Authors:  Gary Cox, Craig Humphris and Donna Meredith

In the decision of Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd [2013] HCA 50, the High Court of Australia, Australia’s supreme court, confirmed that methods of medical treatment are a “manner of manufacture” and therefore represent a patentable invention in Australia. Although Australia’s Patent Office (IP Australia) and the Australian Federal Courts have previously determined and held that such claims are patentable, the matter has never been tested before Australia’s supreme appellate court, the High Court of Australia. The decision is significant because it now provides certainty to both innovators and generics alike, that such claims are patentable. The decision also provides guidance on what might constitute indirect infringement of a second medical use claim by the supply of a product for a first off-patent medical use.

BACKGROUND

In 2008, Sanofi commenced first instance proceedings in the Australian Federal Court against Apotex claiming that Apotex’s supply of leflunomide to treat psoriatic arthritis would infringe Sanofi’s Australian Patent No 670491 (“the Patent”), which covers a method of using leflunomide to treat psoriasis. It is well known that in the majority of cases, patients with psoriatic arthritis have, or will, develop psoriasis and Sanofi claimed that Apotex’s product used on psoriatic arthritic patients would also treat psoriasis. Importantly, in their product information sheet, Apotex included a statement expressly excluding the use of their product for the treatment of psoriasis that is not associated with manifestations of arthritic disease.

Apotex responded by filing: (1) a defence that its product did not infringe the Patent; and (2) a cross-claim, asserting that the Patent is invalid, claiming that a method for treating the human body was not a patentable invention.

In 2011, the Federal Court dismissed Apotex’s cross-claim and found that Apotex had threatened to infringe Sanofi’s patent. On appeal to the Full Federal Court in July 2012, the Full Court upheld the trial judge’s decision. Apotex applied for special leave from the High Court to appeal from the decision of the Full Federal Court. Special leave was granted in December 2012.

THE DECISION

The High Court (which, at the time, comprised French CJ, Hayne, Crennan, Kiefel and Gageler JJ) was asked to answer the following two questions:

Question 1: Is a method of medical treatment a “manner of manufacture” and therefore a patentable invention?

Question 2: If an existing patent is directed to a method of treating a particular disease by the administration of a known drug, does a third party infringe that patent by supplying the same product for the purpose of treating a different disease not covered by the patent?

1. (a)Question 1 – Patent Validity

In delivering their judgement, the Court considered the body of case law in both Australia and the United Kingdom relating to manner of manufacture. Consideration was also given to the positions held in other major jurisdictions. The High Court ultimately reduced the debate down to two fundamental questions:

1. Is a process a proper subject for      the grant of a patent under the 1990 Act only if it results in a product      (a result, outcome or effect) which can be exploited commercially?
2. If yes to the above, does a      method of prevention or treatment of human disease meet that requirement?

In Australia, the boundaries of the definition of “manner of manufacture” are broad and constantly evolving and it is identified in the Explanatory Memorandum to the Patents Bill 1990 as meaning:

“little more than that an invention must belong to the useful arts rather than the fine arts.”

In their judgement, the majority placed emphasis on the following excerpt from the judgment of Lockhart J in the Australian Federal Court (Full Court) decision of Anaesthetic Supplies Pty Ltd v Rescare Ltd (1994) 50 FCR 1 at 19:

“If a process which does not produce a new substance but nevertheless results in ‘a new and useful effect’ so that the new result is ‘an artificially created state of affairs’ providing economic utility, it may be considered a ‘manner of new manufacture’ within s 6 of the Statute of Monopolies.”

In consolidating the views of the majority, Chief Justice French of the present case stated:

“The exclusion from patentability of methods of medical treatment represents an anomaly for which no clear and consistent foundation has been enunciated. Whatever views may have held in the past, methods of medical treatment, particularly the use of pharmaceutical drugs, cannot today be conceived as ‘essentially noneconomic’.”

The majority of the High Court (Hayne J dissenting) therefore answered in the affirmative to the patent validity question, confirming that methods of medical treatment of the human body are valid patentable subject matter in Australia. This is consistent with long-standing practice in Australia and is in line with the decision of the High Court of Australia in Bernhard Joos v Commissioner of Patents (1972) 126 CLR 611, which held that cosmetic processes or methods for improving or changing the appearance of the human body, which could be considered economically beneficial, were proper subject matter for the grant of patents.

1. (b)Question 2 – Patent Infringement

While the majority of the High Court finding that the Patent was valid, their Honours found that Apotex’s leflunomide product did not infringe the patent.

According to s117(1) of the Patents Act, if the use of a product by a person would infringe a patent, then supply of the product can also infringe a patent. Sanofi’s primary argument relied on section 117(2)(c), which states:

“(2)  A reference in subsection (1) to the use of a product by a person is a reference to:

(c) … the use of the product in accordance with any instructions for the use of the product, or any inducement to use the product, given to the person by the supplier or contained in an advertisement published by or with the authority of the supplier.”

In the alternative, Sanofi contended that Apotex was indirectly infringing their patent pursuant to section 117(2)(b), which states that:

“(2)  A reference in subsection (1) to the use of a product by a person is a reference to:

(b) if the product is not a staple commercial product – any use of the product, if the supplier had reason to believe that the person would put it to that use.”

Since Apotex’s instructions specifically excluded the use of their product for non-arthritic psoriasis, the court found that Apotex was not liable for contributory infringement and that the product information sheet does not engage section 117(2)(c) of the Act. The court held that it could not be inferred that Apotex had any reason to believe that their product would be used according to Sanofi’s patented method, given that this would have been contrary to the stated indication on the product information sheet provided by Apotex.

 

In light of this decision, it now appears that in cases where an off-patent pharmaceutical is the subject of a second medical use patent, supply of the pharmaceutical for the purpose of the first medical use might not be considered an infringement of the second medical use patent, provided express instructions are provided by the supplier that the product is only to be used for the off-patent use. Generic suppliers might ultimately avoid being liable for contributory infringement in cases where the end user has used the product for the patented second medical use “off label”, despite instructions to the contrary from the generic supplier. However, the outcome may be very different if there was evidence to suggest that the generic knew, or ought to have known, that their product might be used in a way that would infringe the innovator’s patent.