Case Details
- Citation: [2020] SGCA 84
- Court: Court of Appeal of the Republic of Singapore
- Decision Date: 27 August 2020
- Coram: Andrew Phang Boon Leong JA; Tay Yong Kwang JA; Woo Bih Li J
- Case Number: Civil Appeal No 211 of 2019
- Hearing Date(s): 14 August 2020
- Appellant: Zyfas Medical Co (Sued as a firm)
- Respondent: Millennium Pharmaceuticals, Inc
- Counsel for Appellant: Wong Siew Hong, Kuek Kai Liang (Eldan Law LLP)
- Counsel for Respondent: Suhaimi Bin Lazim, Yan Chongshuo (Mirandah Law LLP)
- Practice Areas: Patents and Inventions; Registration of therapeutic products; Statutory Interpretation
Summary
The Court of Appeal in Zyfas Medical Co (Sued as a firm) v Millennium Pharmaceuticals, Inc. [2020] SGCA 84 has definitively resolved a critical ambiguity within Singapore’s pharmaceutical regulatory framework, holding that process patents fall within the scope of the patent linkage scheme established under the Health Products (Therapeutic Products) Regulations 2016 (“TPR”). The dispute arose from an application by the appellant, Zyfas Medical Co (“Zyfas”), to register a generic anti-cancer drug, “Myborte,” with the Health Sciences Authority (“HSA”). While the active ingredient, bortezomib, was not protected by a product patent, the respondent, Millennium Pharmaceuticals, Inc (“Millennium”), held three subsisting process patents relating to its manufacture. Zyfas failed to disclose these patents in its mandatory declaration to the HSA, leading to a successful High Court application by Millennium for a declaration that Zyfas’s statement was false or misleading in a material particular.
On appeal, the primary doctrinal question was whether the phrase “a patent under the Patents Act… in force in respect of the therapeutic product” in reg 23(2)(a) of the TPR should be interpreted narrowly to include only product patents, or broadly to encompass process patents as well. Zyfas contended for the narrow interpretation, arguing that a process patent is not “in respect of” the product itself but rather the method of its creation. The Court of Appeal rejected this, applying the purposive approach to statutory interpretation. It held that the patent linkage scheme was designed to provide notice and protection to patent proprietors—regardless of whether their rights were grounded in product or process claims—before generic versions enter the market.
The decision also addressed significant procedural issues regarding the introduction of new points on appeal. Zyfas had conceded in the High Court that process patents were covered by the TPR but sought to withdraw that concession on appeal. The Court of Appeal granted leave to raise the new point, noting that it was a pure question of law involving statutory interpretation that required no further evidence. However, upon substantive review, the Court found Zyfas’s new legal position untenable. The judgment reinforces the integrity of the HSA registration process, emphasizing that the burden of disclosure lies squarely on the applicant and cannot be bypassed by an applicant’s unilateral belief that its manufacturing process does not infringe existing patents.
Ultimately, the Court dismissed the appeal, affirming the High Court’s declaration and awarding costs of $40,000 to Millennium. This ruling provides essential clarity for the pharmaceutical industry, ensuring that the patent linkage system remains a robust mechanism for balancing the interests of generic manufacturers with the intellectual property rights of innovator pharmaceutical companies. It confirms that the "Broad Interpretation" of the TPR is the only one consonant with the legislative purpose of ensuring that generic products are not granted marketing approval prior to the expiration of relevant patent terms.
Timeline of Events
- 6 May 2003: The United States–Singapore Free Trade Agreement is signed, necessitating the creation of a patent linkage scheme in Singapore.
- 2 February 2018: Zyfas applied to the HSA to register "Myborte," an anti-cancer drug containing the active ingredient bortezomib.
- 5 July 2019: The HSA approved Zyfas’s application for the registration of Myborte.
- 11 July 2019: Millennium discovered that Zyfas had obtained registration for Myborte.
- 24 July 2019: Millennium’s patent agents wrote to Zyfas requesting a copy of the patent declaration submitted to the HSA.
