THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

REPORTABLE
Case No 1066/2013

In the matter between:

BAYER PHARMA AG (FORMERLY BAYER
SCHERING PHARMA AG)

APPELLANT

and

PHARMA DYNAMICS (PTY) LTD

RESPONDENT

Neutral citation:
Bayer Pharma AG v Pharma Dynamics (Pty) Ltd (1066/2013)
[2014] ZASCA 201 (28 November 2014).
Coram:

Brand, Lewis, Theron JJA and Schoeman and Dambuza AJJA
Heard:

19 November 2014
Delivered:

28 November 2014

Summary: Application for amendment of registered patent in terms of s 51 of
Patents Act 57 of 1978 – objection that proposed amendment will render claim
1 of the patent unclear – further opposition on the basis that, in any event, the
application should be refused for reasons of ‘undue delay’ and ‘reprehensible
conduct’ on the part of the patentee.

___________________________________________________________________

ORDER
___________________________________________________________________

On appeal from:  The court of the Commissioner of Patents of South Africa
(Potterill J, sitting as Commissioner of Patents):

1 The appeal is upheld with costs, including the costs of two counsel.
2 The order of the Commissioner of Patents is set aside and the following order is
substituted:
„(a) The amendment to South African Patent 2002/1968 applied for by the applicant
is granted.
(b) The respondent is ordered to pay the applicant‟s costs, including the costs of two
counsel.‟
___________________________________________________________________
JUDGMENT
___________________________________________________________________

Brand JA (Lewis, Theron JJA and Schoeman and Dambuza AJJA concurring):

[1] This is an appeal against the judgment and order of Potterill J, sitting as the
Commissioner of Patents. The appellant is a German company, Bayer Pharma
Aktiengesellschaft (Bayer). It is the patentee of South African patent 2002/1968 (the
2002 patent or the patent in suit), which is for an invention entitled „Pharmaceutical
combination of ethinylestradiol (EE) and drospirenone (DSP) for use as a
contraceptive‟. The respondent, Pharma Dynamics (Pty) Ltd (Pharma), is a generic
pharmaceutical company and the South African affiliate of Lupin Ltd, a transnational
company based in India. The appeal originates from an application to amend the
2002 patent in terms of s 51(1) of the Patents Act 57 of 1978 (the Act). Pharma
opposed the application which required the matter to be heard by the court a quo
pursuant to s 51(3)(b) of the Act. In the event, Potterill J dismissed the application
with costs, but afforded Bayer leave to bring an appeal to this court.

[2] As foreshadowed by the description in its title, the 2002 patent concerns a
female oral contraceptive, containing the active pharmaceutical ingredients DSP and
EE. It was filed in the South African Patent Office on 27 February 2002, but with the
priority date of 31 August 1999, which it claimed from patent applications in Europe
and the United States. In 2004 Bayer filed Patent 2004/4083 (the 2004 patent) in
terms of s 37 of the Act as a so-called „divisional patent‟ based on the 2002 patent as
its „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 its 2002 and 2004 patents.
Alleging that Ruby constituted an infringement of both its 2002 and 2004 patents,
Bayer brought an application in the court a quo for an interim interdict. In due course
Bayer also instituted an action for a final interdict prohibiting Pharma from infringing
the claims of the 2002 and 2004 patents. The litigation between the parties which
ensued proceeded along a rather tortuous route. Since the amendment application
under consideration formed part of that process, it becomes necessary to traverse at
least part of that route.

[4] Although Bayer initially founded its case on both the 2002 and the 2004
patents, it soon abandoned reliance on the 2002 patent in both the interim interdict
application as well as the action proceedings. As a further step Bayer applied for the
amendment of the 2004 patent. That application was heard together with the
application for the interim interdict, which by then had been confined to the 2004
patent. Despite opposition by Pharma to both these applications, Bayer was
successful in that on 14 November 2011 Vorster AJ granted the interim interdict and
the amendment to the 2004 patent sought. That judgment has since been reported
as Bayer Schering Pharma AG & another v Pharma Dynamics (Pty) Ltd & another
2011 BIP 73 (CP).

