Sweet or sour: The Saccharin doctrine and Australian patent law

Date: 2019-02-26
Authors: James Cherry & Tom Gumley

You will infringe an Australian patent claiming a process of adding A to B to make C, if you carry out that process outside of Australia and import C made by the process into Australia. The act that infringes the process claim is the importation of C into Australia, not the working of the process outside of Australia. But what about the circumstance where an Australian patent contains a product claim to C, and C is utilised to make D outside of Australia, and D is imported into Australia – is the product claim to C infringed?

According to Mylan Health Pty Ltd (formerly BGP Products Pty Ltd) v Sun Pharma ANZ Pty Ltd (formerly Ranbaxy Australia Pty Ltd) [2019] FCA 28 (22 January 2019), the short answer: no.

In more detail, Mylan had complained that importation of Sun Pharma’s products into Australia would have infringed Mylan’s Australian product claims directed to a product which Sun Pharma had utilised outside of Australia to make Sun Pharma’s products. The parties agreed that Sun Pharma’s imported products are not and do not include any product within the scope of Mylan’s Australian product claims.

Mylan submitted that if it is an infringement of an Australian process claim to import into Australia a product made outside Australia by the use of the claimed process, then it would create an incongruity in Australian law if it is not also an infringement of an Australian product claim to use a patented product outside of Australia to produce another product that is subsequently imported into Australia.

In its deliberation, the Court noted that Mylan’s contention of incongruity in the law arises from the Australian legislation that provides that the activities that create liability for infringement of a product claim are different from the activities that create liability for a process claim infringement. In short, any ‘incongruency’ arises from a deliberate drafting choice, the result of which has been “so as not to prevent a person from importing non-patented goods that have been made outside Australia using a patented product”.

The question that remains is whether the Saccharin doctrine is good law in Australia i.e. if you carry out the process of adding A to B to make C outside of Australia, and in addition, you convert C to D outside of Australia, and import D into Australia, do you infringe an Australian patent claiming a process of adding A to B to make C?

In our view, this decision does not answer that question. It is for this reason we consider that those importing goods into Australia should remain wary of Australian process patent claims if the product to be imported arises from an earlier product formed from the claimed process – and indeed whether or not the process to form the earlier product was carried out in Australia.