- 19 August 2019: Millennium filed Originating Summons No 1034 of 2019 (OS 1034) in the High Court seeking a declaration against Zyfas.
- 23 October 2019: The High Court heard OS 1034. Zyfas conceded that process patents fell within reg 23(2) of the TPR.
- 1 November 2019: The High Court granted the declaration in favour of Millennium.
- 21 November 2019: Zyfas filed an appeal against the High Court's decision.
- 29 January 2020: The High Court issued its grounds of decision in [2020] SGHC 28.
- 14 August 2020: The Court of Appeal heard the substantive appeal in Civil Appeal No 211 of 2019.
- 27 August 2020: The Court of Appeal delivered its judgment dismissing the appeal.
What Were the Facts of This Case?
Zyfas Medical Co is a firm operating as a distributor of generic pharmaceutical, medicinal, and healthcare products in Singapore. The dispute centered on its efforts to market "Myborte," a generic version of an anti-cancer medication. The active ingredient in Myborte is bortezomib, a substance used primarily in the treatment of multiple myeloma and mantle cell lymphoma. Under the Health Products Act (Cap 122D, 2008 Rev Ed) (“HPA”) and the TPR, all therapeutic products must be registered with the HSA before they can be legally supplied in Singapore.
The regulatory framework for registration includes a "patent linkage" scheme. Regulation 23(1) of the TPR requires the HSA to consider whether a patent under the Patents Act is in force in respect of the therapeutic product. To facilitate this, reg 23(2) mandates that the applicant furnish a declaration stating whether such a patent exists and whether the applicant is the proprietor of that patent. If the applicant is not the proprietor, they must further declare whether, in their opinion and to the best of their belief, the patent is invalid or will not be infringed by the acts for which registration is sought.
On 2 February 2018, Zyfas submitted its application for Myborte. It was common ground that there was no product patent for bortezomib in force in Singapore at the time. However, Millennium Pharmaceuticals, Inc was the registered proprietor of three patents relating to the processes for the manufacture of bortezomib. These process patents were valid and subsisting. In its declaration to the HSA, Zyfas did not disclose the existence of these process patents. Zyfas’s internal justification was that its manufacturing process for Myborte did not infringe Millennium’s patents, and therefore, it believed no disclosure was required.
The HSA approved Zyfas’s application on 5 July 2019. Shortly thereafter, on 11 July 2019, Millennium discovered the registration. Millennium’s agents contacted Zyfas to inquire about the declaration made under reg 23(2). Zyfas eventually admitted that it had not declared the process patents. Millennium then commenced OS 1034 on 19 August 2019, seeking a declaration under reg 24(1)(a)(ii) of the TPR. This regulation allows the HSA to cancel a registration if a court determines that the applicant’s declaration contained a false or misleading statement in a material particular or omitted to disclose a material matter.
In the High Court, the primary argument raised by Zyfas was that it was not required to serve a notice on Millennium under reg 23(3) because it had not made a declaration under reg 23(2)(c) (which relates to patents that the applicant believes are invalid or will not be infringed). Crucially, during the High Court proceedings, Zyfas’s counsel conceded that process patents did fall within the scope of reg 23(2)(a). The High Court Judge, in [2020] SGHC 28, granted the declaration sought by Millennium, finding that the omission of the process patents was a material non-disclosure. Zyfas subsequently appealed, seeking to overturn the High Court's decision by arguing that its earlier concession was legally incorrect and that process patents were never intended to be covered by the TPR disclosure regime.
What Were the Key Legal Issues?
The appeal presented two primary legal hurdles for the Court of Appeal to resolve, one procedural and one substantive. The framing of these issues was critical to the broader application of the Health Products Act and the Patents Act in the pharmaceutical sector.
The first issue was whether Zyfas should be granted leave to raise a new point on appeal. This was a significant procedural question because Zyfas had expressly conceded in the High Court that process patents were within the ambit of reg 23(2)(a) of the TPR. Under established appellate principles, a party is generally bound by its conduct and concessions in the lower court. The Court had to determine if the "special circumstances" required to depart from this rule were present, particularly given that the new point was a pure question of statutory interpretation.
