CRENNAN AND KIEFEL JJ. The appellant ("Apotex") appeals from a decision of the Full Court of the Federal Court of Australia in favour of the respondents. The appeal mainly concerns the validity of Australian Patent No 670,491 ("the Patent"), held by the second respondent, for an invention entitled "Pharmaceutical for the treatment of skin disorders". The single claim of the Patent, claim 1, is for "[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 [leflunomide]".
The main issue for determination on this appeal is whether the subject matter of claim 1 is a "manner of manufacture" and hence a patentable invention within the meaning of s 18(1) of the Patents Act 1990 (Cth) ("the 1990 Act"). A discrete, narrower issue in respect of validity, also framed by reference to s 18(1), is whether claim 1, for a hitherto unknown therapeutic use of a pharmaceutical substance (having prior therapeutic uses), is a "manner of manufacture". By cross‑claim, Apotex sought revocation of the Patent and, at the same time, denied infringement of claim 1 as alleged by the respondents. If the primary judge's order dismissing Apotex's cross‑claim remains undisturbed, as it was left by the Full Court of the Federal Court, a third issue, the infringement issue, remains to be determined. That issue is whether the proposed supply by Apotex of leflunomide to treat psoriatic arthritis ("PsA") would infringe the Patent under s 117(1) of the 1990 Act, given that claim 1 is limited to the use of leflunomide for the prevention and treatment of psoriasis.
The application for special leave to appeal in respect of infringement was referred to this Court to be argued as on an appeal.
In these reasons it will be concluded that Apotex's application for revocation of the Patent must be refused on the basis that claim 1 discloses a patentable invention. Further, it will be explained that claim 1 is a claim limited by purpose. A method claim, for the administration of a pharmaceutical substance (with prior therapeutic uses) for a hitherto unknown therapeutic use, can be a patentable invention. Thus Apotex's narrower attack on the validity of the Patent fails. These reasons will also explain why Apotex's proposed supply of leflunomide to treat PsA is not an infringement of claim 1.
Background facts
On 14 December 1979, Hoechst AG, a subsidiary of the second respondent, applied for and was granted a patent in Australia for the compound leflunomide, Australian Patent No 529,341 ("Patent 341"), which expired in 2004. For present purposes it can be noted that claim 1 of Patent 341 claimed the compound leflunomide and claim 4 claimed a "[m]ethod for the treatment of inflammations, rheumatic complaints or multiple sclerosis by administering to the patient an effective amount of [leflunomide]".
On 29 March 1994, Hoechst AG applied for and was granted the Patent. The Patent has a priority date of 31 March 1993 and expires on 29 March 2014. Claim 1 has been set out above.
Sanofi‑Aventis Deutschland GmbH, the second respondent, is the registered owner of the Patent under the 1990 Act; Sanofi‑Aventis Australia Pty Ltd ("Sanofi-Aventis"), the first respondent, supplies leflunomide in Australia under the trade names "Arava" and "Arabloc"; together with Aventisub II Incorporated, the third respondent, Sanofi-Aventis owns copyright in product information documentation relating to Arava (collectively, "Sanofi").
In 1999, leflunomide was included on the Australian Register of Therapeutic Goods ("the ARTG") for the treatment of rheumatoid arthritis ("RA") and PsA. In July 2008, Apotex obtained registration of its generic version of leflunomide, Apo‑Leflunomide, on the ARTG. Apotex intends to supply and offer for supply Apo‑Leflunomide in Australia for the treatment of RA and PsA.
A number of related facts, about which there was no dispute in this Court, can be summarised. Psoriasis is a skin condition which occurs in about two per cent of the Australian population. Its occurrence is a diagnostic criterion of PsA. Almost every person with PsA has or will develop psoriasis. Patients who suffer from psoriasis will usually be referred to a dermatologist for treatment. Leflunomide is not used in Australia to treat psoriasis alone. Dermatologists do not prescribe leflunomide for that purpose; however, leflunomide is used by rheumatologists to treat RA and PsA. The evidence established that when this compound is prescribed to treat a patient with PsA, it is usually expected to also prevent or treat the patient's psoriasis, if that person has a concurrent case of psoriasis.
The litigation
In 2008, Sanofi commenced proceedings in the Federal Court of Australia, claiming that Apotex's proposed supply in Australia of Apo‑Leflunomide to treat PsA would infringe the Patent. Sanofi further claimed that Apotex's failure to warn potential customers that the use of Apo‑Leflunomide would infringe the Patent constituted misleading and deceptive conduct under s 52 of the Trade Practices Act 1974 (Cth). Further, Sanofi alleged breach of copyright by Apotex under the Copyright Act 1968 (Cth). Sanofi's claims under the Trade Practices Act and the Copyright Act were dismissed by the Full Court and were not pursued on appeal to this Court.
