AUSTRALIA
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`Patents Act 1990 (Cth)
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`In the Matter of Australian
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`Patent Application No.
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`2002322233 in the name of
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`Neptune Technologies &
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`Bioressources Inc.
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`_ and _
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`Opposition thereto by Aker
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`Biomarine ASA (Opp 1)
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`DECLARATION
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`L Richard Charles Oppenheim, of 67 Gladstone St., Kew, Victoria 3101, Australia, do
`solemnly and sincerely declare the following.
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`l.
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`I have been provided with a copy of the Federal Court Practice Direction — Guidelines
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`for Expert Witnesses in proceedings in the Federal Court of Australia, and have read
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`and understood these guidelines. Now produced to me and marked “RCO-1” is a
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`copy of these guidelines.
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`2.
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`I understand that this information is relevant to a controversy between Aker
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`Biomarine ASA and Neptune Bioressources Inc. regarding patent claims.
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`3.
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`I have no direct relationship with Aker Biornarine ASA or Neptune Bioressources Inc.
`and I am unaware of whatever patents may be involved.
`I have not been provided
`with copies of any patent or patent application in relation to my making this
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`declaration and I have not otherwise read or reviewed any patents or applications in
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`relation to this controversy.
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`4.
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`I am being compensated for my time taken in the preparation of this declaration.
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`I have been asked by Pizzeys Patent and Trade Mark Attorneys to provide
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`information in relation to the knowledge and state of the art in the commercial
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`formulation and manufacture of complementary medicines based upon or employing
`dietary oils such as fish oil and krill oil as at 27 July 2001 (“the Relevant Date”).
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`Unless I state otherwise, I make the statements below based on my personal
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`experience and knowledge of the related science and art, and my knowledge of what
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`others in my profession would have known as at the Relevant Date.
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`Knowledge and Experience
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`7.
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`My current Curriculum Vitae is attached and marked as “RCO—2”.
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`My present position is as Principal of “Dr Richard C Oppenheim”. As the Principal
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`of this company, I work with the therapeutic goods and food industries in Australasia,
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`within the PacRim area, in Europe and in North America. Clients have ranged over
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`companies manufacturing and marketing Prescription and OTC products,
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`Complementary Medicines and Dietary Supplements as well as Devices and foods.
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`I also currently serve on the Advisory Committee for Complementary Medicines
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`(ACCM).
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`I have expertise and skill in the manufacture of medicines, including
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`complementary medicines, and I provide advice to the TGA through my role on
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`ACCM.
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`ACCM provides scientific and policy advice to the Therapeutic Goods Administration
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`(TGA). This advice relates to the supply, use, safety and quality of products and,
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`where appropriate, efficacy relating to the claims made for products.
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`I have been involved in matters regarding the regulatory specifications for oils as
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`complementary medicines or dietary supplements, including fish oils and krill oil.
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`The regulatory specifications administered by the TGA include raw material
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`specifications, 1'. e. the way the material such as krill oil is described so as to
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`distinguish it from conventional fish oil or vegetable oil. The TGA acts, and the
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`ACCM advises, in a regulatory function ensuring the safety and quality of products
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`and is in no way related to intellectual property or patents.
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`12.
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`In 2001-2002 I was an employee of R P Scherer Australia (a part of the world wide
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`Scherer Corporation which became part of Cardinal Health Inc. in 1998, and which
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`became Cardinal Health Australia in 2002). The company at that time was a major
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`contract developer of formulations and manufacturer of products incorporating
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`complementary medicine substances.
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`I held the position of Pacific Regional
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`Technical Director of the company. My roles with the company are particularly
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`described in my Curriculum Vitae.
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`13.
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`From l998 to 2003, I was the Pacific Regional Technical Director for R P Scherer
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`Australia, and based in Melbourne.
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`I reported to a vice president and the Australian
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`general manager.
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`I had responsibility within Australia for the technical department
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`and regulatory affairs in Australia.
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`I oversaw the development of specification
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`documents and I was responsible for overall good manufacturing practice in the
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`facility for making medicines, including complementary medicines. My technical
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`focus, and my employer’s prime focus at the time was in complementary medicines,
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`dietary supplements, and “health foods” in Australia and the Pacific Region. Scherer
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`also had facilities in Japan and Korea, and I had responsibility for technical matters
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`for those facilities as well on technical and regulatory operational management.
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`Australian Complementary Medicines Industry in July 2001
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`14.