[5] In the action for a permanent interdict that followed, Pharma not only denied
that it infringed the 2004 patent, but counterclaimed for the revocation of that patent
on various grounds. Eventually Pretorius J, sitting as the Commissioner of Patents
held, however, that the patent was valid and that Ruby had infringed it. In

consequence Pretorius J granted the relief sought by Bayer and dismissed the
counterclaim. The appeal by Pharma against that judgment was recently dismissed
by this court (see Pharma Dynamics (Pty) Ltd v Bayer Pharma AG (468/130) [2014]
ZASCA 123 (19 September 2014).

[6] After achieving success before Vorster AJ in November 2011, but before the
judgment by Pretorius J, Bayer brought its application to amend the 2002 patent,
which eventually gave rise to this appeal. The amendments sought by Bayer are
quite extensive in particularity and not uncomplicated in content. Broadly speaking,
however, Bayer sought to (a) delete a number of paragraphs from the body of the
patent specification; (b) delete all of the claims of the 2002 patent, except claim 1; (c)
limit claim 1 by: (i) including certain extra features or integers which do not form part
of the claim in its unamended form; (ii) by limiting the dosage ranges in the claim;
and (iii) adding the words „and in a rapid dissolution form‟ as a further limitation to the
claim.

[7] Initially Pharma‟s opposition to the amendment relied on various grounds.
Those remaining on appeal are, however, limited to the following three contentions:
(a)
First, that claim 1 of the 2002 patent would, after amendment, be invalid for
lack of clarity as contemplated by s 61(1)(f)(i) of the Act;
(b)
Secondly, that there has been culpable delay on the part of Bayer in bringing
the amendment application;
(c)
Thirdly, that Bayer was guilty of „reprehensible conduct‟ prior to the application
to amend.

[8] In its judgment the court a quo upheld Pharma‟s first objection based on the
proposed amendment‟s lack of clarity. In consequence the court found it
unnecessary to consider the discretionary grounds of „culpable delay‟ and
„reprehensible conduct‟. In similar fashion, I shall deal with the lack of clarity-ground
first.

Lack of clarity
[9] The principle is well-established that any ground for revocation of a patent
may be advanced in opposition to a proposed amendment. The underlying
consideration, as formulated in Bendz Ltd & another v South African Lead Works Ltd
1963 (3) SA 797 (A) at 803E, seems to be that no purpose can be served by
allowing an amendment which will set the patent up for revocation. One such ground
for revocation, contained in s 61(1)(f)(i) of the Act, is „that the claims of the complete
specification concerned are not – clear‟. In determining whether or not a claim is
sufficiently clear for purposes of this provision, I find guidance in the principles
established by this court in a number of cases, such as Letraset Ltd v Helios Ltd
1972 (3) SA 245 (A) 249H-251B; Roman Roller CC & another v Speedmark Holdings
(Pty) Ltd 1996 (1) SA 405 (A) 419B-G; Ausplow (Pty) Ltd v North Park Trading 3
(Pty) Ltd & others [2011] 4 All SA 221 (SCA) para 20. Included amongst these
principles are the following, which are pertinent:
(a)
It is the duty of a patentee to state clearly and distinctly the nature and limits
of its claim so as to define its monopoly and so that others know exactly what they
may and may not do. The degree of clarity required is that which leads to reasonable
certainty. „Absolutism does not perch happily on the banners of our law‟ (per Holmes
JA in Letraset 250B).
(b)
The court must view the patent through the eyes of the skilled addressee in
the relevant art. In doing so the court may take into account that the addressee is
expected to use reasonable skill and intelligence in interpreting the language of the
patent. The addressee is not required to struggle unduly with it, but must make the
best of it and not adopt an attitude of studied obtuseness.
(c)
The court may also accept that the skilled person, when considering a claim,
should rule out interpretations which are illogical or which do not make technical
sense. The addressee should try to arrive at an interpretation which is technically
sensible and takes into account the whole disclosure of the patent; that the patent
will be construed with a mind willing to understand rather than to misunderstand.
(d)
If words or expressions in a claim are defined by what is said in the body of
the specification, the language of the claim must be construed accordingly.
(e)
In determining whether the limits of the monopoly are sufficiently defined,
technical terms are to be interpreted in the light of evidence given by witnesses
skilled in the art. But words which have no special technical meaning are to be

interpreted by the court and are to be given their natural and ordinary meaning as
read in their context.

