Sanofi-Aventis Australia Pty Ltd v Apotex Pty Ltd (No. 3) [2011] FCA 846

In a decision which considers both patent and copyright issues, the Federal Court recently found in favour of the patentee/originator, distinguishing between the purpose of administration and the result achieved in order to clarify construction of a method of treatment claim. Whether copyright subsisted in a Product Information document was also considered.

Sanofi-Aventis Deutchland GmbH (‘Sanofi’) is the owner of Australian Patent No. 670491 (‘the Patent’) having a priority date of 31 March 1993 and an expiration date of 29 March 2014. The only claim appearing in the granted Patent reads (in part):

“A method of preventing or treating a skin disorder, wherein the skin disorder is psoriasis, which comprises administering to a recipient an effective amount of a pharmaceutical composition containing as an active ingredient a compound of the formula I or II …”.

In relation to these proceedings the relevant compound of formula I is leflunomide. Leflunomide was the subject of an earlier filed Australian patent which expired in 2004. Sanofi Australia supplies leflunomide under the trade names “Arava” and “Arabloc”. Around July 2008 the respondent Apotex Pty Ltd (‘Apotex’) obtained registration of its generic version of leflunomide on the Australian Register of Therapeutic Goods. This was done in order to facilitate its intention to supply and offer to supply in Australia its generic leflunomide products for the treatment of psoriatic arthritis (PsA) and rheumatoid arthritis (RA). As part of this process Apotex submitted a Product Information (‘PI’) document. Sanofi asserted, inter alia, that this proposed conduct in relation to PsA threatened to infringe claim 1 of the Patent. Apotex cross-claimed, asserting that the Patent was invalid and that the supply of leflunomide products for the treatment of PsA would not infringe because, if properly construed, the claimed method is for the treatment of skin diseases only and not joint diseases such as PsA or RA.

Background Knowledge of Psoriasis, PsA and RA

Expert evidence was provided regarding what was understood in the field as at the priority date (1993) and at present in relation to psoriasis, RA and PsA. It was agreed by all experts that psoriasis and PsA were considered to be distinct disorders in 1993 in terms of both aetiology and clinical presentation. At this time it was thought that psoriasis was a proliferative disease in which the genetic abnormality associated with psoriasis directly influenced the epidermal cellular turnover rate. In turn it was thought that this hyper-proliferation of epidermal cells was the cause of the inflammation observed in psoriasis. Accordingly, prior to 1993 it was not an aim of the treatment to specifically target the inflammatory cells in the treatment of psoriasis. On the contrary, it was thought that by treating the hyper-proliferation of skin cells, the inflammation would be resolved. It is now acknowledged that the genetic abnormality associated with psoriasis leads to the inflammatory reaction and this is responsible for the increased cell turnover. While RA and PsA are also both inflammatory arthropathies they are distinct diseases and were known to be distinct as at 1993. It was acknowledged (now and 1993) that nearly all patients diagnosed with PsA who were not initially diagnosed with psoriasis would develop psoriasis sometime in the future. Accordingly, it is now recognised that if leflunomide is administered to a patient with PsA, that administration would also be expected to treat or prevent the patient’s psoriasis. There is no such relationship between psoriasis and RA.

Construction of Claim 1

It was agued by Apotex that the claim should be construed based on the “objective purpose” of the administration of leflunomide. That is, one should construe the claim in terms of the purpose of the administration which is the treatment of psoriasis. Jagot J identified that much of the complexity associated with Apotex’s case was based on trying to resolve the correct construction by reference to the particular conduct Sanofi alleged to be the potential infringing activity. The restraint sought by Sanofi was not direct infringement but indirect infringement through the prospective supply of leflunomide for the treatment of PsA. The Court agreed with Sanofi’s submission that the conduct alleged to constitute infringement should not have any bearing on the proper construction of the claim. In this regard, Jagot J cited Sachtler GmbH & Co KG v RE Miller Pty Ltd¹ which stated: “infringement does not determine construction; construction determines infringement”, and ultimately dismissed Apotex’s construction, acknowledging that the claim itself said nothing about the purpose of administration of the compound. In contrast, Jagot J acknowledged that the method is described and defined by a particular result which is the prevention or treatment of psoriasis. As such, it was concluded that while psoriasis is an essential integer of the method claim its essentiality operates in relation to the result or effect and not, as argued by Apotex, in relation to the purpose of administration.