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`In 2001 the state of the industry was such that the majority of complementary
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`medicines being made in Australia were being made by contract manufacturers,
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`including R P Scherer (Cardinal Health), Pan Pharmaceuticals, and smaller companies
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`such as Lipa Pharmaceuticals, and a whole range of much smaller contract
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`manufacturers. At that time, there were a small number of soft capsule contract
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`manufacturers in the Australia and Pacific Region. R P Scherer would have been one
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`of the biggest.
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`16.
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`Contract manufacturers would either provide the finished product (e.g. bottled tablets
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`or capsules) to the marketer, or they might provide manufactured bulk product, which
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`might then be re—packaged for sale. Nutraceuticals and complementary medicines
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`were being manufactured in this fashion in Australia in 2001. Indeed, that was the
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`primary business of R P Scherer.
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`The role of contract manufacturers in providing these products would typically begin
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`with contract manufacturers taking “known actives” (known active ingredients
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`approved for specific uses by the TGA) and reformulating them in new combinations
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`as new products for the market. These were formulations of new actives that had
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`received approval, e. g. fish oil with vitamin E added, and the like. All the actives in
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`these sorts of products would have already and typically been pre—approved by the
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`TGA for the contemplated uses.
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`Patents in the Australian Nutraeeutical and Complementary Medicine Industry in
`2001
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`17.
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`18.
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`I have been asked about the extent to which someone involved in the processes of
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`formulating and bringing to market complementary medicines or nutraceuticals in
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`Australia would have been aware of patents.
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`In answer, someone in my position with a contract manufacturer at the time would
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`have definitely been aware of patents to actives and their formulations. For example,
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`a role of mine at R P Scherer at that time was to maintain their patent position and l
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`was aware of the patent landscape for the products made by them. This was essential
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`to a successful business as a contract manufacturer, which were the primary suppliers
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`to the market of nutraceuticals and complementary medicines at the time. One of my
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`functions was to review patent landscapes and freedom to operate issues so as to
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`understand what products could be made or reformulated in Australia in relation to IP
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`rights. This was typical and critical for successful development of any new product
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`manufacture or distribution in Australia.
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`19.
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`For example, if a customer proposed a product as a new combination of actives, for
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`example fish oil with vitamin C added, that description would come to my
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`department. An assessment of the patent landscape for such a product would occur
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`very early in the process. When we received a proposal we would first see if there
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`were patent problems or barriers in relation to the actives proposed.
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`20. Then we would assess if the contemplated product would be technically sensible,
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`considering issues such as the potential adverse chemical reactions that might occur in
`the product, then advise the customer as how to we proposed to formulate the product.
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`21. If the formulation appeared feasible, we would get a costing of the formulation. The
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`customer would ultimately take an application to ARTG to get approval for marketing
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`the new formulation, once it passed these hurdles.
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`22. The costs associated with this process would depend on how much work had to be
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`done to assess and modify the product or formulation. For example, stability is a
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`primary concern, and you might have to spend tens of thousands of dollars to assess
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`and find the appropriately stable formulation. The development of the manufacturing
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`steps for such a formulation or capsule might cost as much as $20,000 or more. You
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`certainly would not want to take these steps if the earlier assessments were at all
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`problematic, or if the actives or formulations were protected by patents. So,
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`knowledge of the relevant patents for the products was critical early in product
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`development. If the patent landscape were not clear, then the project would be
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`unlikely to proceed.
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`Oils as Known Actives in July 2001
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`23. Among the known actives in the industry as early as July 2001 were various oils, fatty
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`acids, and phospholipids. In particular, fish oils were an active ingredient attracting a
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`great deal of interest by July 2001. There was an early interest in concentrated fish
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`oils.
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`24. Krill oil was also known to the industry at the time particularly because it was a
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`difficult active ingredient to deal with because of its high phospholipid content. Soft
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`capsules made with krill oil as the fill material would suffer from a problem of
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`capsules leaking. Normal fish oil wouldn’t have that problem because it wouldn’t
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`have as high a phospholipid content. That was well known in the art at the Relevant
`Date.
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`25.
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`Other than the problems with leaking soft capsules, additional problems with actives
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`such as krill oil that had high phospholipid content included water migration into the
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`capsule, which could cause precipitation in the clear oil, creating a “hazy” capsule.
`Additional problems with water migration include the creation of an increase in
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`volume within the capsule, creating a higher pressure. This also can cause the capsule
`to become hard, which leads to cracking of the capsule. For example, Lecithin is high
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`in phospholipids. At the Relevant Date, I, and my colleagues would routinely make
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`capsules with high lecithin content, but we had to account for subsequent increases in
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`Volume, for example, as the capsule contents would increase in volume from water
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`migration.
