Quo Vadis Patent Litigation: Ascendis Animal Health (Pty) Limited v Merck Sharpe Dohme Corporation 2020 1 SA 327 (CC) - In Search of the Bigger Picture on Patent Validity

Abstract

In October 2019 the Constitutional Court (CC) handed down judgment in the matter of Ascendis Animal Health (Pty) Limited v Merck Sharpe Dohme Corporation 2020 1 SA 327 (CC). This is its first judgment dealing with the validity of a patent and, as it concerns issues that go the heart of patent law, the judgment potentially has far-reaching implications for patent litigation in South Africa.

At issue was the question of whether a court's finding of patent validity on one ground in a revocation hearing ought to have a bearing on a subsequent infringement hearing on the same patent, to the extent that the alleged infringer is barred from raising a different ground to attack the validity of a patent. In essence, did the attempt to do so offend the principle of res judicata? This was a direct appeal to the Constitutional Court after the High Court ruled that it did so offend, and the Supreme Court of Appeal refused leave to appeal. The Constitutional Court was deadlocked on this issue, with the result that the decision of the High Court refusing Ascendis' application to amend to introduce a new ground of attack stands, and the res judicata objection was upheld.

The decision raises important questions about the application of the principle of res judicata in such cases where the Patents Act allows dual proceedings for revocation and infringement actions, the meaning of provisions of the Act as they relate to the certification of patent claims, and the broader public interest considerations implicated in patent law adjudication.

This note observes that while the outcome sends a strong signal about the courts' displeasure at attempts to prosecute "repeat litigation", an unsatisfactory outcome is that patents can apparently be validated on the basis of merely one of the mandatory requirements for patent validity as required by the Act. It argues that such an outcome is undesirable and does not serve the public interest. This is because it closes the door to further challenges while potentially thousands of patents, which would not have passed the validity test had they been subjected to substantive examination, remain on the patent register.