The second and central substantive issue was the proper interpretation of reg 23(2)(a) of the TPR. Specifically, the Court had to decide whether the phrase "a patent under the Patents Act... in force in respect of the therapeutic product" includes process patents. This required a choice between two competing interpretations:
- The Narrow Interpretation: That the regulation applies only to product patents (patents for the substance itself).
- The Broad Interpretation: That the regulation applies to both product patents and process patents (patents for the method of manufacturing the substance).
This issue was pivotal because it determined the extent of the disclosure obligations for generic manufacturers. If the Narrow Interpretation prevailed, generic companies could bypass the patent linkage scheme for any drug where the active ingredient was off-patent, even if the manufacturing processes were still protected. If the Broad Interpretation prevailed, the disclosure obligation would be significantly more onerous, requiring a comprehensive search of the patent register for all related process claims.
How Did the Court Analyse the Issues?
The Court of Appeal’s analysis was divided into the procedural question of leave and the substantive question of statutory interpretation. The judgment, delivered by Tay Yong Kwang JA, meticulously applied the purposive approach to resolve the dispute.
1. Leave to Raise a New Point on Appeal
The Court first addressed Zyfas’s application for leave to raise the argument that process patents were excluded from reg 23(2)(a). The Court referred to its recent decision in [2020] SGCA 68 (“JWR”), which summarized the principles from Abhilash s/o Kunchian Krishnan v Yeo Hock Huat and another [2019] 1 SLR 873 and Grace Electrical Engineering Pte Ltd v Te Deum Engineering Pte Ltd [2018] 1 SLR 76. The Court noted at [28] that while there is no absolute legal impediment to raising a new point, leave is only granted in "special circumstances."
The Court found that such circumstances existed here because the issue was a "pure point of law on the interpretation of a piece of subsidiary legislation" and "no further evidence could have been adduced" at the trial to change the outcome of this legal question (at [31]). Furthermore, the Court observed that the High Court Judge had actually considered the point in the grounds of decision despite the concession. Given the importance of the issue to the pharmaceutical industry, the Court granted leave to Zyfas to argue the point, notwithstanding the prior concession.
2. The Interpretation of Reg 23(2)(a)
The Court applied the three-step framework for statutory interpretation set out in Tan Cheng Bock v Attorney-General [2017] 2 SLR 850. This involves: (a) identifying the possible interpretations of the text; (b) determining the legislative purpose; and (c) comparing the interpretations against that purpose.
Step 1: The Possible Interpretations
The Court examined the text of reg 23(2)(a): "whether a patent under the Patents Act is in force in respect of the therapeutic product." The Court noted that Section 2 of the Patents Act defines "patent" as "a patent under this Act" and includes patents in force by virtue of section 117(3). The Patents Act generally does not distinguish between product and process patents in its core definitions (at [40]).
The Court then looked at the definition of "therapeutic product" in the First Schedule of the HPA, which defines it as "any substance that… has as a constituent any of the following active ingredients." The Court reasoned that a patent "in respect of" such a product could naturally include a patent for the process of making that constituent substance. The phrase "in respect of" is traditionally a phrase of wide import. Thus, both the Narrow and Broad Interpretations were textually plausible, though the Broad Interpretation aligned more closely with the general definitions in the Patents Act.
Step 2: Legislative Purpose
The Court delved into the history of the patent linkage scheme. It noted that the scheme originated from the United States–Singapore Free Trade Agreement (6 May 2003). The predecessor provision was s 12A(2) of the Medicines Act (Cap 176, 1985 Rev Ed). The Court observed at [25] that the purpose was "to ensure that generic products were not granted marketing approval prior to the expiration of the patent term of the relevant patent."