[10] The lack of clarity objection is aimed, as I have said, at claim 1 as it will read
in its proposed amended form. In its unamended form, claim 1 reads as follows:
„A pharmaceutical composition comprising;
as a first active agent drospirenone in an amount corresponding to a daily dosage, on
administration of the composition, of from about 2 mg to 4 mg, and as a second active agent,
ethinylestradiol in an amount corresponding to a daily dosage of from about 0.01 mg to 0.05
mg, together with one or more pharmaceutically acceptable carriers or excipients, wherein
said drospirenone is in micronised form.‟
After the proposed amendment, claim 1 will read as follows (with the additions and
other changes emphasised for convenience):
„A pharmaceutical composition in an oral form and in the form of a tablet, a pill or a
capsule comprising:
as a first active agent drospirenone in an amount corresponding to a daily dosage, on
administration of the composition, of 3 mg, and as a second active agent, ethinylestradiol in
an amount corresponding to a daily dosage of 0.015 mg to 0.03 mg, together with one or
more pharmaceutically acceptable carriers or excipients, wherein said drospirenone is in
micronised form and in a rapid dissolution form.‟

[11] Pharma‟s contention, which found favour with the court a quo, is that the
introduction of the words „in a rapid dissolution form‟ will render the claim unclear. In
this regard it is evident from the way in which the objection was formulated, that it
was not aimed at the phrase itself. In other words, it was not contended that the
meaning of „in rapid dissolution form‟ is unclear. Any contention to that effect would
be met by the fact that the expression „rapid dissolution‟ is defined in the body of the
specification to mean „the dissolution of at least 70% over about 30 minutes, in
particular at least 80% over about 20 minutes, of drospirenone from a tablet
preparation containing 3mg of drospirenone in 900ml of water at 37ºC determined by
the USP XXIII Paddle Method using a USP dissolution test apparatus 2 at 50 rpm.‟

[12] The ambiguity will result, so Pharma‟s objection went, from introducing this
phrase in conjunction with the integer that the DSP is provided in micronised form. In
evaluating this objection the court a quo started out from the premise that „this is a

product claim and I need not understand how the product is manufactured‟. In
addition the court accepted that the term „micronised‟ is not technical in that it means
nothing more than „to break up into very small particles‟ and that, while „rapid
dissolution form‟ is technical, it is specifically defined in the specification.

[13] Setting out from these points of departure, the court a quo‟s reasoning as to
why the clarity objection should be upheld, went along the following lines:
(a)
According to the specification of the patent in suit the inventor had found that
the rapid dissolution rate as defined can be achieved by providing the DSP in
micronised form or, alternatively, by dissolving the DSP in a suitable solvent, eg
methanol, and to spray the solution on the surface of inert carrier particles followed
by incorporation of these particles in the pharmaceutical composition.
(b)
It follows that the rapid dissolution is the result of the micronisation of the
DSP. Conversely, that the purpose of micronisation is to achieve rapid dissolution.
(c)
By introducing the additional integer that the micronised DSP must also be „in
rapid dissolution form‟, the claim becomes unclear, because it raises the question
whether a further step must be taken to render the DSP in a rapid dissolution form
and what that step would be.
Or, as summarised in the words of the court a quo:
„. . . [I]n the body of the specification of the patent any reference to rapid dissolution is only in
context of the result of micronisation or the “spraying on” of the drospirenone. No further
alternative methods of achieving “rapid dissolution” are described in the specification and the
question arises whether a further step must be taken to render the drospirenone “in a rapid
dissolution form” or what this step would be. Whereas the dissolution rate was a result of the
process of the micronisation of drospirenone it is now not clear whether it is an added or
different requirement and not only a result of the micronisation.‟

[14] Before us it was common cause that the starting point of the court a quo‟s
reasoning, namely that this is a product claim as opposed to a method claim, cannot
be faulted. But if this is so, it follows, in my view, that the potential infringer need not
concern itself – and neither need the court – with how the product is manufactured.
The question whether „further „steps‟ need to be taken in the process of
manufacturing the product of claim 1, is of no consequence. All that requires
consideration are the constituent elements and properties of the allegedly infringing

product in its final form. This follows from the test for determining infringement as
formulated, eg in Letraset v Helios Ltd supra at 274G-H, namely that it involves a
comparison between the allegedly infringing product and the words of the patent
claim. If the product falls within the ambit of the claim an infringement had been
established, otherwise it had not. Cadit quaestio.

