FEDERAL COURT OF AUSTRALIA
Sanofi-Aventis Australia Pty Ltd v Apotex Pty Ltd (No 3) [2011] FCA 846
IN THE FEDERAL COURT OF AUSTRALIA | |
DATE OF ORDER: | |
WHERE MADE: |
THE COURT ORDERS THAT:
1. The parties confer and file agreed or competing proposed orders reflecting the reasons for judgment published today by 12 August 2011.
2. The proceeding be listed for directions and/or the making of orders at 9.30 a.m. on 16 August 2011.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court’s website.
NEW SOUTH WALES DISTRICT REGISTRY | |
GENERAL DIVISION | NSD 1664 of 2008 |
BETWEEN: | SANOFI-AVENTIS AUSTRALIA PTY LTD ACN 008 558 807 First Applicant SANOFI-AVENTIS DEUTSCHLAND GMBH Second Applicant AVENTISUB II INCORPORATED Third Applicant
|
AND: | APOTEX PTY LTD ACN 096 916 148 Respondent
|
JUDGE: | JAGOT J |
DATE: | 29 july 2011 |
PLACE: | SYDNEY |
REASONS FOR JUDGMENT
1 This proceeding concerns three principal issues. The first is the validity and, if valid, alleged threatened infringement of Australian Patent No. 670491 (the patent). The second, which depends on the resolution of the first issue, relates to alleged contraventions of the Trade Practices Act 1974 (Cth) (the Trade Practices Act) by reason of the alleged threatened infringement of the patent. The third relates to alleged contraventions of the Copyright Act 1968 (Cth) (the Copyright Act) in connection with product information documents.
2 The patent is entitled “pharmaceutical for the treatment of skin disorders”. It has a priority date of 31 March 1993 and expires on 29 March 2014.
3 The patent has a single claim only. Claim 1 of the patent is in these terms:
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…
4 A compound of formula I is leflunomide. The compound leflunomide was the subject of Australian Patent No. 529341, which expired in 2004 (the 341 patent).
5 The first applicant, Sanofi-Aventis Australia Pty Ltd (Sanofi-Aventis Australia), supplies leflunomide in Australia under the trade names “Arava” and “Arabloc” and, it is alleged, is the owner of copyright in certain product information documents associated with the product Arava (the Arava works). The second applicant, Sanofi-Aventis Deutschland GMBH (Sanofi-Aventis Deutschland), is the registered owner of the patent under the Patents Act 1990 (Cth) (the Patents Act) and, it is alleged, the joint owner with the third applicant, Aventisub II Incorporated (Aventisub II), of copyright in some of the Arava works. The applicants are referred to in these reasons for judgment as the Sanofi-Aventis parties or Sanofi-Aventis unless it is necessary to distinguish between them.
6 In or about July 2008 the respondent, Apotex Pty Ltd (Apotex), obtained registration of its generic versions of leflunomide on the Australian Register of Therapeutic Goods (the ARTG). Apotex did so in order to implement its acknowledged intention to supply and offer to supply in Australia its generic leflunomide products for the treatment of psoriatic arthritis and rheumatoid arthritis (referred to as PsA and RA respectively in much of the evidence and, where convenient, below). Sanofi-Aventis claimed that, by its proposed conduct in respect of the indication for PsA, Apotex threatens to infringe claim 1 of the patent by reason of which Sanofi-Aventis Australia and Sanofi-Aventis Deutschland will suffer loss and damage. Sanofi-Aventis further claimed that Apotex’s failure to warn customers that use of Apotex’s leflunomide products will infringe the patent constitutes misleading and deceptive conduct in contravention of the Trade Practices Act.
7 In answer, Apotex contended that if the patent is valid, the supply of its leflunomide products for the treatment of PsA will not infringe the patent because, properly construed, an essential integer of claim 1 is that the method constituting the invention is a method for the treatment of the skin disease psoriasis only and not the joint disease psoriatic arthritis. Alternatively, Apotex contended that the patent is invalid and should be revoked on one or more of the following grounds identified in s 138(3) of the Patents Act:
Claim 1 of the patent does not identify a patentable invention within the meaning of s 18(1)(b)(i) of the Patents Act as the alleged invention was not novel at the priority date (see s 138(3)(b)).
Claim 1 of the patent does not identify a patentable invention within the meaning of s 18(1)(b)(ii) of the Patents Act as the alleged invention does not involve an inventive step (see s 138(3)(b)).
Claim 1 of the patent does not identify a patentable invention within the meaning of s 18(1)(a) of the Patents Act as the alleged invention is not an “invention” or, further or alternatively, is not a “manner of manufacture” (see s 138(3)(b)).
Claim 1 of the patent does not identify a patentable invention within the meaning of s 18(1)(c) of the Patents Act as the alleged invention is not useful (see s 138(3)(b)).
The specification of the patent does not comply with the sufficiency requirement in s 40(2) of the Patents Act (see s 138(3)(f)).
The alleged invention in claim 1 of the patent is not fairly based on the specification as required by s 40(3) of the Patents Act (see s 138(3)(f)).
8 In obtaining registration on the ARTG, Apotex made and supplied to the Therapeutic Goods Administration (the TGA) a product information document concerning the Apotex leflunomide products. The Sanofi-Aventis parties contended that in so doing Apotex infringed the copyright owned by them in certain of the Arava works. Apotex admits that, in making its product information document, it copied a document identified as Arava product information dated 12 February 2007 (otherwise referred to below as the approved Arava PI or version 21). According to Apotex, this act of copying did not breach copyright either because copyright does not subsist in the Arava works as they are not original works, or because Apotex had an implied licence to copy the Arava works.
9 These reasons for judgment are ordered as follows:
[1] | |
[1] | |
[2] | |
[9] | |
[10] | |
[11] | |
[12] | |
[28] | |
[44] | |
[54] | |
[59] | |
[59] | |
[60] | |
[62] | |
[64] | |
[65] | |
[69] | |
[70] | |
[72] | |
B6.5 Professor Smith’s evidence about the prior art documents | [76] |
B6.6 Professor Brooks’ evidence about the prior art documents | [86] |
[94] | |
[94] | |
[104] | |
[108] | |
[108] | |
[113] | |
[116] | |
[131] | |
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[134] | |
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[139] | |
[146] | |
[150] | |
[156] | |
[156] | |
[160] | |
[160] | |
[168] | |
[175] | |
G3.1 General observations | [175] |
[193] | |
[207] | |
[228] | |
[236] | |
[244] | |
[247] | |
[254] | |
[259] | |
[274] | |
[275] | |
[283] | |
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[286] | |
[289] | |
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[293] | |
[302] | |
[316] | |
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[321] | |
[332] | |
[332] | |
[348] | |
[362] | |
[362] | |
[370] | |
[384] | |
[385] |
10 In these reasons for judgment certain abbreviations are used as follows:
AA model means the Adjuvant Arthritis animal model referred to in the 341 patent.
AAP model means the Adjuvant Arthritis Perper Modification animal model referred to in the 341 patent.
AE model means the Allergic Encephalomyelitis animal model referred to in the 341 patent.
approved Apotex PI means Apotex’s Apo-Leflunomide product information document approved by the TGA in July 2008.
approved Arava PI means the Arava product information document dated 12 February 2007.
Arava works means the product information documents for Sanofi-Aventis’s leflunomide product Arava.
ARTG means the Australian Register of Therapeutic Goods.
Bartlett article means Bartlett et al, Leflunomide (HWA 486), a novel immunomodulating compound for the treatment of autoimmune disorders and reactions leading to transplant rejections (1991) 32 Agents and Actions 10-21.
CCP test means the cyclic citrullinated peptide (CCP) test. This is a blood test highly specific for RA.
DMDS means the Development Master Data Sheet created during the early clinical phase of the development of leflunomide.
Gladman article means Gladman D, Toward Unravelling the Mystery of Psoriatic Arthritis (1993) 36 Arthritis and Rheumatism 881-884)
Kaltwasser article means Kaltwasser et al, Efficacy and Safety of Leflunomide in the Treatment of Psoriatic Arthritis and Psoriasis (2004) 5 Arthritis & Rheumatism 1939-1950.
Nash article means Nash et al, Leflunomide Improves Psoriasis in Patients with Psoriatic Arthritis: An In-Depth Analysis of Data from the TOPAS Study (2005) 212 Dermatology 238-249.
NHEK means normal human epidermis keratinocytes.
NSAIDS means non-steroidal anti-inflammatory drugs.
PASI means the Psoriasis Area Severity Index.
341 patent means Australian Patent No. 529341 (a patent for the compound leflunomide).
the patent means Australian Patent No. 670491 (the patent in suit).
PBS means the Pharmaceutical Benefits Scheme.
PI means a product information document regulated by the Therapeutic Goods Act 1989 (Cth).
proposed Apotex PI means Apotex’s Apo-Leflunomide product information document submitted to the TGA for approval in June 2010.
PsA means psoriatic arthritis.
PsARC means the Psoriatic Arthritis Treatment Response Criteria.
RA means rheumatoid arthritis.
Regulatory Guidelines means the Australian Regulatory Guidelines for Prescription Medicines (June 2004) published by the TGA.
RF means the “rheumatoid factor” disclosed in the blood, which is an indicator for RA in about 70% of cases but is not specific for RA.
Rozman abstract means Rozman et al, The effects of Leflunomide (LF) in patients with rheumatoid arthritis (1992) 35 Arthritis and Rheumatism S108.
SPC means the Summary of Product Characteristics created for Arava in about 1997-1998.
TGA means the Therapeutic Goods Administration.
TNF α means Tumour Necrosis Factor α.
TOPAS study means the multinational, double-blind, randomised, placebo-controlled clinical trial of leflunomide for the treatment of PsA and psoriasis the results of which were published in the Kaltwasser article
US PI means the United States product information document for Arava.
B Overview of the evidence about psoriasis, RA and PsA
11 There was little disagreement between the medical experts (Dr Stephen Shumack, Professor Malcolm Smith and Professor Peter Brooks) about the diseases psoriasis, psoriatic arthritis and rheumatoid arthritis as understood in 1993 (the priority date of the patent being 31 March 1993) and today.
12 Dr Shumack is a physician specialising in dermatology. He graduated from the University of New South Wales in 1980 (Bachelor of Medicine / Bachelor of Surgery). In 1991 he became an Elected Fellow of the Australasian College of Dermatologists, having been a Dermatology Registrar both at St Vincent’s Hospital (Sydney) in 1987-1988 and 1990, and at Royal Prince Alfred Hospital (Sydney) in 1989. Between 1991 and 1993 Dr Shumack was an Honorary Consultant Dermatologist of the Skin and Cancer Foundation in Sydney. From 1991 to the present day he has practised at two private clinics. From 1992 to the present day Dr Shumack has also held the position of Consultant Dermatologist at the Royal North Shore Hospital. Between 1992 and 2004 he was also a Consultant Dermatologist at St George Hospital in Sydney, and between 1996 and 2004 he was the Chair of the Department of Dermatology there. He has been a clinical investigator in a number of human trials involving new agents for the treatment of dermatological conditions and has presented the results of a number of these trials in Australia and internationally. Dr Shumack has been a Member of the Board of the College of Dermatologists since 1996. The College administers the accreditation program for dermatologists in Australia. Dr Shumack has held a number of honorary appointments and has co-authored various publications in a range of medical journals.
13 Dr Shumack explained that the skin comprises three distinct layers: the subcutaneous tissue, the dermis, and the outer layer or epidermis. The subcutaneous tissue consists of fat, blood vessels and nerve fibres, and forms the base of the supporting structures for the skin. The dermis consists of collagen and elastin fibres as well as blood vessels, nerve fibres, hair follicles and sweat ducts. The epidermis consists of “a proliferative basal layer where the cells divide before progressing to the outer surface where the cells die, producing a boundary layer of dead cells.” According to Dr Shumack, “[i]n normal skin, the movement of cells from the basal layer to the outer surface of the skin (referred to as cell turnover) takes approximately 35 days. After this, the dead cells shed off either as individual cells or in small microscopic groups.”
14 Dr Shumack described psoriasis as:
…a genetically determined proliferative disease of the skin characterised by demarcated, red scaly plaques.
15 Psoriasis thus results from a genetic abnormality, although the nature of that abnormality is yet to be determined.
16 In patients with psoriasis, “the turnover rate of epidermal cells is increased by a factor of around 5. This means that the time taken for a cell dividing at the base of the skin to reach the surface is approximately 7 days” (in contrast to the 35-day cell turnover in normal skin).
17 Dr Shumack explained that:
Psoriasis is also associated with an inflammatory response primarily confined to the dermis and epidermis, characterised by a microscopic collection of inflammatory cells. These inflammatory cells secrete cytokines which are proteins able to modulate the activity of other cells. The cytokines released by the localized [sic] inflammatory cells produce a number of morphological changes to the skin including increased size and tortuosity (i.e. twisting) of dermal blood vessels, leading to increased blood supply and thickening of the epidermis.
18 Dr Shumack said that psoriasis can range in severity from mild to quite severe. There are a large number of measures used to assess severity, but the most commonly used in a clinical setting is the Psoriasis Area Severity Index (PASI) scoring method. In Australia (given the requirements of the PBS regulating prescriptions) a PASI score of greater than 15 is usually considered severe, whereas as a score of 8 to 15 is usually considered moderate (though medical practitioners would accept a lower PASI score of 12 or above as severe in clinical terms). Psoriasis is characterised by returning bouts of clinical signs of the disease. About one in 40 people worldwide – that is, around 2% of the population – suffers from psoriasis.
19 According to Dr Shumack, in 1993 the cause of the inflammation associated with psoriasis was considered to be the proliferation of skin cells. As Dr Shumack explained:
…it was thought that the genetic abnormality associated with psoriasis directly influenced the epidermal cellular turnover rate. In other words, the genetic abnormality programmed the epidermal cells to turnover more quickly. In 1993, it was also thought that the hyper-proliferation of epidermal cells was itself the cause of the inflammation observed in psoriasis.
20 However, the current view (which is now accepted as orthodox) is that the proliferation of skin cells in psoriasis is caused by inflammation. As Dr Shumack explained:
[t]he current view is that the genetic abnormality associated with psoriasis leads to an abnormal inflammatory reaction localised predominantly to the dermis and epidermis of the psoriasis plaques. This localisation of inflammatory cells leads to the secretion of cytokines which are responsible for increased epidermal cell turnover.
21 In summary, as Dr Shumack put it:
the role that the immune system played in psoriasis was not well defined or understood in March 1993 but rather was seen as a secondary phenomenon resulting from the hyper-proliferation of keratinocytes. Therefore, prior to March 1993, it was not an objective of treatment to specifically target the inflammatory cells in the treatment of psoriasis. It was thought that by treating the hyper-proliferation of skin cells, the inflammation would resolve.
22 Hence, in 1993 Dr Shumack would not have considered administering a drug to a patient with psoriasis on the basis that the drug had been shown to have an effect on the immune system. The reason for this is that as psoriasis was thought to be a condition resulting from hyper-proliferation of skin cells (with the associated inflammation resulting from the hyper-proliferation), treatment with an anti-inflammatory drug would have assisted in resolving the inflammation but the psoriasis would persist. Today, however, psoriasis is considered by dermatologists to be an immune disorder (in that the mechanism underlying the development of psoriasis is known to involve the abnormal activation of the immune system, which is believed to result in inflammation). Dr Shumack confirmed this evidence in cross-examination in the following terms:
But you, yourself, were aware in ’93 of this developing view that the immune system was the driver of psoriasis? I was.
To what extent does the hyperproliferative view actually contradict the immune view now? Well, it doesn’t really contradict. I mean, the view is that – the hyperproliferative view is that the genetic abnormality which is associated with psoriasis results in an increased cellular turnover of the epidermal – that’s the top layer of skin – the epidermal cells, and the increased cellular turnover in itself causes some degree of inflammation which draws in inflammatory cells, which are really, I suppose, passengers in that increased cellular turnover theory. And this was the commonly held view up until probably that time or shortly thereafter. The other view, the alternative view, which we now know is the correct, at this point in time, view, is that the genetic abnormality in psoriasis causes an abnormal immunological action secondary to something that we don’t know, probably an unknown allergen, and it’s this increased cellular infiltrate associated with this inflammation which produces the cytokines that we were talking about before, these inflammatory mediators, and that in itself causes the increased cellular turnover in the mechanism psoriasis. So it’s a bit like the chicken and the egg, in the sense that the old theory – increased cellular turnover, inflammation – and the new theory – inflammation, increased cellular turnover.
23 Dr Shumack explained that both in 1993 and today, as a dermatologist, he had and has a rudimentary understanding of psoriatic arthritis (which he described as “an inflammatory disease in which inflammation is directed at the joint”), including its clinical signs. In 1993 he saw (and today sees) very few psoriasis patients with severe psoriatic arthritis, as these patients ordinarily would be under the care of a rheumatologist. However, he has treated a small number of psoriasis patients who have also been under the care of a rheumatologist for their concurrent psoriatic arthritis.
24 In 1993, “psoriasis and psoriatic arthritis were considered to be distinct disorders both in terms of aetiology and clinically.” To Dr Shumack’s knowledge the only drug then available that treated both diseases was methotrexate, although it was thought to treat psoriatic arthritis by its anti-inflammatory action and psoriasis by its anti-mitotic (i.e. anti-proliferative) activity.
25 According to Dr Shumack:
(1) approximately 65% of patients exhibit psoriatic skin lesions (psoriasis) before the development of psoriatic arthritis;
(2) approximately 19% of patients are diagnosed with psoriatic arthritis before the development of psoriasis; and
(3) approximately 16% of patients develop psoriasis and psoriatic arthritis at the same time.
26 In other words, almost all patients diagnosed with psoriatic arthritis who have not been diagnosed with psoriasis develop psoriasis at some time in the future, although its severity is variable.
27 Dr Shumack had not heard of leflunomide in 1993 and has never prescribed it to any of his patients.
28 Professor Smith graduated with a Bachelor of Science (Biochemistry) in 1973 and with a Bachelor of Medicine / Bachelor of Surgery in 1977, and was awarded his PhD by Flinders University in 1989. He has been a Fellow of the Royal Australian College of Physicians since 1985 and is a member of the Australian Rheumatology Association. He specialised in rheumatology from 1982, training under Professor Brooks, and was appointed Senior Registrar in Rheumatology at Flinders Medical Centre and Repatriation General Hospital in 1984. His PhD involved research into the immunological mechanisms which underlie inflammatory arthritis (specifically the role of the cytokine interleukin 2 in rheumatoid arthritis and psoriatic arthritis). Professor Smith was a postdoctoral research fellow at Harvard Medical School in 1988 and 1989. His research focused on the regulation of cytokines involved in inflammatory conditions including arthritis. In 2002, he was appointed Professor of Medicine at Flinders University in South Australia. Professor Smith is currently Senior Consultant in Rheumatology at Flinders Medical Centre and Repatriation General Hospital. He has been actively involved in research since 1982, including in the establishment of the Rheumatology Research Laboratory at Flinders Medical Centre in 1990 and the synovial membrane tissue bank at the Repatriation General Hospital in 1993. He has been involved in undergraduate and postgraduate teaching since 1980. Professor Smith regularly attends key rheumatology conferences and is the author and co-author of numerous articles in medical journals.
29 Professor Smith described the immune system as “a mechanism for the body to deal with foreign agents or cells that are recognised as foreign.” The immune system includes a soluble chemical-mediated response known as cytokines and a cell-mediated response. Hence, the “immune system involves a complex interaction between a range of cell types, tissues, organs, chemicals, pathways and processes.” Different cell types are involved in an immune response including lymphocytes, particularly B lymphocytes and T lymphocytes. There are different classes of T lymphocytes (or T cells) which play different roles in the immune system.
30 Inflammation is the reaction of the immune system to stimuli. In an inflammatory response, cells of the immune system are drawn to the site of the injury or infection. The hallmarks of inflammation are redness, swelling, pain, increased temperature and loss of function.
31 Conditions involving defects in the immune system may be referred to generally as “immune disorders”, but it is known (and has been known for decades) that each disease manifests from a defect in a particular aspect of the immune system. Hence, according to Professor Smith:
The fact that a drug is known to suppress or modify the immune system is not sufficient to determine whether it will be adequate to treat a particular disease state. To determine this, it is necessary to determine that the drug affects the same immune pathways or cell types that are responsible for the disease state of interest. In the absence of such information one could not have any confidence that the drug would be effective to treat that disease state.
32 Professor Smith described “arthritis” as “a global term applied to a large number of joint-related disorders.” The expression “inflammatory arthritis” is reserved for those forms of arthritis where inflammation of the joint tissues is the underlying cause of damage to the joints (in contrast, for example, to osteoarthritis where the inflammation of the joint is the result of degenerative changes). The so-called inflammatory arthridities or arthropathies are rheumatoid arthritis (on the one hand) and the seronegative arthropathies (on the other hand). The seronegative arthropathies include psoriatic arthritis, ankylosing spondylitis, reactive arthritis and inflammatory bowel disease-associated arthritis. Of the seronegative arthropathies psoriatic arthritis is the most common, accounting for some 25% of all cases of inflammatory arthritis. Rheumatoid arthritis accounts for 60-70% of cases of inflammatory arthritis.
33 Professor Smith explained that rheumatoid arthritis is an autoimmune disease in which the body mounts an immune response to “self”, resulting in inflammation of the synovial membrane that lines joints and tendon sheaths. About 1% of people suffer from RA. RA usually presents as peripheral symmetrical arthritis (i.e. it affects the small joints of the hands and feet on both sides of the body). Professor Smith said that in 1993 it was believed that RA was a T cell-mediated disorder. Subsequent research demonstrated that various types of inflammatory cells, not only T cells, play important roles in the mechanism underlying RA.
34 In 1993, patients were diagnosed with RA largely by reference to the symmetrical peripheral pattern of joint inflammation, which is highly distinctive of RA. In addition, patients would be given a blood test to determine if they were rheumatoid factor (RF) positive. Overall RF is detected in 70% of patients with RA, but rates of detection tend to be lower in the early stages of the disease and increase thereafter. RF, however, can also be detected in patients with other disorders and is not specific for RA. Today other blood tests are available to help confirm a diagnosis of RA, including the cyclic citrullinated peptide (CCP) test. The CCP test is highly specific for RA. Approximately 98% of patients with anti-CCP antibodies in their blood have or will develop RA. Due to this specificity Professor Smith says one can be confident that, if the CCP test is positive, the person has or will develop RA and, if the CCP test is negative, the person does not have and will not develop RA. The CCP test has been available in Australia since 2003.
35 Professor Smith described psoriatic arthritis as an “inflammatory arthritis associated with the skin disorder psoriasis and a negative blood test for RF.” Typically PsA presents as “an asymmetrical inflammatory arthritis affecting around three to five joints in total. Arthritis is said to be ‘asymmetrical’ if it affects a joint on one side of the body without affecting the corresponding joint on the other side.”
36 In 1993, the diagnosis of PsA usually involved taking a family history (as the vast majority of patients with PsA have a personal or family history of the disease). Also, certain X-ray changes are highly characteristic of PsA. Further, since it became available in 2003, a positive CCP test would indicate that a patient suffered from RA rather than PsA.
37 According to Professor Smith, in 1993, although PsA was known to be an inflammatory arthritis, “the specific inflammatory cells, chemicals and pathways driving inflammation and joint damage had not been identified.” In 1993 there was no evidence that PsA was T cell-mediated; in contrast, RA was known to be so. Since 1993, increased research into the pathology of the seronegative arthropathies means that it became known that PsA, like RA, is a T cell-mediated disease. As to treatment, in 1993 there were no drugs specifically identified or designed for the treatment of PsA, while a number of drugs had by then been developed for RA.
38 As to psoriasis, Professor Smith said that:
In 1993, diagnosis and management of psoriasis was not part of the discipline of rheumatologists, but was the domain of dermatologists. The relevance of psoriasis to rheumatologists was as an element in the diagnosis of psoriatic arthritis. Given this, rheumatologists only had a basic or rudimentary understanding of psoriasis (including its underlying pathology) based primarily on study at medical school.
39 Professor Smith said that in 1993 rheumatologists understood psoriasis to be a disease resulting from excessive proliferation of skin cells, although the trigger for the proliferative response was unclear. While it was known in 1993 that psoriasis was characterised by the presence of increased numbers of inflammatory cells in the skin, and increased blood supply, “it was thought this was caused by the hyper-proliferating cells in the basal layer of the skin.” Accordingly, Professor Smith said:
In 1993, given that psoriasis was considered a proliferative disease, it was thought that the pathology of this disease was not related to the pathology of psoriatic arthritis (or rheumatoid arthritis). Given this, rheumatologists did not take any interest in the disease (other than as part of the diagnostic process).
40 As Professor Smith explained in cross-examination:
There were certainly known to be lymphocytes present in the synovial membrane of patients with psoriatic arthritis. Whether they were important in the pathogenesis of the disease was unknown at that stage.
41 In 1993, Professor Smith was aware that most drugs used to treat PsA did not show any benefit in the treatment of psoriasis, with the exception of methotrexate. At that time it was thought that methotrexate “might act beneficially” in the treatment of psoriasis because it has anti-proliferative effects.
42 Professor Smith was not aware of leflunomide in 1993 and did not become aware of it until 1998. Leflunomide modifies the function of different types of T cells. Professor Smith uses leflunomide today to treat both RA and PsA. According to Professor Smith:
Today, on the basis that psoriatic arthritis and psoriasis are both understood to be T cell-mediated disorders, I expect that if a patient suffering from psoriatic arthritis with associated psoriasis received Leflunomide, the Leflunomide would, in addition to treating their psoriatic arthritis, also treat their psoriasis.
Furthermore, if a patient presented with psoriatic arthritis but had not yet manifested psoriasis, I expect that if the patient received Leflunomide, in addition to treating their psoriatic arthritis, the Leflunomide would also reduce the probability of that patient developing psoriasis in the future. If the patient did subsequently develop psoriasis, I expect that it would be less severe, as a result of the Leflunomide treatment, than would otherwise have been the case.
43 When asked in cross-examination about the use of leflunomide in the treatment of psoriasis, Professor Smith gave this evidence:
…the question is asking me how effective is leflunomide in psoriasis, and I can’t answer that because I’m not a dermatologist and I don’t treat psoriasis except when it is in the situation of psoriatic arthritis, and, even then, I’m treating the psoriatic arthritis; I’m not treating the psoriasis. So I can’t really honestly answer that question.
When you say, even then, you are not treating the psoriasis, you are treating the psoriatic arthritis – I think that is what you said? Yes.
You mean you are administering the, let’s say, leflunomide for the purpose of treating psoriatic arthritis in that case? Correct.
The joint disease? Yes.
And if it has a benefit, as the TOPAS study suggests, in relation to the patient’s dermatological disease, that’s an incidental benefit? I am certainly pleased with the result for the patient, but that is not my primary aim of treating the patient.
44 Professor Brooks is the Director of the Australian Health Workforce Institute at the University of Melbourne and has practised as a rheumatologist for over 30 years. He completed his medical degree at Monash University in 1967. In 1974 and 1975 he was the Research Registrar at the Centre for Rheumatic Diseases in Glasgow, Scotland, where he studied rheumatology under Professor Watson Buchanan. He returned to Australia in 1975, taking up a lecturing post in medicine at the University of Tasmania. Professor Smith then held the positions of Senior Lecturer in Medicine and Associate Professor in Medicine at Flinders University. From 1983 to 1991 he was the Florance and Cope Professor of Rheumatology at the University of Sydney. During the same period he was the Head of the Department of Rheumatology and the Foundation Professor of Rheumatology at the Royal North Shore Hospital. Between 1991 and 1998 Professor Smith was Professor of Medicine and the Head of the Department of Medicine, University of New South Wales, at St Vincent’s Hospital. From 1992 to 1998 Professor Smith served as Chairman of the International League Against Rheumatism Standing Committee on Clinical Trials. He has been Associate Dean, Clinical School, St Vincent’s Hospital (1993-1994 and 1997-1998) and Presiding Member, Faculty of Medicine, University of New South Wales (1995-1997). From 1998 until sometime after June 2009 he held the position of Executive Dean, Faculty of Health Sciences, University of Queensland. Sometime between June 2009 and April 2010 he became the Director of the Australian Health Workforce Institute at the University of Melbourne. Professor Brooks is a member of numerous national and international committees, boards and scientific societies (including many editorial boards for medical and research journals). He is the author and co-author and has been the peer reviewer of many articles published in various journals.
45 Professor Brooks explained that inflammatory arthritis affects about 2-3% of the population. In 1993, according to Professor Brooks, patients could first be diagnosed with seronegative arthritis and then develop positive rheumatoid factor, indicating rheumatoid arthritis. As such, in 1993 for about 5-10% of patients he could not be sure whether they had RA or seronegative arthritis. One reason for this is that the RF is present in only 70% of patients with initial phase RA. Since 2003, however, the availability of the CCP test has meant that RA can be distinguished from PsA in 98% or more of cases. In 1993 this potential overlap did not matter as the treatments for RA and the seronegative arthropathies, including PsA, were the same, being non-steroidal anti-inflammatory drugs (NSAIDS) and methotrexate.
46 While Professor Brooks agreed that in 1993 it was not known that PsA was a T cell-mediated disease, he explained that it was known at that time that T cells were involved in PsA. Professor Brooks said that by 1993 it was known, for example, that a principal driver for inflammation in all inflammatory arthropathies was a molecule called Tumour Necrosis Factor α (TNF α). Hence, “[t]he theory developed that if a drug could specifically target the TNF α driver of inflammation it would avoid the undesirable downstream effects of general immunosuppressant drugs.” As further explained by Professor Brooks in cross examination:
…the proposition is that there was no evidence available that suggested that the seronegative arthropathies, including psoriatic arthritis, were mediated by T cells in the way rheumatoid arthritis was then thought to be? Well, I think at the time that the work had not been done, but there was very clear evidence that T cells were involved in inflammatory responses in psoriatic arthritis, as they were in other seronegative arthropathies.
The involvement of T cells doesn’t lead to any evidence that suggests, or knowledge, that the psoriatic arthritis was known to be T cell mediated, does it? Well, that’s absolutely – that’s a different point. T cell mediated versus T cells being involved.
Yes, but you do agree that the propositions that I have been putting to you have been in relation to whether there was knowledge or indeed evidence about psoriatic arthritis being T cell-mediated? Okay, well, if that’s the issue, yes, I would agree with you.
47 Professor Brooks was also questioned about an article published in July 1993 (Gladman D, Toward Unravelling the Mystery of Psoriatic Arthritis (1993) 36 Arthritis and Rheumatism 881-884) (the Gladman article)). This article records that the “pathogenesis of psoriatic arthritis remains to be elucidated, but genetic, environmental, and immunologic factors are thought to be prominent in the development and perpetuation of the disease.” According to the article, while studies had “helped to identify some of the abnormalities seen in patients with psoriatic arthritis, the exact mechanism of the disease remain[ed] a mystery.” Professor Brooks generally agreed with these propositions, noting that the author’s point was essentially that “there’s a whole bunch of stuff about immunological factors that are involved, but the cause of psoriatic arthritis is not known, as is the cause of psoriasis not known.”
48 In response to another article (Ogilvie et al, Treatment of psoriatic arthritis with antitumour necrosis factor-α antibody clears skin lesions of psoriasis resistant to treatment with methotrexate (2001) 144 British Journal of Dermatology 587-589), Professor Brooks gave the following evidence:
This tells us, does it not, that TNF alpha inhibitors, in this area certainly, were originally developed as treatments for rheumatoid arthritis; correct? That’s correct.
And it was only towards the end of the 1990s that they were explored for treatment of the seronegative arthropathies? Yes, it’s unfortunately driven very much by the pharmaceutical industry.
But the statement is true, whatever the factors behind it? Yes.
49 Professor Brooks said that rheumatologists focussed on RA throughout the 1970s, 80s and 90s (and to some extent continue to do so today) because it is the most severe of the rheumatic diseases and the most challenging and intellectually interesting form of arthritis to treat (“rheumatic diseases”, as I understand it, is an umbrella term for diseases affecting the joints encompassing but not limited to both inflammatory and non-inflammatory forms of arthritis). This is consistent with the Gladman article which, amongst other things, notes that RA had been far more intensively studied than PsA (at 883).
50 Professor Brooks said that PsA, a seronegative inflammatory arthritis, has a very low incidence in the population (0.04-0.1%). Nevertheless, by 1993 Professor Brooks had significant experience in diagnosing and treating patients with PsA. Professor Brooks described PsA as usually presenting as asymmetric and affecting only a few joints (in contrast with RA, which presents with more joints affected symmetrically). When diagnosing PsA (in 1993 and today), Professor Brooks looks for the clinical signs of psoriasis. Psoriasis occurs much more frequently than PsA in the population (as psoriasis occurs in about 2% of people). In 1993 Professor Brooks would also take a blood sample and test it for RF. The result would typically be negative in a patient with PsA. According to Professor Brooks:
It is possible, but unusual, for a patient to have psoriatic arthritis without apparent clinical signs of psoriasis… However when such patients are followed over time, about 60-70% of them will develop clinical signs of psoriasis…
51 Professor Brooks’ position was further disclosed in cross examination as follows:
You yourself don’t suggest that, as at 1993, you had any more than a basic understanding of psoriasis? Yes, I would have to say specialties are obviously individual, but I think it is important to understand that physicians, rheumatologists, are actually trained as general physicians, so we actually do a lot more training in the general person that, say, a dermatologist.
In the general person? Yes.
Thank you. But focusing on psoriasis, just to clear it up, if I may clear up the point you don’t suggest that as at 1993 had you any more than a basic understanding of psoriasis? Yes, a reasonable basis, but it was basic.
It is fair to describe it as basic? All right, yes.
…
Even now, however long after it is from 1993, perhaps if I take you to the date you swore your first affidavit, would still describe your knowledge of psoriasis as being a basic knowledge of psoriasis? Yes, in terms of being able to diagnose it and treat it.
…
And so it was acceptable, in fact, in 1993, for a rheumatologist to have a basic knowledge of psoriasis? Well, it depends what you define as a “basic knowledge”. I would expect rheumatologists to know more than be able to spell the condition. Because they are dealing with making a diagnosis of psoriatic arthritis, they need to be able to diagnose it almost as well as a dermatologist, and they need to be able to treat it almost as well as a dermatologist.
…
… I think that, as I said, rheumatologists need to know about psoriasis probably more than most other specialties apart from dermatologists, because they are dealing with a disease that crosses those two boundaries.
…
Not the way it is written there, really. I mean, as I have just said, rheumatologists have to be able to diagnose psoriasis and know basically how to manage it, because otherwise how can they treat psoriatic arthritis?
Sorry, the diagnosis of psoriasis is effectively a key part of the diagnosis of psoriatic arthritis? Absolutely.
But the management of the psoriasis itself is not primarily, at least, the responsibility of the rheumatologist? No, it is not the responsibility.
52 Professor Brooks said that:
You need to know about the basics of the treatments that you would use for psoriasis to ensure that the treatments that you might use for psoriatic arthritis or any other condition – you need to know what are the potential side effects of any other drug that the patient might be taking. That’s what I meant by that. I mean, medicine is not – I know, unfortunately, these days we do tend to compartmentalise it and you have to go to 15 specialists if you have more than two or three diseases, but when you are treating a patient, you really do need to have more than a rudimentary, a basic, understanding of the other drugs the patient might be on, so that you are not going to give them something that might interfere with those other treatments. If you are concerned about that, then obviously you would contact the other doctor who was looking after them or their general practitioner who is trying to coordinate all of these things.
53 Professor Brooks was aware of leflunomide in 1993. To the best of his knowledge it became available in Australia in about 2000. He has prescribed leflunomide for both RA and PsA. Due to the complex nature of the drug, according to Professor Brooks, it is invariably initially prescribed by a rheumatologist.
54 The TOPAS study was a multinational, double-blind, randomised, placebo-controlled clinical trial of leflunomide for the treatment of PsA and psoriasis, the results of which were published in an article by Kaltwasser et al in June 2004 (Kaltwasser et al, Efficacy and Safety of Leflunomide in the Treatment of Psoriatic Arthritis and Psoriasis (2004) 5 Arthritis & Rheumatism 1939-1950 (the Kaltwasser article)) and expanded upon in an article by Nash et al in 2006 (Nash et al, Leflunomide Improves Psoriasis in Patients with Psoriatic Arthritis: An In-Depth Analysis of Data from the TOPAS Study (2005) 212 Dermatology 238-249 (the Nash article)).
55 According to Dr Shumack, the TOPAS study demonstrated that, along with efficacy in the treatment of PsA, leflunomide also exhibited “a degree of efficacy in the treatment of psoriasis” and “a good safety profile”. Dr Shumack particularly noted the conclusions of the Nash article (at 248) that:
…once-daily leflunomide is an effective and convenient treatment for psoriasis as well as PsA, resulting in significant improvements in both skin symptoms and quality of life, with the additional advantage of reducing joint symptoms in those patients who have active arthropathy.