The Court emphasized that the scheme was intended to provide a "procedural mechanism" to protect patent proprietors by giving them notice of potential infringements before the generic product is marketed. This allows the proprietor to seek judicial intervention (such as an injunction) while the registration application is still pending or shortly after approval.
Step 3: Comparing Interpretations against Purpose
The Court concluded that the Broad Interpretation was the only one that fulfilled the legislative purpose. The Court reasoned at [48]:
"The Broad Interpretation would be consonant with the legislative purpose of reg 23 as it was intended to give notice and protection to proprietors of relevant patents, whether they are product or process patents."
The Court rejected Zyfas’s argument that process patents should be excluded because they are more difficult for a generic applicant to identify. The Court held that the difficulty of a patent search does not change the statutory requirement. Furthermore, the Court noted that the TPR scheme already accounts for the applicant’s "opinion and belief" regarding infringement in reg 23(3). If an applicant identifies a process patent but believes their process is different, they must still declare the patent and then state their belief of non-infringement. They cannot simply choose not to declare the patent at all.
The Court also referred to its previous decision in [2019] SGCA 31 (“Drug Houses of Australia”), which dealt with similar issues under the Medicines Act. In that case, the Court had already proceeded on the basis that process patents were relevant to the declaration. Consistency in the regulatory landscape favored maintaining this Broad Interpretation.
What Was the Outcome?
The Court of Appeal dismissed the appeal in its entirety. The Court affirmed the High Court’s decision to grant the declaration sought by Millennium. The operative conclusion of the Court was stated as follows:
"For the above reasons, we dismissed Zyfas’s appeal." (at [49])
The Court’s decision had several immediate legal and practical consequences:
- Affirmation of the Declaration: The Court upheld the declaration that Zyfas’s declaration to the HSA under reg 23(2) of the TPR "contained a false or misleading statement in a material particular or omitted to disclose a matter that was material to the application."
- Regulatory Impact: This judicial determination provided the HSA with the necessary basis under reg 24(1)(a)(ii) to consider the cancellation of the registration for Myborte.
- Costs Award: The Court awarded costs in favour of Millennium. These costs were fixed at $40,000, which was inclusive of disbursements. This award reflected the complexity of the statutory interpretation issues and the significance of the case for the pharmaceutical industry.
- Clarification of Law: The judgment settled the law regarding the scope of reg 23(2)(a), confirming that generic applicants must disclose all relevant patents, including process patents, in their HSA applications.
The Court’s dismissal of the appeal meant that Zyfas’s attempt to narrow the scope of the TPR failed. The firm remained subject to the findings of the High Court regarding its non-disclosure, and the legal precedent was set that "patent" in the context of the TPR linkage scheme is to be read broadly, consistent with the Patents Act.
Why Does This Case Matter?
This case is a landmark decision for Singapore’s pharmaceutical and intellectual property sectors. It provides much-needed judicial certainty on the "patent linkage" system, which is a cornerstone of the regulatory balance between innovator and generic drug manufacturers. By confirming that process patents are included in the disclosure requirements of the TPR, the Court of Appeal has ensured that the protection afforded to patent holders is not hollowed out by technical distinctions between product and process claims.
For practitioners, the case reinforces the rigour required in the HSA application process. It is now settled that an applicant cannot unilaterally decide that a patent is irrelevant because they believe they do not infringe it. The duty is to disclose the existence of the patent if it is "in force in respect of the therapeutic product." The forum for debating infringement is not the internal mind of the applicant, but the structured declaration process under reg 23(3), which may lead to court or patent office proceedings. This maintains the transparency of the registration system and prevents generic manufacturers from "flying under the radar" of patent proprietors.
The decision also highlights the Court of Appeal’s commitment to the purposive approach to statutory interpretation. By looking back to the US-Singapore FTA and the predecessor provisions in the Medicines Act, the Court demonstrated that the TPR must be read as part of a coherent international and domestic policy to protect intellectual property. The Court’s refusal to adopt the "Narrow Interpretation" prevents a significant loophole that would have allowed generic versions of drugs with expired product patents but active process patents to enter the market without notice to the patentee.
