A large number of countries exclude methods of medical treatment from patentability. This reflects an exception to the standard patent rationale of providing incentive for innovation.
The principal reasoning for excluding medical treatment methods from patentability in many countries is one of ethics, namely, that physicians should be free to practice the latest medical advances without fear of patent infringement or incurring costs of licensing new inventions. In a number of cases this patentability exclusion is based on a lack of ‘industrial applicability’ in that medical treatment methods do not qualify as ‘industry’ and are not ‘vendible products’. These notions in determining what defines patentable subject matter are broadly covered by the 'manner of manufacture' requirement under Australian and U.K. law.
Until 1992, the Australian courts had taken guidance from decisions of the English courts which had held that medical treatment methods failed to meet the ‘manner of manufacture' requirement for patentable subject matter. However, this changed in 1992 when a judge of the Australian Federal Court held that a method for treating sleep apnoea related to patentable subject matter (Rescare Ltd v Anaesthetic Supplies Pty Ltd  FCA 1065). This decision was later upheld on appeal to the full bench of the Federal Court, and the notion was re-affirmed by the full bench of the Federal Court in 2000 (Bristol-Myers Squibb Co v FH Faulding & Co Ltd  FCA 316). Although the patentability of medical treatment methods in Australia has generally been considered settled in view of the aforementioned full Federal Court decisions, some uncertainty remained in the absence of a High Court ruling.
On 4 December 2013 the High Court confirmed that methods of medical treatment involving the administration of therapeutic drugs are patentable subject matter in Australia (Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd  HCA 50). By way of background Sanofi commenced infringement proceedings against Apotex before the Federal Court in 2008, alleging that its patent would be infringed by Apotex’s proposed supply of leflunomide to treat psoriatic arthritis. Apotex cross-claimed seeking revocation of Sanofi’s patent on several different grounds, one being that a method of medical treatment of the human body is not a patentable invention under Australian law, as it does not satisfy the ‘manner of manufacture’ requirement. On appeal to the High Court, a 4-1 majority held that Sanofi’s patent is valid and in doing so confirmed that medical treatments involving the administration of therapeutic drugs define patentable subject matter. Despite being unsuccessful in challenging the validity of Sanofi’s patent, Apotex’s proposed supply of leflunomide to treat psoriatic arthritis was nonetheless found not to infringe Sanofi’s patent.
This decision of the High Court confirms the eligibility of medical treatment methods for patent protection in Australia, particularly those methods which require the administration of therapeutic drugs. The patentability of purely medical procedures such as surgery was not however specifically confirmed by High Court and hence may be subject to further consideration.