56 Despite Apotex’s efforts to characterise the efficacy of leflunomide for the treatment of psoriasis as “modest” (with the results of the TOPAS study showing that only 11.5% or 1 in 9 of the patients in the trial obtained a “PASI 50” benefit over and above placebo), Dr Shumack maintained that the TOPAS study showed that leflunomide has clinical efficacy. As Dr Shumack explained, a PASI 50 benefit means an equal to or greater than 50% reduction in a patient’s scores on the PASI. He described a PASI 50 result as a “significant benefit” to the 11.5% of the patients in the trial who achieved it, and noted that the TOPAS study showed other patients would receive a less significant (or “modest”) but nevertheless measurable benefit to their psoriasis from the administration of leflunomide.
57 Professor Smith also gave evidence relating to the TOPAS study. Professor Smith considered that this study showed that both PsA and psoriasis improved with treatment by administration of leflunomide. Professor Brooks agreed that the results of the TOPAS study disclosed that leflunomide treats not only PsA but also psoriasis.
58 After publication of the TOPAS study, Sanofi-Aventis applied to the TGA to extend the indications for which leflunomide was registered on the ARTG to include PsA (its initial registered indication being for RA only). The TGA approved this application. The current approved Arava product information document (discussed below) reflects the approval of this application in late 2004.
B5 The product information documents
59 A product information document (PI) is regulated by the Therapeutic Goods Act 1989 (Cth) (the Therapeutic Goods Act). Under s 23(2)(ba) of that Act an application for registration or listing of therapeutic goods on the ARTG, in the case of restricted medicine, must be “accompanied by product information, in relation to the medicine, that is in the form approved under section 7D in relation to the medicine”. Leflunomide is a restricted medicine. In s 3(1) “product information” is defined to mean “…in relation to therapeutic goods… information relating to the safe and effective use of the goods, including information regarding the usefulness and limitations of the goods.” The form approved under s 7D is the form approved in writing by the Secretary of the Department of Health and Ageing. According to Apppendix 8 of the TGA’s published Australian Regulatory Guidelines for Prescription Medicines (June 2004) (which the parties agreed currently applied), a PI:
is regarded as a document that contains information sufficient to ensure safe and effective use of the medicine under nearly all circumstances. It is to present a scientific, objective account of the medicine’s usefulness and limitations as shown by the data supporting the application. It is to be devoid of promotional material.
60 The approved PI for Arava (Sanofi-Aventis’s leflunomide product) describes leflunomide as an immunomodulatory agent. The approved Arava PI refers to the results of clinical trials of leflunomide for adult RA, juvenile RA and PsA. According to that part of the PI dealing with PsA, the efficacy of Arava was assessed by reference to the Psoriatic Arthritis Treatment Response Criteria (the PsARC), which is based on changes in joint pain/tenderness and swelling, and the PASI, which is based on “changes in the extent and severity of psoriasis lesions as judged by erythema [as I understand it, redness from inflammation], desquamation [as I understand it, removal of scaly crust], and infiltration [the meaning of which is unclear to me in this context].” According to the results of the clinical trials, Arava “resulted in a significant improvement of PASI scores over the 24-week study relative to placebo.”
61 The approved Arava PI deals with “indications” in these terms:
INDICATIONS
ARAVA is indicated for the treatment of:
• Active Rheumatoid Arthritis
• Active Psoriatic Arthritis. ARAVA is not indicated for the treatment of psoriasis that is not associated with manifestations of arthritic disease.
The combined use of ARAVA with other Disease Modifying Anti-Rheumatic Drugs (DMARDS) has not been adequately studied (see PRECAUTIONS).
B5.3 Approved Apotex PI and proposed Apotex PI
62 The TGA approved the PI for Apotex’s leflunomide product (the approved Apotex PI) in July 2008. The approved Apotex PI is a copy of the approved Arava PI with the name changed from Arava to “Apo-Leflunomide” (the name of Apotex’s leflunomide product) and other minor differences (as explained in more detail below in respect of the copyright claims). Accordingly, the approved Apotex PI contains the same clinical trial information as the Arava PI. Its indications are also the same, appearing as follows:
INDICATIONS
Apo-Leflunomide is indicated for the treatment of:
• Active Rheumatoid Arthritis
• Active Psoriatic Arthritis. Apo-Leflunomide is not indicated for the treatment of psoriasis that is not associated with manifestations of arthritic disease.
The combined use of Apo-Leflunomide with other Disease Modifying Anti-Rheumatic Drugs (DMARDS) has not been adequately studied (see PRECAUTIONS).
63 Apotex prepared and applied to the TGA for approval of a new PI in June 2010 (the proposed Apotex PI). The proposed Apotex PI contains information about clinical trials of leflunomide in respect of RA only. The indications in the proposed Apotex PI appear as follows:
INDICATIONS
Treatment of active rheumatoid arthritis.
64 Apotex identified three documents as part of the “prior art base” for the purpose of determining the challenges to the validity of the patent on the grounds of lack of novelty and inventive step: – (i) the 341 patent, (ii) an article by Bartlett et al entitled Leflunomide (HWA 486), a novel immunomodulating compound for the treatment of autoimmune disorders and reactions leading to transplant rejections (1991) 32 Agents and Actions 10-21 (the Bartlett Article), and (iii) an article by Rozman et al entitled The effects of Leflunomide (LF) in patients with rheumatoid arthritis (1992) 35 Arthritis and Rheumatism S108. (the Rozman abstract).
65 The 341 patent became publicly available in 1980 and expired in 2004 (after an extension of its term). The 341 patent is for the compound leflunomide (amongst other compounds). Leflunomide is described as “formula I”. According to the specification of the 341 patent:
By virtue of its pharmacological properties, the isoxazole compound according to the invention, of the formula I, can be used especially as an antirheumatic, antiphlogistic, antipyretic and analgesic agent, and for the treatment of multiple sclerosis.
66 The specification refers to investigations in respect of three animal models – Adjuvant Arthritis (the AA model), Adjuvant Arthritis Perper Modification (the AAP model) and Allergic Encephalomyelitis (the AE model).
67 According to the specification, leflunomide inhibits immunopathological processes in the AAP model and AE model tests. The specification continues in these terms:
The above pharmacological findings show that the compound according to the invention, of the formula I differs advantageously in its pattern of action from the tested antiphlogistic agents, in particular in respect of the inhibition of immunopathological processes on animal models which are also relevant to human illness. This is probably equally true relative to other antiphlogistic agents hitherto employed in therapy. This fact opens up the possibility of tackling, by medication, rheumatic illnesses in man by more nearly treating the cause, instead of purely symptomatic treatment as with the antiphlogistic agents used hitherto.
68 The claims of the 341 patent include the compound leflunomide in claim 1 and, relevantly, claim 4 as follows:
4. Method for the treatment of inflammations, rheumatic complaints or multiple sclerosis by administering to the patient an effective amount of the compound as claimed in claim 1.
69 The Bartlett article was published in 1991. The article states that leflunomide “would seem to be a universal drug to combat autoimmune disorders.” The article presents “very preliminary clinical data concerning leflunomide’s effects on the immune response of patients with rheumatoid arthritis.”
70 The Rozman abstract was published in 1992. The abstract states that:
Having shown efficacy in animal models of arthritis, leflunomide is under investigation as a potential DMARD. 380 patients with active RA were enrolled in a randomized, double-blind, placebo-controlled trial.
71 It further states that:
The results suggest a dose related trend towards efficacy of LF [leflunomide] in RA patients. Further studies will determine its role in the management of RA.
B6.4 Dr Shumack’s evidence about the prior art documents
72 The 341 patent: Dr Shumack was not aware of the compound leflunomide in 1993. Nor had he read the 341 patent (or any patent) at that time. He would have had to consult a medical dictionary to understand the meaning of “antiphlogistic” in 1993 (and had to do so when asked to review the 341 patent). Having done so, he understands it to mean “anti-inflammatory”. In 1993, Dr Shumack would have understood the statement in the 341 patent that leflunomide could be used as “an antirheumatic, antiphlogistic, antipyretic and analgesic agent, and for the treatment of multiple sclerosis” to mean that leflunomide may be useful in the treatment of arthritic and inflammatory conditions and for multiple sclerosis. Dr Shumack agreed that, in 1993, he understood “arthritic and inflammatory conditions” to include RA and PsA. According to Dr Shumack, because the animal models in the 341 patent were based on immune mechanisms and did not involve any hyper-proliferation of skin cells, in 1993 he would not have considered the results of the animal models to be relevant to psoriasis, which was then thought to be a proliferative disease. Hence, Dr Shumack concluded that:
Had I reviewed [the 341 patent] in 1993, given that the aetiology of psoriasis at that time was thought to be a hyper-proliferation process and not an inflammatory or immune-mediated process, there is nothing in the document which would have suggested to me that psoriasis would have been an appropriate condition in which to use Leflunomide.
73 The Bartlett article: Dr Shumack was not aware of the existence of the Bartlett article (or the existence of the journal in which it was published) in 1993. In 1993 the Bartlett article would have shown Dr Shumack (and shows him today) that leflunomide is effective in a number of animal models as an immunological therapy. Further, the Bartlett article would have shown that leflunomide “may be a drug useful in modulating immune reactions and may therefore show efficacy in a number of immunological disorders, although the only clinical results are those shown in rheumatoid arthritis patients.” Dr Shumack thus concluded that:
Had I reviewed [the Bartlett article] in 1993, given that the aetiology of psoriasis at that time was thought to be a hyper-proliferation process and not an inflammatory or immune-mediated process, the [Bartlett article] would not have suggested to me that psoriasis would have been an appropriate condition in which to use Leflunomide.
74 The Rozman abstract: Dr Shumack was not aware of the Rozman abstract in 1993. He described the abstract as relating to a short-term efficacy trial of leflunomide for the treatment of RA. Dr Shumack said that:
In 1993, rheumatoid arthritis and psoriasis were considered unrelated conditions in terms of their aetiology, clinical manifestations and therapy. From a dermatologist’s point of view, very little was known about rheumatoid arthritis other than that it was an autoimmune condition, suffered by a small proportion of the population, affecting the joints. While rheumatoid arthritis was thought to be an immune disease, psoriasis was thought to be a proliferative disease.
75 Dr Shumack thus concluded that:
There is therefore nothing in the Rozman Abstract which would have suggested to me in 1993 that psoriasis would have been an appropriate condition in which to use Leflunomide.
B6.5 Professor Smith’s evidence about the prior art documents
76 The 341 patent: Professor Smith also did not read patents in 1993 as part of his practice as a rheumatologist (and nor does he today). He had not seen and was not aware of the 341 patent in 1993 or until this proceeding. According to Professor Smith, the AA and AAP models, in 1993, were thought to be models of rheumatoid arthritis, and the AE model is a model for multiple sclerosis. Professor Smith thus said (and maintained in cross-examination) that:
…in 1993 and still today, AA, AAP, and AE are not recognised as models for psoriatic arthritis. This is in part because the pattern of joint involvement characteristic of these models differs from that seen in psoriatic arthritis. Given this, in my opinion, the results in [the 341 patent] would in 1993 (and today) have provided no basis for a belief that [leflunomide] might be effective in treating psoriatic arthritis.
77 Professor Smith acknowledged that he did not work in animal models and they were not his area of expertise, but said that there was “certainly no evidence in the literature” in 1993 or today that the AA model was a model for psoriatic arthritis.
78 Having regard to his opinion about the relevance of the animal models in the 341 patent, Professor Smith considered that the phrase “rheumatic illnesses in man”, as used in the specification of the 341 patent, meant to him that the compound leflunomide might be useful in the treatment of rheumatoid arthritis. Professor Smith continued:
There is however no data to suggest that [leflunomide] might have efficacy in any other rheumatic illnesses and so I would not have considered the [341] patent to be making any assertions as to the use of the compound in any other rheumatic conditions.
79 On the same basis Professor Smith would have read “inflammations” and “rheumatic complaints” in claim 4 of the 341 patent as references to rheumatoid arthritis and not psoriatic arthritis or any other inflammatory arthritis. Professor Smith thus would have understood claim 4 of the 341 patent to describe a method of treating rheumatoid arthritis. As Professor Smith put it:
The 341 Patent makes no reference to the use of Leflunomide to treat psoriatic arthritis. The models used in the patent are not models of psoriatic arthritis. Further, given the lack of understanding of the mechanisms responsible for psoriatic arthritis in 1993 (and the fact that it was not in 1993 known to be a T cell-mediated disorder like rheumatoid arthritis[)], the 341 patent would not have informed me at all as to whether Leflunomide would be effective in the treatment or prevention of psoriatic arthritis.
80 Further, as Professor Smith put it:
The 341 Patent also makes no reference to the use of Leflunomide to treat psoriasis. Indeed, the information contained in the 341 Patent does not inform me at all as to whether Leflunomide may be useful in the treatment of psoriasis given that in 1993 it was thought to be a proliferative disease of skin cells and no data is presented showing that Leflunomide has anti-proliferative properties.
81 Professor Smith did not accept the suggestion that rheumatoid arthritis and psoriatic arthritis were closely associated conditions. While both are inflammatory diseases their underlying pathology is, and in 1993 was, understood to be different. Hence, Professor Smith said “the reason you try to distinguish between two diseases is not just about pathogenesis. It is about what the patient can expect in the long term in their condition and what treatments you would offer them.” He agreed that if the words “certain illnesses of the rheumatic type” in the specification of the 341 patent were considered in isolation, they were “very unclear” and would cover any rheumatic condition. So too, “rheumatic complaints” (used in claim 4 of the 341 patent) “could include everything” (that is, all arthritic diseases, including the most common forms of inflammatory arthritis, being RA and PsA). However, Professor Smith did not read the references to rheumatic illnesses and complaints in the 341 patent in that broad way because he considered that the animal models used in the 341 patent related to RA and multiple sclerosis and not to PsA.
82 The Bartlett article: Professor Smith also had not seen the Bartlett article in 1993 or, indeed, until his involvement in this proceeding. Professor Smith noted that the only study conducted in humans in the Bartlett article is an early dosing study investigating the use of leflunomide in patients with active rheumatoid arthritis. Professor Smith also noted that animal models have limitations. Animal models, according to Professor Smith, can only provide an indication as to whether or not a particular treatment may work for a particular disease. In Professor Smith’s view there was no animal model available in 1993 relevant to psoriatic arthritis; nor is there any such model relevant today. As to the study of humans in the Bartlett article Professor Smith said:
Even in light of this study, before one could have any confidence that this drug would be safe and effective in the treatment of rheumatoid arthritis (so as to warrant its administration to a patient), one would have to conduct long-term efficacy studies… and also provide appropriate long-term safety data.
Further, … as rheumatoid arthritis and psoriatic arthritis were considered to be distinct disorders in 1993, the results of this human study would not have led me to consider the use of this drug in the treatment of psoriatic arthritis.
83 Further, as psoriasis was thought in 1993 to be caused by keratinocyte proliferation, the Bartlett article would not have informed Professor Smith as to whether leflunomide might be effective in the treatment or prevention of psoriasis.
84 Professor Smith also noted that the Bartlett article suggests that leflunomide has a selective immunomodulatory activity rather than an immunosuppressive effect in a number of the models used. An immunomodulatory agent is one that has different effects on different aspects of the immune response. Professor Smith thus would have expected leflunomide to suppress some aspects of the immune response whilst restoring other aspects back to normal. Professor Smith thus said:
In the absence of an understanding as to the mechanisms underlying any disease, one could not make any predictions as to whether the drug would work in any particular condition other than those for which the animal models are relevant…
Given the lack of understanding of the mechanisms responsible for psoriatic arthritis in 1993 (and the fact that in 1993 it was not known to be a T cell-mediated disorder), the Bartlett Article would not have informed me at all as to whether Leflunomide would be effective in the treatment or prevention of psoriatic arthritis.
85 The Rozman abstract: Professor Smith had not seen and was not aware of the Rozman abstract until his involvement in this proceeding. The abstract describes a short-term dose-finding efficacy study undertaken in patients with active rheumatoid arthritis. Again, given the lack of understanding of the mechanisms responsible for psoriatic arthritis in 1993 (and the fact that in 1993 it was not known to be a T cell-mediated disorder), Professor Smith said that the Rozman abstract would not have informed him at all whether leflunomide would be effective in the treatment or prevention of psoriatic arthritis. Nor would it have informed him at all as to whether leflunomide might be effective in the treatment or prevention of psoriasis.
B6.6 Professor Brooks’ evidence about the prior art documents
86 The 341 patent: Professor Brooks described the AA model in the 341 patent as one he had used in his own research before 1993 for inflammatory forms of arthritis. While Professor Brooks considered the AA model a very reasonable model for rheumatoid arthritis, he also considered it “a closer model for seronegative arthropathies” (such as PsA) because the animals used in the AA model usually exhibit effects in their spine and often develop a skin rash, both of which are associated with the seronegative arthropathies. Professor Brooks has specific experience in dealing with animal models and is the author of a number of papers based on those models. In this regard Professor Brooks was unusual because, as he said:
… rheumatologists, with the greatest respect, don’t know too much about animal models, clinical rheumatologists, because they don’t deal with them.
87 For this reason Professor Brooks acknowledged that “it might be a reasonably held view by a rheumatologist not dealing much with animal models to not have regard to AA, adjuvant arthritis, as a model for psoriatic arthritis.”
88 Professor Brooks considered that the word “inflammations” in claim 4 of the 341 patent in theory could encompass “all of the 150 or so types of arthritic disease”. However, in light of the animal models and his experience with using the AA model in investigations of rheumatoid and psoriatic arthritis he considered that the references to “inflammations” and “rheumatic complaints” in claim 4 of the 341 patent include at least the inflammatory rheumatic diseases (RA, PsA and other seronegative arthropathies), and that claim 4 is describing a method of treating those inflammatory arthropathies.
89 Professor Brooks, in common with Professor Smith, acknowledged the importance of the particular pathways or mechanisms by which inflammations occur. Professor Brooks gave this evidence:
But it’s correct, isn’t it, moving on, as it were, from inflammation to the immune system, that the fact that a drug is known to suppress or modify the immune system is not sufficient to determine whether it will be adequate to treat a particular disease state? Well, it’s not totally adequate, but if you have a drug which suppresses the immune system and you have a disease where the immune system is in overdrive – ie, inflammatory arthritis, rheumatoid, cancer, all of those things – then you might be swayed to use that drug again initially in in vitro studies in the test tube, then in animal models and then in patients.
Without knowing more, all you would know is that it may or may not work? Absolutely.
90 Professor Brooks also acknowledged the limitations on the use of animal models. Animal models rarely mimic human disease. The ability to extrapolate from an animal model to humans is limited to provision of an indication that the treatment may work in the relevant disease in humans. In terms of the 341 patent, Professor Brooks agreed substantial further work, including phase 1, 2 and 3 clinical trials, would be required in addition to that reported in the 341 patent before he could determine whether leflunomide would in fact be safe and/or effective to treat RA in humans.
91 The Bartlett article: Professor Brooks had not read the Bartlett article before this proceeding. Consistent with his position in respect of the 341 patent, Professor Brooks would have found the Bartlett article of interest in 1993 (particularly given the reference to the AA model, which Professor Brooks considered to be a good model for the seronegative arthropathies) but agreed substantial further work, including clinical trials as described in respect of the 341 patent, would have been required before he could determine whether leflunomide in fact would be safe and/or effective to treat RA in humans.
92 The Rozman abstract: Professor Brooks described the clinical trial in the Rozman abstract as the “gold standard” (as it was a randomised, double-blind, placebo-controlled trial). Professor Brooks also would have found the Rozman abstract interesting in 1993 based on his view that RA and PsA could be described as “closely associated” (both being inflammatory arthropathies), but acknowledged that the same limitations identified in relation to the 341 patent applied also to the Rozman abstract (namely, that substantial further work, including phase 1, 2 and 3 clinical trials, would have been required before he could determine whether leflunomide would in fact be safe and/or effective to treat RA in humans).
93 Generally: Professor Brooks acknowledged (as did Professor Smith and Dr Shumack) that none of the three prior art documents mentions psoriatic arthritis or psoriasis, and none suggests or recommends the use of leflunomide as a method of treating psoriatic arthritis or psoriasis.
94 The patent is entitled “pharmaceutical for the treatment of skin disorders”. The specification refers to the disclosure in European patent 13,376 (the European equivalent of the 341 patent) of a compound (leflunomide) as being anti-inflammatory and, additionally, as having “immunomodulation properties, so that [it is] suitable as pharmaceutical against chronic graft versus host diseases and against autoimmune disorders, in particular systemic lupus erythematosus.”
95 According to the specification:
Psoriasis is a special form of skin disorder characterized by the development of reddish plaques, which tend to be dry and scaly… Manifestations of psoriasis range from a few lesions to widespread disease. Psoriatic lesions are caused by abnormally increased epidermal cell proliferation, e.g., proliferation of keratinocytes is enhanced… Psoriasis is a global problem; it has been reported that in Europe 1 to 2% of the population have this disease. The etiology of psoriasis remains elusive, although it appears to have an inherited component.
96 The specification identifies four common types of psoriasis: – (i) vulgaris (plaque), where the “mechanism of action appears most likely to be direct regulation of keratinocyte proliferation and differentiation”, (ii) eruptive/guttate psoriasis, (iii) erythrodermia, and (iv) pustular psoriasis.
97 The specification notes that:
The treatment of psoriasis is not entirely satisfactory. A large number of ointments and salves have been used, but the reaction to these is unpredictable. Frequently exposure to the sun or ultraviolet light will cause the condition to improve, often psoriasis fails to improve despite any form of therapy.
98 It continues in these terms:
A promising therapeutic approach for the treatment of psoriasis is the use of immunosuppressive agents.
99 The specification identifies cyclosporine A as one such agent but notes also that therapy with immunosuppressive agents is often associated with serious side effects. Accordingly:
In an attempt to develop better agents for the treatment of psoriasis it has been found that a compound of the formula I [leflunomide]… shows effective inhibition of keratinocyte proliferation. The compounds of the formula I… are well tolerated by human beings. During therapy of human beings no decreased resistance to infections, no kidney dysfunction, no relevant changes of laboratory values such as liver enzymes, blood count or body weight have been observed. The compounds of the formula I… show a better risk benefit ratio compared with other immunosuppressive agents, have a long lasting effect after withdrawal and offer the possibility of short term therapy and longer remission intervals.
Therefore the invention relates to a method of preventing or treating a skin disorder in a patient in need thereof by administering an effective amount of a compound of the formula I…
100 The specification deals with dosing regimes in the following terms:
Preferably, the pharmaceutical preparations are prepared and administered in dosage units… In the case of solid dosage units, such as tablets, capsules or suppositories, this dose can be up to about 500 mg, preferably 5 to 400 mg, 5 to 200 mg, 10 to 100 mg 10 to 25 mg.
For the treatment of a patient (70 kg) suffering from psoriasis in the early phases a loading dose of at most 600 mg per day, preferably 300 mg per day and in the later rehabilitation phases an oral administration of 3-times 200 mg per day… are indicated.
Under certain circumstances, however, higher or lower doses may also be appropriate. The administration of the dose can be carried out both by singly administration in the form of an individual dosage unit or else several smaller dosage units and by multiple administration of subdivided doses at specific intervals.
101 The specification provides that:
Preventing includes the prophylactic prevention of psoriasis in a susceptible mammal and treating includes arresting the development, and retarding the progression of psoriasis in a susceptible mammal.
102 The specification includes five examples. Examples 1 and 2 involve preparations, and Example 3 a screen evaluation of the ability of compounds to inhibit in vitro DNA synthesis using, as cells, normal human epidermal keratinocytes (or NHEK). Table 1 sets out the results of Example 3 (inhibition of NHEK proliferation). Example 4 is an acute toxicity test after intraperitoneal administration of the test substances in mice. Example 5 is as follows:
Example 5
Double blind study with human beings
In a randomized double blind study with 400 human beings the patients received a 5, 10 and 25 mg of compound 1 daily maintenance therapy for 6 months preceded by a single initial dose of 50, 100 and 100 mg respectively. During this study urine analysis of the human beings showed no kidney dysfunction (no nephrotoxicity).
103 Claim 1 (the only claim defining the invention), as noted, is in these terms:
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…
C2 Expert evidence about the patent
104 Dr Shumack said that the definitions of “preventing” and “treating” in the patent accorded with his understanding of those terms. On this basis Dr Shumack considered that the administration of leflunomide to a patient suffering from PsA would either treat the patient’s concurrent psoriasis or prevent the patient from developing psoriasis, recognising that a patient with PsA who does not have concurrent psoriasis, in Dr Shumack’s words, “will almost always develop psoriasis at some time in the future”. Dr Shumack also noted that the description of the cause of psoriasis in the patent (cell proliferation) is consistent with his view about dermatologists’ understanding of the cause of the disease in 1993. As it is relevant to certain submissions of the parties, it is also appropriate to note that Dr Shumack considered that his description of how the administration of leflunomide to a patient with PsA would “incidentally” treat or prevent psoriasis in that patient meant the same as saying that leflunomide would treat any concurrent psoriasis in the patient with PsA. Similarly, Dr Shumack accepted that the administration of leflunomide to a patient suffering from any one or more of the other diseases he understood as being encompassed by the 341 patent – rheumatoid arthritis, lupus, graft rejection, gout – would also treat any psoriasis the patient may have or prevent any psoriasis the patient may develop. However, in contrast to PsA, psoriasis plays no part in the diagnosis of those other diseases.
105 According to Dr Shumack, no information of which he was aware in 1993 and none of the documents which he had been asked to review (the 341 patent, the Bartlett article and the Rozman abstract), taken either separately or together, would have suggested to him in 1993 that leflunomide could be used for the treatment or prevention of psoriasis. As such, the claim of the patent – that leflunomide could treat or prevent psoriasis – would have been surprising to Dr Shumack in 1993, given his understanding of the aetiology of psoriasis at that time.
106 While Dr Shumack agreed that the dosing ranges referred to in the patent were “not a lot of help”, he considered that in general “one would start with a lower dose and escalate on the basis of therapeutic response or lack thereof while at the same time ensuring that the side effect profile remains good.” Although it was put to him that this was a version of conducting his own ad hoc clinical trial, Dr Shumack responded as follows:
I think if – well, one would be somewhat reluctant to do that, but certainly if one was looking at developing an early study, a proof of concept, a phase 1 study or maybe an early phase 2 study which we mentioned briefly before, one would design it on the basis of being safe, number 1. So you ensure adequate safety for your clinical subjects. And efficacy would be number 2. In other words, the secondary endpoint.
107 Professors Smith and Brooks did not give evidence in respect of the construction of the patent.
D Some differences OF OPINION between the experts
108 Rheumatologists’ understanding of psoriasis: Professor Smith described rheumatologists as having only a basic or rudimentary knowledge of psoriasis, as their interest in that disease is as an element of the diagnosis of PsA only. Professor Brooks’ concept of “basic” knowledge (noting that he thought it inaccurate to describe a rheumatologist’s knowledge of psoriasis as “rudimentary”) extended to the capacity to diagnose and treat psoriasis. Putting it another way, as I understood Professor Brooks’ evidence, he did not consider it possible to diagnose and treat PsA without also being able to diagnose and treat psoriasis almost as well as a dermatologist, whilst accepting that a patient with psoriasis and not PsA would be the responsibility not of a rheumatologist but a dermatologist. Given that psoriasis is an element of PsA, Professor Brooks thought it wrong to compartmentalise in the same way as Professor Smith.
109 Understanding of PsA in 1993: As noted, while Professor Brooks agreed with Professor Smith that it was not known in 1993 that PsA was a T cell-mediated disease (but this was known in 1993 with respect to RA), Professor Brooks considered that, as at 1993, the rheumatological community had “significant understanding of the complexities involved in the interaction between inflammatory cells and the chemicals they produce”, including cytokines. Further, according to Professor Brooks, RA and PsA were closely related conditions (a proposition with which Professor Smith disagreed) in that it was known in 1993 that RA and PsA were both inflammatory forms of arthritis and that the “inflammatory process, the pathology and the treatment for both of these conditions were reasonably well known and as of 1993 it was clear that there was some overlap between these conditions” (i.e. on the basis that methotrexate was a recognised treatment for both RA and PsA).
110 Overlap between RA and PsA: Professors Smith and Brooks agreed that a person with psoriasis may or may not have either RA or PsA. However, they agreed with Dr Shumack that in almost all cases a person with PsA has or will develop psoriasis. Based on the current understanding of RA and PsA, Professor Smith did not consider that a person could have both diseases, as RA and PsA are distinct disorders with a different genetic trigger for each. In Professor Smith’s view, the availability of the CCP test has meant that since 2003 it has been only in a very small number of cases that a diagnosis of either RA or PsA could not be made. In contrast, Professor Brooks would not exclude the possibility of RA and PsA co-existing in one patient. Professor Brooks accepted, however, that from 2003 onwards the CCP test has meant that RA and PsA can be diagnostically distinguished in 98% or more of patients.
111 Rheumatologists’ treatment of psoriasis: Professor Smith, in his capacity as a rheumatologist, considered that he was responsible for treating a patient’s joint disease. Hence, in the case of a patient with PsA the focus of Professor Smith’s treatment would be the joint disease. If the patient experienced a consequential benefit to their psoriasis, Professor Smith would recognise the benefit but view it as incidental to his treatment objectives. Professor Brooks, also in his capacity as a rheumatologist, considered that the treatment of a patient with PsA necessarily involved treatment of the patient’s psoriasis. Given the nature of PsA, Professor Brooks did not see how it was possible to do otherwise.
112 Relevance of animal models to PsA: Professor Smith considered that none of the animal models in the 341 patent was relevant to PsA and that, in particular, the AA model was relevant only to RA. Professor Smith, however, acknowledged that his expertise did not extend to animal models. Professor Brooks considered that most rheumatologists had little understanding of animal models. He, however, had a particular interest in them and had carried out research using animal models. From his own research Professor Brooks considered the AA model to be a good model for seronegative arthropathies including PsA, although he accepted that other rheumatologists would not necessarily share this view.
D2 Comments on the differences
113 Apart from the evidence about the animal models, most of the differences between the experts involve questions of degree and focus.
114 Insofar as it is necessary to say more at this stage, the differences between the experts can be explained by Professor Brooks’ longstanding expertise and eminence (including his eminence and expertise in 1993), and his special knowledge of animal models arising from his own research activities – knowledge which, according to Professor Brooks, most other rheumatologist do not share today and did not share at any earlier time. For example, and as it emerged in cross-examination, Professor Brooks has been “ahead of the pack” and at the top of his field for a long time, and has a longstanding interest in original research:
And, indeed, one might say, using the vernacular, [you were at as 1993] really at the top of your field in Australia? Yes.
Being at the top of your field, along with others at the top of your field, it would be fair to say that you were very much abreast of international advances, even at the stage of early theories and ideas that were being explored; would that be correct? Yes.
And perhaps, if I can use again the vernacular, somewhat ahead of the pack in relation to knowledge generally? I like to think so.
I’d like to suggest so? Thank you.
115 This evidence is consistent with the fact that, of the three expert medical witnesses (Dr Shumack, Professor Smith and Professor Brooks), only Professor Brooks was aware of leflunomide in 1993. I will further consider the differences between the experts, insofar as this is necessary, in the context of the resolution of the specific issues in dispute.
E GENERAL findings about psoriasis, PsA and RA
116 I make the following general findings about psoriasis, PsA and RA. All findings apply as at 1993 and today unless otherwise indicated.
117 Psoriasis is a skin disease occurring in about 2% of the population.
118 In 1993, the prevailing view of the medical profession was that psoriasis was a proliferative disease in which the genetic abnormality associated with psoriasis directly influenced the epidermal cellular turnover rate. In other words, the genetic abnormality programmed the epidermal cells to turn over more quickly. In 1993, it was also thought that the hyper-proliferation of epidermal cells was the cause of the inflammation observed in psoriasis. While theories were developing before and after 1993 about the role of the immune system in psoriasis, these theories had not undermined the orthodox view that psoriasis was a proliferative disease in which inflammation was a response to cellular proliferation.
119 Although understanding of the pathology of psoriasis continued to develop after 1993, the proliferative theory remained the orthodoxy for a number of years. However, it is now known by dermatologists and rheumatologists that the genetic abnormality associated with psoriasis leads to an abnormal inflammatory reaction localised predominantly in the dermis and epidermis of the psoriasis plaques. These localised inflammatory cells secrete cytokines, which are responsible for increased epidermal cell turnover. In other words, the proliferation of epidermal cells is a response to the inflammatory cells.
120 Rheumatologists use the general or global term “arthritis” to refer to joint disease. There are about 150 types of joint diseases which may be described as “rheumatic diseases”, this being an umbrella term for diseases affecting the joints encompassing but not limited to all forms of arthritis.
121 Rheumatologists distinguish between non-inflammatory and inflammatory arthritis. Their main focus is inflammatory arthritis, which is considered to be a more interesting and challenging disease than non-inflammatory arthritis. “Inflammatory arthritis” is a term reserved for those forms of arthritis where inflammation of the joint tissues is the underlying cause of damage to the joints. For example, osteoarthritis is a very common arthritis which is described as “non-inflammatory” because inflammation is caused by the degradation of the joint, rather than itself being the cause of the disease. Non-inflammatory arthritis has been of far less interest to rheumatologists than inflammatory arthritis.
122 There are two types of inflammatory arthritis: rheumatoid arthritis and the seronegative arthropathies (PsA, ankylosing spondylitis, reactive arthritis and inflammatory bowel disease-associated arthritis). About 2-3% of the population suffers from some form of inflammatory arthritis.
123 Rheumatoid arthritis is associated with, amongst other things, the presence of the positive rheumatoid factor in the blood (70% of persons with RA test RF positive, although the percentage is smaller in the initial phases of the disease). The seronegative forms of arthritis, by definition, are associated with a negative RF test.
124 While RA and PsA are both inflammatory arthropathies, they are distinct diseases and were known to be such in 1993. About 60-70% of cases of inflammatory arthritis are RA and about 25% of cases are PsA. Overall, RA occurs in about 1% of the population, while the incidence rate of PsA is lower.
125 RA and PsA have (and in 1993 had) different diagnostic criteria. One diagnostic element of PsA is (and in 1993 was) psoriasis. By contrast, psoriasis is not (and was not in 1993) a diagnostic element of RA.
126 As around 2% of the population has psoriasis, a person with RA (in common with any other person) might also have or develop psoriasis. By contrast, a person with PsA will almost always have or develop psoriasis, albeit with differing degrees of severity. These facts were known in 1993 and remain true today.
127 In 1993 there was a possibility of not being able to diagnose a patient correctly with RA as opposed to PsA. As noted, the RF test was available and with the other available diagnostic criteria most but not all cases could be distinguished. This inability to distinguish between the two diseases affected the diagnosis of about 5-10% of patients in 1993. Since 2003, and the introduction of the CCP test, the possibility of an unclear or misdiagnosis as between RA and PsA has been remote, affecting less than 2% of patients. Accordingly, at present, RA and PsA can almost always be distinguished by a rheumatologist.
128 As at 1993, PsA had not been as intensively studied as RA. By 1993 it was known by rheumatologists that RA was T cell-mediated. Subsequent research has shown that various types of inflammatory cells, not just T cells, play important roles in the mechanism underlying RA. In contrast, it was not known in 1993 by rheumatologists that PsA was T cell-mediated. While rheumatologists did know at that time that T cells were involved in inflammatory responses in PsA, the nature of their involvement was unclear. Consistent with this position, by 1993 TNF α inhibitors were being developed for the treatment of RA. However, it was not until the late 1990s that TNF α inhibitors were explored for treatment of the seronegative arthropathies (including PsA).
129 Rheumatologists have a basic understanding of psoriasis – in the sense that they know how to diagnose and treat psoriasis – because psoriasis is an element of PsA. Accordingly, a rheumatologist treating a patient with PsA will know how to treat the patient’s psoriasis as part of the treatment of PsA, either independently or in consultation with the patient’s dermatologist if the patient is also under the care of a dermatologist. However, if a patient has psoriasis alone or psoriasis in combination with a disease other than arthritis a rheumatologist would not consider it appropriate to treat the patient’s psoriasis. The rheumatologist would refer the patient to a dermatologist.
130 Leflunomide is a drug used in the treatment of RA and PsA and, for that purpose, is prescribed by rheumatologists. Leflunomide is not used in Australia for the treatment of psoriasis alone and is not prescribed by dermatologists for that purpose. However, if leflunomide is administered to a patient with PsA, that administration would be expected also to prevent or treat the patient’s psoriasis, to some extent at least.
