The High Court's finding this morning that a method of medical treatment can be a "manner of manufacture" and thus a patentable invention, is not only consistent with the long-held view but demonstrates Australia's perspective that these patents bring demonstrated economic benefit. Its finding on cross-label use and patent infringement demonstrate that indirect infringement will depend on the facts in each case (Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd [2013] HCA 50).

Sanofi's psoriasis compound and Apotex's generic

Sanofi-Aventis Deutschland GmbH was the registered owner of a patent which claimed a method of preventing or treating psoriasis by using a compound called leflunomide.

Apotex Pty Ltd registered its generic version of leflunomide on the Australian Register of Therapeutic Goods with the intention of selling it to treat rheumatoid arthritis and psoriatic arthritis. Almost every person with psoriatic arthritis has or will develop psoriasis.

Sanofi-Aventis argued this would infringe its patent; Apotex responded in the usual way by challenging the validity of the patent. By the time the case got to the High Court, the issues had been refined to two questions:

  • could a method of medical treatment be a "manner of manufacture" and thus patentable?
  • if a patent covers a method of treating a disease using a product (in the present case, leflunomide), does another person infringe that patent by supplying that product with instructions that it be used to treat a different disease?

A method of medical treatment can be a "manner of manufacture"

This was dealt with in great depth by the Court, with four of the five judges finding a method of medical treatment can be a "manner of manufacture", and thus patentable. A majority of the Court found seven separate legal and commercial bases justifying the patentability of these methods, including the patient benefits they bring and their economic utility.

Infringement by supply of products: instructions

If the use of a product by a person would infringe a patent, supplying the product can also infringe a patent in certain circumstances, which are set out in section 117 of the Patents Act.

The primary argument put by Sanofi-Aventis relied on section 117(2)(c), which refers to:

"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." [emphasis added]

Apotex's instructions specifically said its product was not indicated for non-arthritic psoriasis. This, said the majority, was an "emphatic instruction to recipients of Apo-Leflunomide from Apotex to restrict use of the product to uses other than use in accordance with the patented method in claim 1. Apotex's approved product information document does not instruct recipients to use the unpatented pharmaceutical substance, which it proposes to supply, in accordance with the patented method, and therefore the product information document does not engage section 117(2)(c) of the 1990 Act."

No evidence of a "reason to believe"

In the alternative, Sanofi-Aventis said that Apotex was indirectly infringing the patent pursuant to section 117(2)(b), which refers to:

" 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." [emphasis added]

The High Court majority also rejected this argument. The Court made it clear that whether a generic company has reason to believe that a product it supplied would be put to an infringing use will depend on the facts of each case.

Here, the claim was construed narrowly so as to only cover a method of treatment of psoriasis. Sanofi's problem was that the evidence at trial disclosed that dermatologists were not prescribing leflunomide for the treatment of non-arthritic psoriasis.

The High Court thus found that the evidence did not show, and did not allow an inference to be drawn, that Apotex had reason to believe that its products would be used in accordance with the patented method – particularly given that Apotex’s approved product information specifically directed that it not be used in this manner.

What does this mean for cross-labelling – and medical treatment patents generally?

The High Court has come down on the side of common sense and the status quo when it comes to patentability, giving all industry players some level of comfort.

When it comes to generics and cross-label or off-label use, the wording of the generic company's product information will be closely scrutinised.

This case was very much dependent on its particular facts and, especially, the specific nature of the directions provided in the Apotex product information and the absence of sufficient evidence about the manner in which the product would actually be used. However, if there had been evidence that the product would be used in an infringing way, and that Apotex ought to have known this was the case, the outcome may well have been very different.

In addition, finding evidence of a supplier's "reason to believe" that its product would be put to an infringing use could be as simple as putting forward its representatives' sales pitch. Given the high stakes involved in pharmaceutical patents, we doubt this avenue will remain unexplored.