of the foreign prosecution history, by framing the independent claim 1 too broadly and knowingly and deliberately maintaining claims of unjust width.

[38] To lay any further doubt to rest over and above what has been stated, cognisance is taken of Astellas confirmation that there are no registrations for mirabegron-containing medicines other than their own and Cipla’s product Urton. No other party could therefore have suffered any actual or potential prejudice as a result of the claims being retained in their unamended form other than Cipla and none is proven.

[39] Borne from the papers the only engagement Astellas has had in relation to the patent in suit, was with Cipla from March 2023.

[40] Having regard to Cipla’s onus and lack of evidence to the contrary, Astellas’ reason can be accepted. In the exercise of this Court’s discretion having regard to all the facts this Court deems it fit that the amendment should succeed.

[41] As to costs, there is no reason why the costs should not follow the result. Astellas argues that because Cipla, at such a late stage withdrew their attack of continuing invalidity it caused undue legal costs. Such costs they argue are to be considered against when Cipla withdrew, namely after they filed their reply and after having prepared an affidavit by Prof Shakesheff. Culminated with this is Cipla’s conduct in the delay in filing its answering affidavit in this application. Astellas seeks seek punitive

costs.

[42] Cipla contends that if the amendment is granted the arguments concerning continuing invalidity will proceed in the revocation application and not be wasted. Cipla’s reluctant referral argument of the continuing invalidity objection to be heard in the revocation application which it bases on the evidence in reply, including the evidence of Professor Shakesheff is rejected by having regard to the their own expert’s opinion, that of Mr Walker who, as mentioned did not considered the validity of the claims.

[43] Furthermore, Cipla too, did not extend that same courtesy to Astellas when it asked this Court, in circumstances when it withdrew its objection of continuing invalidity to, consider their argument thereof as a factor to grant punitive costs against Astellas.

[44] Considering all, this Court exercises its discretion and at this stage is however not inclined to grant a punitive cost order.

[45] As this Court was requested not to consider the expert opinions filed no qualifying fees are entertained as prayed for.

The following order is made:

1. The complete specification of South Africa Patent No. 2011/02406 (“the patent”) is amended in a manner indicated in annexures “FA5” and “FA6” to the affidavit of Mr Kawahama, copies of which are attached to this order.

2. The advertisement published in the 29 March 2023 issue of the Patent Journal, is accepted as the advertisement required in terms of section 51 of the Patents Act, 57 of 1978.

3. The complete specification is corrected in a manner indicated in annexures “FA5” and “FA6” to the affidavit of Mr Kawahama.

4. The application for revocation of the patent brought by the first respondent is stayed pending the final determination of this application.

5. The first and second respondent are jointly and severally liable to pay the applicant’s costs on a party and party scale, scale C and in the event of the employment of two counsel, junior counsel’s fee on scale B.

L.A. RETIEF

JUDGE OF THE HIGH COURT

GAUTENG DIVISION, PRETORIA

Appearances:

For the Applicant: Adv G Marriott Cell: 082 824 0616 Email: marriott@counsel.co.za Instructed by attorneys: Von Seidels Inc Tel: 021 526 2800 Email: ivdmerwe@vonseidels.com For the 1st and 2nd Respondents: Adv A Franklin SC Cell: 079 299 3792 Email: Franklin@lawcircle.co.za Adv K D Iles Cell: 072 312 2559 Email: Kiles@counsel.co.za Instructed by attorneys: ADAMS & ADAMS Tel: (012) 432 6201 Email: Alexis.Apostolidis@adams.africa Russell.Bagnall@adams.africa Date of hearing: 16 April 2024 Date judgment delivered: 26 June 2024

[1] B Braun Melsungen AG and Another v Specialised Systems Electro Medical (Pty) Ltd and Others 2005 BIP 22 (CP) at para [18].

[2] Bendz Ltd and Another v South African Lead Works Ltd 1963 BP 409 (A) at 412B-C; 1963 (3) SA 797 (A) 803E; Water Renovation (Pty) Ltd v Gold Fields of South Africa Ltd 1993 BP 493 (A) 502B-D[1993] ZASCA 169; ; 1994 (2) SA 588 (A) 593J-594A.

[3] Denton Engineering (Pty) Ltd and Another v JP McKelvey and Others 1997 BIP 113 (CP).

[4] Feltex Limited v Interfelt Products (Pty) Ltd 1971 BP 45 (CP) 47A-49E; Interfelt Products (Pty) Ltd v Feltex Limited 1972 (3) SA 335 (T) 343A; Barmac Associates Limited v SA Dynamics 1991 BP 16 (CP) 18F-19D.

[5] SHFL Entertainment Inc (formerly Shuffle Master Inc) v TCS John Huxley (Pty) Ltd and Another 2013 BIP 92 (CP).

[6] Ausplow (Pty) Ltd v Northpark Trading and two Others 2011 BIP SCA 12 (SCA), para [9].

[7] 1989 BP 222 (A) at 229 G-230A; 1989 (4) SA 103 (A) at 107I-108F.

[8] Supra footnote 5.

[9] Supra footnote 4.