F CONSTRUCTION OF CLAIM 1 OF THE PATENT
131 Various constructions of claim 1 of the patent were posited during the hearing (although not all were pressed by the time closing submissions had been reached). Claim 1, it will be recalled, is as follows:
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…
132 The potential constructions of claim 1 included the following:
(1) A method comprising the administration to a recipient of a pharmaceutical composition [containing leflunomide] by a medical practitioner who intends, by the administration, to prevent or treat psoriasis in the recipient.
(2) A method comprising the administration by a medical practitioner to a recipient of a pharmaceutical composition [containing leflunomide] where the “objective purpose” of the administration is to prevent or treat psoriasis in the recipient.
(3) A method comprising the administration by a medical practitioner to a recipient of a pharmaceutical composition [containing leflunomide] to prevent or treat the recipient’s psoriatic arthritis by which, incidentally, psoriasis will also be prevented or treated in the recipient.
(4) A method comprising the administration by a medical practitioner to a recipient of a pharmaceutical composition [containing leflunomide] where the effect of the administration in fact is to prevent or treat the recipient’s psoriasis.
133 Constructions (1) to (3) emerged in various parts of Apotex’s submissions. Apotex ultimately disavowed any suggestion that the subjective intention of the medical practitioner administering leflunomide (construction (1)) could be relevant. A construction dependent on subjective intention is inconsistent with the objective doctrine of infringement (discussed further below). Construction (2), in which the “objective purpose” of the administration of leflunomide is the touchstone, became Apotex’s preferred construction of claim 1. Apotex attributed construction (3) to Sanofi-Aventis but Sanofi-Aventis disavowed this construction. Sanofi-Aventis’s preferred construction is construction (4), in which the touchstone is the effect of the administration of leflunomide.
F2 Competing submissions about claim construction
134 A feature of the competing submissions was the emphasis Apotex placed on the complexity of construing a claim for a method of treatment, compared to Sanofi-Aventis’s contention that this complexity is illusory or immaterial.
135 On analysis, much of the complexity in Apotex’s case is a consequence of its attempt to resolve the proper construction of the claim of the patent by reference to the particular conduct Sanofi-Aventis alleged to constitute the threatened infringement. Sanofi-Aventis acknowledged that the conduct it sought to restrain as threatening infringement of claim 1 was the supply of leflunomide for the treatment of PsA (as, according to the evidence, a person with PsA will almost always either have or develop psoriasis and thus the use of leflunomide will prevent or treat that person’s psoriasis), but submitted that the proper construction of claim 1 could not be affected by the conduct alleged to constitute infringement in the particular case. Sanofi-Aventis’s basic proposition about construction is correct. Infringement does not determine construction; construction determines infringement (see Sachtler GmbH & Co KG v RE Miller Pty Ltd [2005] FCA 788 at [42] per Bennett J). Nevertheless, in order to understand the significance of these matters to the competing cases some further explanation is necessary.
136 A person may infringe a patentee’s exclusive right, during the term of the patent, to “exploit the invention and to authorise another person to exploit the invention” (s 13(1) of the Patents Act), where the invention is a method, by using that method (see the definition of “exploit” in Sch 1 to the Patents Act).
137 Sanofi-Aventis does not allege that Apotex will use the method claimed in the invention and, thereby, directly infringe the patent. Sanofi-Aventis’s case against Apotex depends on s 117 of the Patents Act, and specifically on s 117(2)(b) and (c). Section 117 is in these terms:
(1) If the use of a product by a person would infringe a patent, the supply of that product by one person to another is an infringement of the patent by the supplier unless the supplier is the patentee or licensee of the patent.
(2) A reference in subsection (1) to the use of a product by a person is a reference to:
(a) if the product is capable of only one reasonable use, having regard to its nature or design – that use; or
(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; or
(c) in any case – 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.
138 Paragraphs 44 to 48 of Sanofi-Aventis’s statement of claim identify Apotex’s alleged infringement as follows:
44 Apotex intends to supply and offer to supply in Australia the Apotex Leflunomide Products for the treatment of active psoriatic arthritis.
Particulars
(i) In or about July 2008, the Apotex Leflunomide Products were registered on the ARTG by the TGA.
(ii) The Apotex PI states that the Apotex Leflunomide Products are “indicated for the treatment of… Active Psoriatic Arthritis”.
(iii) On 25 September 2008, Sanofi-Aventis Australia received a letter from the Australian Government Department of Health and Ageing stating that a new brand of Leflunomide would be listed on the PBS on 1 December 2008.
45 The use by a person of the Apotex Leflunomide Products for the treatment of active psoriatic arthritis would infringe claim 1 of the Patent.
Particulars
(i) Claim 1 of the Patent claims a method of preventing or treating the skin disorder psoriasis which comprises administering an effective amount of a pharmaceutical composition containing Leflunomide as an active ingredient.
(ii) The Apotex Leflunomide Products are pharmaceutical compositions containing Leflunomide as an active ingredient.
(iii) When an effective amount of an Apotex Leflunomide Product is administered to treat active psoriatic arthritis, it will prevent or treat the skin disorder psoriasis.
46 The Apotex Leflunomide Products are not staple commercial products.
47 Apotex intends, and has reason to believe, that the Apotex Leflunomide Products will be used by persons for the treatment of active psoriatic arthritis.
Particulars
Apotex intends and has reason to believe that the Apotex Leflunomide Products will be used as indicated in the Apotex Pl.
48 The use of the Apotex Leflunomide Products by the persons referred to in paragraph 45 above will be use in accordance with instructions for the use of the products given by Apotex to such persons.
Particulars
The Apotex Leflunomide Products will be used as instructed by and in accordance with the Apotex PI.
139 Against this background Apotex approached the question of construction of the claim in the context of Sanofi-Aventis’s case on infringement. Apotex submitted that intention is irrelevant to direct or primary infringement as the monopoly which a patent affords is absolute. In the case of indirect or secondary infringement as provided for in s 117, however, elements of mental state are relevant (as evinced by the inclusion of the “reason to believe” element in s 117(2)(b)). Apotex acknowledged that the High Court has rejected any need for consistency with the approach of the European Patents Office (Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (2004) 217 CLR 274; [2004] HCA 58 (Lockwood) at [66]) but said that analysis of the problems in Europe and the United Kingdom relating to the infringement of patents for the use of a known product in a new way exposed problems with Sanofi-Aventis’s case. Apotex referred in particular to the comments of Lord Hoffman in Merrell Dow [1996] RPC 76 at [52] about the distinction between an old product being used in a new way to achieve a new purpose (where novelty would not be an issue) and an old product being used in an old way to achieve a new purpose (where novelty would be an issue because the new purpose might then reside only in the mind of the user). As Lord Hoffman put it:
I think it is fair to say that, in the United Kingdom at least, this aspect of the Enlarged Board’s decision has been criticised on the ground that a patent for an old product used in an old way for a new purpose makes it difficult to apply the traditional United Kingdom doctrine of infringement. Liability for infringement is, as I have said, absolute. It depends upon whether the act in question falls within the claims and pays no attention to the alleged infringer’s state of mind. But this doctrine may be difficult to apply to a patent for the use of a known substance in a known way for a new purpose. How does one tell whether the person putting the additive into his engine is legitimately using it to inhibit rust or infringing by using it to reduce friction?
140 According to Apotex, this problem is avoided by construing claim 1 of the patent as requiring an objective determination whether the medical practitioner will administer leflunomide as a method of treating psoriasis (construction (2) above). This, submitted Apotex, involves four steps as follows:
(a) identify a patient,
(b) identify the doctor’s diagnosis (no doubt recorded in the doctor’s notes) – here, it is RA, PsA or psoriasis,
(c) identify the drug that the doctor prescribes for the treatment of the identified disease that has been diagnosed by the doctor, and
(d) if necessary, confirm this by reference to the regime within which the doctor practices: whether the drug is registered on the ARTG for use in the particular disease; the indication referred to in the PI; what “hurdles” the doctor has to clear in [order] to prescribe the drug for the particular disease; and so on.
141 Apotex distinguished this from Sanofi-Aventis’s approach which, according to Apotex, inescapably construed claim 1 of the patent as including any administration of leflunomide which incidentally prevents or treats psoriasis (see construction (3) above), even where (for example) it is not known by the prescribing doctor that the patient suffers from psoriasis. According to Apotex, if it were otherwise, Sanofi-Aventis’s case that “use by a person of the Apotex Leflunomide Products for the treatment of active psoriatic arthritis would infringe claim 1 of the Patent” could not be made out. However, on Apotex’s case administering leflunomide for the prevention or treatment of PsA constitutes use of a method of treatment of PsA, but “the fact that this also ‘treats psoriasis’ is merely incidental: the method claimed is not used.” For these reasons, Apotex characterised the evidence of Professor Brooks that when treating PsA he also treated psoriasis (and the contrary evidence of Professor Smith that he treated PsA only) as irrelevant to infringement but relevant to novelty (separately addressed below). Analysed by reference to Apotex’s criteria for the objective determination of purpose, Apotex recast Professor Brooks’ evidence in these terms:
(a) the patient is identified,
(b) the doctor has diagnosed the patient as suffering from PsA,
(c) the doctor prescribes Leflunomide to treat the PsA,
(d) the “context of the PI” relevantly limits the prescription of the drug to “…active psoriatic arthritis”, and
(e) not only is the doctor not instructed to prescribe the drug for psoriasis; the evidence is that none of the doctors who gave evidence ever has or ever would wish to.
142 According to Apotex, irrespective of their (irrelevant) different states of mind when prescribing leflunomide to a patient with PsA, “[w]hat the two Professors [Smith and Brooks] had in common was an awareness that, in light of its modest benefits in treating psoriasis, when they prescribe Leflunomide in a method of treatment of PsA, they can expect or hope for an incidental treatment or prevention of the patient’s psoriasis.” This, said Apotex, was no different from the situation in relation to those of the 2% of people suffering from RA who (as 2% of the general population has psoriasis) also suffer from psoriasis: a doctor prescribing leflunomide to such a patient for RA might also hope for a modest incidental benefit to that patient’s psoriasis. Using Apotex’s words:
…awareness of a potential incidental side benefit is no more an element of the method of treatment than awareness of a potential incidental side effect.
143 In respect of patents for methods of treatment of humans generally, Apotex reserved its right to challenge the correctness of the decisions in Rescare Ltd v Anaesthetic Supplies Pty Ltd (1992) 25 IPR 119, Anaesthetic Supplies Pty Ltd v Rescare Ltd (1994) 50 FCR 1 (Anaesthetic Supplies v Rescare) and Bristol-Myers Squibb Co v FH Faulding & Co Ltd (2000) 97 FCR 524; [2000] FCA 316 (Bristol-Myers Squibb v FH Faulding) (which confirmed the patentability of such methods of treatment). For the purpose of this hearing Apotex said that, if patentable, such methods of treatment must have as an essential integer use for the treatment of a (or the) particular disease: in this case, the skin disease psoriasis. In Apotex’s words, if the objective purpose of treating psoriasis is not an essential integer of the claim then the mere administration of leflunomide for any purpose potentially infringes the patent (as 2% of the population has psoriasis) “and the claim is hopelessly invalid”.
144 According to Apotex, the present case bears striking similarities to the decision of the United States Court of Appeals for the Federal Circuit in Warner-Lambert Company v Apotex Corp 316 F3d 1348 (Fed. Cir. 2003), in which the patent in suit claimed a method for treating neurodegenerative diseases by administering gabapentin. Gabapentin was the subject of an expired compound patent and an expired patent claiming a method of treating epilepsy by administering gabapentin. The Court of Appeals rejected an argument that an application for regulatory approval to market gabapentin for the treatment of epilepsy would infringe the patent in suit (which related to the treatment of neurodegenerative diseases more broadly). This result, however, turned on a specific provision in the relevant law deeming it to be an act of infringement to submit an application for regulatory approval to manufacture, use or sell a drug claimed in a patent or the use of which is claimed in a patent. The Court of Appeals said that the provision was not able to exclude a competitor from seeking to market an off-patent drug for an approved use not covered by a current patent. Apotex submitted that, analysed in this way, Sanofi-Aventis was attempting to achieve the same result as the unsuccessful patentee, as:
Leflunomide is off-patent. It is approved for the rheumatic diseases RA and PsA. The applicants are seeking to use a patent for a different method of treatment, [of] psoriasis, to exclude competition.
145 Apotex submitted that, in the case of a subsequent medical use patent (that is, a patent claiming a method of treatment consisting of the administration of a known product for a new disease), any construction in which the new disease is not an essential integer of the claim necessarily renders the claim invalid because incidental treatment of the new disease will inevitably have occurred in the use of the known product for the first or earlier diseases. That is, if the new disease is not an essential integer of the claim, the claim for the method of treating the new disease will fail for lack of novelty because, on the reverse infringement test (discussed below), the claim of the earlier or first patent would have been infringed by performing that method.
F2.3 Sanofi-Aventis’s submissions
146 Sanofi-Aventis characterised the submissions of Apotex, and the construction of claim 1 it attempted to attribute to Sanofi-Aventis (construction (3)), as misconceived.
147 As a general proposition, Sanofi-Aventis said that claims for methods of medical treatment (be they for a first or subsequent medical use) do not form any special category calling for a different approach to construction from the orthodox approach. There is no authority in Australia to support any such special category and, indeed, observations in Anaesthetic Supplies v Rescare at 17-19 and Bristol-Myers Squibb v FH Faulding at [13]-[17] and [142] suggest the contrary.
148 As to purpose (subjective or objective as in constructions (1) and (2)), Sanofi-Aventis submitted that claim 1 contains no such reference. The claimed method is a method to prevent or treat the skin disorder psoriasis. A person uses the method by administering a compound containing leflunomide to the recipient where the effect of the administration in fact is to prevent or treat psoriasis (that is, to arrest the development or retard the progression of psoriasis in a susceptible mammal). The method claimed does not refer to the purpose of the administration, whether that purpose be subjectively ascertained on the basis of the medical practitioner’s state of mind or objectively ascertained on the basis of surrounding circumstances. According to Sanofi-Aventis, the fact that leflunomide may also treat other diseases is immaterial. The claimed method is only for the treatment or prevention of psoriasis.
149 Sanofi-Aventis also disavowed Apotex’s attribution to it of a construction involving the treatment of psoriasis incidental to the treatment of PsA. Sanofi-Aventis submitted that the characterisation of prevention or treatment as incidental or otherwise is immaterial. The claim says nothing about the character of the prevention or treatment as direct, indirect, incidental or otherwise. The claim requires merely the prevention or treatment of psoriasis (the terms “preventing” and “treating” being defined in the specification in a manner that accords with the evidence Dr Shumack gave about their meaning). In the case of the administration of leflunomide to treat PsA, the evidence is inescapable. Almost all patients with PsA either have or will develop psoriasis. Hence, administering leflunomide to those patients will treat or prevent the psoriasis which almost all of those patients either have or will develop. The fact that administering leflunomide to patients with RA (or, for that matter, any other disease) will also prevent or treat psoriasis in 2% of those patients (as 2% of the population suffers from psoriasis) is immaterial. Sanofi-Aventis does not seek to restrain the supply of leflunomide for the purposes of such conduct.
150 As Sanofi-Aventis submitted, there is no sound basis in authority for applying to a claim for a method of medical treatment (whether it be for a first, second or subsequent use of a compound) anything other than the orthodox approach to claim construction. The Full Court set out the relevant principles in PAC Mining Pty Ltd v Esco Corporation (2009) 80 IPR 1; [2009] FCAFC 18 at [27]-[29] (referring to the earlier Full Court decision in Pfizer Overseas Pharmaceuticals v Eli Lilly & Co (2005) 225 ALR 416; [2005] FCAFC 224):
[27] The Full Court noted, apparently with approval, the ten principles of construction set out by Sheppard J in Decor Corp Pty Ltd v Dart Industries Inc (1988) 13 IPR 385 at 400; 225 ALR 416 at 468 [249]:
(1) The claims define the invention which is the subject of the patent. These must be construed according to their terms upon ordinary principles. Any purely verbal or grammatical question that can be answered according to ordinary rules for the construction of written documents is to be resolved accordingly.
(2) It is not legitimate to confine the scope of the claims by reference to limitations which may be found in the body of the specification but are not expressly or by proper inference reproduced in the claims themselves. To put it another way, it is not legitimate to narrow or expand the boundaries of monopoly as fixed by the words of a claim by adding to those words glosses drawn from other parts of the specification.
(3) Nevertheless, in approaching the task of construction, one must read the specification as a whole.
(4) In some cases the meaning of the words used in the claims may be qualified or defined by what is said in the body of the specification.
(5) If a claim be clear, it is not to be made obscure because obscurities can be found in particular sentences in other parts of the document. But if an expression is not clear or is ambiguous, it is permissible to resort to the body of the specification to define or clarify the meaning of words used in the claim.
(6) A patent specification should be given a purposive construction rather than a purely literal one.
(7) In construing the specification, the court is not construing a written instrument operating inter partes, but a public instrument which must define a monopoly in such a way that it is not reasonably capable of being misunderstood.
(8) The body, apart from the preamble, is there to instruct those skilled in the art concerned in the carrying out of the invention; provided it is comprehensible to, and does not mislead, a skilled reader, the language used is seldom of importance.
(9) Nevertheless, the claims, since they define the monopoly, will be scrutinised with as much care as is used in construing other documents defining a legal right.
(10) If it is impossible to ascertain what the invention is from a fair reading of the specification as a whole, it will be invalid. But the specification must be construed in the light of the common knowledge in the art before the priority date.
…
[28] In Pfizer, the Full Court also noted that the “clear words of a claim are not to be distorted by importing passages from the specification” and that “when a claim is clear it is not to be glossed or obscured by reference to the specification” (225 ALR 416 at 467 [247]). In this respect their Honours referred to the words of Barwick CJ and Mason J in Interlego AG v Toltoys Pty Ltd (1973) 130 CLR 461 at 478 that “it is not permissible to vary or qualify the plain and unambiguous meaning of the claim by reference to the body of the specification” (225 ALR 416 at 467 [247]). However, as their Honours in Interlego also pointed out, where an expression is not clear “it is… permissible to resort to the body of the specification to define or clarify the meaning of words used in the claim…” (225 ALR 416 at 468 [248]).
[29] The correct approach to the construction of claims has been referred to in two recent judgments of the Full Court. In Insta Image Pty Ltd v KD Kanopy Australasia Pty Ltd [2008] FCAFC 139, [82] the Full Court said [citations excluded]:
Construction of claims is a matter for the Court… When claims are being construed, the specification is to be read as a whole in order that the necessary background to the invention may be known and words or expressions used in the claims may be understood… However, where a claim is clear and unambiguous, it is not permissible to resort to the specification in order to qualify it… It may, however, be possible to resolve any ambiguity or lack of clarity by reference to the body of the specification…
In Kinabalu Investments Pty Ltd v Barron and Rawson Pty Ltd [2008] FCAFC 178, [44]-[45] the Full Court said:
The principles of construction applicable were not in dispute. When determining the nature and extent of the monopoly claimed, the specification must be read as a whole. But as a whole it is made up of several parts which have different functions. The claims mark out the legal limits of the monopoly granted. The specification describes how to carry out the process claimed and the best method known to the patentee of doing that. Although the claims are construed in the context of the specification as a whole, it is not legitimate to narrow or expand the boundaries of monopoly as fixed by the words of a claim, by adding to those words glosses drawn from other parts of the specification. If a claim is clear and unambiguous, it is not to be varied, qualified or made obscure by statements found in other parts of the document. It is legitimate, however, to refer to the rest of the specification to explain the background of the claims, to ascertain the meaning of technical terms and resolve ambiguities in the construction of the claims. See Flexible Steel Lacing Co v Beltreco Ltd (2000) 49 IPR 331 at [73]-[75] (Hely J).
Other more specific principles of construction collected in Flexible Steel at [81] are:
• a specification should be given a purposive construction rather than a purely literal one;
• the hypothetical addressee of the specification is the non-inventive person skilled in the art before the priority date;
• the words used in a specification are to be given the meaning the hypothetical addressee would attach to them, both in the light of the addressee’s own general knowledge and in the light of what is disclosed in the body of the specification;
• as a general rule, the terms of the specification should be accorded their ordinary English meaning;
• evidence can be given by experts on the meaning those skilled in the art would give to technical or scientific terms and phrases, and on unusual or special meanings given by such persons to words which might otherwise bear their ordinary meaning;
• however, the construction of the specification is for the court, not for the expert. In so far as a view expressed by an expert depends upon a reading of the patent, it cannot carry the day unless the court reads the patent in the same way.
151 Sanofi-Aventis maintained that the skilled addressee of the patent, as at the priority date (March 1993), would have been a dermatologist such as Dr Shumack. The patent concerns the skin disease psoriasis which was (and is) the domain of the dermatologist. It may be that this approach to the skilled addressee is too confined. As the evidence disclosed, in 1993 it was known in the medical profession that one of the diagnostic criteria for PsA was psoriasis. While a rheumatologist confronted by a patient with symptoms of psoriasis but not PsA would refer the patient to a dermatologist, Dr Brooks’ evidence that psoriasis and PsA are diseases the boundaries of which overlap indicates that the skilled addressee of the patent might include dermatologists and rheumatologists to the extent that both had to deal with psoriasis as a routine part of their medical practice in 1993 (and today) and thus would have had a “practical interest” in the subject-matter of the patent (Catnic Components Ltd v Hill & Smith Ltd (No 1) [1982] RPC 183 at 242-243). Whether this is so or not is of little significance, however. The essence of the dispute between the parties insofar as it related to the construction of the patent is ultimately whether the claim for a “method of preventing or treating a skin disorder, wherein the skin disorder is psoriasis” by administration of a compound should be construed as involving the purpose, object or aim of the administration (whether that purpose, object or aim be determined subjectively or objectively), or the effect in fact of the administration.
152 Apotex’s three proposed constructions (one of which, construction (3), it attributed to Sanofi-Aventis) all involve the concept of the purpose, object or aim of the administration. Hence, construction (1) (disavowed by Apotex by closing submissions) depends on the subjective intention of the treating physician. It asks whether the treating physician, in administering the compound, has the purpose, object or aim of preventing or treating psoriasis. Construction (2) (adopted by Apotex as its preferred construction by closing submissions) depends on an objective determination of the treating physician’s purpose, object or aim in administering the compound. It asks whether the purpose, object or aim of the treating physician’s administration of the compound can be objectively characterised as preventing or treating psoriasis. Construction (3) is also underpinned by this concept of purpose. The concept of the “incidental” treatment of psoriasis assumes the existence of another direct or immediate purpose of treatment. By contrast, the purpose, aim or object of the administration (subjective or objective) is irrelevant to construction (4). Sanofi-Aventis’s construction asks whether the administration will in fact have the effect of preventing or treating psoriasis. This essential difference explains Sanofi-Aventis’s refusal to accept the attribution to it of construction (3). Apotex insisted that it was not open to Sanofi-Aventis to do so because construction (3) was Sanofi-Aventis’s case on infringement.
153 Apotex’s submission that Sanofi-Aventis’s case necessarily involves adopting construction (3) of claim 1 should not be accepted. Claim 1 of the patent has a meaning. It is true that “what is required is a construction of the specification which is reasonable and fair to both the patentee and the public” so that “[i]f, upon a reasonable view, the specification can be read to protect the inventor then the court should give effect to that construction” (Root Quality Pty Ltd v Root Control Technologies Pty Ltd (2000) 49 IPR 225; [2000] FCA 980 at [41]). This principle, however, does not mean that the proper construction of the claim is to be resolved by reference to the conduct said to constitute the threatened infringement of the claim.
154 What then is the proper construction of claim 1 of the patent? The difficulty for Apotex’s proffered constructions is that the claim itself says nothing about the purpose of the administration of the compound. The method claimed is a method of preventing or treating the skin disorder psoriasis by administering an effective amount of the compound. The method is described and defined by the result: the prevention or treatment of psoriasis. If there were any ambiguity in the concepts of preventing or treating psoriasis, the definition of those terms in the specification confirms that they mean achieving a particular biological result or effect in the recipient of the administration of the leflunomide. According to the specification, “prevention” is the prophylactic prevention of psoriasis in a susceptible mammal and “treatment” is arresting the development and retarding the progression of psoriasis in a susceptible mammal. As Apotex submitted, the particular disease, psoriasis, is an essential integer of the method claimed. But its essentiality operates in terms of result or effect (the fact of prevention or treatment of psoriasis) and not, as Apotex said, in terms of the purpose of the administration.
155 Accordingly, the claimed method is used where the compound (leflunomide) is administered to a recipient in an effective amount so that the recipient’s psoriasis is in fact prevented or treated. The validity of the patent and, if valid, its infringement are to be determined on the basis of this construction.
156 Under s 138(3)(b) of the Patents Act a patent may be revoked on the ground that the invention is not a patentable invention.
157 Section 18(1) of the Patents Act provides that:
(1) Subject to subsection (2), an invention is a patentable invention for the purposes of a standard patent if the invention, so far as claimed in any claim:
(a) is a manner of manufacture within the meaning of section 6 of the Statute of Monopolies; and
(b) when compared with the prior art base as it existed before the priority date of that claim:
(i) is novel; and
(ii) involves an inventive step; and
(c) is useful; and
(d) …
158 “Prior art base” is defined in Sch 1 (by reference to s 3) of the Patents Act in these terms:
“prior art base” means:
(a) in relation to deciding whether an invention does or does not involve an inventive step or an innovative step:
(i) information in a document that is publicly available, whether in or out of the patent area; and
(ii) information made publicly available through doing an act, whether in or out of the patent area.
(b) in relation to deciding whether an invention is or is not novel:
(i) information of a kind mentioned in paragraph (a); and
(ii) information contained in a published specification filed in respect of a complete application where:
(A) if the information is, or were to be, the subject of a claim of the specification, the claim has, or would have, a priority date earlier than that of the claim under consideration; and
(B) the specification was published after the priority date of the claim under consideration; and
(C) the information was contained in the specification on its filing date and when it was published.
159 Section 7 of the Patents Act is as follows:
(1) For the purposes of this Act, an invention is to be taken to be novel when compared with the prior art base unless it is not novel in the light of any one of the following kinds of information, each of which must be considered separately:
(a) prior art information (other than that mentioned in paragraph (c)) made publicly available in a single document or through doing a single act;
(b) prior art information (other than that mentioned in paragraph (c)) made publicly available in 2 or more related documents, or through doing 2 or more related acts, if the relationship between the documents or acts is such that a person skilled in the relevant art would treat them as a single source of that information;
(c) prior art information contained in a single specification of the kind mentioned in subparagraph (b)(ii) of the definition of prior art base in Schedule 1.
(2) For the purposes of this Act, an invention is to be taken to involve an inventive step when compared with the prior art base unless the invention would have been obvious to a person skilled in the relevant art in the light of the common general knowledge as it existed in the patent area before the priority date of the relevant claim, whether that knowledge is considered separately or together with the information mentioned in subsection (3).
(3) The information for the purposes of subsection (2) is:
(a) any single piece of prior art information; or
(b) a combination of any 2 or more pieces of prior art information;
being information that the skilled person mentioned in subsection (2) could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood, regarded as relevant and, in the case of information mentioned in paragraph (b), combined as mentioned in that paragraph.
(4) […]
G2 Competing submissions – novelty
G2.1 Apotex’s submissions – novelty
160 Apotex’s case is that the 341 patent, the Bartlett article and the Rozman abstract, each of which was published before the priority date of the patent, deprive the patent of novelty. Apotex accepted that none of these publications refers to psoriasis. Apotex submitted, however, that as Sanofi-Aventis’s construction of the claim “captures the use of Leflunomide to treat RA and/or PsA, the claim must be anticipated by prior disclosures of methods of treatment for these diseases.” Apotex’s submissions on novelty proceeded as follows.
161 The 341 patent, in claim 4, discloses a “[m]ethod for the treatment of inflammations [and] rheumatic complaints… by administering to the patient an effective amount of [leflunomide]”. As the most common forms of inflammatory arthritis are RA and PsA, claim 4 of the 341 patent must refer to, and thus disclose, a method of treatment of RA and PsA. This construction is consistent with the specification, which refers to leflunomide’s anti-phlogistic and anti-rheumatic actions, as well as the concluding statement in the specification that the pharmacological findings:
show that the compound according to the invention… differs advantageously in its pattern of action from the tested antiphlogistic agents, in particular in respect of the inhibition of immunopathological processes on animal models which are also relevant to human illness. This is probably equally true relative to other antiphlogistic agents hitherto employed in therapy. This fact opens up the possibility of tackling, by medication, rheumatic illnesses in man by more nearly treating the cause, instead of purely symptomatic treatment as with the antiphlogistic agents used hitherto.
162 Apotex submitted that Sanofi-Aventis’s case that the animal models in the 341 patent limited the disclosure to RA (as opposed to PsA) is unsustainable. According to Apotex: – (i) Dr Shumack accepted that “rheumatic complaints” in claim 4 of the 341 patent included RA and the seronegative arthropathies (of which PsA is the most common), (ii) Professor Brooks read claim 4 of the 341 patent in the same way, and (iii) Professor Smith also ultimately accepted that the 341 patent suggested the treatment of RA and PsA. Insofar as Sanofi-Aventis proposed a more confined reading of the 341 patent based on Professor Smith’s evidence about the animal models, Professor Brooks’ evidence to the contrary should be accepted. In any event, the animal models “just provide an indication that a treatment may work in humans”.
163 Further, according to Apotex, the fact that clinical trials would be required before the safety and efficacy of using leflunomide in humans could be established is immaterial. The prior art need not disclose proof to that level to amount to a disclosure sufficient to deprive the patent of novelty. Using Apotex’s words:
As a matter of law, a prior disclosure does not have to persuade the skilled reader to “go out and buy a blister pack of Leflunomide and dish it out to the next patient who walks in” (T290.2-36). It has to disclose (relevantly) a method of treating RA or PsA (on the Applicant’s case) where the experts agree that a percentage (11% on the basis of [the TOPAS study]) of those treated (2% with RA; most with PsA)) will have any concomitant psoriasis treated or prevented. It does not have to prove the safety and efficacy of the treatment.
164 Apotex submitted as follows:
If what is claimed by the Patent in suit includes the treatment of rheumatic complaints such as RA and/or PsA because such treatment will in any event (or incidentally) treat or prevent psoriasis in those patients, then the 341 Patent discloses exactly what is claimed and no question of enablement or sufficiency arises ([H Lundbeck A/S v Alphapharm Pty Ltd (2009) 177 FCR 151; [2009] FCAFC 70 at] [180], [190]).
Alternatively, if Leflunomide will inevitably treat or prevent psoriasis in persons to whom it is administered to treat RA and/or PsA in 2011, that was also the case in 1993 (and indeed in 1980) if a person were to follow the teaching of the 341 Patent and use Leflunomide for the treatment of rheumatic complaints. Thus if the absence of a reference to psoriasis takes the 341 Patent outside the realm of Lundbeck at [180], the inevitable chemical operation of Leflunomide (on the applicants’ case) to treat or prevent psoriasis will deprive the Patent in suit of novelty on a General Tire basis as described in Lundbeck at [182].
165 At [180] in H Lundbeck A/S v Alphapharm Pty Ltd (2009) 177 FCR 151; [2009] FCAFC 70 (Lundbeck) Bennett J stated that there will be anticipation, and thus lack of novelty, where a prior publication “discloses exactly what is claimed” in the patent in suit. In such cases “the evidence of the skilled addressee is not likely to be of much further assistance.” At [182] her Honour referred to the fact that it “may be that the prior disclosure is of a method that produces the claimed product. If that method leads inexorably to the product, there is anticipation… If it may or may not result in the claimed product, there is no anticipation.”
166 According to Apotex, these considerations disclose the aptness of the “reverse infringement” test of novelty (that is, the test which asks whether use in accordance with a prior publication would have infringed the patent had the patent been first in time). On this basis, as Apotex put it, if a prior publication discloses the administration of leflunomide to treat RA (as each of the 341 patent, the Bartlett article and the Rozman abstract does) and/or PsA (as the 341 patent does) then, given Sanofi-Aventis’s case on infringement, that administration would result in a reverse infringement from which it must follow that the claimed invention is not novel. Reverse infringement would occur because the use of leflunomide to treat RA and/or PsA would also (in some cases) treat or prevent psoriasis, which is the method claimed in the invention. Contrary to Sanofi-Aventis’s submission, it is not necessary that the hypothetical administration of leflunomide in accordance with the 341 patent would in every case have resulted in the prevention or treatment of psoriasis. Apotex relied on the “reverse infringement” test being satisfied. The doctrine of “inevitable result” emphasised in Sanofi-Aventis’s submissions applies only in “a narrow special class of cases relating to ambiguous disclosures”.
167 Apotex submitted that, as the Bartlett article and the Rozman abstract also teach the use of leflunomide to treat RA, it must follow that these publications deprive the patent of novelty on the same basis discussed above.
G2.2 Sanofi-Aventis’s submissions – novelty
168 Sanofi-Aventis observed that none of the three publications on which Apotex relied in respect of novelty refers to psoriasis. Accordingly, Sanofi-Aventis submitted that the conventional basis for claimed lack of novelty – prior disclosure of the invention as claimed –is unavailable. Given the omission of any reference to psoriasis in the three prior art publications, Apotex’s submission that “the 341 patent discloses exactly what is claimed”, said Sanofi-Aventis, may be put to one side. Therefore Apotex’s case that the invention fails for lack of novelty at the priority date, Sanofi-Aventis submitted, requires the conclusion that the skilled addressee following directions in the 341 patent, the Bartlett article or the Rozman abstract would carry out the method claimed in the patent. According to Sanofi-Aventis this conclusion should not be reached for four reasons:
(1) The prior publications do not teach (in the sense of direct, recommend or suggest) the use of leflunomide in a method of treatment of any disease.
(2) If, contrary to (1) above, any of the prior publications teaches the use of leflunomide in a method of treatment of the disease RA, the publications do not deprive the claimed invention of novelty; Apotex is necessarily invoking the test of “inevitable result” (that is, claiming that the inevitable result of following the teaching is the use of the method claimed in the patent), but that test is either inapplicable or unsatisfied.
(3) In respect of the 341 patent, properly construed, the publication does not refer to PsA at all.
(4) If, contrary to (3), the 341 patent refers to PsA then Apotex’s own case is that the 341 patent merely includes or encompasses that subject-matter (that is, the use of leflunomide in a method of treating PsA and therefore psoriasis) along with many other diseases. The breadth of this disclosure is such that the 341 patent cannot anticipate the later, specific claim in the patent.
169 In respect of (1), Sanofi-Aventis’s case was that the prior publications do not teach a method of treatment of any disease (let alone the skin disease psoriasis) by administration of leflunomide. The 341 patent, for example, contains no information about the effect of leflunomide in human clinical trials. The skilled addressee of the 341 patent would not have considered administering leflunomide to a person to treat any disease by reason of anything contained in the 341 patent. As to psoriasis, Sanofi-Aventis relied on Professor Brooks’ evidence that the 341 patent does not “provide any information whatsoever to establish or suggest that the administration of the drug will be safe or effective in the treatment of psoriasis in humans”. Insofar as the Bartlett article refers to “very preliminary clinical data” in respect of leflunomide’s effects on the immune response of patients with RA, Sanofi-Aventis relied on Professor Brooks’ evidence that more work would need to be done before he would consider administering leflunomide to treat any disease in humans. Similarly, the disclosure in the Rozman abstract of the conduct of a “gold standard” clinical trial with results suggesting a “dose related trend towards efficacy of” leflunomide would not have caused Professor Brooks to consider administering leflunomide to humans to treat any disease. Consistent with the reference in the Rozman abstract to further studies being required to determine the role of leflunomide in the management of RA, Professor Brooks said such studies, including clinical trials, would be necessary before he would administer leflunomide for the treatment of any disease in humans.
170 In respect of (2), Sanofi-Aventis’s case was that the invention in the patent is a method of treatment of the skin disease psoriasis by the administration of leflunomide. Accordingly, for the prior publications to anticipate the claimed invention, they must disclose a direction, recommendation or suggestion to administer leflunomide to humans as a method of treating psoriasis. Insofar as Apotex relied on Lundbeck at [182], it is apparent that the principle of “inevitable result” there explained relates to a product and so is inapplicable to patents claiming a method. A better guide to method claims is the analysis in Apotex Pty Ltd (formerly GenRx Pty Ltd) v Sanofi-Aventis (2008) 78 IPR 485; [2008] FCA 1194 (the first Apotex case) at [50], referred to with approval in Lundbeck at [169], that “all integers of an invention must be in the prior specification if novelty is to be defeated. In the case of a process or method, that means each integer of the process or method.” In other words, for a method claim, anticipation requires disclosure of the method. The method claimed is not disclosed by the prior publications, which do not teach the administration of leflunomide to prevent or treat psoriasis.
