Apotex Pty Ltd v Sanofi -Aventis Australia Pty Ltd (No 2) [2012] FCAFC 10

The Full Court of the Federal Court of Australia has recently confirmed that Apotex did not have an implied licence to copy the Product Information (PI) for trade rival Sanofi's anti-arthritis drug, Arava (active ingredient leflunomide) for the purposes of obtaining TGA approval of Apotex's generic leflunomide products. The Court held that Apotex had therefore infringed Sanofi's copyright.

Sanofi's allegations of copyright infringement

As previously reported, in 2008, Sanofi issued Federal Court proceedings against Apotex alleging that, amongst other things, Apotex had infringed the copyright subsisting in the PI for its anti-arthritis drug "Arava" (leflunomide) by submitting PI for Apotex's generic leflunomide products that reproduced a substantial part of the Arava PI.1

Apotex's initial response

In response, Apotex contended that copyright did not subsist in the Arava PI and that, in any event, it had an implied licence to copy the Arava PI for the purposes of TGA approval, which arose either out of customary practices in the pharmaceutical industry or the conduct and acquiescence of Sanofi.

The copyright findings at first instance

In July 2011, Justice Jagot found that, despite Apotex's assertions to the contrary, copyright subsisted in the Arava PI as original literary works, and that Apotex was not an implied licensee of that copyright.In relation to the latter finding, Justice Jagot considered that Apotex had failed to show a proper foundation for the existence of an implied licence in circumstances where:

  1. the evidence was insufficient to establish the existence of an industry wide practice of PI copying;
  2. it was not necessary for drug companies seeking to register a generic version of the drug to copy originator PI; and
  3. there was no mutuality as between originator and generic pharmaceutical companies, in the sense that generic companies rarely contributed original PI to the pool of approved PI.

Full Court confirms that Apotex did not have an implied licence

In December 2011, Apotex appealed Jutice Jagot's decision to the Full Court of the Federal Court of Australia contending that her Honour wrongfully rejected its claim to an implied licence. Apotex did not seek to disturb her Honour's copyright subsistence findings.

On appeal, the Full Court dismissed Apotex's assertions, finding that Justice Jagot's views were "amply justified".2 Chief Justice Keane considered that Justice Jagot's findings were also consistent with "the common law's disapproval of horizontal arrangements between traders which might tend to blunt the edge of competition between them".3

New PI exemptions to copyright infringement

Sanofi was entitled to relief in respect of copyright infringement by Apotex that occurred before the commencement of new PI exemptions in the Australian Copyright Act on 28 May 20114. However, as a result of those new exemptions, Sanofi was not entitled to any relief for copyright infringement occurring on or after 28 May 2011. This means that as of 28 May 2011, generic pharmaceutical companies can copy originators' PI documents without liability for copyright infringement in certain circumstances, but they may still be held liable for any copying that occurred prior to 28 May 2011.

A detailed discussion of the new copyright infringement exemptions is available here.