[15] Moreover, it was common cause in argument before us that the court a quo
was right in accepting (a) that micronisation is not a technical term and (b) that, while
rapid dissolution may be technical, it is defined in the specification of the patent. In
this light, I believe it should therefore create no problem for the potential infringer to
establish whether or not (a) the DSP in its composition is micronised and (b) the
dissolution profile of the DSP in its composition falls within the scope of „rapidly
dissolving‟ as defined in the patent specification. If the infringer‟s pharmaceutical
product satisfies both of these tests, then the product infringes the claim of the 2002
patent. Conversely, if the infringer‟s product does not satisfy both of these
requirements, then it does not. I can find nothing unclear about this.

[16] Formulating the same proposition somewhat differently, counsel for Pharma
argued before us that inasmuch as it is unclear whether rapid dissolution is merely a
result of micronisation or whether something additional is required, the potential
infringer will be confused as to whether further steps need to be taken in order to
constitute an infringement. But despite the different formulation, I remain
unpersuaded by the argument. Even assuming that, in accordance with the
specification of the patent in suit, micronising DSP will result in the composition of
claim 1 being rapidly dissolving, this does not render the patent unclear. A potential
infringer does not need to know whether a further step needs to be taken in the
preparation of the pharmaceutical composition to render DSP both micronised and
rapid dissolving. The forbidden field of claim 1, as sought to be amended (even if
found to be tautologous), is clearly defined. All infringers would know exactly what
they may and may not do.

[17] What is more, I believe that an enquiry at a somewhat more sophisticated
level leads to the same conclusion. The starting point of this enquiry relies on the
crystallised principle of patent interpretation, that it must be read through the eyes of

a person skilled in the art. This being so, it must follow, in line with common
experience, that even non-technical words may, in the context of a patent, have a
meaning to a person skilled in the art which is different from the one conveyed by the
literal meaning of the words to the layperson. Ergo, even a conclusion that the literal
words convey a meaning to the layperson which is unclear, would call for an enquiry
at a more sophisticated level before the claim can be held to be invalid for lack of
clarity. That enquiry is: do these words in the context of the patent, convey a
meaning to a person skilled in the art, which is unclear?

[18] The evidence by Bayer‟s expert – which stands uncontradicted by any expert
on behalf of Pharma – was that the dissolution rate of micronised DSP from a tablet
preparation may be slowed down through the use of techniques well-known to those
skilled in the art. For example, by applying an enteric coat to the tablet. Carriers or
excipients that retard rather than promote dissolution (which are expressly
contemplated in the patent) would be another example of doing so. Where a
potential infringer therefore uses an enteric coat or an inert carrier in its composition
that slows down the dissolution rate of micronised DSP to a degree that it no longer
dissolves at the rate defined in the patent, that product will not infringe the patent. In
this light the court a quo‟s finding that, post amendment, the claim may require „a
further step‟ to be taken in respect of the DSP in order to achieve the rapid rate of
dissolution, is in my view unwarranted. As the skilled person would understand the
claim, a potential infringement can be avoided by slowing down the dissolution rate
of the micronised DSP contained in the tablet to below the level of „rapid dissolution‟.

[19] For these reasons I do not agree with the court a quo‟s conclusion that the
proposed amendment will render claim 1 of the patent unclear. It follows that in my
view the refusal of the amendment application on that basis cannot be sustained.
That, however, is not the end of the matter. It is settled law that, although an
amendment may satisfy all substantive requirements, the Commissioner nonetheless
has a discretion to refuse it. As we know, Pharma advanced two grounds as to why
the Commissioner should exercise that discretion adverse to Bayer, namely that
Bayer was guilty of „culpable delay‟ and „reprehensible conduct‟. Unlike the
Commissioner, we now have to consider these contentions in the light of our
contrary finding that the amended patent would not be unclear. Yet, in considering

the two grounds relied upon by Pharma separately, the overall approach in the
exercise of this discretion, as directed by authority, starts out from the premise that
amendments will ordinarily be granted, unless the conduct of the patentee was
blameworthy to an extent that warrants refusal, despite compliance with substantive
requirements (see eg Interfelt Products (Pty) Ltd v Feltex Ltd [1972]  3 All SA 299 (T)
at 303).