171 Even if the approach in Lundbeck to products (that a product which is the inevitable result of a previously disclosed method lacks novelty) is applicable to method claims, Sanofi-Aventis said the test is not satisfied. There is conflict in the evidence about what the 341 patent teaches. Professor Brooks acknowledged that other rheumatologists would not be likely to understand the animal models in the 341 patent as relevant to PsA. Accordingly, the following observations in Abbott GMBH and Co KG v Apotex Pty Ltd (No 2) (2010) 87 IPR 561; [2010] FCA 940 (Abbott v Apotex (No 2)) at [58] are applicable:
The court must, of course, construe the prior art document, and do so through the eyes of the skilled addressee. But the ultimate question is not what the document means in some absolute sense: it is whether the document discloses the invention in suit either in terms or by mapping out a path which, if followed, would inevitably lead to the compound the subject of that invention. If the document is reasonably open to two or more interpretations, only one of which would lead to the compound of interest, it will, in my view, be impossible to conclude that following the instructions in the document would inevitably lead to that compound.
172 Insofar as the 341 patent can be said to teach the administration of leflunomide to prevent or treat RA, Apotex’s argument relies on these patients having or developing a coincidental case of psoriasis. In common with the rest of the population, about 2% of people suffering from RA have psoriasis. Unlike PsA, of which psoriasis is a diagnostic criterion and almost all sufferers of which have or will develop psoriasis, psoriasis in sufferers of RA is merely coincidental. The administration of leflunomide will not inevitably result in the prevention or treatment of psoriasis in such persons. On a statistical analysis, where 1% of the population suffers from RA and 2% from psoriasis, the potential for overlap exists in about 0.02% of the population. Thus, Sanofi-Aventis submitted that it cannot be said that the method (that is, the administration of leflunomide for the treatment of psoriasis) is inevitably used whenever RA is treated (assuming the prior publications teach such treatment). The administration of leflunomide in accordance with the prior art documents, on this basis, may or may not result in the use of the method. Accordingly, anticipation by reason of the doctrine of inevitable result does not arise.
173 In respect of (3), Sanofi-Aventis’s case was that the 341 patent must itself be construed in accordance with the applicable principles. To the non-inventive skilled addressee (as opposed to Professor Brooks) the 341 patent, construed as a whole, would not have disclosed anything about the treatment or prevention of PsA.
174 In respect of (4), Sanofi-Aventis’s case was that if the 341 patent can be construed as referring to PsA then it must also refer to all possible types of rheumatic complaints. The authorities establish that mere disclosure in a prior publication of methods falling within the scope of the claimed invention is insufficient to deprive the claimed invention of novelty (Bristol-Myers Squibb v FH Faulding at [67] and Pfizer Overseas Pharmaceuticals v Eli Lilly & Co (2005) 225 ALR 416; [2005] FCAFC 224 (Pfizer v Eli Lilly) at [311]-[322]). On this basis, Sanofi-Aventis characterised the purported disclosure in the 341 patent as “hopelessly broad”. Such a broad disclosure could not anticipate the method claimed, which involves the administration of leflunomide to prevent or treat a different type of disease altogether, being the skin disease psoriasis.
175 As noted, an invention is patentable under the Patents Act only if the invention as claimed is novel when compared with the prior art base as it existed before the priority date of the claim (s 18(1)(b)(i) of the Patents Act). By operation of s 7(1) of the Patents Act, an invention is taken to be novel as required by s 18(1)(b)(i) unless it is not novel in light of the kinds of information specified therein, which must be made publicly available in a single document (s 7(1)(a)). Information in two or more related documents may be considered together only where the relationship between the documents “is such that the person skilled in the relevant art would treat them as a single source of [the relevant] information” (s 7(1)(b)).
176 In the present case there was no suggestion that the skilled addressee would have treated any combination of the 341 patent, the Bartlett article and the Rozman abstract as a single source of information about the qualities and potential uses of leflunomide. Accordingly, s 7(1) of the Patents Act requires each of those three publications to be considered separately.
177 The effect of a prior publication on novelty is to be determined in accordance with established principles.
178 First, disclosure in a publication before the priority date of a claim defining an invention may deprive the invention of novelty if it discloses either the exact invention or something less than the exact invention but nevertheless sufficient. In either case the invention has been anticipated and thus is not novel. In this regard, as Bennett J put it in Lundbeck at [163]:
the question is whether an invention is novel when compared to prior art information made publicly available. The test is not whether the invention has been made publicly available.
179 Second, for the purpose of comparison with the invention as claimed, the prior publication must be construed to determine what it discloses. Consistent with the principles of construction applicable to patents generally, a prior publication is to be read through the eyes of the skilled addressee having regard to the state of knowledge at the date of publication of the document (General Tire and Rubber Company Ltd v The Firestone Tyre and Rubber Company Ltd [1972] RPC 457 (General Tire) at 485).
180 In EI Du Pont de Nemours & Co v Imperial Chemical Industries PLC (2007) 163 FCR 381; [2007] FCAFC 163 (EI Du Pont) at [155] Bennett J distinguished between what a prior art document teaches for the purpose of a disclosure undermining novelty and what might be “included” or “encompassed in” a prior art document. A prior broad disclosure thus may not be sufficient “in the absence of the skilled addressee understanding or perceiving” the later claimed invention therein (Lundbeck at [173]). To the same effect, in IGT (Australia) Pty Ltd v Aristocrat Technologies Australia Ltd (2008) 77 IPR 482; [2008] FCAFC 131 (IGT v Aristocrat) Heerey and Middleton JJ also distinguished between a prior art document which merely includes or encompasses a later invention (which will not anticipate the patent), and a prior art document which gives the skilled addressee clear or unmistakeable directions to make or perform the invention (which will anticipate the patent and so is novelty-destroying) (at [48]-[61]). In so doing their Honours referred at [55] to the decision of the Full Court in ICI Chemicals & Polymers Ltd v Lubrizol Corp Inc (2000) 106 FCR 214; [2000] FCA 1349 (ICI Chemicals) which “concluded that a prior art patent did not deprive the claimed invention of novelty, despite the fact that, read literally, the terms used in [the] prior art patent were sufficiently broad to encompass the claimed invention” because (quoting the Full Court at [51]):
A familiar metaphor illustrating the concept of anticipation is that the prior inventor must clearly be shown to have planted his flag at the precise destination before the patentee: General Tire at 485, 486. In the present case, the appellants’ argument involved the skilled addressee rummaging through the [the prior inventor’s] flag locker to find a flag which [it] possessed and could have planted.
181 This focus on what the prior art document communicates to the skilled addressee, and the quality of what is communicated, also underlies the conclusion of Jessup J in Abbott v Apotex (No 2) at [58], quoted above in relation to Sanofi-Aventis’s submissions on novelty.
182 This is not to say, however, that disclosure sufficient to undermine novelty involves a subjective test. As with infringement, the effect of a prior publication is objective. If performance in accordance with the prior publication must result in infringement then it is immaterial that no person would have been aware of that fact at either the time of publication of the prior document or the priority date of the patent. But, as Lord Hoffman said in SmithKline Beecham Plc’s (Paroxetine Methanesulfonate) Patent [2006] RPC 10 (SmithKline Beecham) at [22]-[23] (cited in Abbott v Apotex (No 2) at [56]):
…the infringement must be not merely a possible or even likely consequence of performing the invention disclosed by the prior disclosure. It must be necessarily entailed. If there is more than one possible consequence, one cannot say that performing the disclosed invention will infringe. The flag has not been planted on the patented invention, although a person performing the invention disclosed by the prior art may carry it there by accident or (if he is aware of the patented invention) by design. Indeed, it may be obvious to do so.
183 Third, the infinite permutations arising from the consideration of a claimed invention against a prior art document to determine whether the invention lacks novelty has generated a substantial body of principle expressed in many different ways. The “reverse infringement” test; ascertaining what the prior art document “teaches” the skilled addressee; asking whether the claimed invention is the “inevitable or inexorable result” of the skilled addressee following a direction, recommendation or suggestion in the prior art document; determining whether the prior art document contains “clear and unmistakeable directions” to the claimed invention; and asking if the prior disclosure involves the “planting of a flag” at the same destination as the invention, are criteria for assessment the aptness and application of which depend on the facts of the particular case. Whatever their expression, all these criteria involve consideration of the substance of what the documents (both the prior art and the patent in suit) communicate to the skilled addressee: an exercise which necessarily involves considering the quality and degree of what has been communicated.
184 Against the background of the broad principles set out above, the various criteria which have been developed to determine if a prior publication deprives a claimed invention of novelty may be further considered.
185 The “reverse infringement” test seeks to identify whether the disclosure in the prior art document is sufficient to deny the claimed invention of novelty. Its premise is that if the alleged anticipation would infringe the claim, the invention as claimed is not novel. The Full Court analysed the use of this test in Bristol-Myers Squibb v FH Faulding. At [61]-[72] Black CJ and Lehane J summarised the relevant position as follows:
(1) In Meyers Taylor Pty Ltd v Vicarr Industries Ltd (1977) 137 CLR 228 at 235 Aickin J said:
The basic test for anticipation or want of novelty is the same as that for infringement and generally one can properly ask oneself whether the alleged anticipation would, if the patent were valid, constitute an infringement.
(2) The words “basic” and “generally” are “not to be overlooked”. In particular, the test cannot literally be applied to a paper anticipation as the hypothetical infringement does not depend on the publication but on someone hypothetically making or doing what the publication describes or suggests.
(3) Given these limits of the reverse infringement test, it is necessary to recall the principles established in Hill v Evans (1862) 45 ER 1195 (Hill v Evans), including the following:
• The “antecedent statement must be such that a person of ordinary knowledge of the subject would at once perceive, understand, and be able practically to apply the discovery without the necessity of making further experiments and gaining further information before the invention can be made useful. If something remains to be ascertained which is necessary for the useful application of the discovery, that affords sufficient room for another valid patent.”
• “Apparent generality, or a proposition not true to its full extent, will not prejudice a subsequent statement which is limited and accurate, and gives a specific rule of practical application.”
• The “prior knowledge of an invention to avoid a patent must be knowledge equal to that required to be given by a specification, namely, such knowledge as will enable the public to perceive the very discovery, and to carry the invention into practical use.”
(4) The statement in Flour Oxidising Co Ltd v Carr & Co Ltd (1908) 25 RPC 428 at 457 also remains relevant, so that:
where the question is solely a question of prior publication, it is not… enough to prove that an apparatus described in an earlier Specification could have been used to produce this or that result. It must also be shown that the Specification contains clear and unmistakable directions so to use it.
(5) Accordingly (at [67]):
a prior publication, if it is to destroy novelty, must give a direction or make a recommendation or suggestion which will result, if the skilled reader follows it, in the claimed invention. A direction, recommendation or suggestion may often, of course, be implicit in what is described and commonly the only question may be whether the publication describes with sufficient clarity the claimed invention or, in the case of a combination, each integer of it.
186 The “basic” or “general” nature of the reverse infringement test, and its limitations, continue to be noted (see, for example, Gambro Pty Ltd v Fresenius Medical Care South East Asia Pty Ltd (2004) 61 IPR 442; [2004] FCA 323 at [191], and Pfizer v Eli Lilly at [313]).
187 The limitations of the reverse infringement test arise largely from the fact that it is one way of expressing the broader principle that, if a finding of anticipation is to be made, all that is “essential to the invention must be read out of the prior publication” (Hill v Evans at 1201). Thus, for an invention comprising a method or process, novelty is defeated on this basis only if each integer of the method or process is disclosed in the prior art document (first Apotex case at [50], referred to with approval in Lundbeck at [169]). If the exact invention claimed has been disclosed then no question as to the sufficiency of the disclosure for the purpose of destroying novelty arises (Lundbeck at [180] and [190]).
188 In General Tire at 486 the principles relevant to prior disclosure depriving a patent of novelty are expressed as follows:
If the prior inventor’s publication contains a clear description of, or clear instructions to do or make, something that would infringe the patentee’s claim if carried out after the grant of the patentee’s patent, the patentee’s claim will have been shown to lack the necessary novelty, that is to say, it will have been anticipated… if carrying out the directions contained in the prior inventor’s publication will inevitably result in something being made or done which, if the patentee’s patent were valid, would constitute an infringement of the patentee’s claim, this circumstance demonstrates that the patentee’s claim has in fact been anticipated.
If, on the other hand, the prior publication contains a direction which is capable of being carried out in a manner which would infringe the patentee’s claim, but would be at least as likely to be carried out in a way which would not do so, the patentee’s claim will not have been anticipated, although it may fail on the ground of obviousness. To anticipate the patentee’s claim the prior publication must contain clear and unmistakable directions to do what the patentee claims to have invented… A signpost, however clear, upon the road to the patentee’s invention will not suffice. The prior inventor must be clearly shown to have planted his flag at the precise destination before the patentee.
189 In Lundbeck at [173] Bennett J conveniently identified many of the relevant principles. Although limited in terms to product claims (see the comment at [172]), many of the principles are capable of application to method claims with or without adaptation. The principles are:
• An invention is a piece of information (Merrell Dow Pharmaceuticals Inc v HN Norton & Co Ltd (1995) 33 IPR 1 at 8). It follows that a disclosure is the communication of information.
• Commonly the only question may be whether the prior publication describes the claimed invention with sufficient clarity (Bristol-Myers [v FH Faulding] at [67]).
• The disclosure is assessed by reference to the skilled addressee, a person of ordinary skill in the art.
• The question is whether the prior publication is sufficient to make the claimed invention apparent to the skilled addressee (Nicaro Holdings Pty Ltd v Martin Engineering Co (1990) 91 ALR 513 at 529).
• A prior publication does not invalidate a patent unless it supplies sufficient information to enable a person of ordinary skill to produce the product subsequently claimed (Acme Bedstead Co Ltd v Newlands Brothers Ltd (1937) 58 CLR 689 at 707). A specification is not to be read as in a vacuum but by the reader having at least the common knowledge of the art (Acme Bedstead at 701; Nicaro at 530).
• The requirement is that a person of ordinary knowledge of the relevant subject would be able practically to apply the prior published discovery without the necessity of making further experiments (Hill v Evans at 6-7).
• The further experiments do not include those that formed part of standard procedure or common general knowledge. They are experiments with a view to discovering something not disclosed ([C Van der Lely NV v Bamfords Ltd (1962) 1A IPR 86] at 90).
• The further experiments do not mean ordinary methods of trial and error (Van der Lely at 90).
• If the alleged anticipation is to a process that produces the claimed product, it is not an anticipation if the process would not necessarily achieve the result claimed for it (Olin Corporation v Super Cartridge Co Pty Ltd (1977) 180 CLR 236 at 260-261).
• Something less than a full description of the invention allegedly anticipated may be sufficient to invalidate it for want of novelty (Nicaro at 529).
• Something less than a full description of an effective means by which the combination claimed in a patent may be produced may be sufficient to a reader having common general knowledge in the art (Nicaro at 531).
• A direction, recommendation or suggestion may be implicit in what is described (Bristol-Myers [Squibb v FH Faulding] at [67]).
• A disclosure that describes an effective means by which a claimed invention may be produced falls short of anticipation if it requires the exercise of inventive ingenuity or the taking of any inventive step (Nicaro at 531).
• Where the prior disclosure is to a broad chemical claim encompassing many compounds, there may not be anticipation in the absence of the skilled addressee understanding or perceiving a specific compound in the disclosure (Imperial Chemicals Industries Pty Ltd v Commissioner of Patents (2005) 213 ALR 399 at [64]-[65]). That is, there is no actual description of the particular compound to the skilled addressee; there is no relevant disclosure. There may be a distinction, albeit fine, between a “fleeting” or “paper” disclosure or the “intellectual content” of a disclosure on the one hand and a “disclosure for novelty purposes” or “enabling disclosure” on the other (Imperial Chemicals at [68]; University of Georgia Research Foundation v Biochem Pharma Inc (2000) 51 IPR 222, a decision of Dr Barker of the Patent Office described by Crennan J in Imperial Chemicals as a “sound account of the relevant distinctions between a ‘paper disclosure’ and an ‘enabling disclosure’ in the field of chemistry” (at 412)). It depends on what the skilled reader would understand.
190 Against the background of these principles Bennett J in Lundbeck made the observations at [180]-[182] which the present parties have emphasised (albeit to support their competing positions). Bennett J said:
[180] Where the prior publication discloses exactly what is claimed, there is anticipation. This can be objectively determined and, apart from an understanding of terms of art, the evidence of the skilled addressee is not likely to be of much further assistance. However, this does not always occur and many of the authorities contain discussions of the extent to which a disclosure less than the entirety of the claim constitutes an anticipation of a product or a process to deprive the claimed invention of novelty.
[181] If the prior art discloses some but not all integers of a claimed patent to a product, such as a combination, there is anticipation if the skilled addressee would add the missing information as a matter of course and without the application of inventive ingenuity or undue experimentation (Nicaro [Holdings Pty Ltd v Martin Engineering Co (1990) 91 ALR 513] at 530-531).
[182] It may be that the prior disclosure is of a method that produces the claimed product. If that method leads inexorably to the product, there is anticipation (General Tire at 138). If it may or may not result in the claimed product, there is no anticipation.
191 In the context of the subject-matter of the dispute in Lundbeck (a product, albeit a complex one) Bennett J concluded as follows in respect of novelty:
[189] For the purposes of disclosure, the prior art must disclose an invention which, if performed, would necessarily infringe the patent. Once the very subject matter of the invention has been disclosed, the person skilled in the art is assumed to be willing to make trial and error experiments to get it to work. For the purposes of disclosure, the disclosure is either of an invention which, if performed, would infringe the patent, or it is not…
[190] It follows that, where the prior publication is of the subsequently claimed invention, that is sufficient. Where the prior disclosure falls short of a complete disclosure, the question of the sufficiency of that disclosure arises. It is there that consideration must be given to the quality of a disclosure to the skilled addressee armed with common general knowledge. It is in that context that, in a limited fashion, questions of “enablement” can be said to arise. The use of that expression tends to cause confusion between anticipation and sufficiency. Rather, the court, armed with the evidence of the skilled addressee as to terms of art and the nature and extent of the disclosure in the prior art document, must determine whether the prior disclosure is sufficient to enable the skilled addressee to perceive, understand and, where appropriate, apply the prior disclosure necessarily to obtain the invention.
[191] Where the prior disclosure is of large numbers of compounds by reference to a chemical formula, evidence will establish whether or not such a form of disclosure in the context of the examples and the discussion in the specification is disclosure of any particular subsequently claimed compound. I agree with Dr Barker in University of Georgia [Research Foundation v Biochem Pharma Inc (2000) 51 IPR 222] that a disclosure of a racemate does not necessarily amount to a disclosure of the individual enantiomers. It depends upon the disclosure in the context of the prior art document.
192 The mere fact that further work may be required to exploit the invention does not necessarily deprive a prior publication of its novelty-destroying effect. Referring to the decision in Bristol-Myers Squibb v FH Faulding, the Full Court in Merck and Co Inc v Arrow Pharmaceuticals Limited (2006) 154 FCR 31; [2006] FCAFC 91 (Merck v Arrow Pharmaceuticals) at [109]-[111] rejected a submission that, “in the case of pharmaceutical patents, no publication can amount to an anticipation unless clinical trials have been actually conducted.” Accordingly, “characterisation of an alleged anticipation as suggestion is not necessarily fatal to a novelty argument. Nor is it necessary that a reader, or even all readers, agree with the suggestion.” Rather:
[a]s Hill v Evans (at 301, 1200) long ago established, equality of disclosure, anticipation as against patent, is the essential element:
… the information as to the alleged invention given by the prior publication must, for the purposes of practical utility, be equal to that given by the subsequent patent. The invention must be shewn to have been before made known. Whatever, therefore, is essential to the invention must be read out of the prior publication. If specific details are necessary for the practical working and real utility of the alleged invention, they must be found substantially in the prior publication.
G3.2 The Bartlett article and the Rozman abstract
193 Assessed in accordance with these principles, it is apparent that neither the Bartlett article nor the Rozman abstract discloses any matter which undermines the novelty of the patent. Neither the Bartlett article nor the Rozman abstract discloses the exact invention as claimed, or something less which is nonetheless capable of constituting sufficient disclosure to deprive the invention of novelty.
194 The claim of the patent, as noted, defines the invention as a method where the compound (leflunomide) is administered to a recipient in an effective amount so that the recipient’s psoriasis is prevented or treated. The Bartlett article and the Rozman abstract do not mention psoriasis. The documents mention RA but, at the time of publication of the documents and the patent, the skilled addressee of the documents (a non-inventive rheumatologist) would not have understood the prevention or treatment of the disease RA as having any potential relevance to the prevention or treatment of the disease psoriasis. RA was known by rheumatologists to be an inflammatory autoimmune disorder, whereas psoriasis was thought to be caused by hyper-proliferation of skin cells. Moreover, RA and PsA were also thought to be distinct disorders at the time of publication of the documents and the patent. The documents make no mention of PsA. The general reference to “autoimmune disorders” in the Bartlett article would not have suggested to the skilled addressee the use of leflunomide to prevent or treat PsA. Using the language of Bennett J in Lundbeck at [173], the documents do not make apparent the claimed invention to the skilled addressee.
195 Further, insofar as the Bartlett article and the Rozman abstract would have taught anything to the skilled addressee, that teaching cannot be characterised as a direction, recommendation or even suggestion to administer leflunomide to prevent or treat any disease in humans, be it RA or otherwise. This is not merely because further clinical trials would have been required before the safety and efficacy of leflunomide for humans could be established. It is because the further work required for this to be established – namely, extensive clinical trials – would involve far more than the mere application of the skilled addressee’s common knowledge or ordinary methods of trial and error. Rather, further work would be required to ascertain whether such clinical trials would be warranted at all. This is apparent from the terms of the documents themselves and the evidence of Professors Smith and Brooks.
196 As noted, the Bartlett article presents “very preliminary clinical data concerning leflunomide’s effects on the immune response of patients” with RA. The results showed clinical improvement of RA without signs of toxicity, leading the authors to conclude that they were “sure that leflunomide w[ould] prove to be an effective drug to combat human autoimmune disorders”. Leflunomide was thus characterised in the Bartlett article as a drug that “seems to be a universal drug to combat autoimmune disorders”. The Rozman abstract describes the results of the trial with which it is concerned as suggesting a dose related trend towards the efficacy of leflunomide in RA patients, but notes that further studies would be required to determine its role in the management of RA. As noted, psoriasis was not thought by the skilled addressee to be an immune disorder at the time of publication of Bartlett article or the Rozman abstract, or at the priority date of the patent. PsA was also thought to have a different underlying pathology from RA. In any event, while the publications indicate that administering leflunomide might have a positive role to play in the prevention and treatment of RA, they do not by any means contain a clear direction, recommendation or suggestion to administer it to humans for that purpose.
197 Nor is this a case where performance in accordance with the prior publication would necessarily result in infringement of the patent irrespective of the knowledge (or lack of knowledge) of the skilled addressee at the relevant time. The reason for this is that, for the reasons given above, performance in accordance with the prior documents would not involve administering leflunomide to humans to treat any disease including RA. Performance in accordance with the prior documents would involve the carrying out of further studies to determine what role, if any, leflunomide might play in the treatment of RA. On this basis it cannot be said that the reverse infringement test is satisfied; nor, for that matter, that the authors of the prior publications planted their flag at the precise destination of the invention as claimed, or gave some clear and unmistakable direction, recommendation or suggestion to that end.
198 Furthermore, it cannot be said that the prior publications would inexorably lead to the invention as claimed or that the invention as claimed is the inevitable result of carrying out the teaching those documents contain. Again, the documents teach only that leflunomide might have some positive role to play in the treatment of RA. They do not teach the administration of leflunomide to treat RA in humans. It follows that these prior art documents do not inexorably lead to a method to prevent or treat psoriasis by administering an effective amount of leflunomide. Nor is the inevitable result of carrying out what the documents teach the application or exploitation of a method to prevent or treat psoriasis by administering an effective amount of leflunomide. Putting it another way, it is apparent that all of the essential integers of the claimed invention cannot be “read out of” the prior publications. The prior publications do not disclose a method of preventing or treating any disease by administering leflunomide and, on any view, do not disclose a method of preventing or treating psoriasis by such administration.
199 The cross-examination of Jane Deane, a regulatory affairs consultant who was involved in the creation of the Arava PI in her former employment role, does not provide material support for the contrary conclusion. While it appeared to Ms Deane that the clinical study referred to in the patent had the same parameters as a clinical study in respect of RA, that is an insufficient basis upon which to draw the inference posited by Apotex that the only human trial referred to in the patent involved RA. In terms of the requirement that “the information as to the alleged invention given by the prior publication must, for the purposes of practical utility, be equal to that given by the subsequent patent” (Hill v Evans as cited above) there is a material difference between the indications in the Bartlett article and Rozman abstract that leflunomide might have some positive role to play in the treatment of RA and the promise of the patent of a method of preventing or treating psoriasis by administration of an effective amount of leflunomide.
200 Even if, as Apotex submitted, the Bartlett article and Rozman abstract did teach the administration of leflunomide to treat RA (contrary to the conclusions above), the various tests for want of novelty are not satisfied. Apotex’s case, as noted, is that because a certain proportion of people suffering from RA (2% of the population generally according to the evidence and thus 2% of people suffering from RA) will also have psoriasis, the administration of leflunomide to patients with RA (as taught by the Bartlett article and the Rozman abstract) necessarily will also treat psoriasis in those people. On this basis, according to Apotex, the reverse infringement test is satisfied because administering leflunomide to treat people with RA in accordance with the prior art publications would prevent or treat psoriasis in 2% of the people to whom leflunomide was administered. I do not accept this argument for the following reasons.
201 It is necessary to recognise that there is no logical basis for limiting the argument to the administration of leflunomide to persons suffering from RA. The evidence establishes that 2% of the population generally suffers from psoriasis. It also establishes that while psoriasis is a diagnostic element of PsA, and almost all people with PsA also have or will develop psoriasis, there is no such connection between RA and psoriasis. The occurrence of psoriasis in a person suffering from RA is purely coincidental. In other words, it appeared to be common ground that 2% of people with RA have psoriasis merely because 2% of all people have psoriasis. Thus if leflunomide is administered to any person then, on the evidence, it may prevent or treat psoriasis in that person. If it is administered to a (presumably statistically significant) group of people representative of the population generally then it will prevent or treat psoriasis in the 2% of people in that group susceptible to psoriasis.
202 What should be made of this evidence? Sanofi-Aventis submitted that the evidence demonstrated that the prevention or treatment of psoriasis would not be the inevitable result of the administration of leflunomide to persons suffering from RA (assuming the prior publications taught such administration, which it denied). The evidence showed rather that such administration may or may not result in the carrying out of the claimed invention – which, as noted above, is not enough to deprive the patent of novelty. Apotex submitted that this was a misconception, as there is no requirement that every person to whom leflunomide is hypothetically administered must have their psoriasis prevented or treated, the doctrine of “inevitable result” being limited to “a narrow special class of cases relating to ambiguous disclosures”.
203 Insofar as Apotex sought to confine the doctrine of “inevitable result” to a particular class of case involving ambiguous disclosures, it suffices to say that no such limitation is apparent from the authorities on which it relied. Abbott v Apotex (No 2) at [55]-[58] does not support the proposition. To the contrary, in those paragraphs Jessup J’s point is that an ambiguous disclosure does not satisfy the test of inevitable result. The reason for this is that the performance of the teaching of the prior art document, given the ambiguity of the disclosure, may or may not result in the claimed invention depending on the interpretation adopted. Similarly, General Tire at 485 does not assist Apotex. The distinction there drawn is between a clear description of or direction to make the claimed invention in a prior art document, and a description or direction the carrying out of which will inevitably result in the claimed invention. Neither the Bartlett article nor the Rozman abstract contains any clear description of or direction to use the method claimed in the patent. SmithKline Beecham at [22] also provides no support for the proposition. The point there made is that an invention may be the inevitable result of the teaching of a prior art document whether or not any person was aware of the fact at the time of publication of the prior art document.
204 The difficulty for Apotex is that whatever description is used – be it carrying out, performing or following the teaching – doing so in relation to the Bartlett article and the Rozman abstract (even if, contrary to my conclusion above, they are construed so as to disclose the administration of leflunomide to treat RA) would not necessarily entail, inevitably result in or inexorably lead to infringement of the patent. This is not merely because the administration of leflunomide to patients with RA will not prevent or treat psoriasis in every case; it is because the administration of leflunomide to patients with RA may or may not prevent or treat psoriasis in any given patient. It is thus apparent that there will be more than one possible consequence of performing the teaching of the Bartlett article and Rozman abstract (if construed so as to involve the administration of leflunomide to treat RA). On the evidence, the administration of leflunomide to a person suffering from RA is far more likely not to infringe the patent (98% of cases of administration) than to infringe the patent (2% of cases of administration). As such, consistent with the authorities above, it cannot be said that either the Bartlett article or Rozman abstract anticipates the claimed invention and thus deprives it of novelty.
205 The so-called “symmetry of the reverse infringement test”, on which Apotex relied, is not of material assistance. The reverse infringement test asks whether the alleged anticipation would infringe the patent. It is inherent in that test that there must be infringement for the test to yield a positive answer. If the alleged anticipation might or might not result in infringement, the test can take the matter no further. Recourse must be had to the principles which have been developed across the range of contexts in order to determine whether the particular anticipation deprives the claimed invention of novelty. The fact that Sanofi-Aventis contends that particular conduct (the proposed supply of leflunomide to treat PsA) would infringe the patent does not affect either what the prior art documents communicate to the skilled addressee or the consideration of claimed invention in light of that communication.
206 For similar reasons, the question whether the Bartlett article or Rozman abstract includes or encompasses the claimed invention does not arise. This is primarily because the Bartlett article and Rozman abstract do not teach the administration of leflunomide to treat any disease. Alternatively, if it is assumed that these documents do teach the administration of leflunomide to treat RA, the mere fact that 2% of people with RA will also have psoriasis does not constitute the inclusion of a method of treating psoriasis. As the occurrence of RA and psoriasis in any one person is a mere coincidence, these prior art documents cannot have communicated anything about psoriasis to the skilled addressee.
207 The complete specification for the 341 patent is entitled “An isoxazole derivative, processes for its preparation, compositions containing it, and its use for combating rheumatism”. As noted, the derivative described as formula 1 in the 341 patent is leflunomide. It will be recalled also that the 341 patent notes that the compound, by virtue of its pharmacological properties, “can be used especially as an antirheumatic, antiphlogistic, antipyretic and analgesic agent, and for the treatment of multiple sclerosis.” The specification further records that experiments with the three animal models (the Adjuvant Arthritis or AA model, the Adjuvant Arthritis Perper modification or AAP model and the Allergic Encephalomyelitis or AE model) showed that the compound “is superior to known compounds to a surprising degree” in terms of antiphlogistic action, effect on immunological processes, ulcerogenic activity and acute toxicity. As set out above, the specification summarises the results of the animal model experiments as follows:
The above pharmacological findings show that the compound according to the invention, of the formula I differs advantageously in its pattern of action from the tested antiphlogistic agents, in particular in respect of the inhibition of immunopathological processes on animal models which are also relevant to human illness. This is probably equally true relative to other antiphlogistic agents hitherto employed in therapy. This fact opens up the possibility of tackling, by medication, rheumatic illnesses in man by more nearly treating the cause, instead of purely symptomatic treatment as with the antiphlogistic agents used hitherto.
208 The claims of the 341 patent include the compound leflunomide in claim 1 and claim 4 as follows:
4. Method for the treatment of inflammations, rheumatic complaints or multiple sclerosis by administering to the patient an effective amount of the compound as claimed in claim 1.
209 Dr Shumack’s evidence confirmed that the skilled addressee of the 341 patent would have been a rheumatologist rather than a dermatologist. Dr Shumack, a dermatologist, said that the animal models in the 341 patent all concerned immune processes. On his reading of the 341 patent it related to a compound, leflunomide, which might be useful in treating arthritic and inflammatory conditions and multiple sclerosis. As the 341 patent said nothing about proliferative processes, Dr Shumack would not have considered the 341 patent to be relevant to psoriasis. As noted, in 1993 and for a number of years thereafter, psoriasis was generally understood to be a proliferative disease and not an inflammatory or immune-mediated response. It follows that Dr Shumack’s evidence is not that of the skilled addressee.
210 Professors Smith and Brooks are both rheumatologists. Contrary to Apotex’s submissions, Professor Smith did not read the 341 patent as encompassing PsA within the general terms “rheumatic illnesses” and “rheumatic complaints”. Rather, it is apparent from his evidence as a whole that Professor Smith considered those terms to be so broad as to be nearly meaningless if read in isolation. Professor Smith, however, did not do so. As a skilled addressee he had regard to the animal models in order to give meaning to the very general references in the 341 patent to “rheumatic illnesses” and “rheumatic complaints”. Professor Smith was adamant that none of the animal models was relevant to PsA. The models were relevant to RA and, in the case of the AE model, multiple sclerosis. On this basis Professor Smith read the 341 patent as dealing with potential treatments for RA and multiple sclerosis. No material was put to Professor Smith in cross-examination suggesting that his view about the animal models was wrong.
211 Professor Brooks had a different view. As noted, Professor Brooks had used animal models in his own research. He considered the AA model to be relevant to the seronegative arthropathies, including PsA, because of his own research using such models. In his words, however, rheumatologists generally “don’t know too much about animal models”. In common with Professor Smith, Professor Brooks considered various references in the 341 patent to be very broad or, as he put it, capable of including “all of the 150 or so types of arthritic disease”. However, in light of his view of the animal models Professor Brooks concluded that the 341 patent was concerned with inflammatory rheumatic diseases including RA, PsA and other seronegative arthropathies. Professor Brooks thus described claim 4 of the 341 patent as involving a method of treatment of inflammatory rheumatic diseases including RA, PsA and other seronegative arthropathies. Nevertheless, Professor Brooks acknowledged that animal models rarely mimic human disease. Accordingly, the ability to extrapolate from them is limited to an indication that the treatment may work in the relevant human disease. Substantial further work would be required to determine whether leflunomide would be safe or effective to treat any disease in humans.
212 On the basis of this evidence it is apparent that the 341 patent, at its priority date, disclosed nothing to the skilled addressee about the skin disease psoriasis. No one at the priority date considered psoriasis to be a form of rheumatic illness or rheumatic complaint (the terms used in the 341 patent). Thus nothing in the 341 patent would have suggested to the skilled addressee that leflunomide might be a potential treatment for psoriasis. However, as the competing submissions of the parties disclose, this conclusion is not the end of the matter. As noted, while a prior art document is to be read through the eyes of the skilled addressee, the effect of the document is objective. While Apotex disavowed the concept of “inevitable result” and urged the aptness of the symmetry of the “reverse infringement” test, in the present context the distinction between the two is more apparent than real. The reverse infringement test asks whether the alleged anticipation would infringe the claim. The test presupposes the proper identification of both the alleged anticipation and the claim, and requires consideration of the relationship between the two. The concept of “inevitable result” is concerned with the nature of the relationship between the alleged anticipation and the claim which is required to deprive the claim of novelty.
213 Apotex’s principal argument about lack of novelty is to be assessed with these considerations in mind. The argument involves the following steps:
(1) The 341 patent discloses the administration of leflunomide as a method of treatment of (at least) RA and PsA in humans.
(2) The alleged anticipation is thus the administration of leflunomide as a method of treatment of (at least) RA and PsA in humans.
(3) Sanofi-Aventis asserts that the claim of the patent will be infringed by Apotex’s proposed supply of leflunomide for use as a method of treatment for PsA.
(4) If, as Sanofi-Aventis asserts, the claim of the patent includes the use of leflunomide as a method of treatment for PsA, the claim is the same as the alleged anticipation.
(5) It follows that the alleged anticipation, on Sanofi-Aventis’s own case, infringes the claim of the patent.
(6) The reverse infringement test is satisfied. Accordingly, the claim of the patent is not novel.
214 Each step of this argument involves controversy. Steps (1) and (2) involve the proper identification of the disclosure of the 341 patent, which is in issue between the parties. Step (3) equates the proper construction of the claim of the patent with Sanofi-Aventis’s description of the conduct said to constitute infringement, an equation which Sanofi-Aventis disputes. Steps (5) and (6) assume the result (infringement of the claim) from the fact that the alleged anticipation and conduct said to constitute infringement of the claim are the same.
