The Domino Effect, Reversed

By Harley Rose

The case of Merck Sharp & Dohme Corp & Anor v Hovid Bhd features a landmark decision made by the Federal Court of Malaysia on 21 August 2019. The issue brought to the Federal Court was whether the adjudication of an independent claim as invalid automatically renders claims which are dependent on that independent claim invalid, without the need for the court to consider separately the validity of each and every dependent claim.

In SKB Shutters Manufacturing Sdn Bhd v Seng Kong Shutter Industries Sdn Bhd, the Federal Court held that if the independent claim is found invalid, the dependent claims that are dependent on that independent claim will fall like dominoes. You can read more on the SKB Shutter case here: https://kass.pixelcodeweb.com/articles/the-fall-of-a-stack-of-patent-claims-in-malaysia/

The appellants in this case, American company Merck Sharp & Dohme and its local licensee & distributor (referred to as “Merck”) argued that the SKB Shutter decision is not consistent with patent practice in other jurisdictions and it is “uncertain, unjust or outmoded or obsolete in modern conditions”.

Background & Facts

Merck had been granted a patent over a dosing regime for a pharmaceutical product with the trade name “Forsamax”, used in the treatment of Osteoporosis and similar bone diseases in humans. The respondent, Hovid Bhd, began marketing a similar drug containing the same active ingredient as Forsamax, at the same dosage. The appellants sued for patent infringement. The respondent counterclaimed that Merck’s patent be declared invalid on several grounds, most notably that it did not contain the obligatory “inventive step” to warrant protection. At trial, the High Court favoured Hovid’s counterclaim, and invalidated the patent and Merck’s independent claim. Following the SKB Shutters precedent, as the independent claim was dismissed, all dependent claims were automatically dismissed. Merck appealed to the Court of Appeal and when that failed, they appealed to the Federal Court.

Issues

The Federal Court decided that it would make its analysis and subsequent decision based on the following:

the concept and definitions of independent and dependent claims;
the form and different types of claims in a patent application to determine whether the blanket rule in SKB Shutters was justified;
positions in other jurisdictions, in relation to (i) the effect of the different forms of claims on the issue of interdependency; (ii) the different types of challenges available to oppose patent claim validity; (iii) how these claims and challenges are dealt with and adjudicated upon.

Decision

The Federal Court ultimately found that dependent claims fall within two categories; the first being those that are subsidiaries of an independent claim, and the second being those which hold additional information or features. The latter form of claim, the Court decided, must be addressed individually should their respective independent claim fall, as they were not rendered meaningless because of this. Consequently, the principles of SKB Shutters were entirely overturned. Thus, the appeal was allowed, and the case has been remitted to the High Court to separately evaluate the Appellant’s dependent claims.

Conclusion

Whilst the fate of the Merck’s patent is yet to be decided, this case poses particular significance for patent litigation in Malaysia as it recognises the value of dependent claims. Even where an independent claim is dismissed, the law has opened to allow for the validity of dependent claims to remain. This decision gives patent owners stronger security in their patent protection in Malaysia, with the domino effect being removed.

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KASS International is an established Intellectual Property Firm which offers a one-stop solution for IP matters in Malaysia, South East Asia, and worldwide.