In addition to denying infringement of claim 1, relied on by Sanofi, Apotex, by cross‑claim, sought revocation of the Patent on a number of grounds, including the ground that claim 1 did not disclose a patentable invention. Before the primary judge, Apotex reserved its right to challenge the correctness of two decisions of the Full Court of the Federal Court, namely Anaesthetic Supplies Pty Ltd v Rescare Ltd and Bristol‑Myers Squibb Co v F H Faulding & Co Ltd, as to whether a method of medical treatment of the human body is a patentable invention.
On 18 November 2011, the primary judge (Jagot J) made orders in the Federal Court dismissing Apotex's cross‑claim and restraining Apotex from infringing claim 1 of the Patent, in particular from supplying or offering to supply its leflunomide products "for the treatment of psoriatic arthritis". The Full Court dismissed Apotex's appeal in respect of its cross‑claim and, notwithstanding construing claim 1 differently from the primary judge, the Full Court also dismissed Apotex's appeal concerning infringement.
The statutory framework
Background
Briefly, the first Australian patent legislation, the Patents Act 1903 (Cth) ("the 1903 Act"), imported into Australia principles established and enacted in legislation then current in the United Kingdom, where the law of patents had been wholly statutory since the Statute of Monopolies 1623.
Relevantly, "Invention" was defined in the 1903 Act to mean "any manner of new manufacture the subject of letters patent and grant of privilege within section six of the Statute of Monopolies". That definition was continued in the Patents Act 1952 (Cth) ("the 1952 Act") and in the 1990 Act. Given that history, it is useful to observe, as Lord Diplock did, that the law of patents originated before the dawn of the modern sciences of physics and chemistry.
Until 1977, legislation in the United Kingdom continued to define "invention" by reference to s 6 of the Statute of Monopolies with the addition of "and any new method or process of testing applicable to the improvement or control of manufacture". However, on the introduction of the Patents Act 1977 (UK), requirements for patentability were codified for the purposes of harmonisation, following the Convention on the Grant of European Patents (1973) ("the EPC"), about which more will be said later. It can be noted that s 130(7) of the Patents Act 1977 (UK) declares that various provisions "are so framed as to have, as nearly as practicable, the same effects in the United Kingdom as the corresponding provisions of the [EPC and] the Community Patent Convention".
Returning to Australian patent legislation, revocation (originally by the prerogative writ of scire facias − in essence a writ to show cause) could be ordered upon a petition to the relevant court on the basis of any ground which would have been available at common law. Lack of subject matter was a ground available pursuant to that writ. Again, reflecting developments in the United Kingdom, the 1952 Act introduced a consolidated list of grounds for the revocation of a patent, including the precursor to the ground under the 1990 Act relied upon by Apotex.
After the decision of Barwick CJ sitting in the original jurisdiction of the High Court in Joos v Commissioner of Patents, which will be discussed later, the Australian Patent Office's Patent Examiner's Manual ("the Patent Manual") was changed to include an instruction to examiners of applications for patents that "no objection is to be taken to methods or processes for the treatment, medical or otherwise, of the human body or part of it, only on the basis that the human body is involved."
The Industrial Property Advisory Committee ("the IPAC") reviewed the 1952 Act and reported to the Minister for Science and Technology on 29 August 1984. The IPAC noted that specific legislative exclusions from patentability "would be likely to prove a very slow, blunt and inefficient instrument for influencing the economic direction of particular industries or fields of technological development in Australia." The IPAC referred to the codified approach to patentability in the Patents Act 1977 (UK) and then said:
"We consider that the existing concept [manner of new manufacture] operates quite satisfactorily. It has the advantage of being underpinned by an extensive body of decided case law which facilitates its application in particular circumstances. At the same time it has, in the past, exhibited a capacity to respond to new developments. To replace it with a codification would be likely to produce far more problems, with attendant costs, than it would solve."
As will be explained later in these reasons, that codified approach included a provision (now repealed) which expressly excluded from patentability methods of treatment of the human body. The IPAC's recommendation was accepted when the 1990 Act was enacted.
The Agreement on Trade‑Related Aspects of Intellectual Property Rights (1995) ("the TRIPs Agreement"), to which Australia is an original signatory, necessitated amendments to the 1990 Act so as to comply with Australian obligations under that Agreement. Importantly, Art 27(1) provides that subject to Art 27(3), "patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application." Article 27(3)(a) relevantly gives all contracting States the option to "exclude from patentability ... diagnostic, therapeutic and surgical methods for the treatment of humans". The abovementioned amendments to the 1990 Act did not enact Art 27(1) or Art 27(3)(a) of the TRIPs Agreement into Australian domestic law. However, the requirements for patentability under the 1990 Act are consistent with Australia's international obligations under Art 27(1).
Relevant provisions of the 1990 Act
In its cross‑claim, Apotex relied on ss 138(3)(b) and 18(1)(a) of the 1990 Act. Section 138(3)(b) provides, as a ground of revocation, "that the invention is not a patentable invention". "Invention" is defined in Sched 1 to the 1990 Act to mean:
"any manner of new manufacture the subject of letters patent and grant of privilege within section 6 of the Statute of Monopolies, and includes an alleged invention."