215 For present purposes (and contrary to Sanofi-Aventis’s case), assume that the 341 patent discloses (in the sense of teaches) a method of treatment of PsA by the administration of leflunomide to a person suffering from that disease. Inherent in that teaching is the idea that the treatment will be effective in the sense that the administration of leflunomide will in fact treat the disease PsA. If this is so, the reverse infringement test cannot yield a positive answer unless performance in accordance with the teaching of the 341 patent must result in infringement of the claim of the patent. Such infringement must be “necessarily entailed” before a conclusion of infringement can be reached. Possible or even likely infringement is insufficient. Awareness of the fact of infringement is irrelevant; if following the teaching of the prior art inevitably results in the infringement of the claim of the patent, the latter cannot be novel (SmithKline Beecham at [22]-[23]). On this basis, the distinction Sanofi-Aventis sought to draw between product and method claims is beside the point. It is true that, taken literally, it is meaningless to speak of disclosure of a method that inevitably leads to production of the method. The relevant point for present purposes is that if performing the teaching of the 341 patent inevitably results in the use of the method claimed in the patent then it must follow, by reference to the relevant principles, that the method claimed in the patent is not novel.
216 On the assumption set out above about the 341 patent (namely, that it teaches a method of treatment of PsA by the administration of leflunomide to a person suffering from PsA), the inescapable conclusion on the evidence is that following that teaching would infringe the claim of the patent. The evidence establishes that: – (i) psoriasis is a diagnostic criterion of PsA, (ii) almost every person suffering from PsA either has or will develop psoriasis, and (iii) administering an effective amount of leflunomide to a person suffering from PsA will therefore prevent or treat psoriasis in that person in almost all cases. Otherwise put, if the teaching of the 341 patent is a method of treatment of PsA by the administration of leflunomide to a person suffering from PsA then the following of that teaching will inevitably result in the use of the method claimed in the patent (namely, preventing or treating the skin disease psoriasis by the administration of an effective amount of leflunomide). The fact that the evidence described the proportion of persons suffering from PsA who also have or will develop psoriasis as “almost all” rather than “all” is immaterial. The evidence is sufficient to reach the required certainty of infringement being the “inevitable result” of or “necessarily entailed” by the assumed alleged anticipation. Consistent with principle, on this analysis, it does not matter that no one would have been aware that the administration of leflunomide to a person with PsA would also prevent or treat psoriasis in that person. The skilled addressee’s knowledge of the different aetiology of PsA and psoriasis is relevant to the substance of the disclosure of the 341 patent (which is presently being assumed for the purpose of this discussion), but not to the effect of the disclosure. This analysis also does not equate (impermissibly according to Sanofi-Aventis) the claimed invention with the conduct alleged to constitute infringement. From this analysis it becomes apparent that the real issue is identifying the alleged anticipation or, in other words, determining what it is that the 341 patent discloses. As such, in order to determine whether Apotex has made out its case on novelty, it is necessary to consider whether the 341 patent does in fact disclose a method of treatment of PsA by the administration of leflunomide to a person suffering from PsA.
217 Sanofi-Aventis’s first argument against characterising the 341 patent as making such a disclosure is that, for reasons similar to those given in respect of the Bartlett article and the Rozman abstract, the skilled addressee would not read the 341 patent as directing, recommending or suggesting the administration of leflunomide for the treatment of any disease. The 341 patent refers to experiments with animal models. Professors Smith and Brooks agreed that the ability to extrapolate from animal models to human diseases is limited. Experiments with animal models can provide an indication that a treatment might work for a particular human disease but no more. Further investigations would always be required before any conclusions about the safety and efficacy of the relevant drug in the treatment of human diseases could be drawn. As Professor Brooks said, on reading the 341 patent, he would have concluded that “…this is a very interesting drug. We need to do a clinical trial. And, before that, we need to make sure that it is not going to kill anybody when they take it, first.” According to Sanofi-Aventis (adopting the language of General Tire at 485-486), the evidence falls far short of establishing a clear and unmistakable direction, recommendation or suggestion to administer leflunomide as a method of treating any disease in humans; putting it another way, the “flag” planted by the 341 patent is distant from the “precise destination” marked out by the method claimed in the patent.
218 It may be acknowledged, as Apotex submitted, that the disclosure in the 341 patent need not persuade the skilled addressee to administer leflunomide to treat a particular disease before it can be said to teach such administration. This is the point made by the Full Court in Merck v Arrow Pharmaceuticals at [109]-[111] (referred to above) in the context of pharmaceutical patents and the need for clinical trials. The question remains whether the invention has “been before made known” (Hill v Evans at 301), the invention in the present case being the claimed method of preventing or treating the skin disease psoriasis in humans by administering an effective amount of leflunomide. With this in mind, I find persuasive Sanofi-Aventis’s argument that the 341 patent – like the Bartlett article and the Rozman abstract – falls well short of teaching the administration of leflunomide for the treatment of any disease. The 341 patent identifies the compound leflunomide and records that by virtue of its pharmacological properties it can be used as an agent having a wide range of broadly described effects – as an “antirheumatic, antiphlogistic, antipyretic and analgesic agent, and for the treatment of multiple sclerosis.” In context, the focus of the 341 patent is the pharmacological properties of leflunomide and its potential for use in a wide range of possible treatments. The experiments with animal models show that leflunomide differs advantageously in its pattern of action from other tested antiphlogistic agents in respect of the inhibition of immunopathological processes “on animal models which are also relevant to human illness.” This is said to open up “the possibility of tackling, by medication, rheumatic illnesses in man by more nearly treating the cause…”. In light of the terms of the specification, the treatment of any disease in humans is a possibility supported by the pharmacological properties of leflunomide and the results of the experiments with the animal models. On this basis, the evidence of Professors Smith and Brooks, as a whole, does not support construing the 341 patent, including claim 4, as in fact teaching the administration of leflunomide to treat any disease in humans.
219 Apotex’s argument to the contrary, relying upon the proposition that the animal tests in the 341 patent provide better safety and efficacy data than that the patent in suit (in which, submitted Apotex, the human trial data is based on a trial involving RA), is not persuasive. The 341 patent, construed as a whole, discloses the possibility of treating diseases in humans by administration of leflunomide. The patent in suit discloses a method of treatment of the skin disease psoriasis by the administration of leflunomide. The specification of the patent in suit identifies that leflunomide is well tolerated by human beings with a better risk-benefit ratio than other immunosuppressive agents in terms of resistance to infections, kidney dysfunction, and laboratory values such as liver enzymes, blood count and body weight. Further, and as noted above, the inference that the human trial data in the patent in suit is based on a trial for RA is not one which I draw on the evidence. For these reasons Apotex’s suggestion that, in terms of safety and efficacy in the treatment of human diseases, the 341 patent and patent in suit contain disclosures equal “for the purposes of practical utility” (Hill v Evans as cited above) is not convincing. The result is that the 341 patent does not deprive the patent in suit of novelty, as the assumption on the basis of which I would be prepared to find that the various tests for anticipation have been satisfied (as set out above) is not supported by the evidence.
220 If, contrary to this conclusion, the 341 patent does teach a method of treatment of a disease or diseases in humans by the administration of leflunomide, the next question is the identification of the relevant disease(s). Sanofi-Aventis’s second argument is that the skilled addressee would not read the 341 patent as directing, recommending or suggesting the administration of leflunomide for the treatment of PsA.
221 The formula in claim 4 of the 341 patent is “inflammations, rheumatic complaints or multiple sclerosis”. The focus of the evidence, as noted, was the phrase “rheumatic complaints” (and the equivalent general references to “rheumatic illnesses” in the specification). In short, Professor Smith read this as a reference to RA but not PsA. Professor Brooks read this as a reference to at least RA and PsA. Both relied on their view of the animal models to support their reading. The difficulty with the evidence about the animal models is twofold. Insofar as Professor Smith is concerned, he was adamant that none of the models was relevant to PsA. Moreover, nothing was put to Professor Smith to suggest that his opinion in this regard was incorrect. Insofar as Professor Brooks is concerned, he considered that the AA model was relevant to PsA – and that he would have considered it to be so at the priority date of both the 341 patent and the patent in suit – because he had used that model in his own research. However, he accepted that he was “ahead of the pack” (the “pack” being rheumatologists generally) and had particular knowledge of animal models when most rheumatologists knew little if anything about them. This evidence founded Sanofi-Aventis’s submission that Professor Brooks was not the skilled addressee in the sense of the typical non-inventive skilled worker in the field. Professor Brooks, rather, was himself inventive and was bringing to bear his own experiments to support his conclusions. When all of this evidence is weighed I am satisfied it supports the inference for which Sanofi-Aventis contends: the skilled addressee would not have read the 341 patent as saying anything about PsA.
222 This conclusion is supported by other evidence relevant to the substance of what the 341 patent would have communicated to the skilled addressee. It is apparent that neither Professor Smith nor Professor Brooks read the references in the 341 patent to “rheumatic complaints” and “rheumatic illnesses” literally. If read literally then, as Professor Brooks said, the phrases would encompass all of the 150 or so types of arthritic disease. However, drawing upon the context presented by the animal models, Professor Brooks read the words as referring to the inflammatory rheumatic conditions (RA, PsA and the other seronegative arthropathies) whereas Professor Smith read them as referring to RA alone. The large number of potential diseases encompassed by the concept of “rheumatic complaints” and “rheumatic illnesses” speaks against a literal construction. Whatever is being disclosed by the 341 patent, it would not be understood by the skilled addressee as communicating a method of treatment of all types of rheumatic illness.
223 The choice which the evidence presents, accordingly, is between reading the 341 patent’s reference to “rheumatic complaints” as meaning either all forms of inflammatory arthritis or RA alone (the most common form of inflammatory arthritis). To assist in the task of construction it is relevant to note that the 341 patent was published in 1980. It is not necessary to decide whether the relevant date for construction of the 341 patent is 1980 or the priority date of the patent in suit (March 1993) because, on the evidence, there is no material difference between those two dates. The relevant point is that the 341 patent nowhere mentions PsA or the seronegative arthropathies, but it does refer to “arthritis”, “inflammation”, and “rheumatic” illnesses and complaints. With this in mind a number of other key facts must be recalled. First, “arthritis” is a general term applying to numerous types of joint disorders. Second, rheumatologists distinguish between non-inflammatory and inflammatory arthropathies, with the latter term reserved for those forms of arthritis where inflammation of the joint tissues is the underlying cause of damage to the joints. Third, there are two types of inflammatory arthritis, rheumatoid arthritis and the seronegative arthropathies (PsA, ankylosing spondylitis, reactive arthritis and inflammatory bowel disease-associated arthritis). Fourth, RA is associated, amongst other things, with the presence of the positive rheumatoid factor in the blood. The seronegative forms of arthritis, by definition, are associated with a negative RF test. Fifth, and as Professors Smith and Brooks said, for a number of years after the priority date of the claim in the patent (March 1993) little was known about PsA. By March 1993 (and for some years thereafter) most research efforts had focussed on RA as the most common form of inflammatory (as opposed to non-inflammatory) arthritis. The aetiology of RA and PsA was thought to be different. RA was known to be T cell-mediated. PsA was not. The mechanisms underlying RA were known, but those underlying PsA were merely in the course of being investigated and understood. For example, the role of TNF α in RA was emerging but its similar role in PsA was unknown until the late 1990s. Moreover, RA was known to be by far the most common form of inflammatory arthritis (accounting for about 70% of cases of inflammatory arthritis). As Professor Brooks said, research was largely driven by the pharmaceutical industry and the principal focus was thus RA and not PsA.
224 These five considerations support the conclusion that the skilled addressee reading the 341 patent either in 1980 or at the priority date of the patent would have understood the 341 patent to concern the most common form of inflammatory arthritis, being RA, and multiple sclerosis (which is expressly mentioned), but not the seronegative arthropathies PsA, ankylosing spondylitis, reactive arthritis and inflammatory bowel disease-related arthritis. Hence, if (contrary to the conclusion above) the 341 patent discloses a method of treatment of diseases in humans, it does not disclose as a method of treatment of PsA by the administration of leflunomide. The administration of leflunomide to treat RA or multiple sclerosis, on the evidence, may or may not also treat psoriasis and thus, for the reasons given above, is not a disclosure sufficient to anticipate the invention claimed in the patent. Accordingly, on this basis the 341 patent cannot be said to deprive the patent of novelty.
225 Insofar as Apotex sought to rely upon Dr Shumack’s evidence to support the contrary conclusion, three points need to be made. The first is that, for the reasons given above, I do not consider Dr Shumack (a dermatologist) to be the skilled addressee of the 341 patent (as at the priority date of either the 341 patent or the patent in suit). The second is that the parts of Dr Shumack’s evidence on which Apotex relied (that is, that Dr Shumack would understand references in the 341 patent to rheumatic illnesses and the like as references to diseases that would be treated by a rheumatologist such as RA, seronegative arthritis, lupus and connective tissue diseases; that the assertions in the 341 patent are “fairly wide-ranging or far-reaching”; and that it sounds reasonable to a non-rheumatologist that animal models for RA might also work for PsA) did not involve consideration of the phrases to which Dr Shumack was taken in the context of the 341 patent as a whole. The third is that the evidence, when analysed, does not touch upon the first and third of Sanofi-Aventis’s arguments.
226 Sanofi-Aventis’s third argument was that even if, as a matter of proper construction through the eyes of the skilled addressee, the 341 patent teaches a method of treatment of “rheumatic complaints”, and the term “rheumatic complaints” would have been understood to encompass or include PsA, the disclosure is too broad to deprive the claim of novelty. Sanofi-Aventis relied on the reasoning in ICI Chemicals, IGT v Aristocrat and EI Du Pont to support this argument. None of these cases provides an exact analogy to the present case. Nevertheless, on the evidence, the reference to “rheumatic complaints” in claim 4 of the 341 patent, if read literally, would include all 150 or so types of arthritic disease. So read, Sanofi-Aventis’s case that the disclosure is too broad to undermine the novelty of the claim is persuasive. The question is then whether it is possible to identify a basis upon which the 341 patent can be read as dealing with not only RA but also with all the seronegative arthropathies, which include but are not limited to PsA. For the reasons given above, Professor Brooks’ evidence in this regard is not that of the skilled addressee. Nothing else in the evidence supports reading “rheumatic complaints” as meaning all or even the two most common types of inflammatory arthritis (as opposed, for example, to all 150 or so types of arthritic disease). It follows that Sanofi-Aventis’s argument – that if the 341 patent teaches a method of treating rheumatic complaints in humans (including, amongst 150 or so possible diseases, PsA) by the administration of leflunomide, the disclosure is too broad and lacks sufficient clarity to deprive the patent of novelty – is persuasive and should be accepted.
227 For these reasons, the three prior art documents on which Apotex relied do not have the effect of anticipating the patent and thereby depriving the claim of the patent of novelty.
228 Another ground on which a patent may be revoked is lack of inventive step. The provisions of the Patents Act relevant to the issue of inventive step are set out in section G1 above (ss 7, 18(1), 138(3)(b) and the definition of “prior art base” in Sch 1). By operation of these provisions it will be recalled that s 18(1)(b) specifies that an invention is a patentable invention if the invention, so far as claimed in any claim, “when compared with the prior art base as it existed before the priority date of that claim… involves an inventive step”. The “prior art base” is defined in Sch 1 to the Patents Act. Section 7(2) also prescribes that, for the purposes of the Act, “an invention is to be taken to involve an inventive step when compared with the prior art base unless the invention would have been obvious to a person skilled in the relevant art in the light of the common general knowledge as it existed in the patent area before the priority date of the relevant claim, whether that knowledge is considered separately or together with the information mentioned in subsection (3).”
229 Apotex submitted that the invention as claimed in claim 1 of the patent does not involve an inventive step. The submission involves the following steps:
(1) Properly construed, the Patents Act does not require a comparison between the invention as claimed and the common general knowledge. Rather, s 18(1)(b) requires a comparison with the prior art base as defined in Sch 1, which the skilled addressee considers through the prism of the common general knowledge together with the information in ss 7(2) and (3).
(2) Consistent with the reasoning in Apotex Pty Ltd v Sanofi-Aventis (2009) 82 IPR 416; [2009] FCAFC 134 (the second Apotex case) and Aktiebolaget Hassle v Alphapharm Pty Ltd (2002) 212 CLR 411; [2002] HCA 59 (Aktiebolaget Hassle v Alphapharm), the correct starting-point for the assessment of inventive step is that, at the priority date, leflunomide was a drug known to be useful in the treatment of rheumatic complaints including RA and PsA. This is supported by the repeated references to European Patent 13,376 in the patent in suit. For example, the opening paragraph to the specification of the patent in suit states that European Patent 13,376 discloses leflunomide as being anti-inflammatory (European Patent 13,376 is the patent from which the 341 patent was translated).
(3) From this assumed starting-point, the invention as claimed does not represent any “difficulty overcome” or “barrier crossed” (RD Werner & Co Inc v Bailey Aluminium Products Pty Ltd (1989) 25 FCR 565 (RD Werner v Bailey) at 574) and cannot be said to be “beyond the skill of the calling” (Allsop Inc v Bintang Ltd (1989) 15 IPR 686 (Allsop v Bintang) at 701).
(4) The claimed invention thus involves no inventive step.
230 To the extent that this argument depends on the comparison between the claim and the prior art base required by s 18(1)(b) being carried out independently of the terms of s 7(2), it cannot be reconciled with the fundamental tenets of statutory construction. Section 18(1)(b) does require comparison between the invention as claimed and the prior art base. It is true, moreover, that the prior art base is defined in Sch 1 to the Patents Act as made operative by s 3. The statute, however, is to be construed as a whole. The operative phrase in s 18(1)(b) is “the invention… when compared with the prior art base… involves an inventive step”. Section 7(2), by its own terms, operates for “the purposes of this Act”. For that purpose (which includes the purposes of s 18(1)(b)), s 7(2) provides that an invention is “taken to involve an inventive step when compared with the prior art base” unless the prescribed test of obviousness is satisfied. Section 7(2) is thus, as Sanofi-Aventis submitted, a deeming provision. Its deeming effect operates directly upon s 18(1)(b). For the purposes of that section (which is part of the Patents Act), an invention is to be taken to involve an inventive step unless the test of obviousness in s 7(2) is satisfied. The test is whether the invention would have been obvious to a person skilled in the relevant art in the light of the common general knowledge before the priority date of the claim, whether that knowledge is considered separately or together with s 7(3) information. Section 7(3) information is information that the skilled person before the priority date of the claim could be reasonably expected to have ascertained, understood as relevant and (if applicable) combined. These provisions are unambiguous. Apotex’s recourse to extrinsic material (the recommendations of the Intellectual Property Advisory Committee which preceded the introduction of the Patents Act) to support its construction provides it with no real assistance. It follows that the proposition in step (1) of Apotex’s argument on inventive step cannot be sustained.
231 This conclusion undermines one of the foundations of Apotex’s argument on inventive step. The evidence does not support the inference that European Patent 13,376 was part of the common general knowledge before the priority date of the claim of the patent in suit. Nor is there any basis in the evidence for the conclusion that European Patent 13,376 constitutes information falling within the terms of s 7(3) of the Patents Act.
232 The fact that the specification of the patent in suit refers to European Patent 13,376 does not support Apotex’s approach of treating that document as either a part of the common general knowledge or as s 7(3) information, or of characterising leflunomide as a known drug known to be useful in the treatment of rheumatic complaints including RA and PsA at the priority date of the claim. The reasoning in the second Apotex case and Aktiebolaget Hassle v Alphapharm does not provide any support in principle for Apotex’s argument. Neither case suggested that a mere reference to information in a specification rendered that information part of the common general knowledge with which the skilled addressee would have been armed. Nothing in Apotex’s argument discloses any process of reasoning analogous to that in the second Apotex case, in which the specification of the patent in suit assumed a particular starting-point in seeking solutions to a known problem and so enabled the question of obviousness to be answered on the basis of the information which constituted that starting-point despite the fact that it would not otherwise have formed part of the common general knowledge at the priority date.
233 As Apotex acknowledged that its case on lack of inventive step depended upon its argument about the assumed starting-point, these reasons are sufficient to reject the case as made. To the extent that it is necessary to deal with Apotex’s submission that the invention as claimed does not represent any “difficulty overcome” or “barrier crossed” (RD Werner v Bailey at 574) and cannot be said to be “beyond the skill of the calling” (Allsop v Bintang at 701), the following observations can be made.
234 The skilled addressee of the patent is a person with a practical interest in the treatment of psoriasis. While the principal person with such an interest would be a dermatologist, I do not accept Sanofi-Aventis’s submission that the skilled addressee is necessarily so confined. Rheumatologists also had a practical interest in psoriasis at the priority date (March 1993) because psoriasis was part of the diagnostic criteria of PsA – a disease primarily treated by rheumatologists. It was part of the common general knowledge of the medical profession at that date that psoriasis was a proliferative disease. Neither Dr Shumack nor Professor Smith had heard of leflunomide in 1993. Professor Brooks (an inventive, as opposed to a non-inventive, skilled worker in the field) had heard of leflunomide as an anti-inflammatory drug. However, the received orthodoxy about psoriasis at that time would not have indicated to the skilled addressee that leflunomide would be an effective treatment for psoriasis. The lack of knowledge of the underlying causes of PsA (as opposed to RA) at the relevant date, explored above, also would not have indicated to the skilled addressee that leflunomide would be an effective treatment for PsA. That outcome would not have been “very plain” in light of the common general knowledge. The skilled addressee would not have been led as “as a matter of course” to try the claimed method in any expectation of a useful result in respect of the treatment of psoriasis or PsA (Aktiebolaget Hassle v Alphapharm at [34] and [53]).
235 For these reasons, Apotex’s case that the invention fails for lack of an inventive step cannot be accepted.
236 Apotex’s argument that the invention as claimed is not a manner of manufacture within the meaning of s 6 of the Statute of Monopolies and thus is not a patentable invention given the terms of s 18(1)(a) of the Patents Act raises the same considerations as Apotex’s contentions of lack of novelty and inventive step. According to Apotex, as the patent in suit refers to the fact that European Patent 13,376 disclosed leflunomide as being anti-inflammatory (and that patent also claimed the treatment of rheumatic complaints), the treatment of psoriasis would have been the inevitable result of following the teaching of European Patent 13,376 to treat RA and PsA. Thus Apotex contended that, on the face of the specification of the patent in suit, the invention lacks the necessary quality of newness and inventiveness required (National Research Development Corp v Commissioner of Patents (1959) 102 CLR 252; [1959] HCA 67 (NRDC), NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd (1995) 183 CLR 655 (NV Philips) and Bristol-Myers Squibb v FH Faulding).
237 In NRDC the High Court (referring to the decision in Commissioner of Patents v Microcell Ltd (1959) 102 CLR 232; [1959] HCA 71 (Microcell)) acknowledged the requirement of newness so that, if it is apparent on the face of the specification that the claimed invention is not new, the invention is not patentable. In so doing the High Court exposed the distinction between a new use of an old substance (old in the sense that its methods of production, constituents and characteristics are known – citing Re BA’s Application (1915) 32 RPC 348 at 349) and a new use of an old substance taking advantage of “a hitherto unknown or unsuspected property of the material” (at 262). In NV Phillips at 663-664 the High Court confirmed that if “if it is apparent on the face of the relevant specification that the subject matter of the claim is, by reason of absence of the necessary quality of inventiveness, not a manner of new manufacture for the purposes of the Statute of Monopolies”, the claimed invention is not patentable. In Bristol-Myers Squibb v FH Faulding the Full Court of the Federal Court at [30] concluded that:
The majority of the High Court in [NV] Philips explicitly say that their observations about a case where want of the threshold requirement of inventiveness is not apparent on the face of the specification are not necessary to their decision. And, in discussing the commencement point (what is “known”) of the inquiry about inventiveness, their Honours refer only to the Microcell principle. In our view, in the light of the authorities to which we have referred, Philips stands for the proposition (as a matter of construction of the [Patents] Act) that if, on the basis of what was known, as revealed on the face of the specification, the invention claimed was obvious or did not involve an inventive step – that is, would be obvious to the hypothetical non-inventive and unimaginative skilled worker in the field ([Minnesota Mining and Manufacturing Co v Beiersdorf (Australia) Ltd (1980) 144 CLR 253] at 260 per Barwick CJ) – then the threshold requirement of inventiveness is not met. Some elaboration, however, is required in relation to what the specification reveals as “known”. If a patent application, lodged in Australia, refers to information derived from a number of prior publications referred to in the specification or, generally, to matters which are known, in our view the Court – or the Commissioner – would ordinarily proceed upon the basis that the knowledge thus described is, in the language of s 7(2) of the [Patents] Act, part of “the common general knowledge as it existed in the patent area”. In other words, what is disclosed in such terms may be taken as an admission to that effect. In substance, we think, that is what happened, both in Microcell and in Philips.
238 In reconciling the relationship between the threshold requirement of newness and those of novelty and inventive step, the Full Court in Bristol-Myers Squibb v FH Faulding at [45] said:
Although Philips suggests that there may be such cases (it does not decide the question, because obviousness was not pressed), it is not easy to envisage circumstances in which a claimed invention may lack the threshold requirement of inventiveness, but yet involve (for the purposes of s 18(1)(b)(ii)) an inventive step. This is not a case, like Philips, where there was no attack on the patents on the ground of obviousness. It was, instead, a case where expert evidence, including evidence as to common general knowledge, was available (and was given). Where the Court has evidence on the basis of which it can make a finding about common general knowledge, and the other information referred to in s 7(2) and s 7(3), and about what would or would not have been obvious to persons skilled in the relevant art, it must be only rarely that it will be appropriate to find (by resort to a “threshold test”) lack of inventiveness on the face of a specification.
239 Lockhart J made the same point in Anaesthetic Supplies v Rescare in the following terms (at 19):
Although a “mere new use for an old thing” is not patentable, a discovery which itself involves ingenuity or novelty, that an old substance may be used so as to produce a new result, may ground a patentable invention. In such a case the old substance is treated as if it were new, its hitherto unknown or unsuspected potential being revealed by the discovery which is itself a consequence of scientific ingenuity ([Wellcome Foundation Ltd v Commissioner of Patents (1980) 145 CLR 520] at 528). 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: NRDC at 265 and 277 and Wellcome at 528.
240 Apotex’s argument (that the treatment of psoriasis would have been the inevitable result of following the teaching of European Patent 13,376 to treat RA and PsA) does not deal squarely with the relevant principles.
241 As Sanofi-Aventis submitted, the reference in the specification of the patent in suit to European Patent 13,376 as disclosing leflunomide’s anti-inflammatory action cannot be equated to a disclosure on the face of the patent in suit that leflunomide treats PsA or psoriasis. The patent in suit attributes no such disclosure to European Patent 13,376. Even if it is permissible in this context to look beyond the face of the patent in suit, European Patent 13,376 makes no reference to either PsA or psoriasis. For the reasons given above, disclosure to that effect cannot be ascribed to the 341 patent (which is the equivalent of European Patent 13,376).
242 The qualities of leflunomide (or its character), on the face of the patent in suit, also could not be described as “known” in the sense that term is used in this context. It is true that the patent in suit discloses leflunomide as being anti-inflammatory, but that general description cannot be said to exhaustively define the actions and thus the characteristics or qualities of leflunomide. This is consistent with the position disclosed by the objective evidence available at that time. For example, it is apparent from the Bartlett article that the precise nature of leflunomide’s immunomodulatory qualities was not known in the early 1990s. In fact, the article discloses that many of leflunomide’s qualities were still being discovered at that time.
243 These considerations weigh against Apotex’s argument that the claimed invention is not patentable because it lacks the necessary quality of newness inherent in a manner of manufacture as required by s 18(1)(a) of the Patents Act.
244 Section 18(1)(c) provides that an invention is a patentable invention if the invention, so far as claimed in any claim, is useful.
245 Apotex submitted that the claim defining the invention lacks utility, as the method (the administration of leflunomide) will not produce the desired result (the prevention or treatment of psoriasis) (WM Wrigley Jr Co v Cadbury Schweppes Pty Ltd (2005) 66 IPR 298; [2005] FCA 1035 (Wrigley v Cadbury Schweppes)). In support of this submission Apotex relied on a series of propositions, each of which is discussed below.
(1) The patent does not make any promise about the efficacy of leflunomide in humans beyond the language of the claim: “preventing or treating”.
To the contrary of proposition (1), the promise of the patent is clear from the invention as claimed – namely, a method of preventing or treating the skin disorder psoriasis comprising the administration of an effective amount of leflunomide.
(2) The only evidence in the patent about use by humans is that the participants in the study “showed no kidney dysfunction”. The study should be inferred to be a study in respect of the use of leflunomide for the treatment of RA, not psoriasis.
I am satisfied that the latter inference should not be drawn. In any event, the patent contains more information about the use of leflunomide in humans than Apotex acknowledges. The specification deals with the compound’s effect on keratinocyte production in humans, general tolerance of the compound by humans, and a range of indicia of tolerance, as well as providing a comparison with the risk-benefit ratio of other immunosuppressive agents. Thus I do not accept proposition (2).
(3) The promise of the invention, when the patent is read as a whole, is that leflunomide is sufficiently efficacious in the treatment of psoriasis and sufficiently safe for human use that it is appropriately administered for preventing or treating psoriasis (as opposed to other diseases).
The source of this characterisation of the patent’s promise is not apparent. It is also difficult to reconcile with proposition (1) above. The relevance of the concepts of “sufficiently efficacious”, “sufficiently safe” and “appropriately administered”, as well as the contention that these criteria must be met in relation to psoriasis “as opposed to other diseases”, are not apparent in any part of the patent. Proposition (3) is thus unfounded.
(4) The TGA’s view is that leflunomide should not be used for the treatment of psoriasis that is not associated with manifestations of arthritic disease. Further, users of leflunomide only obtain the benefit of the Pharmaceutical Benefits Scheme (the PBS) if the drug is prescribed for severe active RA or PsA where other disease-modifying anti-rheumatic drugs (including methotrexate) are ineffective and/or inappropriate. This is not consistent with leflunomide being sufficiently efficacious and safe in the treatment of psoriasis to make it appropriate to administer for that purpose.
This proposition involves testing leflunomide against immaterial criteria in order to ascertain whether it achieves an irrelevant result. As noted, the promise of the patent is not as asserted by Apotex. Moreover, the position of the TGA and the drug’s status under the PBS cannot be proper determinants of utility. Insofar as the TGA is concerned, it approved the Arava PI which contains the indication: “Active Psoriatic Arthritis. ARAVA is not indicated for the treatment of psoriasis that is not associated with manifestations of arthritic disease”. The Arava PI also contains reports of clinical trials for PsA, the results of which include improvements in psoriasis by reference to the PASI index. Insofar as the PBS is concerned, numerous factors unconnected to the utility of leflunomide are likely to have affected the scheme of operation. No inference about lack of utility can be drawn on either basis. I thus reject proposition (4).
(5) The United States product information document (the US PI) for Arava contains a boxed warning at the beginning of the document in respect of the risks of liver failure.
As Sanofi-Aventis said, medications of all kinds have side-effects. Side-effects do not establish lack of utility. Professor Brooks acknowledged what must be the common-sense position – if medical practitioners did not use any drugs with black-box warnings, they would not have much of an armamentarium. Proposition (5) is thus of no real weight.
(6) The US PI also refers to interstitial lung disease having been reported during treatment with leflunomide, with associated fatal outcomes.
The answer to proposition (5) also applies to this proposition. While such outcomes are catastrophic for the individual patient, the risk that they will occurr does not deprive the claimed invention of utility.
(7) Various adverse reactions were reported in the indicated percentage of all patients taking Leflunomide in clinical trials.
The answer to proposition (5) also applies to this proposition. Adverse reactions do not establish lack of utility.
(8) The TOPAS study shows that only one in nine patients achieved at least a 50% improvement in their psoriasis compared to the placebo group. Eight in nine patients received no significant benefit – in other words, the odds of a patient experiencing no benefit in their psoriasis are greater than the odds of achieving any significant benefit.
As Dr Shumack said, a 50% improvement in PASI scores is a significant improvement. Furthermore, other patients in the TOPAS study achieved a modest improvement in their psoriasis. Thus Apotex’s conclusion about the odds (which compares significant to no benefit) does not follow. Not every patient needs to enjoy a significant benefit from the use of a method in order for an invention comprising the method to have utility. The lack of a 100% success rate does not mean that the claim covers means which will not produce the desired result and is thereby bad as referred to in Wrigley v Cadbury Schweppes at [138]). The claimed method has one means (the administration of an effective amount of leflunomide) to one end (the prevention or treatment of psoriasis). On the evidence the method as claimed is useful: it treats or prevents psoriasis in patients, albeit not with uniform levels of success.
(9) Dr Shumack has never prescribed leflunomide to treat psoriasis and, despite Dr Shumack’s vague reference to it having been used in Sweden, leflunomide is not in dermatological guidelines from Europe, the US or the UK.
As Sanofi-Aventis submitted, lack of exploitation is not the same as lack of utility. Proposition (9) is thus immaterial.
(10) The highest Dr Shumack could put the efficacy of leflunomide in treating psoriasis, not from his own experience but based on the TOPAS study, was that “some [patients] could be expected to show a modest improvement [in their psoriasis].”
This does not accurately convey the totality of Dr Shumack’s evidence (see proposition (8) above). In any event, a modest improvement is not consistent with a lack of utility.
(11) Dr Shumack did not find the dosage ranges in the patent to be of any great assistance, and gave evidence that he would find it necessary first to find a safe dose for a particular patient and then to find an effective dose. This would, in effect, require him to conduct an ad hoc clinical trial.
Again, this does not accurately convey the totality of Dr Shumack’s evidence. Dr Shumack had regard to the dose ranges provided in Example 5 to conclude that the initial preferred dosage range would be between 10 and 25 mg. The study in support appeared to Dr Shumack to be a phase 3 clinical trial, which Dr Shumack considered would usually be directed to efficacy (safety already having been established) even though the results provided in the patent mention toxicity only. While Dr Shumack acknowledged the width of the dosage ranges on p 7 of the patent and described those ranges as “not a lot of help” in ascertaining appropriate doses he also said that, in general, “of course, one would start with a lower dose and escalate on the basis of therapeutic response or lack thereof while at the same time ensuring that the side effect profile remains good.” As Sanofi-Aventis submitted, considered as a whole it cannot be said that Dr Shumack’s evidence indicated that he would have been unable to apply the method to achieve a useful result on the basis of the information contained in the specification. Furthermore, Dr Shumack did not characterise this process as conducting an ad hoc clinical trial. To the contrary, he said he would be reluctant to do so and noted that, if one were to carry out phase 1 or 2 studies, the first endpoint would be safety and the second efficacy. I thus reject proposition (11).
(12) Professor Smith does not use a loading dose when administering leflunomide because of its toxicity. Dr Shumack also thought it would be best not to use a loading dose. The patent recommends at pp 7 and 13 the use of a loading dose.
The references to loading doses in the patent are either part of a preferred embodiment, or a fact about a clinical trial carried out and described. In this context the therapeutic preference of Dr Shumack and Professor Smith not to use loading doses (which was not shared by Professor Brooks) says nothing about the utility of the claimed invention.
(13) The applicants and their international affiliates, as well as regulators and physicians, consider leflunomide to be an anti-rheumatic drug with serious side-effects warranting its use in the treatment of (severe) rheumatic diseases but limited to circumstances where other anti-rheumatic drugs are ineffective or inappropriate.
For the reasons given above, this generalisation does not undermine the utility of the claimed invention.
(14) Leflunomide does not meet the promise of the invention: it is not a drug for treating or preventing psoriasis. If one follows the “teaching” of the patent (by administering leflunomide in amounts at the higher end of the recommended dosage ranges), one would cause a significant overdose in a patient and thus fail to achieve the promise of safety. As submitted, it fails to achieve the promise of efficacy.
For the reasons given above, the first part of this proposition is inconsistent with the evidence. Furthermore, there is no basis in the evidence for the suggestion that following the teaching of the patent would cause a significant overdose. That was not the effect of the expert evidence available. The evidence, as summarised above, also does not support the purported lack of efficacy of leflunomide in treating and preventing psoriasis in a susceptible person. I thus reject proposition (14).
246 Accordingly, Apotex’s case against the utility of the claimed invention cannot be sustained.
247 Section 138(3)(f) of the Patents Act provides that a patent may be revoked on the ground that the specification does not comply with ss 40(2) or (3) of the Act. Section 40(2)(a) of the Patents Act requires a complete specification to “describe the invention fully, including the best method known to the applicant of performing the invention”. Section 40(3) concerns fair basis and is dealt with below.