Culpable delay
[20] Underlying Pharma‟s charge of culpable delay is its contention that Bayer
must have known that the 2002 patent was invalid for a number of years prior to the
amendment application. As the factual basis for its contention Pharma relied on the
proposition that the 2002 patent in its unamended form includes within its scope non-
oral, non-solid pharmaceutical combinations and that the patent is invalid in this form
for lack of an inventive step. This basis in turn derives from two passages in the
specification of the patent in suit – which Bayer now seeks to delete – relating to
non-oral, non-solid types of composition.

[21] As a matter of law, an objection on the ground of culpable delay needs to
satisfy a number of requirements. The two of these that I find most pertinent appear
from the following dicta by Nicolas AJA in South African Druggists Ltd v Bayer AG
1989 (4) SA 103 (A) 107I-108F:
„The legal position on the question of delay on the part of a patentee in applying for
amendments has been considered in a number of cases. A deliberate intention to delay
knowing full well that some of the claims are invalid can in some circumstances be a bar to
amendment. Even though a patentee never attempted to enforce them he has created an
area which prevented competitors from freely entering it.‟
And:
„Mere delay without actual or potential prejudice is unlikely to result in an amendment being
refused.‟
(See also eg Barmac Associates Ltd v SA Dynamics 1991 BP 16 (CP) 20G; Denton
Engineering (Pty ) Ltd & another v J P McKelvey & others 1997 BIP 113 (CP) 121-
122.)

[22] I propose to deal with the requirement of prejudice first, because as I see it,
the reliance on culpable delay should founder on this basis alone. I say that for the
reasons that follow. Pharma made no allegation whatsoever that it has been
prejudiced by the delay in the bringing of the application. Indeed, Bayer‟s expert says
the following in her answering affidavit, which has not been denied or even dealt with
in any way on behalf of Pharma in reply:
„It is important, firstly, under this heading to note that it is highly improbable that any third
party (including the respondent) will have been prejudiced by the fact that the claims of the
2002 patent prior to the amendment covered non-oral, non-solid dosage forms. As far as I
am aware, no one has ever registered or produced a non-oral, non-solid pharmaceutical
composition falling within the scope of the claims of the 2002 patent.
It should also be borne in mind that generics companies such as the respondent seek to
replicate innovator medicines which are already on the market. To the best of the patentee‟s
knowledge no one other than the patentee‟s licensee and the respondent have registered
products in South Africa which relate to the Bayer products. As the patentee has never
commercialised a non-oral, non-solid pharmaceutical dosage form, it would be most unlikely
that any generics companies would ever seek to market such a formulation as to do so
would require extensive investment on their part in obtaining regulatory approval.‟

[23] Nonetheless, to complete the picture, I shall also deal with Pharma‟s
contention that Bayer must have known for a number of years that the 2002 patent
was invalid, but intentionally delayed the amendment application. The factual basis
for the contention, as we know, derives from two passages in the patent
specification, which Bayer now seeks to delete, which relate to non-oral, non-solid
types of composition. However, according to Bayer‟s answering affidavit, its experts
always thought that despite these passages in the specification, the invention
protected by the patent in suit was clearly confined to solid oral formulations and that
no skilled addressee would understand it differently. This statement is supported by
the evidence of an independent expert, Prof Martyn Davies, during the trial action for
a final interdict. When confronted in cross-examination on behalf of Pharma with the
passages in the specification referring to non-oral and non-solid compositions, Prof
Davies‟ response was that, despite these references, „I never thought the 2002 or
the 2004 patent could be used for anything other than oral administration‟. The direct
evidence on behalf of Bayer was that it only became aware of the averment that the
claims of the 2002 patent were not limited to solid oral dosage formulations in June

2011, when the issue was raised in Europe for the first time. In all the circumstances,
I do not believe that an implied finding of dishonesty in rejecting this statement, is
warranted. For these reasons I find that the objection based on culpable delay
cannot be sustained.

