Ascendis Animal Health (Pty) Limited v Merck Sharpe Dohme Corporation and Others

Ascendis filed an application for revocation of Merck's South African Patent 1998/10975 in June 2011 on grounds of lack of novelty and obviousness under section 61(1) of the Patents Act 57 of 1978. Merck then instituted infringement proceedings against Ascendis. The parties agreed to stay the infringement proceedings and proceed with the revocation proceedings first. Ascendis indicated it would argue novelty first and, if unsuccessful, seek oral hearing on obviousness. Merck objected to this bifurcated approach. Teffo J revoked the patent for lack of novelty without addressing the obviousness claim. The Supreme Court of Appeal reversed this decision and certified all claims of the patent as valid under section 74 of the Act. Ascendis then sought to amend its plea in the infringement action to delete the novelty defence, retain the obviousness defence, and add a new defence of inutility. Merck opposed this and sought to amend its replication to plead res judicata. Van der Westhuizen J (the Commissioner of Patents) refused Ascendis's amendment and granted Merck's, finding the matter was res judicata. Leave to appeal was refused by both the High Court and Supreme Court of Appeal.

• Whether the grounds for revocation of a patent under section 61 of the Patents Act constitute a single cause of action or separate and distinct causes of action
• Whether the validity of the patent was res judicata following the Supreme Court of Appeal's decision on novelty, thereby precluding Ascendis from raising defences based on obviousness and inutility in the infringement proceedings
• Whether amendments to pleadings should be permitted under Rule 28 of the Uniform Rules of Court
• Whether the principle of res judicata and issue estoppel applies to bar the raising of invalidity defences (on grounds not previously adjudicated) in infringement proceedings following an unsuccessful revocation application
• Whether the constitutional right of access to courts under section 34 of the Constitution was implicated

Leave to appeal was granted. The appeal was dismissed. Each party was ordered to pay its own costs. The order of the High Court of South Africa, Gauteng Division, Pretoria refusing Ascendis's amendment application and granting Merck's amendment application therefore stood.

There is no binding ratio decidendi because the Constitutional Court was evenly split 5-5, resulting in no majority decision. The effect is that the High Court's judgment stands, but it does not create binding precedent from the Constitutional Court. The High Court had held that: (1) the grounds for revocation under section 61 constitute a single cause of action (invalidity of the patent); (2) the validity of the patent was res judicata following the Supreme Court of Appeal's decision; and (3) Ascendis's amendment should be refused. However, these findings are not elevated to binding Constitutional Court precedent due to the split decision.

Khampepe J made several observations: (1) that abuse of process was not properly before the Court as it was not pleaded in the High Court and only raised for the first time in oral argument before the Constitutional Court; (2) that section 74's certificate of contested validity does not certify a patent as valid as a whole, but only certifies that certain claims were contested and found valid; (3) that the Act contains internal mechanisms (punitive costs under section 74(2)) to discourage re-litigation of certified claims; (4) that Rule 28 is an enabling rule and amendments should generally be allowed unless there is good cause; (5) observations on South Africa's status as a non-examining patent jurisdiction and forthcoming reforms. Cameron J observed: (1) that bifurcated patent systems (as exist in Germany, US, Japan) generally include statutory estoppel provisions to prevent repeated challenges; (2) that allowing repeat validity challenges would lead to "Angora cat" problems where patent holders argue for narrow construction in validity proceedings but broad construction in infringement proceedings; (3) that res judicata requirements should be applied flexibly based on equity and fairness; (4) that Ascendis had procedurally abandoned its obviousness claim in the revocation proceedings; (5) comparative observations about patent litigation systems in other jurisdictions.

This case is significant in South African patent law because it highlights fundamental tensions in patent litigation regarding: (1) whether different statutory grounds for patent revocation constitute separate causes of action; (2) the proper scope of res judicata and issue estoppel in patent disputes; (3) the relationship between revocation proceedings and infringement actions; (4) whether parties can raise invalidity defences in infringement proceedings that were not adjudicated in prior revocation proceedings; (5) the balance between preventing piecemeal litigation and ensuring access to justice. The even split in the Constitutional Court creates uncertainty on these issues and means lower courts must continue to grapple with these questions without definitive guidance from the apex court. The case underscores South Africa's position as a non-examining patent jurisdiction and the importance of private litigation in testing patent validity. It also demonstrates judicial concern about patent holders and alleged infringers engaging in strategic, multi-stage litigation.