248 In Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1; [2001] HCA 8 (Kimberly-Clark) at [25] the High Court explained that under s 40(2)(a) the “question is, will the disclosure [in the specification] enable the addressee of the specification to produce something within each claim without new inventions or additions or prolonged study of matters presenting initial difficulty?”. According to Apotex, the specification of the patent in suit does not disclose an effective (including safe) method of administering leflunomide for the treatment of psoriasis either in isolation or incidentally in the treatment of RA or PsA. Apotex relies on the following propositions to support this contention:
(1) The US PI recommends a dosing regime for leflunomide of a 100 mg loading dose followed by a daily dose of 20 mg. Daily doses of 25 mg resulted in increased side-effects. Example 5 in the specification of the patent discloses a single loading dose of “50, 100 and 100 mg respectively” with a daily dose thereafter of 5, 10 or 25 mg. Given the results of the TOPAS study, a daily dose of 5 or 10 mg is likely to be ineffective. A daily dose of 25 mg should be avoided according to the US PI.
(2) Page 7 of the specification creates more difficulties. It proposes a maximum dose in excess of that recommended in the approved Arava PI: specifically, it proposes a dose of “at most 600 mg per day” but goes on to state that, “under certain circumstances… higher or lower doses may also be appropriate.” The US PI reports chronic overdose at 100 mg per day. Thus, according to Apotex, the specification discloses a dose 30 times the recommended daily dose of a drug with serious side effects. Furthermore, p 7 of the specification discloses a preferred loading dose of 300 mg but says nothing about the duration of the loading phase. It also says that in the later rehabilitation phase “3-times 200 mg per day, preferably 1-time 20 mg per day… are indicated.” Apotex described the relationship between “3-times 200 mg per day” and “1-time 20 mg per day” as “completely opaque” in circumstances where 600 mg per day represents a serious overdose. In addition, the specification refers to the possible use of leflunomide in conjunction with compound 2 on p 10.
(3) Dr Shumack and Professor Smith would not administer a loading dose of leflunomide due to safety concerns. Dr Shumack would have conducted an ad hoc phase I or II clinical trial to identify a safe dose of leflunomide before establishing an effective dose.
(4) Example 5 in the specification refers to a dosing study for the treatment of RA and not psoriasis.
(5) For these reasons, the reader of the specification would be “unable to determine an appropriate dosage regime [for the treatment of psoriasis] without significant trial and error in the nature of a phase II clinical trial.”
249 Apotex also submitted that, insofar as Sanofi-Aventis contended that the 341 patent does not anticipate the invention claimed in the patent in suit because more work would need to be done to translate the teaching into a direction, recommendation or suggestion to use leflunomide for the treatment of human disease, the contention (albeit misconceived in respect of the law of novelty) would be fatal to the patent in suit on the ground of insufficiency.
250 These submissions are contrary to either principle or the facts.
251 In terms of principle, for the purpose of determining sufficiency, the reader of the specification is the hypothetical skilled addressee (Kimberly-Clark at [24]). Moreover, for the purposes of sufficiency a specification need only enable the making or performance of one embodiment of the invention as claimed in any claim (Lockwood at [60]).
252 In terms of fact, the TOPAS study does not provide a sound foundation for the inference that daily doses of 5 or 10 mg are likely to be ineffective. This is speculation. It is also not the case that the risk of increased side-effects reported in the US PI in respect of a 25 mg daily dose renders such a dosing regime unsafe or inappropriate (leaving aside the additional fact that these effects were reported in a “small cohort” of patients only). The inference that the clinical trial in Example 5 related to RA and not psoriasis should not be drawn for the reasons already given. Furthermore, for the reasons given above, Dr Shumack’s evidence about dosing does not have the character Apotex wishes to attribute to it. As noted above, Dr Shuack denied that he would need to conduct a clinical trial to work out a safe and effective dose of leflunomide. According to his evidence, Dr Shumack would have regard to Example 5 in the specification and to his expertise to establish a dose range of 10 to 25 mg (initially starting at the lower end, with 15 to 20 mg) and to make adjustments thereafter having regard to efficacy and side-effects. This process of adjustment is not a clinical trial but standard practice for a medical practitioner. Moreover, unlike Dr Shumack and Professor Brooks, Professor Smith would use a loading dose. Thus, the use or otherwise of loading doses is nothing more than a practitioner preference; and, as Professor Brooks’ evidence disclosed, medical practitioners routinely adjust doses, including loading doses, in response to patient tolerance and drug efficacy. The reference to a 600 mg loading dose is a recommended maximum only, albeit subject to the possibility of higher or lower doses depending on the circumstances. The other references pointed to by Apotex are also examples of dosing alternatives. The dosing regimes which the specification discloses do not define the invention as claimed but, as the evidence of Dr Shumack, Professor Smith and Professor Brooks made apparent, are sufficient to enable the skilled addressee to work the invention (that is, to implement the claimed method) without new inventions or additions or prolonged study.
253 For these reasons, Apotex’s case for revocation of the patent on the ground that the specification contravenes s 40(2)(a) of the Patents Act cannot be accepted.
254 Section 40(3) of the Patents Act provides that the “claim or claims must be clear and succinct and fairly based on the matter described in the specification”. The “claim or claims” are the claim or claims “defining the invention” referred to in s 40(2)(b).
255 The principles relating to the operation of this requirement are identified in Lockwood at [43]-[69]. In summary: – (i) the grounds of invalidity of a patent are and must be kept conceptually distinct, (ii) it follows that a patent can be successfully challenged on the ground that the claims are not fairly based even though every other possible ground of challenge fails, (iii) the language of s 40(3) points to a comparison between the claims and what is described in the specification only, and does not call for any inquiry into “inventive step” or inventive “merit” or a “technical contribution to the art”, (iv) it is wrong to seek to isolate in the body of the specification “essential integers” or “essential features” of an alleged invention and to ask whether they correspond with the essential integers of the claim in question, and (v) the test is whether there is a “real and reasonably clear disclosure” in the body of the specification of what is claimed.
256 Apotex’s case is that if (contrary to its primary position on construction of the claim) the claim is construed as “encompassing the incidental treatment or prevention of psoriasis arising from the administration of leflunomide to treat RA and/or PSA” then the claim “travels beyond the matter disclosed in the specification” (Lockwood at [57]) and is not fairly based as required by s 40(3) of the Patents Act. According to Apotex this is a contention truly in the alternative, as its primary case is that the invention as claimed does not encompass the administration of leflunomide for the objective purpose of preventing or treating any disease other than psoriasis merely because by such administration psoriasis is incidentally prevented or treated.
257 As Sanofi-Aventis submitted, Apotex’s case on lack of fair basis involves a false inquiry. The question is whether there is a real and reasonably clear disclosure in the body of the specification of what is claimed. The claim is for the method as described (that is, according to the interpretation adopted above, the administration of leflunomide in an effective amount so that the recipient’s psoriasis is in fact prevented or treated). The specification similarly discloses that the invention “relates to a method of preventing or treating a skin disorder in a patient in need thereof by administering an effective amount of” leflunomide. The “skin disorder” is psoriasis, the only human disease described as such in the specification. The specification, moreover, defines both prevention and treatment by the effect on psoriasis – prevention being the prophylactic prevention of psoriasis in a susceptible mammal and treatment being arresting the development and retarding the progression of psoriasis in a susceptible mammal.
258 It follows that there is a real and reasonably clear disclosure of the claimed invention in the specification. Apotex’s contrary argument depends on construing the claim to mean something other than what it says – a construction rejected above.
259 Sanofi-Aventis’s case on threatened infringement depends on s 117 of the Patents Act, which is in these terms:
(1) If the use of a product by a person would infringe a patent, the supply of that product by one person to another is an infringement of the patent by the supplier unless the supplier is the patentee or licensee of the patent.
(2) A reference in subsection (1) to the use of a product by a person is a reference to:
(a) if the product is capable of only one reasonable use, having regard to its nature or design – that use; or
(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; or
(c) in any case – 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.
260 In accordance with these provisions the supplier of a product may infringe a patent if, first, the use of the product by the person to whom it is supplied would infringe the patent and, second, one or more of the conditions specified in s 117(2) is satisfied. Sanofi-Aventis relies on the conditions in ss 117(2)(b) and/or (c).
261 As noted, the approved Apotex PI contains a statement in respect of indications as follows:
INDICATIONS
Apo-Leflunomide is indicated for the treatment of:
• Active Rheumatoid Arthritis
• Active Psoriatic Arthritis. Apo-Leflunomide is not indicated for the treatment of psoriasis that is not associated with manifestations of arthritic disease.
The combined use of Apo-Leflunomide with other Disease Modifying anti-Rheumatic Drugs (DMARDS) has not been adequately studied (see PRECAUTIONS).
262 There was a debate between the parties about the meaning of the phrase “Apo-Leflunomide is not indicated for the treatment of psoriasis that is not associated with manifestations of arthritic disease.” Sanofi-Aventis submitted that the phrase means that Apo-Leflunomide is indicated for the treatment of psoriasis that is associated with manifestations of arthritic disease. Apotex submitted that the double negative in the phrase could not be transformed into a positive. Given the undisputed evidence about the relationship between PsA and psoriasis, this point may be moot. The evidence establishes that psoriasis is a diagnostic criterion of PsA. It further establishes that nearly every person with PsA has or will develop psoriasis. The evidence thus establishes that the administration of leflunomide to a person with PsA will treat that person’s PsA and psoriasis (if they have a concurrent case of psoriasis) or treat that person’s PsA and prevent psoriasis (if the person otherwise would have developed psoriasis). Apotex’s approved PI, on any view, instructs a medical practitioner (namely, a rheumatologist) to use Apotex’s leflunomide product for the treatment of PsA. As almost all people with PsA have or will develop psoriasis, psoriasis being one of the diagnostic criteria of PsA, it is apparent that the approved Apotex PI instructs rheumatologists to use leflunomide to treat psoriasis irrespective of the phrase “Apo-Leflunomide is not indicated for the treatment of psoriasis that is not associated with manifestations of arthritic disease”. It does so by reason of the indication for PsA against the background of the undisputed evidence about the relationship between PsA and psoriasis. If the point is not moot, I am satisfied in any event that the meaning which Sanofi-Aventis attributes to this phrase is unavoidable. In the context of an indication for PsA, the statement that “Apo-Leflunomide is not indicated for the treatment of psoriasis that is not associated with manifestations of arthritic disease” can mean only that Apo-Leflunomide is indicated for the treatment of psoriasis that is associated with manifestations of arthritic disease. Apotex’s argument to the contrary is not persuasive. It contradicts the ordinary meaning of the indication and is inconsistent with the undisputed medical evidence about the relationship between PsA and psoriasis. It follows from this analysis that the approved Apotex PI gives instructions for the use of Apotex’s leflunomide product for the treatment of psoriasis within the meaning of s 117(2)(c) of the Patents Act.
263 It also follows from this analysis that Apotex has reason to believe that the person to whom the product is supplied (by inference, a rheumatologist prescribing the product to a patient) will put Apotex’s leflunomide product to use for the treatment of psoriasis, and so that the condition in s 117(2)(b) of the Patents Act is satisfied (if the product is not a staple commercial product, an issue in dispute between the parties dealt with below). In this regard it is apparent from the findings and analysis above that is not the case that Apotex’s leflunomide product merely might treat psoriasis in a percentage of patients with PsA. The evidence of Dr Shumack, Professor Smith and Professor Brooks cannot be so characterised. On their evidence, the administration of an effective amount of leflunomide to a person with PsA will in fact treat or prevent psoriasis, albeit with variable degrees of success depending on the individual patient. From this it follows that Apotex has reason to believe that Apotex’s leflunomide product will be used in a method of preventing or treating psoriasis as claimed in claim 1 of the patent.
264 Another conclusion which follows from the findings and analysis above is that Sanofi-Aventis has established its case that the “use of a product by a person would infringe a patent” as required by s 117(1) of the Patents Act. In other words, Sanofi-Aventis has made good its case that there will be direct infringement of the patent by the person to whom Apotex proposes to supply its leflunomide product and so that Apotex, as the supplier, attracts potential liability under s 117. As Sanofi-Aventis put it, on the evidence, it is apparent that:
(a) a rheumatologist diagnosing a patient with psoriatic arthritis will diagnose a concurrent case of psoriasis or a future case of psoriasis (in particular by reference to a personal or family history of psoriasis);
(b) the Apotex PI is expressly indicated for the treatment of patients with psoriatic arthritis;
(c) psoriatic arthritis is associated with psoriasis including in the sense that it is concurrent or will invariably develop in the future [in almost all patients];
(d) when leflunomide is administered to a patient with psoriatic arthritis, any concurrent psoriasis will be treated and any future psoriasis will be prevented; and
(e) psoriasis and psoriatic arthritis are now known to be both T cell-mediated; and leflunomide is now known to work by modulating the function of different types of T cells.
265 I accept this summary of the effect of the evidence, subject only to the fact that the association between PsA and psoriasis exists in the sense that psoriasis is concurrent or will develop in almost all patients with PsA. The focus on PsA in this summary of the effect of the evidence is appropriate. One feature of Apotex’s case is its focus on RA and/or PsA. One reason for this, presumably, is Apotex’s intention as disclosed in the approved Apotex PI to supply its leflunomide product for the treatment of RA and PsA. Another is the way in which Apotex put its case on novelty. The additional focus on RA may distract from two important matters. The first is that the evidence is to the effect that there is no relationship between psoriasis and RA. As noted above, psoriasis is no more or less likely to occur in a person with RA than any other person. If psoriasis does occur in a person with RA, its occurrence is mere coincidence. In this sense RA is the same as all other diseases except for PsA. In a person with PsA, by contrast, psoriasis is a diagnostic criterion and, in almost all cases, either is present or will develop. The second matter is that although one may speculate that this difference is the reason Sanofi-Aventis does not contend that Apotex threatens to infringe the patent by reason of Apotex’s intention to supply its leflunomide product for the treatment of RA, such speculation is immaterial. Sanofi-Aventis makes no claim in respect of that proposed conduct. Sanofi-Aventis does not suggest that supply by Apotex for the treatment of RA could engage s 117(2)(b) or (c) of the Patents Act. Thus it is not to the point that a person with RA who is treated by the administration of leflunomide might have a coincidental concurrent or future case of psoriasis, that the psoriasis might also be treated or prevented, and so that the person administering the leflunomide might infringe the patent.
266 There is no dispute that Apotex, if not restrained, proposes to supply its leflunomide product for administration to treat PsA. It admits as much in its defence (para 44). When the Apotex leflunomide product is administered for the treatment of PsA, the method in claim 1 of the patent will be used and Sanofi-Aventis’s exclusive right to exploit the invention thereby infringed. Apotex’s arguments to the contrary have been considered and rejected in the reasons thus far. As Sanofi-Aventis has proven its case of threatened direct infringement, Apotex is exposed to liability as a supplier. As the requirement in s 117(2)(c) (a subsection which applies “in any case”) is satisfied Sanofi-Aventis has also proved that Apotex, in its capacity as a prospective supplier of its leflunomide product, threatens to infringe the patent. Although not strictly necessary, it is nevertheless appropriate to deal with the outstanding issue whether the product is a staple commercial product within the meaning of s 117(2)(b) of the Patents Act.
267 Section 117(2)(b) applies in circumstances where “the product is not a staple commercial product”. Contrary to Apotex’s approach, “the product” in question is not leflunomide generally. It is Apotex’s leflunomide product, Apo-Leflunomide. It is not the excipients in that product – it is the product as a whole proposed to be supplied. This follows from the words of s 117(2)(b) read in context. Section 117 of the Patents Act concerns the circumstances in which a supplier of a product may be liable for infringement of a patent. The “product” for the purposes of s 117(2)(a)-(c) is the product as referred to in s 117(1) – that is, the product as supplied by the supplier to another person to use. The product as proposed to be supplied by Apotex is not simply leflunomide. It is the product described in the approved Apotex PI and as registered on the ARTG. The product is Apo-Leflunomide, which is a tablet in 10 or 20 mg forms containing leflunomide as its active ingredient and a number of other inactive ingredients.
268 In Northern Territory v Collins (2008) 235 CLR 619; [2008] HCA 49 (Northern Territory v Collins) the High Court described a staple commercial product as “one that is supplied commercially for various uses” (per Hayne J at [41] agreeing with Crennan J at [145]; see also Heydon J at [57]). According to Hayne J at [41], a staple commercial product “must be an article of commerce that not only can be used in a variety of ways but also is traded for use in various ways”. His Honour further reasoned that, as s 117(2)(a) deals with products having only one reasonable use, a staple commercial product in s 117(2)(b) must mean a product having more than one reasonable use (at [47]). In other words (at [48]):
To read “staple commercial product” as identifying a product that is supplied commercially for various uses does not reflect the notion of principal or chief importance sometimes conveyed by the adjective “staple”. But as Crennan J concludes, “staple”, used adjectivally in the compound expression “staple commercial product”, should not be read as directing attention to the economic significance of the product concerned. Rather, it should be read as inviting attention to the variety of uses to which the product both can be, and is in fact, put. It is that variety of uses which, when the product is supplied commercially, makes the product a staple commercial product.
269 Hayne J also noted at [43] that:
In this setting “staple commercial product” should not be given a narrow meaning. To do so would expand the classes of supply which are reached by s 117, thus expanding the rights of the patentee where, by hypothesis, the act of supply is not otherwise an infringement of the patentee’s monopoly. Further, the meaning given to “staple commercial product” must recognise that the central focus of s 117 falls upon the use of a product. The construction of the section must be approached with these two matters at the forefront of consideration.
270 Assessed against these principles, Apotex’s leflunomide product Apo-Leflunomide is not a staple commercial product. As Apotex’s approved PI discloses, the proposed use of Apo-Leflunomide according to the instructions given by Apotex is oral administration of the Apo-Leflunomide tablet in either 10 or 20 mg dosage forms for the treatment of the indicated diseases RA and PsA (including, for the reasons given above, psoriasis in association with PsA). No other proposed use of Apo-Leflunomide is apparent from the evidence. Adopting Hayne J’s language in Northern Territory v Collins the proposed use of the product, Apo-Leflunomide, is oral administration to treat disease. The specific indications provided by Apotex are for RA, PSA, and psoriasis in association with PsA. Accordingly, Apo-Leflunomide is not “supplied commercially for various uses”. It is to be supplied commercially for a single use (oral administration of the tablet in 10 or 20 mg form for the medical conditions indicated).
271 Apotex’s arguments to the contrary should not be accepted. It is not to the point that there is evidence that leflunomide is useful in treating a range of autoimmune disorders including RA, multiple sclerosis and lupus. There is no suggestion in the evidence that the product to be supplied by Apotex, Apo-Leflunomide, is either capable of being used or in fact to be used (that is, orally administered) to treat anything other than the indicated diseases RA, PsA, and psoriasis in association with PsA. As noted, the relevant question is whether the product Apotex proposes to supply (Apo-Leflunomide in 10 or 20 mg tablets) is a staple commercial product, and not whether leflunomide generally in any form in which it might be deployed is one. Furthermore, the fact that one of the indicated conditions for which Apo-Leflunomide may be orally administered is RA is not enough to make good Apotex’s case. As noted, the evidence discloses only one use of Apo-Leflunomide – oral administration to treat disease. The indications for which that use is appropriate do not mean that the product has more than one use. Even if the range of indications for Apo-Leflunomide does create two classes of use (oral administration for the treatment of RA and oral administration for the treatment of PsA, including psoriasis if associated with PsA) 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”.
272 Apo-Leflunomide, accordingly, is not a staple commercial product. And Apotex does have reason to believe that the persons to whom it wishes to supply that product (rheumatologists) will put Apo-Leflunomide to an infringing use. As noted above, it has reason to believe this because, on the evidence, Apotex knows that nearly every person who is treated for PsA by administration of leflunomide also has or will develop psoriasis and that, by the administration, such psoriasis will be prevented or treated (albeit with varying levels of success). Apotex’s attempts to avoid this conclusion by referring to the 11% of patients who achieved an improvement of 50% on their PASI scores (dealt with above) impermissibly elides this result (which represents a “significant improvement”, according to Dr Shumack) with the concept of “treatment” generally. Its attempts are also inconsistent with the acknowledgment in Apotex’s notes in reply that it has always agreed as a matter of fact that administration of an effective amount of leflunomide “will (‘modestly’) treat or prevent psoriasis”. The characterisation of the treatment or prevention as “modest” does not mean that treatment or prevention has not been achieved.
273 In short, the proposed administration of Apotex’s leflunomide product will involve use of the method in the claim (each essential integer of the claim being engaged by the proposed use) as referred to in s 117(1) of the Patents Act, and Apotex proposes to supply its product for such use in circumstances where each of s 117(2)(b) and (c) of the Patents Act applies. Apotex’s avowed intended conduct therefore constitutes a threatened infringement of the patent.
N CONCLUSIONS ABOUT PATENT ISSUES
274 Apotex has not established that the claim of the patent is invalid. Sanofi-Aventis has established that Apotex’s proposed supply of Apotex’s leflunomide product for the treatment of PsA will infringe the patent. Sanofi-Aventis is thus entitled to declarations and an injunction generally in accordance with paras 14 to 16 of the amended application.
O THE MISLEADING AND DECEPTIVE CONDUCT ISSUES
275 Sanofi-Aventis contended that if Apotex supplies or offers to supply its Apotex leflunomide product for the treatment of PsA it will, in so doing, make various representations to medical practitioners, pharmacists and patients. It further contended that Apotex made some of the same representations to the TGA by providing to the TGA on or about 3 July 2008 a certificate pursuant to s 26B(1)(a) of the Therapeutic Goods Act. According to Sanofi-Aventis these representations are false and are made or to be made in trade or commerce. In consequence Apotex intends to engage and has engaged in conduct that is misleading or deceptive, or likely to mislead or deceive, in contravention of s 52 of the Trade Practices Act and/or intends to make and has made false representations in contravention of s 53(c) and (d) of the Trade Practices Act (the Trade Practices Act continuing to apply to this proceeding by operation of the Competition and Consumer Act 2010 (Cth)).
276 Sanofi-Aventis identified the relevant representations as set out below.
(1) To the TGA and medical practitioners, pharmacists and patients, representations that:
(a) Medical practitioners are entitled to prescribe and use the Apotex Leflunomide Products for the treatment of active psoriatic arthritis.
(b) Pharmacists are entitled to dispense the Apotex Leflunomide Products for the treatment of active psoriatic arthritis.
(c) Patients are entitled to use the Apotex Leflunomide Products for the treatment of active psoriatic arthritis.
(d) The use of the Apotex Leflunomide Products for the treatment of active psoriatic arthritis will not infringe a patent.
(e) The use of the Apotex Leflunomide Products for the treatment of active psoriatic arthritis will not infringe the Patent [defined as the patent in suit].
(2) To medical practitioners, pharmacists and patients, representations that:
(f) The Apotex Leflunomide Products are approved by sanofi-aventis Deutschland GmbH.
(g) Apotex is approved by or affiliated with sanofi-aventis Deutschland GmbH.
277 Particulars of these representations include that Apotex, with knowledge of the patent in suit, has not warned and does not intend to warn any of the recipients or the TGA that the use of the Apotex leflunomide product for the treatment of active psoriatic arthritis will or may infringe the patent. An inference to this effect should be drawn based on Apotex’s admissions in the defence (particularly para 44, where Apotex admits its intention to supply and offer to supply in Australia the Apotex leflunomide product for the treatment of active psoriatic arthritis) and the terms of the approved Apotex PI (which contains no such proposed warning).
278 Sanofi-Aventis relied on the reasoning in Ramset Fasteners (Aust) Pty Ltd v Advanced Building Systems Pty Ltd (1999) 164 ALR 239; [1999] FCA 898 at [66]-[68] in which Burchett, Sackville and Lehane JJ said (excluding case citations):
[66] Having regard to the conclusions reached earlier in these reasons, it is unnecessary to say much about this issue. Even if damages should have been awarded under s 82 of the Trade Practices Act 1974, in respect of the contravention of s 52, it would have involved a doubling up to have awarded such damages in addition to the larger damages for infringement of the patent. But [the primary judge] did make a finding that s 52 had been contravened, and the appellant challenges that finding. His Honour said:
I am of the view that the failure of Ramset to warn its customers that use of clutches or components in a particular way might constitute an infringement of Advanced’s patent, does constitute conduct in trade or commerce which is misleading or deceptive or likely to mislead or deceive users.
We agree with the reasons his Honour gave for this conclusion, and accordingly shall confine ourselves to some brief remarks.
[67] Section 52 requires that a “corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive”. Attention has been drawn, in a number of cases, to the fact that the section is not limited to “representations”, a word that does not appear in it, although contravening conduct is generally apt to involve representations… Whether or not Ramset’s conduct should be analysed as conveying an implicit misrepresentation, it acted misleadingly when it promoted and sold face-lift tilt-up equipment in the way that it did, without informing its customers of the liability it was inducing them to incur. This was conduct calculated to cause a mistaken impression about a significant consequence of the transaction proposed to those customers. In our opinion, in such a case, it is unnecessary, and may be artificial, to speak of a representation. The orthodox theory would find one, but it is more realistic to see the conduct as misleading, without resorting to a sophisticated analysis in which no one would have engaged at the time.
[68] It is plain, on the evidence and the findings of the trial judge, that Ramset’s conduct was engaged in for the purpose of persuading customers to purchase the various forms of equipment it supplied for face-lift tilt-up operations. Many persons did so. For example, Mr Nightingale gave evidence, to which reference has been made, of a big change in the source of supply upon which Brambles Cranes drew to obtain ring clutches. In Como Investments Pty Ltd v Yenald Nominees Pty Ltd (1997) ATPR 43,617 at 43,619-43,620, a full court jointly stated:
Where a representation is relevant to the decision in question, and in its nature persuasive to induce the making of that decision, it accords with legal notions of causation to hold that it has a causative effect. And where a respondent, who may be taken to know his own business, has thought it was in his interests to misrepresent the situation in a particular respect, the Court may infer that the misrepresentation was persuasive. These inferences arise from the making of the representation followed by the respondent doing the thing it was calculated to induce him to do.
Those observations may be applied equally to the effect of the misleading conduct of Ramset upon its customers… In the present case, the inference should be drawn that Ramset’s misleading conduct did cause damage to Advanced, but it is unnecessary to pursue this point further.
279 Insofar as the certificate under s 26B of the Therapeutic Goods Act is concerned, the relevant provision is as follows:
(1) The certificate required under this subsection is either:
(a) a certificate to the effect that the applicant, acting in good faith, believes on reasonable grounds that it is not marketing, and does not propose to market, the therapeutic goods in a manner, or in circumstances, that would infringe a valid claim of a patent that has been granted in relation to the therapeutic goods; or
(b) a certificate to the effect that:
(i) a patent has been granted in relation to the therapeutic goods; and
(ii) the applicant proposes to market the therapeutic goods before the end of the term of the patent; and
(iii) the applicant has given the patentee notice of the application for registration or listing of the therapeutic goods under section 23.
The certificate must be signed by, or on behalf of, the applicant and must be in a form approved by the Secretary.
280 I do not accept Sanofi-Aventis’s case of misleading or deceptive conduct or false representations based on the giving of the certificate under s 26B of the Therapeutic Goods Act. The certificate which Apotex submitted certified that, acting in good faith, Apotex believes on reasonable grounds that it was not marketing and did not propose to market its product in a manner or circumstance that would infringe a valid claim of a patent. The representation conveyed by the certificate can extend no further than the terms of the certification provided. The certification is not absolute. It depends on Apotex’s state of mind. As such, Sanofi-Aventis has not proved that the representation in fact conveyed by the certificate is false or misleading or deceptive. Nor can I see any basis on which the provision of the certificate would convey representations to the TGA to the effect of those in sub-paragraphs (f) or (g) of the relevant paragraphs of the amended statement of claim as set out above. Nothing in the certificate indicates any such relationship, and such a relationship is by no means implied by the terms of the certificate.
281 I also do not accept that Apotex’s proposed conduct of supplying and offering to supply its leflunomide product involves any representation to the TGA different in nature or extent from the representation conveyed by the certificate. I accept, however, that Apotex’s proposed conduct of supplying and offering to supply its leflunomide product without any warning to the contrary would convey, in trade or commerce, representations (a), (b) and (c) to medical practitioners, pharmacists and patients respectively. These representations would be false and likely to mislead and deceive because the respective recipients would not be entitled to prescribe, dispense and use Apotex’s leflunomide product as such conduct would infringe the patent. I do not accept that any greater specificity of representation is conveyed than a general entitlement to use and, accordingly, I am not satisfied that representations (d) or (e) would be conveyed by Apotex’s proposed conduct.
282 For these reasons Sanofi-Aventis has established a proper basis for the making of declarations and injunctions to the general effect of those in paras 19-21 of the amended application (albeit not by reference to all of the representations on which it relied).
283 As noted, Sanofi-Aventis claimed that in making the approved Apotex PI and supplying it to the TGA Apotex infringed copyright in certain of the Arava works (in effect, the product information documents for Sanofi-Aventis’s leflunomide product Arava). The complex issues to which this claim gives rise, at least insofar as the future is concerned, have been rendered moot by the commencement of the Therapeutic Goods Legislation Amendment (Copyright) Act 2011 (Cth) (the amendment Act). The amendment Act, which commenced on 28 May 2011, amends the Copyright Act. It provides that certain acts are not a breach of copyright “in a work that is product information approved under section 25AA of the Therapeutic Goods Act 1989 in relation to medicine”. The acts which do not constitute breach include acts of supplying, reproducing, publishing, communicating or adapting done under the Therapeutic Goods Act in respect of “some or all” of “product information approved under section 25AA of the Therapeutic Goods Act in relation to medicine”.
284 Apotex’s acts the subject of complaint in this proceeding would be within the scope of the protection the amendment Act provides. However, the operative provisions of the amendment Act apply to acts on or after its commencement (even though the product information may have been approved at an earlier time). In the present case an interlocutory injunction was granted on 30 October 2008 in the following terms:
2 Until the hearing and determination of this proceeding or further order, and subject to the Respondent’s rights under s 43 of the Copyright Act 1968, the Respondent, whether by itself, its directors, officers, servants, agents or otherwise be restrained from, in Australia:
(a) reproducing in any material form or communicating to the public, or authorising such reproduction or communication, of the Arava PI or the Apotex PI referred to in paras 7 and 21 respectively of the Statement of Claim; or
(b) distributing or otherwise dealing with copies of the Arava PI or the Apotex PI without the licence of the Applicants,
provided that it shall not be a breach of these orders for the Respondent to make no more than 10 copies of the Arava PI and of the Apotex PI for purposes other than:
(a) supply to patients, hospitals, medical practitioners, pharmacists, wholesalers or distributors; or
(b) obtaining approval for the marketing (or re-imbursement) of any product containing Leflunomide in Australia, or in any other territory.
285 These interlocutory orders were granted on the basis of the usual undertaking as to damages being given by Sanofi-Aventis Australia and Sanofi-Aventis Deutschland. The orders remained in place between 30 November 2008 and 31 May 2011. On 31 May 2011, with the consent of all parties, I vacated the orders by reason of the commencement of the amendment Act. However, it was common ground that I must nonetheless resolve the issues between the parties with respect to copyright because the resolution may be relevant to a claim by Apotex for the payment of damages pursuant to the undertaking. The issues fall for resolution without regard to the provisions of the amendment Act (other than to the extent that Sanofi-Aventis submitted that the amendment Act itself demonstrated that Apotex did not have an implied licence to copy the Arava works).
P2 Regulation of product information
286 As set out above, under s 7D of the Therapeutic Goods Act the Secretary of the Department of Health and Ageing approves the form in relation to product information for medicines. The approved form for product information is in the Australian Regulatory Guidelines for Prescription Medicines (June 2004) (the Regulatory Guidelines). Appendix 8 to the Regulatory Guidelines describes a PI as “a document that contains information sufficient to ensure safe and effective use of the medicine under nearly all circumstances.” It specifies that a PI “is to present a scientific, objective account of the medicine’s usefulness and limitations as shown by the data supporting the application” and “is to be devoid of promotional material”. Section 2 of Appendix 8, which deals with the contents of a PI, provides that a PI should contain information under headings as follows:
i) Name of the medicine
• The non-proprietary name of the substance, or in the case of a mixture of substances, of each therapeutically active ingredient;
• The chemical structure should be included except in the case of inorganic salts and simple organic compounds (where a molecular formula may suffice), complex biological molecules such as large peptides and proteins (where a simpler schematic presentation of the structure may suffice), and substances where the structure is not defined;
• CAS number
ii) Description
• A description of relevant physical and chemical characteristics of the medicine and its formulations. Australian Approved Names should be used;
• Excipients should be listed for new product registrations (but may be included under (xi) Presentation). Inclusion of excipients is recommended for PI updates.
ii) [sic] Pharmacology
• The pharmacology, including pharmacokinetics and pharmacological actions, especially in humans.
iii) Clinical trials
• The Clinical Trials section should describe trials supportive of the indications;
• If the product has been registered prior to 1991 and there have been no applications requiring ADEC advice since then it is unlikely that a suitable clinical trial will be available. In that case the Clinical Trials section shouldn’t be added.
iv) Indications
• The therapeutic applications of the medicine, clearly stating whether the treatment is curative, palliative, adjunctive, and including any conditions imposed by TGA.
v) Contraindications
• Situations where patients should never or generally not be treated with the medicine. In rare cases where the medicine should never be given, this must be specifically outlined.
vi) Precautions
Include information under the following sub-headings:
• Describe the circumstances where caution is required (for example, describe particular populations or clinical situations where dosage reduction is required);
• Describe the actions the health care professional should take (for example, specify particular investigations that may need to be carried out);
• Effects on fertility;
• Use in pregnancy.
Include a proposed or approved Australian Pregnancy Categorisation, any relevant standard text and other information consistent with this categorisation. Also include effects on labour and delivery;
• Use in lactation;
• Paediatric use;
• Use in the elderly;
• Carcinogenicity;
• Genotoxicity;
• Interactions with other medicines.
Include known clinically relevant interactions and other potentially serious interactions based on the pharmacology of the medicine. It is useful to group interactions according to outcome (for example, potentiation or reduction of effect) and to explain the mechanism of action where this is known;
• Effect on laboratory tests; [sic]
vii) Adverse effects
• An indication of severity, clinical importance and frequency should be given. This section of the PI should be written in CIOMS (Council for International Organizations of Medical Sciences) format.
viii) Dosage and administration
Include information on:
• dosage (dose and interval);
• dosage adjustment in:
• renal insufficiency;
• hepatic insufficiency;
• dialysis;
• concomitant disease;
• maximum tolerated daily dose and the maximum dose for an entire course of therapy;
• monitoring advice;
• other pertinent information such as relationship to meals and compatibility with other drugs and fluids.
ix) Overdosage
• The symptoms, signs and recommended treatment of overdosage or accidental poisoning;
• ADEC had made the following recommendations for the Overdosage section:
Syrup of Ipecac and gastric lavage. These are no longer considered to be standard therapy for gut decontamination. Reference to these interventions should be excluded from the PI.
Activated charcoal. If activated charcoal is considered to be potentially useful in the management of overdose of the drug, then a suitable statement for inclusion in the PI would be:
Activated charcoal may reduce absorption of the drug if given within one or two hours after ingestion. In patients who are not fully conscious or have impaired gag reflex, consideration should be given to administering activated charcoal via a nasogastric tube, once the airway is protected.
Whole bowel irrigation. Whole bowel irrigation may be useful in the management of overdose of slow release preparations with significant toxicity (eg. slow release calcium channel blockers) or drugs not absorbed by charcoal (eg. iron, lithium). If whole bowel irrigation is considered to be potentially useful in the management of overdose of the drug, then a suitable statement for inclusion in the PI would be:
Whole bowel irrigation (eg. 1 or 2 litres of polyethylene glycol solution orally per hour until rectal effluent is clear) may be useful for gut decontamination.
For all overdoses, the mainstay of treatment is supportive and symptomatic care. This should be emphasised before discussion of specific antidotes. Information on serious toxicity, Tmax, elimination half-life (in the setting of overdose) and the effectiveness of haemodialysis and repeated doses of activated charcoal in removing the drug are very useful in the management of overdose. Any available information on these issues, including animal data, should be included. It is generally appropriate to include LD50 values from the animal studies.
x) Presentation and storage conditions
• The presentation, including dosage form and quantity, proportion or strength of each therapeutically active ingredient;
• The container type and pack sizes.
xi) Name and address of the sponsor.
xii) Poison schedule of the medicine.
xiii) Date of approval
• Following approval for registration, the date of approval is to be given in the PI;
• The PI is changed at some time after approval, the PI must show the date of approval of the changed PI, except where notification or self-assessment is involved. In these cases, where the PI change does not require approval, the PI must show the date of the last TGA approval (if applicable) and the date of the most recent notification or self-assessment which resulted in the change, as Date of most recent amendment.