Reprehensible conduct
[24] Pharma‟s first charge of reprehensible conduct on the part of Bayer relies on
the allegation that „the timing of the interim interdict application and the institution of
the action displayed abuse of the procedure of this honourable court‟. I find this
complaint misplaced. Firstly, Bayer was successful in both the interim interdict and
the action proceedings. If its conduct in those proceedings indeed amounted to an
abuse, that relief would hardly have been granted. Secondly, if Bayer‟s conduct was
in any way inappropriate in those proceedings, it should have been dealt with there
and then, perhaps by way of a special costs order. But it has no bearing on these
amendment proceedings.

[25] Pharma‟s second charge under this heading is that Bayer sought to enforce
the 2002 patent in circumstances when it knew (a) that the patent was invalid and (b)
that, in any event, Pharma‟s Ruby product did not constitute an infringement. I have
already found the contention resting on Bayer‟s alleged knowledge of invalidity
unsustainable. All that needs to be added in this regard is that Bayer launched both
the interim interdict and the final interdict proceedings before the allegations of
invalidity came to its notice in June 2011. Shortly thereafter it withdrew its reliance on
the 2002 patent and sought an amendment to the 2004 patent so as to remove the
offending passages from the specification. With regard to the allegation that Ruby
did not infringe the 2002 patent because it does not contain DSP in micronised form,
Bayer‟s answer is that it is still not convinced that this is so. This answer appears to
be supported by the inherent probabilities. If Bayer indeed knew that the DSP
contained in Ruby is not in micronised form, it would mean that Bayer embarked on
litigation without any hope of success, which is hardly likely.

[26] Finally, Pharma contended that Bayer has abused the patent system in South
Africa by obtaining „two patents for the same invention‟. All I need to say in this
regard is that a similar argument was advanced by Pharma and dismissed by this

court in the previous litigation between the parties (see Pharma Dynamics (Pty) Ltd v
Bayer Pharma AG (468/2013) [2014] ZASCA 123 (19 September 2014) paras 42-
45). For these reasons I find that the objection based on the reprehensible conduct
on the part of Bayer, must also fail.

Costs
[27] What remains are issues of costs. The reason for these issues arising is the
contention by Pharma that, even if the amendment application were to be
successful, Bayer should be ordered to pay the costs occasioned by the opposition,
at least in the court a quo. In support of this contention Pharma argued that Bayer
had sought an indulgence and that the grounds of objection raised against the
application were „fair, reasonable and not vexatious‟. As authority for this argument
Pharma relied on the general approach with regard to matters involving the
amendment of pleadings. I do not believe, however, that the considerations
underlying the approach to applications for the amendment of pleadings can be
transposed without qualification to the amendment of patents. Especially where the
amendments are aimed in the main at limiting the claims of the patent, I believe it to
be in the public interest that a patentee should not be discouraged through
apprehension of an adverse costs order to seek those amendments. In addition,
Pharma also referred to decided cases involving amendments of patents where
costs were awarded in favour of the unsuccessful objector. That is hardly surprising.
The issue of costs is a matter that falls squarely within the discretion of the court and
one can obviously think of cases where a costs order to that effect is warranted. But
on the facts of this case, it is not one that falls within that category. In consequence,
the costs order should, in my view, follow the event, both in this court and in the
court a quo.

[28] For these reasons:

1 The appeal is upheld with costs, including the costs of two counsel.
2 The order of the Commissioner of Patents is set aside and the following order is
substituted:
„(a) The amendment to South African Patent 2002/1968 applied for by the applicant
is granted.

(b) The respondent is ordered to pay the applicant‟s costs, including the costs of two
counsel.‟

_________________
F D J BRAND
JUDGE OF APPEAL

APPEARANCES:

For the Appellant:

P Ginsburg SC, G Marriot
Instructed by:
Adams & Adams Inc, Pretoria
c/o Honey Attorneys Inc, Bloemfontein

For the Respondent:

L Bowman SC, B du Plessis
Instructed by:
Von Seidels, Cape Town
c/o Webbers, Bloemfontein