Validity and Infringement

The claimed invention was found to be valid. Apotex submitted that based on the “reverse infringement test”, should the Court decide the issue of construction in favour of Sanofi, it should also find that the claim lacks novelty over the prior use of leflunomide. More particularly, if the use of leflunomide to treat PsA after the priority date is deemed an infringement of the claim, then the same use, before the priority date, will inherently also treat psoriasis and this will anticipate the claim. In relation to the first part, Jagot J found that because all patients with PsA will at some point develop psoriasis (that is, psoriasis is a diagnostic criterion of PsA) treating a person for PsA will also treat or prevent the psoriasis and hence infringement would occur. Unfortunately for Apotex, however, the prior art relied upon only taught that leflunomide was effective in the treatment of RA and multiple sclerosis. While it was acknowledged that as at the priority date 2% of people with RA would also have psoriasis, unlike PsA, the evidence showed that the prevention or treatment of psoriasis would not be an inevitable result of the administration of leflunomide to person suffering from RA. Jagot J concluded that in this context the reverse infringement test asks whether the alleged anticipation would infringe the patent. It is inherent in the test that there must be infringement for the test to yield a positive answer.

Based on the information from Apotex’s PI document, and in particular the phrase; “Apo- Leflunomide is not indicated for the treatment of psoriasis that is not associated with manifestations of arthritic disease”, Jagot J found that the proposed activities of Apotex would infringe based on section 117 of the Patents Act. This provision states that the supplier of a product may infringe a patent if: (1) the use of the product by the person to whom it is supplied would infringe the patent, and (2), one or more certain other conditions regarding the use are fulfilled. The PI document fulfilled one of these conditions involving the supply of instructions which induces another to infringe.  

Another one of the conditions is mentioned in section 117(2)(b) which states:  

“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.”  

In relation to this condition Apotex argued that leflunomide was a staple commercial product. Jagot J considered that the “product” as referred to in section 117(2)(b) was not leflunomide per se, but the specific formulation Apo-Leflunomide with all of its excipients and particular dosage amounts. Citing the High Court decision in Northern Territory v Collins2 with approval, Jagot J stated that it cannot be said that Apo-Leflunomide is a product “that not only can be used in a variety of ways but also is traded for use in various ways”. It would appear from at least this section of the judgment, that the Court has made it quite difficult for generic suppliers to avoid the section 117(2) (b) criteria as any deviation in formulation parameters to accommodate the new use is likely to result in a finding that the product is not a commercial staple.

COPYRIGHT INFRINGEMENT OF PRODUCT INFORMATION DOCUMENTS

What are Product Information Documents (PI)

Generally, before a medicine can be lawfully marketed and supplied in Australia, it must be approved by the Therapeutic Goods Administration (“TGA”). As part of this regulatory process, companies wishing to introduce a new drug or a new generic version of a drug must submit a Product Information document (“PI”) to the TGA for approval. PIs are intended to assist doctors, pharmacists and other health professionals to more competently prescribe and dispense medicines by setting out objective information regarding the drug’s quality, safety and efficacy.

Sanofi’s Product Information documents

Consistent with this regulatory regime, Sanofi had obtained TGA approval for a series of PIs it had submitted for the purposes of securing approval for its leflunomide pharmaceutical product, “Arava” (the “Arava PI”).

Apotex’s allegedly infringing conduct

In or about July 2008, Apotex obtained registration of generic versions of leflunomide on the Australian Register of Therapeutic Goods (“ARTG”). Relevantly, in procuring ARTG registration, Apotex submitted PI, which it admitted, reproduced a substantial part of the Arava PI.

Consequently, Sanofi alleged that Apotex had infringed the copyright subsisting in the Arava PI as a literary work within the meaning of s. 10 of the Copyright Act 1968 (Cth).  

In response, Apotex:  

  1. Challenged the originality and authorship of the Arava PI; and  
  2. Submitted that it had an implied license to copy the Arava PI for the purposes of obtaining TGA approval.  

Authorship

Jagot J found that the Arava PI were brought into existence through the collaborative effort of members of Sanofi’s Arava Cross-Functional and Global Labelling teams, who were each “qualified persons” for the purposes of the Copyright Act. The work undertaken by each member of the team could not be separated. Accordingly, Jagot J found that the Arava PI were works of “joint authorship”, noting consistently with the Full Court’s findings in Telstra Corporation Limited v Phone Directories Company Pty Ltd [2010] FCAFC 149, 3 that “it is not the case that each and every author must be individually identified for there to be a work of joint authorship”.4

Originality

Following the seminal decision of the High Court in Ice TV v Nine5, in order for copyright to subsist in a literary work, the work must be sufficiently “original”. To be “original” for the purposes of copyright law in Australia, the work, amongst other things, must be the result of human independent intellectual effort directed to the expression of the work in its material or published form.  

Relying upon these principles, Apotex submitted that the Arava work was not sufficiently original as, the work involved in merely completing a template form provided by the TGA was “so trivial as not to make that work an original work”.6  

Jagot J rejected these submissions, finding that the evidence clearly demonstrated that Sanofi’s employees had collectively imparted considerable skill, judgment and knowledge in the expression of the PI in a material form, including in the:  

  • selection of relevant material from a vast array of available information; and  
  • interpretation, arrangement and presentation of the information “so as to best convey a balanced statement about the drug’s risks and benefits”.7  

Accordingly, Jagot J found that copyright subsisted in the Arava PI as original literary works.  

Implied Licence

Apotex submitted that it had an implied licence to copy the Arava PI for the purpose of obtaining regulatory approval arising out of customary practices within the pharmaceutical industry, as well as the conduct and acquiescence of Sanofi. Apotex relied upon, amongst other things, the public policy benefits it said flowed consistency between originator and generic PI, and the fact that Sanofi “ha[d] been aware of, participated in, benefited from and never complained about the practice of generic companies making close copies of originator PIs.”8

Jagot J dismissed Apotex’s contentions, finding that:  

  • the evidence was insufficient to establish “either the existence of an industry wide practice of copying, or anything more than apparent neutrality by participants in the industry as to the copyright implications of such copying”9;
  • it was not necessary for drug companies seeking to register a generic version of a drug to copy originator PI in the interests of safety or otherwise; and
  • 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.  

For these reasons, Jagot J concluded that Apotex had infringed the copyright subsisting in the Arava PI without the license of Sanofi in contravention of section 36 of the Copyright Act.  

The Therapeutic Goods Legislation Amendment (Copyright) Act 2011 (Cth) (“TGLAC Act”)

As noted by Jagot J, flowing from recent amendments to the Copyright Act, from 28 May 2011, generic pharmaceutical companies have been able to use originators’ PI that have been previously approved by the TGA, without infringing the copyright in the original PI.  

The scheme has been implemented by the TGLAC, which inserts a new section 44BA into the Copyright Act. Section 44BA, provides, amongst other things, that the copyright subsisting in TGA approved PI is not infringed by an act that is undertaken to register a medicine under the Therapeutic Goods Act 1989 (Cth).10  

Jagot J explained that had the acts of infringement occurred on or after 28 May 2011, Apotex could have relied upon the protection provided by section 44BA.