287 The Regulatory Guidelines also contain other requirements. Section 4.3 deals with essentially similar medicines (an “essentially similar medicine” being one that has the same qualitative and quantitative composition in terms of active principles/substances and the same pharmaceutical form as, and is bioequivalent to, another medicine). An application for registration of an essentially similar medicine on the ARTG may be approved on the basis of an appropriate bioavailability study rather than safety and efficacy data. However, if the PI for the essentially similar medicine is “different in content to [that] of the already registered brand, safety and/or efficacy data may be needed”. So too, if a sponsor registers an additional brand of its already registered brand then the sponsor must submit either a statement that the PI is identical to the PI of the existing brand or a list of differences between the two. If the PI is “not identical to [that] of the already registered brand, safety and/or efficacy data may be needed depending on the case.”
288 Section 4.4 of the Regulatory Guidelines concerns modified applications, including changes required to PIs for safety reasons. Safety-related changes that only reduce the patient population, remove and indication or add a warning, precaution, contraindication or adverse event may be made without approval of the TGA but subject to a notification process. Otherwise quality changes and minor editorial changes may also be made without approval but subject to a self-assessment and notification process. All other changes to a PI require TGA approval.
289 The TGA approved the most recent version of the Arava PI (Arava being Sanofi-Aventis’s leflunomide product) on 28 October 2005. The approved Arava PI is a document of 20 pages. It is written in English and contains headings, text, tables and diagrams. The major headings reflect the structure prescribed by the Regulatory Guidelines, except for the order in which the “poisons schedule for the medicine” appears. Hence, the major headings of the Arava PI are: – (i) name of the medicine, (ii) description, (iii) pharmacology, (iv) clinical trials, (v) indications, (vi) contraindications, (vii) precautions, (viii) adverse effects, (ix) dosage and administration, (x) overdosage, (xi) presentation and storage conditions, (xii) poisons schedule of the medicine, (xiii) name and address of sponsor, and (xiv) date of approval. Some of the sections under the major headings also reflect the structure of topics identified in the Regulatory Guidelines. For example, under the “name of the medicine” heading there are sub-headings “non-proprietary name”, “chemical structure” and “CAS number”. The sub-headings in other sections do not reflect those in the Regulatory Guidelines. For example, under the heading “description” there is a single paragraph which deals with the content prescribed by the Regulatory Guidelines but does not adopt the two-part structure apparent from the two dotpoints under that heading in the Regulatory Guidelines. As a further example, the Regulatory Guidelines require a PI, under the heading “pharmacology”, to deal with the drug’s “pharmacology, including pharmacokinetics and pharmacological actions, especially in humans.” This part of the Arava PI is two pages in length and deals with pharmacology by reference to sub-headings which are not used in the Regulatory Guidelines, being “site and mode of action”, “pharmacokinetics” (absorption, distribution, metabolism, elimination), “paediatric pharmacokinetics”, and “special populations” (gender, age, smoking, chronic renal impairment, hepatic impairment). The same approach is taken in the “clinical trials” section of the Arava PI, the structure of which does not reflect any requirement of the Regulatory Guidelines. The content of this section is in numerous parts – “adult rheumatoid arthritis”, “ACR criteria”, “ACR response over time”, “X-ray data”, “functional ability/quality of life”, “paediatrics”, and “psoriatic arthritis”. The clinical trials section contains various graphs, diagrams and tables. Similarly, the sections on “precautions”, “adverse effects”, “dosage and administration” and “overdosage” are organised by reference to numerous drug-specific issues rather than directly by reference to the subheadings identified in the Regulatory Guidelines.
290 The approved Arava PI is version 21 of a document that has existed in numerous different forms over time. Much of the controversy between the parties about the subsistence of copyright arises from the fact that the product information documents for Arava are the result of a collaborative effort by a number of persons relying on a wide range of source documents and involve numerous amendments over time.
291 Apotex admitted that it copied a substantial part of the approved Arava PI (that is, version 21) in creating the approved Apotex PI. Comparison between the approved Arava PI and the approved Apotex PI shows minor differences only and supports a finding that, in effect, Apotex copied the whole of the approved Arava PI in creating the approved Apotex PI. Apotex also admitted that the approved Arava PI (and earlier versions of it) are each a “literary work” within the meaning of the Copyright Act. Apotex, however, challenged both the originality and the authorship of the approved Arava PI and of the earlier versions of it on which Sanofi-Aventis relied in respect of its case on infringement.
292 Sanofi-Aventis did not rely upon the approved Arava PI to establish its case of copyright infringement. Sanofi-Aventis relied on three earlier versions of the approved Arava PI, known as version 19 (the immediate predecessor to version 21), version B (an earlier version) and the SPC (a European version of a document entitled “summary of product characteristics” earlier in time yet again).
293 Dr Pierre-Emile Bruand, Marketing Manager (Internal Medicine) for Sanofi-Aventis Australia, was involved in the development of each version of the PI for Arava in Australia. Dr Bruand holds a Doctor of Pharmacy degree and a postgraduate qualification in Management (Pharmaceutical Industry). Dr Bruand explained that:
In my experience, there are a great many ways in which the content of a PI can be expressed and arranged. Creating a PI which is expressed and arranged in the most appropriate way involves the exercise of considerable skill, judgment and knowledge. For example, in drafting a PI, it is necessary to:
(a) draw on knowledge of the pharmaceutical product, the treatment of the disease for which it is indicated and the needs of clinicians in relation to such treatment;
(b) consider how to present the information in a way that is accurate, clear and relevant to Australian healthcare professionals;
(c) ensure that a balanced account of the potential benefits and risks associated with the pharmaceutical product is provided;
(d) consider how to express the information in a way which assists healthcare professionals to understand the place that the pharmaceutical has in the treatment of the particular indication and how it compares to other treatments; and
(e) consider the possible use of elements such as text, tables and/or graphs as ways of best communicating the key messages in respect of the above matters.
294 Dr Bruand consistently rejected the idea that the creation of the different versions of the Arava PI involved nothing more than a “cut and paste” exercise. He said:
I mean, this is something that I feel very strongly about and took a lot of work. You are describing it as just a copy and pasting job, and it was not. There was a lot of work of discussion and research to decide on which graphs were the most appropriate to express the results of the pivotal trials.
295 Ms Deane, a former employee of Sanofi-Aventis Australia, was involved in the creation of a version of the Arava PI known as version A (the immediate predecessor to version B, on which, as noted above, Sanofi-Aventis relied). Ms Deane holds a Bachelor of Science (Honours) degree in Pharmacology. Ms Deane said that:
In 1998, the process of writing an Australian PI within HMR Australia [the corporate predecessor of Sanofi-Aventis Australia] involved reviewing material, including [the European Dossier and United States Prescribing Information for the relevant product], and determining which of the information contained in that material needed to be presented in the document and how, bearing in mind the purpose of an Australian PI. There are many different ways to present such information and, in writing Australian PIs at HMR Australia, I exercised judgment as to how best to convey the information in a manner that could be readily understood by healthcare professionals. Importantly, an Australian PI has to properly inform without overstating or understating the benefits and risks of the product.
The TGA publishes guidelines concerning Australian PIs. In 1998, these were found in the “Australian Guidelines for the Registration of Drugs” (AGRD)… The AGRD did not… give guidance as to how the information in an Australian PI was to be expressed or arranged under a particular heading.
296 Dr Alfons Fontaine was the head of the global labelling group of a company the corporate successor of which is Sanofi-Aventis Deutschland. Dr Fontaine holds a Doctor of Medicine with postgraduate qualifications in anaesthesiology and emergency medicine. While head of the global labelling group, Dr Fontaine supervised the master labelling process of all products including Arava. Master labelling is the name given to the process by which a pharmaceutical company creates product information for its own purposes. According to Dr Fontaine, master labelling involves not merely summarising or distilling research data but also, in part, reaching conclusions based on those data. Dr Fontaine said:
The creators of Master Labeling [sic] must exercise judgment in:
(a) selecting appropriate data from pre-clinical and clinical studies to be included;
(b) placing their interpretation on the available data;
(c) designing statements and advice for healthcare professionals regarding the product’s use; and
(d) deciding upon the most appropriate way to present such statements and advice.
It is an essential part of the skill of the creators of Master Labeling to communicate such information in language that will achieve the appropriate level of “alertedness” in the document’s readers. The language used must appropriately reflect the relative importance of the issue being addressed.
297 Having regard to this evidence (which I accept) I am satisfied that, as Sanofi-Aventis put it, the “preparation of a PI… involves the exercise of considerable skill, judgment and knowledge by the author or authors.” To the extent that Apotex’s case depended on a contrary conclusion, by reason of either the heading structure suggested by the Regulatory Guidelines or the nature of the exercise involved in the preparation of a PI, it should not be accepted.
298 I also accept as accurate Sanofi-Aventis’s characterisation of each of the versions of the Arava PI in evidence as “a document in complete literary English, with sentences, paragraphs and the like” which “can be read from start to finish as a coherent and informative piece of prose.” As such, on their face, none of the versions of the Arava PI in evidence bears any resemblance to a mere compilation. Apotex appeared to accept this proposition, describing the Arava PI documents in closing submissions as being more akin to scientific articles than mere compilations.
299 The differences between versions 19 and 21 of the Arava PI are minor. They are identified in the following table. For present purposes there is no need to consider the references to versions 20 and 22, which relate to Arabloc, Sanofi-Aventis’s other leflunomide product. The PI documents for the two drugs (versions 19 and 21 for Arava and versions 20 and 22 for Arabloc) are the same but for the difference in name.
Arava Pl v 19 (“Arava”) / Arava Pl v 20 (“Arabloc”) | Arava Pl v 21 (“Arava”) / Arava Pl v 22 (“Arabloc”) |
NAME OF THE DRUG Leflunomide … | NAME OF THE Non-proprietary name Leflunomide Chemical Structure |
CAS: 75706-12-6 | CAS Number
|
PHARMACOLOGY Mechanism of action | PHARMACOLOGY
|
Carcinogenicity, mutagenicity and impairment of fertility |
|
Carcinogenicity | |
Immunosuppression … If evidence of bone marrow suppression occurs in a patient taking [ARAVA/ARABLOC] treatment with [ARAVA/ARABLOC] should be stopped and cholestyramine or charcoal should be used to reduce the plasma concentration of leflunomide (see Overdosage). | Immunosuppression … If evidence of bone marrow suppression occurs in a patient taking [ARAVA/ARABLOC] treatment with [ARAVA/ARABLOC] should be stopped and cholestyramine or charcoal should be used to reduce the plasma concentration of leflunomide (see OVERDOSAGE |
Skin reactions … As soon as skin and/or mucosal reactions are observed which raise the suspicion of such severe reactions, (Arava/ARABLOC] and any other possible associated medication must be discontinued, and cholestyramine or charcoal should be used immediately to reduce the plasma concentration of leflunomide (see Overdosage). … | Skin reactions … As soon as skin and/or mucosal reactions are observed which raise the suspicion of such severe reactions, (Arava/ARABLOC] and any other possible associated medication must be discontinued, and cholestyramine or charcoal should be used immediately to reduce the plasma concentration of leflunomide (see OVERDOSAGE |
Use in children |
|
ADVERSE REACTIONS | ADVERSE |
PRESENTATION … Blister: Aluminium / Aluminium blister. Bottle: HDPE-wide-necked bottle, 100mL with screw cap with inserted sealing ring and integrated desiccant container. STORAGE CONDITIONS Blister: Store in the original container. Store below 25ºC. Bottle: Keep the container tightly closed. Store below 25ºC. | PRESENTATION AND STORAGE CONDITIONS … Blister: Aluminium / Aluminium blister. Store in the original package. Store below 25ºC. Bottle: HDPE-wide-necked bottle, 100 mL with screw cap with inserted sealing ring and integrated desiccant container. Keep the container tightly closed. Store below 25ºC. NB. Arabloc packaging does not refer to the first paragraph (i.e. Blister pack) |
NAME AND ADDRESS OF SPONSOR Aventis Pharma Pty Limited ACN 008 558 807 27 Sirius Road Lane Cove NSW 2066 | NAME AND ADDRESS OF SPONSOR
|
300 Apotex did not copy the Arava PI version 19 in the sense that, in creating the approved Apotex PI, it did not have before it version 19. Instead, Apotex had before it and copied version 21. However, it is also apparent that the Arava PI version 19 is itself reproduced wholly (the changes being trivial) or substantially in version 21. In other words, leaving aside the issues of originality and authorship which Apotex disputed, the approved Apotex PI not only involves a reproduction of the whole or a substantial part of the Arava PI version 21 but also of version 19.
301 The same conclusion applies in respect of the Arava PI version B and the SPC. Considered both qualitatively and quantitatively, the text in the approved Apotex PI which appears in version B and the SPC shows that the approved Apotex PI involves a reproduction of at least a substantial part of each of version B and the SPC.
P4.2 The documents in more detail
302 Sanofi-Aventis summarised the status of the relevant documents leading up to version 21 of the Arava PI (which Apotex acknowledged copying). I accept that summary as reproduced (with certain amendments) below.
303 The DMDS: DMDS stands for “Development Master Data Sheet”. The DMDS was created in Europe during the early clinical phase of the development of leflunomide. It comprised a variety of information, including a combination of target statements (representing the elements of the desired product profile) and finalised statements supported by the outcome of completed studies and trials. Various versions of the DMDS were created between about 1994 and 1998. Sanofi-Aventis Deutschland and the third applicant (Aventisub II) are the joint owners of any copyright subsisting in the DMDS.
304 The SPC: SPC stands for “Summary of Product Characteristics” and is the European equivalent of a PI. Versions of the SPC for Arava were created in about 1997-98. These were generated from earlier documents that cannot now be located. Sanofi-Aventis Deutschland and Aventisub II are joint owners of any copyright subsisting in the Arava SPC, including in the version that is Exhibit ALF-12. That version is the last version of the Arava SPC before the Australian PIs were created.
305 The Arava PI version A: This was the first Australian version of the Arava PI. It was prepared in 1998 by Ms Deane, then an employee of Sanofi-Aventis Australia. It drew in particular upon the SPC and the United States prescribing information, as well as certain other documents. It was submitted to the TGA on 14 May 1998.
306 The Arava PI version B: Version B included amendments to Version A. The amendments arose from review of Version A by a team of employees of Sanofi-Aventis Australia referred to as the Arava Cross-Functional Team. Version B was submitted to the TGA on 29 April 1999.
307 The Arava PI versions 1 to 20: Version 1 was the first version of the Arava PI approved by the TGA. It contained some further amendments to Version B. The TGA first notified approval of the Arava PI on 28 September 1999. Versions 2 to 20 represent subsequent versions containing additional amendments, as approved by the TGA from time to time.
308 I also accept Sanofi-Aventis’s description of the process by which the various versions of the documents were created as incorporated in the following findings.
309 As to the DMDS and the SPC:
(1) Dr Fontaine convened a labelling working group to begin the development of master labelling for Arava.
(2) All the members of the Arava labelling working group were employees of the predecessor company to Sanofi-Aventis Deutschland.
(3) The group prepared the Arava master labelling text in DMDS format during the period 1994-1996, although no version of that document can now be located.
(4) The DMDS would have contained text based upon completed preclinical studies and would have included target statements prepared by members of the appropriate working group in accordance with the working method described by Dr Fontaine (see paragraphs 27 to 30 of his affidavit affirmed 31 August 2009).
(5) As a matter of some urgency the working group was required to restart the process of preparing a PI for Europe. The documents in evidence were prepared by using the existing master labelling text prepared over the previous three years as a starting-point, although until late 1997 the document existed only in SPC format rather than in DMDS format.
(6) Further consideration of the draft European SPC took place in 1997-1998 and textual changes were discussed among the working group, which included Dr Fontaine, Dr Horn and Ms von Spechthof, and were made by members of the working group. That process culminated in the creation of the SPC (Exhibit ALF-12) in early 1998.
310 As to the Arava PI version A, and as Ms Deane explained, in 1998 a key priority was to gain regulatory approval for Arava in Australia. The Arava Cross-Functional Team was established to guide the launch and marketing of Arava in Australia, including obtaining regulatory approvals. All members of this team were employees of the corporate predecessor of Sanofi-Aventis Australia. Ms Deane prepared the draft Australian PI for Arava as part of the application for regulatory approval for Arava. Ms Deane could not recall the specific documents to which she referred in preparing the draft PI for Arava, but gave evidence that she typically would have referred to the US PI and to the European dossier for the product, containing the SPC and (in the case of Arava) the clinical expert report and reports of the clinical trials of Arava including study US301 and study HWA486/2 F01. From these sources Ms Deane determined what should be included in the draft PI and “how this information should be expressed and arranged under the headings prescribed” by the Regulatory Guidelines. In an email of 4 April 1998, Ms Deane noted to a European colleague, Dr Csech, that she had “prepared a draft version of the Product Information for Australia based on the SPC but with the addition of a clinical trials section.” In a later email to Dr Fontaine of 22 April 2008, Ms Deane said that the draft PI she had prepared was:
based on the European SPC although I have included some comments from the draft US product information… [t]he only ‘new’ section is the ‘Clinical Trials’ section which has recently been required by the TGA. The content of this section has been taken from either the US draft PI or the results section of the clinical study reports.
311 Ms Deane described her work in preparing the draft Arava PI, particularly the section on clinical trials, as involving the objective of conveying “accurate, concise and balanced information concerning Arava”. After Ms Deane had prepared a draft of the Arava PI she discussed its contents with the Arava Cross-Functional Team. Once this team had agreed on the text of the draft Arava PI, Ms Deane forwarded the draft to Dr Fontaine and Dr von Spechthof for review and comment. They approved the content and the draft Arava PI was submitted to the TGA on 14 May 2008 as part of the Arava dossier. The version prepared by Ms Deane and settled according to this process is the Arava PI version A. The text of version A was superseded by subsequent editions of the Arava PI, including version B (on which Sanofi-Aventis relied). Little or nothing of Ms Deane’s work remained in the subsequent editions of the document.
312 As to the Arava PI version B, and as Dr Bruand said, after submission of the Arava dossier to the TGA on 14 May 1998 he and other members of the Arava Cross-Functional Team continued to review the dossier, particularly the sections that described the phase II dose-ranging study and each of the clinical trials. Again, all members of this team were employees of the corporate predecessor to Sanofi-Aventis Australia. The dossier comprised some four to five volumes of material. As a consequence of this review and discussions with rheumatologists, Dr Bruand and his colleagues in the Arava Cross-Functional Team “gained a better understanding of rheumatoid arthritis and the benefits and limitations of Arava in its management.” The Arava Cross-Functional Team thus decided that the Arava PI version A needed to be updated to include material from the clinical trials of Arava that addressed “key issues facing rheumatologists in the management of patients with rheumatoid arthritis.” Dr Bruand and the Arava Cross-Functional Team thereafter prepared the Arava PI version B, which was submitted to the TGA on 29 April 1999. In preparing version B, the Arava Cross-Functional Team sent documents to the Arava global labelling team and to the Arava Advisory Board for review and comment. Whilst this process resulted in the making of suggestions, “ultimately, the members of the Arava [Cross-Functional Team]… determined whether these suggestions would be accepted and, if so, how the document would be amended to incorporate the suggestions.” During the preparation of version B, the TGA also made comments including by way of seeking clarifications or making suggestions about the text. Dr Bruand and the other members of the Arava Cross-Functional Team considered these comments “in the light of [their] knowledge concerning Arava and its clinical benefits and limitations”. On some occasions the Arava Cross-Functional Team accepted the comment and the suggested text. On other occasions the team did not and persuaded the TGA that the point should not be included in the Arava PI. In all cases, it was a matter for the Arava Cross-Functional Team, including Dr Bruand as its leader, to “determine how to address the points raised by the TGA”.
313 In respect of subsequent versions of the Arava PI, the same drafting process as set out above for the Arava PI version B was implemented. As information was obtained from broader experience with the use of Arava in patients, that information was “progressively incorporated” into the Arava PI through the process described above. Including Dr Bruand the Arava Cross-Functional Team consisted, at different times, of a total of 23 employees of Sanofi-Aventis Australia, each of whom lived in Australia when a member of the team.
314 As to the Arava PI version 19, the publication in around 2003 of the TOPAS study, which related to the safety and efficacy of leflunomide in treating PsA, prompted amendments to the PI to include an indication for that disease. Reena Patel, an employee of Sanofi-Aventis Australia and member of the Arava Cross-Functional Team from about August 2003 onwards, prepared amendments to the Arava PI in respect of the sections dealing with indications, contraindications, clinical trials, and dosage and administration. Subsequently, further amendments were made by Ms Patel and other members of the Arava Cross-Functional Team. These amendments took into account comments received from Sanofi-Aventis’s global labelling personnel and the TGA, and were made in a manner generally consistent with that implemented in respect of the earlier versions of the Arava PI. Ms Patel undertook her work under Dr Bruand’s supervision and, in so doing, drew on a number of documents including the most recent versions of the SPC, the US PI and the Arava Master Data Sheet (by that time, renamed the Arava Corporate Data Sheet). All of the amendments were reviewed and approved by Dr Bruand.
315 Insofar as the Arava PI versions A and B and all versions thereafter are concerned, their authors were either resident in Australia in their capacity as members of the Arava Cross-Functional Team or resident in country party to one or more relevant international conventions in their capacity as members of the Sanofi-Aventis global labelling team (see ss 32 and 184 of the Copyright Act and the Copyright (International Protection) Regulations 1969 (Cth)). All authors were also either employed by Sanofi-Aventis Australia or Sanofi-Aventis Deutschland (or a company to which Sanofi-Aventis Deutschland or Sanofi-Aventis Australia succeeded). Further, all versions of the Arava PI approved by the TGA (including versions A and B, as well as versions 19 and 21) were first published in Australia by distribution and supply to various healthcare professionals.
P5 Competing submissions on copyright infringement
P5.1 Sanofi-Aventis’s submissions
316 Sanofi-Aventis summarised its case on infringement of copyright in the following paragraph:
A short statement of Apotex’s position posits a straightforward way in which the copyright case can be determined in sanofi-aventis’ favour. Apotex admits that the pleaded copyright works are literary works, but does not admit their originality or authorship. Further, Apotex admits that it has reproduced the whole or a substantial part of one or more of the versions of the Arava PI. The precise content of that admission may need to be explored but it follows that, once any version of the PI in which any degree of originality is established is shown to have been copied in its entirety (or practically its entirety), infringement must follow. Here, the evidence will clearly establish original skill and labour in the production of Version 19/20, either as it embodies earlier versions or considered alone, by authors in the employ of sanofi-aventis Australia, which will be sufficient.
317 Sanofi-Aventis submitted that Apotex’s admitted copying of the Arava PI version 21 to create the approved Apotex PI also involved reproduction (albeit indirectly) of the whole or a substantial part of the Arava PI version 19. Sanofi-Aventis described as “miniscule” both those parts of version 21 not reproduced in the approved Apotex PI, and the differences between versions 19 and 21 of the Arava PI. Further, according to Sanofi-Aventis, in respect of the Arava PI version B:
considering what part of [version B] continues to appear… in the [approved] Apotex PI, the amount of text that continues to appear there – the source of which can only be direct copying from the Arava PI Version 21, and through that indirectly [from] Version B… – needs only to be looked at, read and appreciated to reach the conclusion that it is both [quantitatively] and, more importantly, qualitatively a substantial part of Version B.
318 In respect of the SPC, Sanofi-Aventis said:
considering the European SPC… and applying the same approach, again the amount of text that continues to appear there – also by indirect copying via Version 21 – also yields the conclusion that it is both [quantitatively] and, more importantly, qualitatively a substantial part of the SPC.
319 Sanofi-Aventis described Apotex’s apparent suggestion that its copying of the Arava PI version 21 did not involve reproduction of the earlier versions of the relevant documents (the Arava PI version 19, the Arava PI version B and the SPC) as “novel”, indirect copying being “an orthodox, usual and incontrovertible method of copyright infringement”. By “indirect copying” I understand Sanofi-Aventis to mean copying from sources other than the works said to have been infringed (in this case, copying the Arava PI version 19, the Arava PI version B and the SPC via the admitted copying of the Arava PI version 21). In such a case the question remains whether the work in suit has been copied in whole or as to a substantial part even if via an intermediate source. This follows from the concept of “reproduction”, which Gibbs CJ described in these terms in SW Hart & Co Pty Ltd v Edwards Hot Water Systems (1985) 159 CLR 466; [1985] HCA 59 at 472:
The notion of reproduction, for the purposes of copyright law, involves two elements – resemblance to, and actual use of, the copyright work, or, to adopt the words which appear in the judgment of Willmer LJ in Francis Day & Hunter Ltd v Bron [1963] Ch 587 at 614, “a sufficient degree of objective similarity between the two works” and “some causal connection between the plaintiffs’ and the defendants’ work”. Lord Reid said in Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 WLR 273 at 276; [1964] 1 All ER 465 at 469:
Broadly, reproduction means copying, and does not include cases where an author or compiler produces a substantially similar result by independent work without copying. And, if he does copy, the question whether he has copied a substantial part depends much more on the quality than on the quantity of what he has taken.
(See also [1964] 1 WLR, at pp 283, 288 and 293; [1964] 1 All ER, at pp 473, 477 and 481.) In the same case, Lord Evershed said [at [1964] 1 WLR p 283; [1964] 1 All ER p 473], that “what amounts in any case to substantial reproduction… cannot be defined in precise terms but must be a matter of fact and degree”.
320 Sanofi-Aventis also challenged Apotex’s reliance on the recent decisions in IceTV Pty Ltd v Nine Network Australia Pty Ltd (2009) 239 CLR 458; [2009] HCA 14 (IceTV) and Telstra Corp Ltd v Phone Directories Co Pty Ltd (2010) 273 ALR 725; [2010] FCAFC 149 (Telstra v Phone Directories). As Sanofi-Aventis put it:
A work that is frequently, if annually, revised is nonetheless a copyright work. To hold otherwise would be to deny copyright in works that fall squarely within copyright’s purview. As the evidence has shown … the Arava PI has been published in a series of editions. The changes between editions have sometimes been minimal; sometimes been dictated by external factors (such as changes in the headings required by the TGA); and sometimes been substantial. Adopting again the analogy of a law textbook (or for that matter at an accounting textbook, or a medical textbook), it may over time go through many editions or reprints, and the opportunity may be taken (even frequently) to make small corrections, or to attend to matters of reorganisation. Also, periodically, there may be an extensive re-write. Apotex appears to suggest that the occurrence of many editions, and the applicants’ reliance on them, somehow weakens the force of the applicants’ copyright in the Arava PI. It does not.
321 According to Apotex, the decisions in IceTV and Telstra v Phone Directories “raise the bar” for establishing copyright. Apotex described these decisions as emphasising the “requirement for unity of or relationship between the work and the author” in the sense that:
The work referred to in s 32 of the [Copyright Act] must emanate from the author; the efforts of the particular author (or joint authors, if the definition in s 10(1) is satisfied) are what constitutes the originality that is the pre-condition for subsistence of copyright.
322 Section 32(2) of the Copyright Act provides that copyright subsists in an original literary, dramatic, musical or artistic work if, relevantly, the first publication of the work took place in Australia and the author of the work was a qualified person (as defined by s 32(4) and extended by s 184 to countries party to certain intellectual property conventions in the circumstances specified) at the time when the work was first published. As noted, all versions of the Arava PI approved by the TGA (including versions A and B, as well as versions 19 and 21) were first published in Australia by distribution and supply to various healthcare professionals, and all authors of those versions were persons employed by Sanofi-Aventis or Sanofi-Aventis Deutschland who were resident in Australia or a convention country at the time of first publication.
323 Section 10 of the Copyright Act defines “work of joint authorship” to mean:
a work that has been produced by the collaboration of two or more authors and in which the contribution of each author is not separate from the contribution of the other author or the contributions of the other authors.
324 Section 78 of the Copyright Act provides that:
Subject to this Division, a reference in this Act to the author of a work shall, unless otherwise expressly provided by this Act, be read, in relation to a work of joint authorship, as a reference to all the authors of the work.
325 By operation of s 35(1) of the Copyright Act, the owner of copyright subsisting in a work is the author of the work. However, s 35(6) provides that:
Where a literary, dramatic or artistic work to which neither of the last two preceding subsections applies, or a musical work, is made by the author in pursuance of the terms of his or her employment by another person under a contract of service or apprenticeship, that other person is the owner of any copyright subsisting in the work by virtue of this Part.
326 Despite these provisions, Apotex submitted that version 19 is neither the original work of a sole author nor a work of joint authorship. First, Ms Patel cannot be the author of the Arava PI version 19 because the bulk of version 19 has been copied from earlier versions of the Arava PI (Ms Patel’s contribution to version 19 amounting to just over one page and being, in any event, derived from other sources such as the US PI). In other words, Apotex contended that version 19 cannot be a original literary work with a sole author because it fails the tests of originality and authorship. Second, version 19 cannot be a work of joint authorship between Ms Patel and others because the authors of the remaining original text (amounting to some three pages, including Ms Patel’s contribution) are not identified beyond the table provided by Dr Bruand (which, as noted, identifies some 22 other employees of Sanofi-Aventis Australia who were part of the Arava Cross-Functional Team). Apotex’s position was that identification of all joint authors is required in order for the definition of a work of joint authorship to be satisfied. Moreover, according to Apotex, these other unidentified authors “did not collaborate in the sense required for joint authorship”, their contributions having been independent rather than collaborative. Thus, as “[t]here is no middle category” between works of joint authorship and works with a sole author, Apotex submitted that version 19 is not an original literary work in which copyright subsists.
327 Apotex also made the following points in support of its case: – (i) the question of the subsistence of copyright in any version of the Arava PI depends on the degree of skill and labour of the alleged authors so far as is manifested in the “particular form of expression” of the version being considered (citing IceTV at [49] and [52]), (ii) the overall structure of version 19 was dictated by the TGA, and what the alleged authors have done is “cut and paste paragraphs, sentences and tables from prior documents”, (iii) as in IceTV at [33]-[44], [53]-[54] and [167]-[168], anterior work that does not have sufficient connection with the particular form of expression is to be set aside (see also Telstra v Phone Directories at [90]-[92], [101], [104], [108], [119] and [140]), and (iv) thus, the originality of version 19 is to be considered putting to one side the anterior decision to include PsA as an indication as well as decisions to include sentences recommended by the TGA relating to safety. Applying these considerations, said Apotex, led to the conclusion that the relevant skill and labour:
can only be the insertion at various parts of version 19 of sentences, paragraphs or tables taken from elsewhere, perhaps with a linking word or two or a sentence or two contributed by one of a number of Sanofi employees, including Ms. Patel. Even if this does, contrary to the Respondent’s submission, constitute the work of joint authors, the contribution to the overall form of expression of version 19 is so trivial as not to make that work an original literary work.
328 In respect of the question whether Apotex had copied a substantial part of any of the three works on which Sanofi-Aventis relied (the Arava PI version 19, the Arava PI version B and the SPC), Apotex noted the observation in IceTV at [37] (citing Lord Pearce in Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 All ER 465) that the “reproduction of a part which by itself has no originality will not normally be a substantial part of the copyright [work] and therefore will not be protected”. According to Apotex:
only a small part of what is reproduced is itself original. As submitted, the order and arrangement is dictated at an overall level by the [Regulatory Guidelines], and intra-heading by predecessor documents. The skill and labour of expression of what remains and in the respective versions is not sufficient to amount to a substantial part.
329 Apotex made the same points in respect of the Arava PI version B and the SPC and their source documents, the DMDS and the Arava PI version A. As to the DMDS, Apotex noted that:
[t]he evidence does not support the conclusion that Dr Fontaine was the sole author of the DMDS and indeed he does not assert that he was. The DMDS is therefore a work of joint authorship but the other alleged authors are not identified and the manner of their collaboration (as required by the definition of such a work in s 10) is not explained. The general evidence of collaboration is of no assistance because the question of originality falls to be determined by analysis of the “authorial contribution” to particular text. This evidence does not permit this.
330 As to the SPC:
evidence as to the preparation of the SPC is given by Dr Fontaine and suffers the same limitations as the evidence with respect to the DMDS. The SPC has no originality over the DMDS.
331 As to version A, the “evidence demonstrates that Version A, except for the Clinical Trials section, was almost completely copied from the SPC.” As to the clinical trials section, the source was the US PI. Analysis of the source shows that Ms Deane’s own effort consisted in rewriting two sentences which, said Apotex, is not a sufficient authorial contribution to confer originality.
332 IceTV involved a claim of infringement of copyright in a weekly broadcasting schedule containing time, title and additional information about television programmes. The subsistence of copyright in the weekly schedule was not in dispute (unlike the present case). The alleged infringing work was an electronic television guide containing time and title information (the IceGuide). The joint judgment of French CJ, Crennan and Kiefel JJ does emphasise the importance of the concept of authorship to copyright protection (at [22], [24]). It also reinforces the propositions that: – (i) copyright protects the particular form of expression of a work rather than the facts or information it contains (at [28]), (ii) in considering whether a substantial part of a copyright work has been reproduced the quality of what has been taken is critical, not merely the extent of the copying (at [30]), (iii) more specifically, the originality of the part copied is essential to its quality (at [32]), (iv) originality requires that the work originated with the author in the sense that the work required “some independent intellectual effort” rather than being merely a copy of another work (at [33]), (v) thus, the “degree of originality in the expression of the part of the work reproduced” is relevant to its substantiality (at [40]), and (vi) in contrast, “[r]ewarding skill and labour in respect of compilations without any real consideration of the productive effort directed to coming up with a particular form of expression can lead to error” (at [52]).
333 In applying these principles to the facts at hand, French CJ, Crennan and Kiefel JJ accepted that the weekly schedule as a whole involved “orderly arrangement of its various elements” and that “the evidence showed choices were made about what programmes were included or excluded.” Thus, “[a]s a whole, it [was] an original (i.e. not copied) collocation of both information and creative material” (at [41]). However, the time and title information in respect of each programme was held to be “not a form of expression which require[d] particular mental effort or exertion”, and the “way in which the information [could] be conveyed [was] very limited”. Hence, the time and title information lacked the “requisite originality… for the part to constitute a substantial part” (at [42]), with the form of the expression of the time and title information being “essentially dictated” by the “nature of that information” (at [54]). The time and title information in question consisted of the first two columns of a table in which entries were made such as “06.00 MAKE WAY FOR NODDY Policeman for a day” (see the table at [118]).
334 Gummow, Hayne and Heydon JJ adopted a similar approach to the requirements of authorship and originality (at [95]-[98]). At [99] their Honours said:
Where a literary work is brought into such existence by the efforts of more than one individual, it will be a question of fact and degree which one or more of them have expended sufficient effort of a literary nature to be considered an author of that work within the meaning of the [Copyright] Act. If the work be protected as a “compilation”, the author or authors will be those who gather or organise the collection of material and who select, order or arrange its fixation in material form. May there be joint authors of the one original work, rather than several authors each of a distinct work?
335 By reference to the definition of “work of joint authorship” in s 10(1), this question was answered in the affirmative. However, as their Honours also said at [119], “[i]t is not readily apparent that any one or more of the items treated above as ‘title information’ (column 2) would qualify as an original literary work by itself. The same must be so of the time information of column 1. The synopses in column 5 may have had that character, but they were not reproduced in the IceGuide.” Hence Gummow, Hayne and Heydon JJ accepted the submission that, for the purpose of determining whether a substantial part of the weekly schedule had been reproduced, “the originality of the compilation being the Weekly Schedule lay not in the provision of time and title information, but in the selection and presentation of that information together with additional programme information and synopses, to produce a composite whole” (at [152]).
336 Telstra v Phone Directories involved the yellow and white pages telephone directories. It was common ground that the form of the directories was the result of an automated computer programme (at [4]). In his reasons Keane CJ observed (at [57]) that:
it may be accepted, for the sake of argument, that there is force in the appellants’ criticism of the trial judge’s insistence on the identification of all the “authors”. One may accept that identification by name of each and every author is not necessary in order to make out a claim that copyright subsists under s 32(2)(c): what is necessary, however, is that it be shown that the work in question originates from an individual author or authors.
337 At [58] his Honour also said:
It may also be accepted that the level of intellectual effort necessary to produce an original literary work is not required to rise to the level of “creativity” or “inventiveness”. In determining whether a literary work is original, the focus of consideration is not upon creativity or novelty, but upon the origin of the work in some intellectual effort of the author.
338 At [92] Keane CJ accepted that the directories were not works of joint authorship as follows:
The contributions of individuals discussed in [the primary judge’s] findings may have been precursors to the compilation of the directories but they were not part of the actual compilation. Moreover, the work of these individuals was not collaborative. It was, no doubt, organised to facilitate the production of the directories but this organisation was not collaboration of the kind contemplated by the definition of joint authorship, and the contribution of each of the groups of individuals referred to earlier was made quite separately.