Furthermore, the procedural aspect of the case serves as a reminder of the "special circumstances" test for raising new points on appeal. While the Court was willing to hear the new point because it was a pure question of law, the fact that it ultimately rejected the argument after granting leave suggests that parties should be extremely cautious about making concessions in the High Court that they might later regret. The costs award of $40,000 also underscores the financial stakes involved in such high-level regulatory litigation.
Finally, the case places Singapore’s patent linkage scheme in a clear light: it is a notice-based system designed to prevent the "fait accompli" of a generic product entering the market before a patent proprietor has had the chance to assert its rights. By broadening the scope to process patents, the Court has aligned the regulatory requirements with the commercial reality that many modern therapeutic products are protected by a complex web of process and manufacturing patents rather than a single product claim.
Practice Pointers
- Comprehensive Patent Searches: Applicants for therapeutic product registration must conduct exhaustive patent searches that include not only product patents but also process and manufacturing patents related to the active ingredient.
- Disclosure is Mandatory, Not Discretionary: The obligation to declare a patent under reg 23(2) is triggered by the existence of the patent, not by the applicant's assessment of infringement. If a patent is "in force in respect of" the product, it must be disclosed.
- Utilize Regulation 23(3): If an applicant believes a process patent is not infringed, the correct procedure is to disclose the patent and then state the belief of non-infringement under reg 23(3). This triggers the notice requirements and protects the applicant from allegations of making a "false or misleading" statement.
- Risk of Cancellation: Practitioners should advise clients that a failure to disclose a material patent can lead to a court declaration of non-disclosure, which is a statutory ground for the HSA to cancel the product's registration under reg 24.
- Criminal Liability: Under reg 25 of the TPR, making a false patent declaration is a criminal offence. Compliance is not merely a regulatory matter but a serious legal obligation.
- Appellate Strategy: Be wary of concessions in the High Court. While the Court of Appeal may grant leave to raise a new point of law in "special circumstances," the threshold is high, and the Court will strictly apply the purposive interpretation framework.
- Purposive Interpretation: When advising on the TPR or HPA, always look to the legislative purpose—specifically the patent linkage goals of the US-Singapore FTA—as the Court will use this to resolve textual ambiguities.
Subsequent Treatment
As a decision of the Court of Appeal, Zyfas v Millennium stands as the definitive authority on the scope of reg 23(2)(a) of the TPR. It established the ratio that process patents are included within the phrase "a patent under the Patents Act... in force in respect of the therapeutic product." This ratio has provided the foundation for subsequent HSA regulatory practices and has been cited in pharmaceutical patent litigation to emphasize the breadth of the disclosure obligations in the patent linkage scheme.
Legislation Referenced
- Health Products Act (Cap 122D, 2008 Rev Ed)
- Health Products (Therapeutic Products) Regulations 2016 (S 329/2016) (“TPR”), specifically Regulations 23, 24, and 25
- Patents Act (Cap 221, 2005 Rev Ed), specifically Sections 2, 14(2), 51(1), 66, 67, 68, and 117(3)
- Interpretation Act (Cap 1, 2002 Rev Ed)
- Medicines Act (Cap 176, 1985 Rev Ed), specifically Section 12A(2)
Cases Cited
- Applied:
- [2019] SGCA 31; Millennium Pharmaceuticals, Inc v Drug Houses of Australia Pte Ltd and another appeal
- Tan Cheng Bock v Attorney-General [2017] 2 SLR 850
- Referred to:
- [2020] SGCA 68; JWR Pte Ltd v Edmond Pereira Law Corporation and another
- Abhilash s/o Kunchian Krishnan v Yeo Hock Huat and another [2019] 1 SLR 873
- Grace Electrical Engineering Pte Ltd v Te Deum Engineering Pte Ltd [2018] 1 SLR 76
- [2020] SGHC 28; Millennium Pharmaceuticals, Inc v Zyfas Medical Co (sued as a firm)