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`26.
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`So, in coming up with a commercially relevant formulation for manufacture of an oil
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`product at the Relevant Date, you would have to assess what the phospholipids were
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`in any proposed active, such as Lecithin or krill oil. You would need to know how
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`much phospholipid was there, and take this into account in making the product for
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`manufacture or for shelf stability.
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`27.
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`Since most phospholipids are inherently unstable once they are in the presence of
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`water or oxygen, they would necessarily degrade over time and this is another
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`problem that would have to be dealt with. Steps would have to be taken to remove the
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`component leading to the degradation. Degradation was typically a mixture of
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`oxidation and/or hydrolysis. Anything with phosphatidylserine in it, for example,
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`which is highly surface active and not chemically stable, was always a problem in
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`stabilization because of oxidation and/or hydrolysis.
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`28.
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`If you had an oxidation problem, you would add an antioxidant. A common addition
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`was one of the tocopherols (e. g. vitamin E) to reduce oxidation. It was commonly
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`added as a matter of routine to most of the oils formulated because the fatty acids in
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`the oils would readily oxidize. The addition of vitamin E (e.g. as d—alpha tocopherol)
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`would be to reduce oxidation of the oils and the rancidity of the oils. That was a
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`problem with all the oils.
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`29.
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`There was a wide range of antioxidants that would be used at that time: Vitamin E
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`(and other tocopherols), BHT, BHA, ascorbyl palmitate, and in the very old days,
`gallates. Vitamin E has the advantage of being able to be used as both an active and
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`an excipient, since Vitamin E has its own beneficial properties as a supplement. At the
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`Relevant Date, if I had been provided with a composition having a high phospholipids
`content for use as a nutraceutical, or a description of such a composition, I would
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`have assumed that the composition had an antioxidant added or would require one.
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`30.
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`If the product specified a high content of omega—3 fatty acids, a first concern would be
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`the prevention of oxidation. This would include adding antioxidants and the use of a
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`nitrogen atmosphere in manufacture. In some cases the product (or oil) would be
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`blanketed with nitrogen during manufacture. It was also standard to put such material
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`under a Vacuum - to suck any air out ~ in order to remove or deplete the oxygen
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`contacting the material so as to reduce oxidation.
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`.
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`I have been asked if, at the Relevant Date, I would have had a concern about
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`oxidation of any oil that contained DHA and/or EPA. In answer, I would have been
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`especially concerned about oxidation of any oil that contained DHA and/or EPA.
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`That would be the case because of how highly susceptible to oxidation such oils
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`would be. It would not matter if you have 10% or 90% of DHA or EPA in the oil, it
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`will still be subject to undesired oxidation with the oil becoming rancid.
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`.
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`I have been asked if plant compounds such as flavonoids would be used as
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`antioxidants in this process. In answer, if you had a mixture of an oil with a plant
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`extract with a flavonoid antioxidant, that might be beneficial, like the addition of
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`Vitamin E to such an oil. But you would have to have the flavonoid approved with
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`the TGA at least for use as an excipient. If larger amounts of flavonoid are put in,
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`where it may have a therapeutic benefit as well, the flavonoid would have to be an
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`approved active ingredient by the TGA.
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`33. At the Relevant Date, there were concerns in the production of oils in relation to any
`residual organic solvents present because of the negative health consequences of their
`presence in any product. Moreover, their presence could violate the TGA
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`specifications approved for the oil.
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`34. Extraction processes would commonly involve organic solvents. There was often a
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`step in the production process for these oils to reduce or remove organic solvents.
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`Some oils would lend themselves to one solvent over another.
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`35. Any new oil would prompt us to inquire into how it was extracted. There were limits
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`on the amount of residual solvents that could be in the product, and that would be part
`of the raw material specification. For example, acetone or hexane might have been
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`used, so their residual content would have to be checked to ensure they were in
`acceptable limits.
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`36. If a delivered lot of oil was received that showed greater than approved levels of
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`solvents, it would be sent back to the supplier of the oil. It was beyond the scope of
`the contract manufacturer to deal with that problem.
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`And I make this solemn declaration under the Patents Act 1990, and subject to the penalties
`provided by that Act for the making of false statements in statutory declarations,
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`conscientiously believing the statements contained in this declaration to be true in every
`particular.
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`DECLARED at
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`£7 é/{“—«-”(§fi/0:‘\€7
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`K94
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`M‘ M64 5.
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`3«’o/
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`this
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`/W N975
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`day of October 2012.
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`4
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