339 Perram J at [127] also said that:
The appellants submitted that the learned primary judge had erred by holding that they failed because they had not identified each individual author. I do not believe her Honour made such a finding. To the contrary, her Honour said “[i]f an author or authors… cannot be identified at all, in contradistinction to a situation where the author’s or authors’ exact identity cannot be identified, copyright cannot subsist”: Telstra Corporation Ltd v Phone Directories Co Pty Ltd (2010) 264 ALR 617 at [37]. I do not read her Honour, therefore, as having required that the appellants literally name the authors but only that they demonstrate that the authors existed. If I am wrong in my reading of the primary judge’s reasons, however, I would not accept that it is necessary to identify each author. All the [Copyright] Act requires in the case of s 32(2) is that there be an original work first published in Australia. The necessity for there to be an original work carries with it the necessity for there to be an author or authors but all that needs to be demonstrated is that such persons exist. Their identification is not legally required by the concept of an original work. The statement by Gummow, Hayne and Heydon JJ in IceTV that “[t]o proceed without identifying the work in suit and without informing the inquiry by identifying the author and the relevant time of making or first publication, may cause the formulation of the issues presented to the court to go awry” (at [105]) is, I think, a counsel of wisdom rather than a legal stipulation.
340 Certain other decisions should be noted.
341 In Milwell Pty Ltd v Olympic Amusements Pty Ltd (1999) 85 FCR 436; [1999] FCA 63 (Milwell), the Full Court of the Federal Court agreed with the trial judge that the works in question (prize scales for poker machine games) were works of joint authorship. In so doing the Full Court, at [42], said:
The evidence, it must be said, does not expressly or with clarity identify the precise person, place or time when each of the prize scales was first written down, but plainly each was brought into existence and on the evidence no-one other than the mathematicians or employees of Olympic could have been the authors. In the case of Wildcard 5 the evidence established the collaboration of employees of Olympic with Dr Brown in settling on the numbers to be included in the prize scale. Those numbers, and the prize scale as a whole, reflected the work and skill contributed from both sources, and it was not critical to know whether it was an employee of Olympic who ultimately acted as the scribe to record the result of their collaboration. In the case of Wildcard 14, however, the evidence leaves little room for doubt that it was employees from Olympic who first reduced it to a material form.
342 By way of contrast, in Primary Health Care Ltd v Commissioner of Taxation (2010) 186 FCR 301; [2010] FCA 419 (Primary Health Care) Stone J held medical records not to be works of joint authorship as each of the individual entries in the records was separate and distinct rather than the result of collaboration. As her Honour put it (at [122]):
Although in some cases the consultation notes and history of a patient where entries [are] made by more than one doctor, could be seen as forming a continuous narrative with the patient as its subject, the individual entries are separate and distinct and, on the evidence, not the result of collaboration between the doctors. The description of the process given by the doctors both in their affidavit evidence and in cross-examination indicates that each entry in the consultation notes is created by the doctor using his or her individual expertise and intellectual effort to form and record an opinion as to the patient’s condition and treatment. Whether or not the individual doctors collaborated in their care of a patient, there is no evidence of collaboration in the production of the patient records.
343 Jessup J considered related issues in Acohs Pty Ltd v Ucorp Pty Ltd (2010) 86 IPR 492; [2010] FCA 577 (Acohs). The works in question were electronic information sheets (material safety data sheets or MSDSs) in respect of hazardous substances and dangerous goods. In dealing with the question of works of joint authorship his Honour remarked as follows (at [56]):
Counsel for Acohs pressed for an affirmative answer to be given to these questions by reference to what were said to be analogous situations in which I ought to regard it as self-evident that joint authorship was involved, such as encyclopaedias, later editions of a book prepared by someone other than the original author, directories published by a company in which a large team of contributors was involved, and the musicals of Gilbert and Sullivan. The point was that a work of joint authorship might well be created by two or more people, each of whom contributed a particular component of the ultimate work, and none of whom need have any appreciation – or even awareness – of the detailed contributions of his or her fellows. I am, however, disposed to think that these kinds of analogies are a distraction from the questions which arise under the definition of “work of joint authorship”, and, in any event, have problems of their own. In the case of an encyclopaedia, it is not at all obvious that a single work, rather than a collection of separate works, is involved. In the case of a directory prepared by a team in a company, the facts will not always sustain the conclusion that a work of joint authorship was thereby created: see Telstra Corporation Ltd v Phone Directories Co Pty Ltd [2010] FCA 44 at [333]-[338]. In the case of a musical in which the words were written by one author and the music by another, it may be accepted that collaboration may have been involved, but the question whether the contribution of one author was separate from that of the other may be much more problematic: see, in the context of legislation expressed quite differently, Redwood Music Ltd v B Feldman & Co Ltd [1979] RPC 385, 403.
344 At [59]-[60] Jessup J explained why the works in suit were not protected by copyright:
[59] In short, the respective contributions of the programmers and the authors/transcribers to the source code for a particular MSDS were separate each from the other along the axes of communication, time, expertise and content. Only by a quite artificial straining of the language to meet the needs of Acohs in the present litigation might those contributions be regarded as a matter of collaboration in the statutory sense. I do not consider that the source code for any of the MSDSs on which Acohs sues was a work of joint authorship.
[60] Since the source code the subject of para 8(a) of Acohs’ pleading was not the work of any one human author, and was not a work of joint authorship, that code cannot be regarded as an original literary work within the meaning of the Copyright Act.
345 At [62] his Honour also said that:
under s 35(6), for copyright in a work of joint authorship to vest in an employer, it is necessary that all the authors be employees of that employer. In the context of the present case, even if the Visual Basic programmers and the (external) authors were jointly the authors of the source code for an MSDS, Acohs, not being the employer of all of them, would not own any corresponding copyright.
346 However, it will be apparent that a less strict approach was taken to this issue by the Full Court in Milwell, discussed above.
347 The decision in Fairfax Media Publications Pty Ltd v Reed International Books Australia Pty Ltd (2010) 189 FCR 109; [2010] FCA 984 should also be noted. The question before Bennett J was whether newspaper headlines, newspaper articles including their headlines, the compilation of all articles within an edition of a newspaper (“Article Compilations”), and/or an entire edition of a newspaper (“Edition Works”), attracted copyright protection. At [89] her Honour observed that she was “not persuaded that, where evidence establishes a work of joint authorship, the authors are identified as Fairfax employees holding specified job descriptions and the skill and labour involved in those job descriptions are identified, it is fatal to a claim of copyright that each person making contributions to the contended works is not identified”; however, it was unnecessary for that issue to be resolved one way or another. At [104]-[105] Bennett J held that:
[104] The evidence establishes that the Article Compilations and the Edition Works in the June edition and the November edition are original in the sense that these compilations originated from the authors of the work, as opposed to being copied, and also have the character of being produced through the exercise of considerable skill, judgment, knowledge, labour and expense involved in gathering, selecting and arranging the material included in the compilation (Desktop Marketing Systems Pty Ltd v Telstra Corporation Ltd (2002) 119 FCR 491 at [160], [409]). Unlike the expression and arrangement of the time and title information in IceTV, which was obvious, prosaic and essentially dictated by the nature of the information, the expression and arrangement of the material in the Article Compilation and the Edition Work required particular mental effort or exertion by the joint authors (IceTV at [42]-[43]).
[105] Assuming that it is not necessary to identify each and every Fairfax employee who were joint authors of the compilations by name rather than by job description, copyright subsists in the Article Compilation and the Edition Work as original literary works and Fairfax owns the copyright in these works.
348 It will be apparent from the above summaries of the decisions on which Apotex placed particular emphasis (IceTV and Telstra v Phone Directories) that the works in suit in those cases bear no resemblance to the product information documents relevant to the present case. Other factors relevant to those decisions must also be considered. In IceTV the weekly schedule was admitted to be protected by copyright. The issue was whether the IceGuide reproduced a substantial part of the weekly schedule by copying the time and title information from that document. In dealing with the question of the quality of the parts of the weekly schedule constituting time and title information and the degree of intellectual effort involved in their expression, the judgments expose the relevance of the limited ways in which the information, by its very nature, could be expressed. The same conclusion cannot be drawn about product information documents. While the Regulatory Guidelines prescribe the general structure of PIs, it is plain from the evidence that the way in which the information if presented – that is, the particular form of expression used to convey the information – is very much at large. Moreover, it is plain that the information selected to be part of PIs (within the very general confines established by the Regulatory Guidelines), and the form in which that information is expressed, is the result of significant intellectual effort on the part of the authors of such documents. Apotex’s submission that what was involved in the production of the Arava works was merely a “cut and paste” job from other documents is untenable. The conclusions which the evidence in this case compels are to the contrary.
349 The evidence in the present case establishes that:
(1) The information in a product information document may be expressed in a multiplicity (indeed, an infinite) number of ways, subject only to the general structure and content requirements of the Regulatory Guidelines and the need for ultimate TGA approval.
(2) Significant intellectual skill and knowledge is required to write a product information document. Authors frequently appear to have specialised qualifications in the medical or pharmacological fields and substantial experience in both analysing the vast amounts of information available about a drug by the stage a product information document comes to be prepared, and in dealing with regulatory authorities.
(3) Consistent with these general observations, the principal authors of the product information documents in this case are Dr Bruand (who contributed to and supervised the production of all versions of the Arava PI in Australia) who holds a Doctor of Pharmacy and a postgraduate qualification in Management (Pharmaceutical Industry); Ms Deane (who prepared the Arava PI version A) who holds a Bachelor of Science (Honours) degree in Pharmacology; and Dr Fontaine (the head of the global labelling group which created the DMDS and SPC) who holds a Doctor of Medicine with postgraduate qualifications in emergency medicine and anaesthesiology.
(4) Dr Bruand, Ms Deane and Dr Fontaine each explained the significant knowledge, skill and effort brought to bear upon the preparation of the relevant product information document(s), which included not merely selection of relevant material from a vast array of available information, but also its interpretation, arrangement and presentation so as to best convey a balanced statement about the drug’s risks and benefits.
350 This is the factual context in which the reasoning in IceTV must be considered and applied. It is apparent that the preparation of a product information document is a form of expression which requires a considerable degree of mental effort and exertion. The information available for inclusion is vast, the selection of information complex, and the interpretation, arrangement and presentation of the selected information a matter of real judgment and skill. Unlike the form of expression of the time and title information in IceTV, it cannot be said that the form of expression of the ideas in a product information document is dictated by the nature of the information. Nor, as the exercise of comparison of the Regulatory Guidelines and (for example) version 21 of the Arava PI carried out above discloses, is the form of expression dictated by those Guidelines or by the TGA. The Regulatory Guidelines specify a series of headings establishing topics which must be addressed. They leave to the authors of the PI a wide scope for the selection, interpretation, arrangement and expression of information. The TGA is the approving authority and, as such, makes suggestions about content (including the inclusion of particular sentences relating, for example, to safety issues), but the final decision on the content and its arrangement is that of the people preparing the document.
351 If there is any meaningful analogy capable of being drawn between the circumstances of the present case and those of IceTV, it is to be found in the High Court’s acceptance of the agreed position that copyright subsisted in the weekly schedule. French, Crennan and Kiefel JJ described the weekly schedule as an original (in the sense of not copied) document by reason of the orderly arrangement and selection process that its expression represented (at [41]). Gummow, Heydon and Hayne JJ noted that a single column of that document, column 5 (containing a synopses of the programmes), might itself be an original literary work but was not reproduced (at [119]). On this basis the creative process described by Dr Fontaine, Dr Bruand and Ms Deane as involved in the preparation of the Arava works cannot be dismissed as mere copying from other sources such as the US PI or earlier iterations of the Arava works. As Ms Deane said, when preparing version A, she sat surrounded by folders, reviewed all of the information, applied her expertise in understanding clinical trials and pharmacological reports, and thereby exercised her judgment in deciding what to include and exclude and how to present and convey the information “in a manner that could be readily understood by healthcare professionals” and “without overstating or understating the benefits and risks of the product”. From Dr Bruand’s evidence it is apparent that the same process was involved in each major review of the Arava PI. On this basis it cannot be said that the works in suit – the SPC, the Arava PI version B and the Arava PI version 19 – are mere copies of other documents. Moreover, the form of expression of the information is such that Apotex’s submissions about the need to put aside anterior decisions (such as the inclusion of an indication for PsA) carry little, if any, weight. As Sanofi-Aventis submitted, the reasoning in IceTV about anterior work does not permit the exercise of skill and judgment about the particular form of expression to be used to be put to one side; to the contrary, that is the essence of the test of originality. In the present case, that which Apotex seeks to discard as mere anterior work includes the application of judgment and skill to the form of expression used in the documents in question. As the authorities above make clear, this is impermissible.
352 Similarly, the present case arises in a context very different from the circumstances considered in Telstra v Phone Directories. There is no useful analogy capable of being drawn between a telephone directory created by a computer programme from information collated by various disparate processes, and a product information document created by a group of professional people attempting to convey product information consistent with the requirements of the TGA and the Regulatory Guidelines.
353 Consideration of the different circumstances of the present case undermines not only Apotex’s case on lack of originality, but also its contentions on authorship. As the above discussion discloses, it is not the case that each and every author must be individually identified for there to be a work of joint authorship. In any event, as far as the Arava PI version B and version 19 are concerned, Dr Bruand has identified all members of the Arava Cross-Functional Team for the relevant period. It is true that it is not possible to identify, with precision, the team member who suggested or wrote every sentence of each of the Arava works. But the authors, as members of a group constituted for a common purpose, have been identified. Moreover, the authors, in the sense of the people who wrote each document, were all employees of Sanofi-Aventis at the relevant time. As in Milwell, it was those employees who first reduced each of the Arava works to material form. The TGA did not have an authorial role. The TGA was no more an author of the product information documents than, for example, a peer reviewer of a scientific article who may make suggestions or even require changes before a document is accepted for publication. The author of the scientific article remains the author because that person alone decides whether or not to accept the suggestion or make the required change. The same position applies in respect of the role played by the TGA in the production of PIs.
354 Accordingly, and as Sanofi-Aventis submitted:
It is clear from the evidence, and from inferences that may comfortably be drawn from the evidence, that the Australian PI is a document that exists nowhere else in the world… the Australian PI, principally for present purposes in the form in which it appears in Version 19, can only have resulted from the application of “pen to paper” by Australian residents working in Australia and from the selection and arrangement of the source materials into the particular form of the Australian PI… Given the nature of the work, and given the description of the type of work, it is quite evident that the overall form, arrangement, content and presentation of Version 19 has resulted in a very significant measure from the skill and labour of Australian-based authors. As submitted elsewhere, Apotex has taken as good as the whole of version 19.
355 Nor can it be said that the preparation of the product information documents involved the kind of separate and individual contributions that led to the conclusion that the alleged works in Primary Health Care and Acohs were not works of joint authorship. The members of the Arava Cross-Functional Team and the global labelling team may well have made suggestions as individuals about various aspects of the product information documents. But it cannot be said that the documents are the result of individual and separate efforts rather than collaboration as required by the definition of “work of joint authorship”. The works in question are the result of a collaborative effort. They are not analogous to a series of individual patient notes written by different healthcare professionals as in Primary Healthcare. Nor are they analogous to the individual contributions of programmers necessary to create material safety data sheets in Acohs. Apotex’s submissions to the contrary are not persuasive and seek to recast the evidence of Dr Bruand, Dr Fontaine and Ms Deane about the process of preparing the Arava works in a manner which does not accurately reflect the import of that evidence. The evidence does not support Apotex’s characterisation of the process as people simply “plugging in various materials from various sources”. The work involved was iterative and collaborative.
356 For the same reasons the balance of Apotex’s contentions on the subsistence of copyright in the SPC, the Arava PI version B and the Arava PI version 19, as well as the reproduction of a substantial part of these works, should not be accepted. Curiosities in the relationship between the DMDS and the SPC are not material to the resolution of the issues in dispute. It may be accepted that Ms Patel is not the sole author of the Arava PI version 19. But it is apparent from the evidence that the people who first reduced to material form the various versions of the Arava PI are the members of the Arava Cross-Functional Team in collaboration with each other and the global labelling team. In other words, the authors of the Arava works are all Sanofi-Aventis employees who collaborated with each other to create the documents. Ms Patel, accordingly, is one author but not the sole author of one or more versions of the Arava works, including the Arava PI version 19. The same reasoning applies to Dr Bruand in respect of version B, and Ms Deane in respect of version A. Apotex, moreover, reproduced the whole or a substantial part of the Arava PI version 21 (by its own admission). In so doing, Apotex also reproduced at least a substantial part of the SPC, version B and version 19. The extent and quality of what Apotex copied in the approved Apotex PI, as well as the causal connection established by Apotex’s act of copying version 21, leads inevitably to the conclusion that Apotex, in its approved Apotex PI, reproduced a substantial part of each of the copyright works in suit.
357 Again, adopting Sanofi-Aventis’s submissions with respect to version 19 in particular:
(a) if there is any originality in Version 19 by way of selection of material from the multiple sources, Apotex appropriates that originality;
(b) if there is any originality in Version 19 by way of arrangement of material from multiple sources – and for the purposes of this exercise sanofi-aventis would say that one can “subtract” the high-level heading structure required by the TGA – Apotex appropriates that originality;
(c) if there is any originality in Version 19 by way of rewriting and digesting the material from the sources, Apotex appropriates that originality;
(d) if there is any originality in Version 19 in editing and adapting the material from other sources, Apotex appropriates that originality.
358 The Arava PI version 19 is original in each of the ways Sanofi-Aventis described and Apotex has appropriated that originality by reproducing the whole, or at the least a substantial part, of that work.
359 It should also be noted that no issue was raised – and I have accepted above – that, if copyright subsists in the Arava works in suit, the relevant copyright owners are Sanofi-Aventis Australia for each version of the Arava PI (including the Arava PI versions B and 19) and Sanofi-Aventis Deutschland and Aventisub II for the SPC (as well as the DMDS).
360 For these reasons, Sanofi-Aventis has established that Apotex infringed copyright in the SPC, the Arava PI version B and the Arava PI version 19 by reproducing in a material form (see s 31(a)(1)(i) of the Copyright Act) a substantial part of each of those works (see ss 13 and 14 of the Copyright Act).
361 The only remaining issue is whether, as Apotex contended in the alternative, it reproduced a substantial part of these copyright works with the copyright owners’ implied licence. This question arises under the terms of s 36(1) of the Copyright Act, which provides as follows:
Subject to this Act, the copyright in a literary, dramatic, musical or artistic work is infringed by a person who, not being the owner of the copyright, and without the licence of the owner of the copyright, does in Australia, or authorizes [sic] the doing in Australia of, any act comprised in the copyright.
362 Apotex’s first point concerns the question of onus. According to Apotex, as the absence of a licence is a necessary ingredient of infringement (see s 36(1) of the Copyright Act), the onus of disproving the existence of a licence lies on Sanofi-Aventis (citing in support Avel Pty Ltd v Multicoin Amusements Pty Ltd (1990) 171 CLR 88; [1990] HCA 58 (Avel v Multicoin)).
363 In terms of evidence, Apotex relied on the affidavit of Shaun McVicar, solicitor. Mr McVicar’s affidavit annexes PIs for three classes of drugs as follows: – (i) 13 drugs of which Sanofi-Aventis was the innovator and 22 generic versions of the same drug, (ii) the top 10 drugs by value on the PBS and 62 generic versions of the same drug, and (iii) eight drugs of which companies other than Sanofi-Aventis were the innovators and generic versions of those drugs of which Sanofi-Aventis was the issuer. The purpose of this affidavit is to demonstrate that the PIs for the generic versions of the drugs are close copies of the PIs of the innovator companies, in circumstances where there is no evidence of complaint of copyright infringement in respect of any of the innovator PIs before this proceeding.
364 Apotex stressed that Sanofi-Aventis filed no evidence in reply to the affidavit of Mr McVicar. Further, Sanofi-Aventis did not call any witness who was in a position to prove that the practice of copying PIs was other than universal. Dr Bruand, according to Apotex, “could offer only some limited confirmation of the practice and no evidence at all to contradict it”. Insofar as Sanofi-Aventis relied on other PIs for generic versions of drugs which were not copied from the relevant innovator PI, Apotex noted that the evidence: – (i) was not provided until the last day of the hearing, (ii) was of limited value as the nature and extent of the searches conducted to discover these examples had not been disclosed (Chase Manhattan Overseas Corporation v Chase Corporation Ltd (1985) 9 FCR 129), and (iii) did not in any event disprove the practice of copying.
365 Using Apotex’s words, the evidence establishes that Sanofi-Aventis has “been aware of, participated in, benefited from and never complained about the practice of generic companies making close copies of originators’ PIs.” As such, Apotex said that:
In light of the unchallenged evidence on this matter and the Applicants’ failure even to attempt to discharge their onus (except perfunctorily, at the last minute), their copyright case must fail in limine because an essential element of s 36(1) is not made out.
366 Apotex also submitted in the alternative that an implied licence can arise from the circumstances. In Avel v Multicoin at 123, McHugh J acknowledged that a licence might be implied from conduct (including indifference), although mere failure to object or even intention not to do so would not necessarily suffice. Apotex relied on a number of circumstances from which it said an implied licence could be inferred: – (i) the Second Reading speech and Explanatory Memorandum for the amendment Act both refer to the “long-standing practice” of the TGA of approving PIs for generic versions of drugs in essentially the same or similar form to the PI approved for the original version of the drug, (ii) Dr Bruand and Ms Deane agreed that this long-standing practice existed, (iii) the exhibits to the affidavit of Mr McVicar established that Sanofi-Aventis had both acquiesced in and benefited from this long-standing practice, (iv) the regulatory regime under the Therapeutic Goods Act (s 25A in particular) provides a five-year data exclusivity period and thereafter permits the TGA to use the original supplier’s data to assess drugs subsequently submitted for evaluation, (v) this regime is reflected in the Regulatory Guidelines, which require safety and efficacy data if the PI is not identical to that of the already registered version of the drug (see the summary of the Regulatory Guidelines above), (vi) the public policy benefits flowing from PIs for generic drugs being in the same form as that of the already registered brand (which presupposes the generic versions being established to be bioequivalent to the original drug, in which event safety and efficacy data are not required by the TGA unless the PI is different) are manifest in terms of safety and convenience, (vii) the MIMS Annual contains the full text of the innovator PI under the originator brand for a particular drug and then invites the reader to “see other brands/presentations” under the generic brand of the same drug, (viii) in addition to Mr McVicar’s affidavit, Apotex identified another 38 drugs in which the generic PIs are close copies of the innovator PIs, including well-known brands which have been the subject of patent litigation in this Court and in relation to which no complaint of copyright infringement has been made, (ix) from the evidence of Dr Bruand and Ms Deane it is apparent that great care is taken by the originator company in formulating the PI to ensure its accuracy without over- or understatement; as a PI is the primary source of information about a drug, the risk of confusing and inconsistent messages must be avoided, and (x) the originator company is the repository of relevant safety updates and thus has access to the information required for safety-related and other necessary amendments to PIs.
367 According to Apotex, necessity is not a requirement of a licence implied from conduct. Cases referring to necessity concern the implication of a term as a matter of law (for example, Copyright Agency Ltd v State of New South Wales (2008) 233 CLR 279; [2008] HCA 35 (Copyright Agency v State of New South Wales) at [80]-[81] and [84]-[93], Byrne & Frew v Australian Airlines Ltd (1995) 185 CLR 410; [1995] HCA 24 (Byrne v Australian Airlines) at 440, Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577; [2006] HCA 55 (Concrete v Parramatta Design), Con-Stan Industries v Norwich Winterthur Insurance (Aust) Ltd (1986) 160 CLR 226; [1986] HCA 14 and Liverpool City Council v Irwin [1977] AC 239 at 254). Apotex also rejected the proposition that its evidence of the custom on which it relied was insufficient, pointing out that evidence “is to be weighed according to the proof which it was in the power of one party to produce and in the power of the other to contradict” (citing in support Odgers, Uniform Evidence Law (9th ed, 2010), [1.4.120]).
368 Apotex contended that it was not now open to Sanofi-Aventis to claim that it had revoked any implied licence. Sanofi-Aventis’s case as pleaded and position as adopted in evidence was that there was no such licence. Accordingly, Apoex said Sanofi-Aventis could not claim that any implied licence was revoked and, had it done so earlier, Apotex would have pleaded an estoppel in response.
369 As Apotex put it in conclusion:
in the present circumstances, there is an implied licence to do what Apotex has done. Compare TCN Channel Nine v Network Ten [2001] FCA 841, where an implied licence was held not to exist, principally because there was not “any established trade practice or custom constituting a mutually implied licence” to the relevant effect. Here, there is.
370 In Lorenzo & Sons Pty Ltd v Roland Corporation (1992) 23 IPR 376 at 380 the Full Court of the Federal Court said:
Counsel for Lorenzo emphasised that it was now established that the onus of proving the absence of a licence by the owner of a copyright in relation to an issue of infringement under s 37 of the [Copyright] Act lay on the party who asserted the infringement, that is to say, upon Roland and Roland Australia, and that it was not for Lorenzo to establish the presence of such a licence: Avel Pty Ltd v Multicoin Amusements Pty Ltd (1990) 171 CLR 88.
In response, counsel for the respondents submitted that the appellant was inviting the court to proceed on assumptions and conjecture as to any relationship between Roland and one or more of the businesses in Hong Kong, let alone the resale by them to Australian purchasers of Roland products which would be unsuitable for use in Australia. He submitted that whilst undoubtedly the respondents had borne the onus to prove the absence of a licence by Roland that did not mean that in the course of reaching a conclusion upon that issue there would arise, in the conduct of the trial, an evidential burden as distinct from the ultimate legal burden of proving (or disproving) the ultimate fact in issue: see Byrne and Heydon Cross on Evidence, 4th Australian ed. 1991, paras 7005-7030. We accept that submission. Counsel for the respondents contended that when all the relevant circumstances were looked at they did not lay a proper foundation for the drawing of an inference that Roland had given its permission, informally, to the importation of the D-50 booklets.
The relevant principles as to the implication of licences in this field are discussed in Interstate Parcel Express Co Pty Ltd v Time-Life International (Nederlands) BV (1977) 138 CLR 534, Computermate Products (Aust) Pty Ltd v Ozi-Soft Pty Ltd (1988) 20 FCR 46 (Full Court), Avel Pty Ltd v Multicoin Amusements Pty Ltd supra, Star Micronics Pty Ltd v Five Star Computers Pty Ltd (1990) 18 IPR 225 (Davies J), and Broderbund Software Inc v Computermate Products (Australia) Pty Ltd (1991) 22 IPR 215 (Beaumont J).
371 Consistent with these observations, it is not necessary to analyse the pleadings and conduct of the hearing to determine whether one or other of the parties accepted an evidentiary burden to prove or disprove the implication of a licence said to be based on industry custom (including Sanofi-Aventis’s own conduct in respect of PIs). The relevant question is whether, in all the relevant circumstances, there is a proper foundation for the existence of the implied licence by which Apotex claimed it was authorised to copy the Arava PI version 21.
372 I am satisfied that the evidence requires the conclusion that there is no such proper foundation. My reasons are as follows.
373 First, insofar as the regulatory regime is concerned, it is apparent that the TGA does not require PIs for a generic or later version of a drug to be identical to the PI for the original drug. To the contrary, the Regulatory Guidelines disclose that if the PI is “different in content” or “not identical” to that of the registered brand then safety and/or efficacy data may be needed “depending on the case”. There are also in evidence communications from the TGA articulating its position. According to these communications:
While the expression “requirement” has been used (as in the brief attached to this email), it is not, as you know, a legal requirement that the documents be the same. Relevant to the emergence of that practice may be the fact that any differences in the wording of a draft PI submitted by a generic may indicate to the TGA differences in substance in the medicine itself from the originator’s medicine (which in turn may require additional information and evaluation, and possibly additional fees). Generic companies may well have taken the view that providing a draft PI for a medicine in very similar terms to the approved PI of the originator’s medicine would reduce that risk.
[…]
In summary, in the period 2007-2008 there was a practice in the TGA to approve PIs for generic medicines that contained similar information to that in PIs for the originator medicine. Some generic companies have provided to the TGA draft PIs in very similar terms to the originator’s approved PI. PIs have been approved by the TGA for generic medicines in very similar terms to the approved PI of the originator’s medicine. There was no articulated “policy” as such.
374 It may be accepted that the preparation of safety and efficacy data, if required by the TGA due to differences between innovator and generic PIs, would be likely to involve significant time and expense. However, the Regulatory Guidelines disclose that such data may not be needed even if the PIs are different, it being a matter for the TGA depending on the circumstances of each case. It is also not impossible for such data to be provided if required, albeit at a cost to the generic supplier.
375 Second, insofar as public policy is concerned, it also may be accepted that there is a public interest in PIs for the same or bioequivalent drugs also being the same. These considerations may be inferred to be the reason for the amendment Act. While this public policy issue may explain the TGA’s position, it does not establish the existence of an implied licence for one drug company to copy the PI of another drug company. There are many circumstances in which it might be said that a particular statutory monopoly, on reflection, is contrary to the public interest. The legal consequence of that is not that the statutory monopoly simply ceases to exist on recognition of the inconsistency with public policy. It becomes a matter for the legislature to determine whether the monopoly should continue or be modified. In the present case, the legislature has made its determination and has passed the amendment Act. As the reasoning in Copyright Agency v State of New South Wales discloses, the balance to be struck between competing policy interests in this context is a matter for the legislature with many options available including, for example, statutory licence regimes (see, for example, [48] and [71]).
376 Third, insofar as the “long-standing practice” of copying PIs is concerned, the evidence is equivocal. It is true that Apotex has discovered PIs where one may infer that the generic company has copied from the innovator PI (including PIs which suggest such copying by Sanofi-Aventis itself). It is also true that, albeit late in the day, Sanofi-Aventis has located other PIs which appear not to have been copied or, at least, not to have been copied to the same extent. It may also be accepted that the MIMS annual takes the approach of cross-referring from a generic drug to the innovator PI for that drug. But the evidence as a whole is simply 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 (at least until the present case). As to the issue of custom, the evidence does not disclose the proportion of PIs in evidence (tendered by either party) compared to all approved PIs. The PIs in evidence, accordingly, lack any meaningful context. As to mere neutrality, it cannot be inferred from the lack of evidence of any objection until that of Sanofi-Aventis in the present case that participants in the industry implicitly consented to the so-called industry-wide practice of copying. The evidence, at best, indicates a mere lack of objection to apparent cases of PIs being copied. In the circumstances outlined above, lack of objection without a duty to object is equivalent to mere neutrality which, as McHugh J said in Avel v Multicoin at 123, is not sufficient to establish an implied licence.
377 Fourth, insofar as the care with which PIs are created is concerned, the consequences are far from clear-cut. The fact that originator companies take care when crafting a PI (a proposition which I accept, but which is not readily reconcilable with Apotex’s submissions on the subsistence of copyright in the Arava works in the present case) does not seem to make the alleged industry-wide practice more or less likely. Apotex itself managed to create a draft PI for its leflunomide product (the proposed Apotex PI) which does not copy any part of the approved Arava PI (or any of the other Arava works). The fate of the proposed Apotex PI has not yet been determined by the TGA and, given the commencement of the amendment Act, may never be determined. The point is that, when it considered it might be necessary to do so, Apotex managed to create a PI which had not been copied from the innovator PI, presumably with the same level of care an originator company brings to bear upon that process, and without any evidence of it having been particularly difficult to do so.
378 Fifth, insofar as safety updates are concerned, Apotex sought to make a case based in part on the fact that the originator drug company is the repository of all reports of adverse reactions and thus is best placed to make any required safety amendment to a PI. This may be so. But it is presumably a circumstance which has existed for many years. Generic brands must have PIs. PIs are often amended over the years as more information becomes available. The evidence does not disclose the details of practices by which drug companies review and disclose their safety data or by which drug companies remain apprised of amendments to PIs (including amendments by generic companies which have become aware of some safety issue). While it might be presumed (and hoped) that suitable systems are in place for the disclosure and exchange of safety information, the evidence in this case shows (for example) that some generic PIs contain warnings and safety information, as well as information about adverse reactions and drug interactions, which are not found in the relevant innovator PI. In other words, the evidence about the need for the copying of innovator PIs based on the system for safety notifications is equivocal at best.
379 Taken together these considerations indicate that, in all of the circumstances, a licence to copy innovator PIs for the purposes of obtaining regulatory approval for generic drugs cannot be implied. If, consistent with Avel v Multicoin, the legal onus for disproving the alleged implied licence lies upon Sanofi-Aventis the evidence, taken as a whole, has enabled that burden to be discharged. As a result it is not necessary to deal with the balance of the issues between the parties including shifting evidentiary burdens, the requirement for necessity and/or mutuality, or the possible revocation of any implied licence. Nevertheless I briefly record my conclusions on those remaining issues.
380 As to shifting burdens of proof, it is the case that Sanofi-Aventis pleaded that the infringing acts were done without its licence (para 23 of the further amended statement of claim). Apotex denied the allegation and, in the particulars of its denial, asserted that it benefitted from a licence from Sanofi-Aventis “which is to be implied according to trade, custom, conduct or acquiescence”. By the terms of its denial Apotex accepted that there was no express licence. While correspondence between the parties about this issue ensued, Apotex’s implied licence case, as the above discussion indicates, remained broadly based. As Sanofi-Aventis submitted, given the pleading as particularised it is difficult to see how Sanofi-Aventis could be expected to adduce evidence to disprove each and every class of implied licence on which Apotex appeared to rely. This lends support to Sanofi-Aventis’s submission that Apotex’s case was not made good by any alleged default on Sanofi-Aventis’s part in adducing evidence to rebut the suggested implied licence.
381 As to necessity, it is plain that the evidence does not establish that it is necessary for drug companies seeking to register a generic version of a drug to copy the relevant innovator PI. It is also apparent that the observation in Copyright Agency v State of New South Wales at [92] (“[f]inally, and importantly, a licence will only be implied when there is a necessity to do so”) is not limited to cases of licences as terms implied by law into a contract. Copyright Agency v State of New South Wales itself is not such a case. While there is no doubt, as Apotex said, that an implied licence can arise outside of a contractual setting, it seems to me that the observation at [92] involves a more general unifying principle: unless necessary, terms and consents will not be implied. Even if this is incorrect, and necessity is not required for the implication of a licence in a non-contractual setting, the evidence establishes that copying innovator PIs may be convenient but is by no means necessary. Lack of necessity, even if not decisive, is not an irrelevant consideration and, if weighed along with the other evidence, would be an indicator against the existence of the implied licence as claimed.
382 Mutuality involves different considerations. It appears that mutuality has arisen because Apotex relied on TCN Channel Nine v Network Ten [2001] FCA 841 to support its case. In that case there was emphasis on the mutuality of any implied licence, as there was in Concrete v Parramatta Design. In the present case it would be difficult to find any form of mutuality as between originator and generic drug companies. On the evidence, for example, Apotex has never contributed an innovator PI to the pool of PIs it maintains are available for copying by other drug companies. Apotex has only copied other companies’ innovator PIs. While mutuality might not be an essential component of an implied licence the fact is that, in the present case, there is no relationship (contractual or otherwise) between the various drug companies generally or Sanofi-Aventis and Apotex in particular. As with necessity, it is difficult to accept that mutuality would be an irrelevant consideration – and, if this is weighed with the other evidence, it too would tend to negate the existence of an implied licence as claimed.
383 As to revocation, Sanofi-Aventis said that Apotex could not assert that it was too late for the alleged implied licence to be revoked for two reasons: – (i) Sanofi-Aventis could not revoke a licence before the infringing conduct, and (ii) Apotex’s complaint could not answer the quia timet case in respect of threatened infringements. It seems to me that neither proposition is an answer to Apotex’s point that, before closing submissions, Sanofi-Aventis did not rely on any claimed revocation. Had it done so it might have been open to Apotex to claim that Sanofi-Aventis was estopped from revoking the licence. The issue is one of fairness. It would be unfair, and irremediably so, for Sanofi-Aventis to now be permitted to rely on a claim of alleged revocation. For the reasons given above, however, it is also unnecessary for Sanofi-Aventis to do so.
384 For these reasons Sanofi-Aventis has established that Apotex, without a licence to do so, infringed copyright in the Arava works on which Sanofi-Aventis relied (the SPC, the Arava PI version B and the Arava PI version 19) in contravention of s 36 of the Copyright Act. The amendment Act, however, must be taken into account. The parties may wish to be heard on that issue.
385 For the reasons given above, Sanofi-Aventis has established that Apotex threatens to infringe the patent and has infringed its copyright in the Arava works. Apotex has not established invalidity of the patent on any ground. The terms of final orders will be determined after hearing further from the parties.
I certify that the preceding three hundred and eighty-five (385) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. |
Associate:
