High Court unanimously invalidates Crestor patent, but ‘starting point’ still a numbers game

What it means:

• The final patent protecting Crestor, AstraZeneca’s blockbuster anti-cholesterol drug, has been invalidated by the High Court.
• The High Court’s decision to avoid clarifying the “starting point” means that, at  least under the Patents Act 1990, the starting point for assessing an inventive step must be the common general knowledge rather than the disclosure of the patent, for example through the adoption of a “problem-solution” approach as Apotex v Sanofi had indicated.
• The High Court decision opens the door to damages claims by generic manufacturers who were restrained from launching rosuvastatin products during the proceedings. The manufacturers may however face difficulties in accurately quantifying their damages.
• AstraZeneca may also face a claim for damages by the Commonwealth, akin to other claims the Commonwealth is currently pursuing.

The High Court recently handed down its decision in the ongoing battle between AstraZeneca and three generic companies (Apotex, Watson and Ascent) over AstraZeneca’s Crestor® (rosuvastatin). The High Court has affirmed previous rulings that the only patent the subject of the appeal is invalid.

The primary issue on appeal was whether or not the claimed invention possessed an inventive step. The High Court, having found no inventive step was disclosed, declined the opportunity to consider other significant issues raised in the appeal.

The Court was required to consider the construction and interpretation of sections 7(2) and 7(3) of the Patents Act 1990, which relate to the use of prior art publications. When conducting searches to identify documents relevant to inventive step, experts for the generic companies identified multiple documents which disclosed novel compounds for the treatment of hypercholesterolemia. One document disclosed rosuvastatin, the active ingredient in Crestor, while another article disclosed an alternative compound. A third document disclosed that rosuvastatin was then in clinical trials. The experts had utilised a combination of these documents as multiple sources of information, none of which formed part of the common general knowledge, with a view to identifying single documents that were ‘regarded as relevant’ as is required by section 7(3) of the Patents Act. AstraZeneca argued that utilising multiple documents to identify the most relevant course to pursue was in breach of section 7(2).

The High Court agreed with the decision of the Full Federal Court, finding that section 7(2) precluded the use of a combination of documents in determining whether the patent disclosed an inventive step, but not for the purposes of satisfying the ‘regarded as relevant’ requirement in section 7(3). The comparison of documents for the purposes of deciding that a document was relevant was within the scope of section 7(2).

Having dismissed the appeal on this basis, the High Court declined to take a position on the validity of the “starting point” analysis for an assessment of whether an inventive step is disclosed. This area of patent law has been in flux since the Full Federal Court decision, which was inconsistent with the earlier Full Federal Court decision in Apotex v Sanofi-Aventis. In the Sanofi-Aventis decision, the Full Federal Court had decided that, with respect to a patent specification which disclosed a ‘problem’ and its ‘solution’, the appropriate starting point was the disclosed problem. The Full Federal Court in AstraZeneca had decided that the reasoning in Sanofi-Aventis was, at most, relevant for the purposes of the Patents Act 1952. Most commentators awaiting the decision had expected the High Court to rule on whether the “starting point” approach could be followed. Given the Court has elected not to do so, it leaves considerable doubt as to the appropriate starting point for patents granted under the 1952 Act. These patents are, however, diminishing in number, meaning this point may not be litigated again.

AstraZeneca will now face claims for damages from each of the three generic companies pursuant to the undertaking AstraZeneca proffered when it was granted interlocutory injunctions preventing the generics from launching. Quantifying this sum is likely to be complicated by the fact that multiple generic parties will have claims to damages, and determining the respective damage of each will require evidence on the market share each would have had if not restrained.

The Commonwealth may also make a claim for damages under the same undertaking consistent with the Commonwealth’s recent position in other cases. Unusually, the Commonwealth’s position might well be complicated by the listing, on the same date the Apotex generic was scheduled to list, on the Pharmaceuticals Benefit Scheme of two generic versions of atorvastatin. This listing triggered a mandatory price reduction in the cost of Crestor on that date. Therefore, the Commonwealth’s loss is likely be confined to the quantum of damage caused by the delayed application of the price disclosure regime. The result is likely to be that the Commonwealth’s damages are significantly reduced, and also far more difficult to quantify. It is also worth noting that the Commonwealth’s entitlement to damages under the undertakings are still awaiting judicial opinion.