Section 18(1)(a) of the 1990 Act provides that "an invention is a patentable invention ... if the invention, so far as claimed in any claim ... is a manner of manufacture within the meaning of section 6 of the Statute of Monopolies". Paragraphs (b), (c) and (d) of s 18(1) contain other requirements including that an invention be novel, involve an inventive step, and be useful. It can be noted that s 18(2), which first appeared in the 1990 Act, provides that "[h]uman beings, and the biological processes for their generation, are not patentable inventions."
In SmithKline Beecham PLC's (Paroxetine Methanesulfonate) Patent, Lord Walker of Gestingthorpe explained that the constitutional importance of the Statute of Monopolies, which generally declared void all monopolies, lay in its effect in curbing the prerogative of the Crown. The proviso in s 6 excepts grants of letters patent for a term of 14 years or less, in respect of the "making of any manner of new manufactures within this Realm". The proviso is subject to a further proviso in s 6 excluding grants which are "contrary to the law ... mischievous to the State, by raising prices of commodities at home, or hurt of trade, or generally inconvenient".
In Grain Pool of Western Australia v The Commonwealth, this Court, citing National Research Development Corporation v Commissioner of Patents, explained the effect on patent law of the passage of the Statute of Monopolies:
"Thereafter, the scope of permissible patentable subject matter involved an inquiry 'into the breadth of the concept which the law [had] developed by its consideration of the text and purpose of [that statute]'".
So much was accepted by Apotex.
Further, it was generally accepted that the basic purpose of patent legislation is to encourage invention (and any underlying research leading to an invention) by granting an inventor/patentee the protection of a limited monopoly, in exchange for benefit to the public of a full disclosure of the invention including the practical use to which it can be put.
Under the Royal Grant, once part of the words of grant of letters patent deriving from the Statute of Monopolies, the patentee received "full power [and] sole privilege ... [to] make, use, exercise and vend the ... invention". It was for the patentee alone to "have and enjoy the sole use and exercise and the full benefit of the ... invention".
Section 13(1) of the 1990 Act provides to the patentee "the exclusive rights, during the term of the patent, to exploit the invention and to authorise another person to exploit the invention." The definition of "exploit" in Sched 1 distinguishes between the circumstance where an invention is a product and where it is a method or process:
"(a) where the invention is a product - make, hire, sell or otherwise dispose of the product, offer to make, sell, hire or otherwise dispose of it, use or import it, or keep it for the purpose of doing any of those things; or
(b) where the invention is a method or process - use the method or process or do any act mentioned in paragraph (a) in respect of a product resulting from such use."
A distinction between product and method is also made in s 119A, which creates an exception to infringement for acts undertaken solely for the purpose of applying for the inclusion of therapeutic goods on the ARTG. Section 119A(3) defines a "pharmaceutical patent" as including both a "pharmaceutical substance" and a "method, use or product relating to a pharmaceutical substance". A "pharmaceutical substance", defined in Sched 1 to the 1990 Act, means a substance for therapeutic use which involves "interaction ... with a human physiological system" or "action on an infectious agent, or on a toxin or other poison, in a human body". The expression "therapeutic use" as defined in Sched 1 includes "use for the purpose of … preventing, diagnosing, curing or alleviating a disease, ailment, defect or injury in persons".
Section 70 confines extensions of term of standard patents relating to pharmaceutical substances to patents which claim (a) pharmaceutical substances per se; or (b) pharmaceutical substances that are "produced by a process that involves the use of recombinant DNA technology".
Section 133, which provides for compulsory licensing, applies to both products and methods or processes which can be patented and envisages licensing a licensee "to work the patented invention." "Work" is defined in Sched 1 in relation to an invention which is "a method or process".
Sanofi's claim regarding infringement rests on s 117 of the 1990 Act, which governs infringement by supply. Section 117 will be examined later in these reasons.
Primary judge
Patentable invention?
The primary judge rejected Apotex's narrow attack on the validity of the Patent.
Infringement
The primary judge also rejected the construction of claim 1 of the Patent urged by Apotex. Regarding the infringement issue, Jagot J held that Apotex's intended supply of Apo‑Leflunomide would infringe the Patent under s 117(1) of the 1990 Act. Her Honour's conclusions on infringement depended on the construction of claim 1, on which the parties disagreed. Her Honour explained:
"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 … or the effect in fact of the administration."
Apotex preferred the former construction. Sanofi favoured the latter construction, which resulted in a finding of infringement dependent upon whether the administration of leflunomide would in fact have the effect of preventing or treating psoriasis.
Accepting Sanofi's construction of claim 1, the primary judge found that the supply of Apo‑Leflunomide for the treatment of PsA would infringe the Patent, as that use of the compound would inevitably lead to the treatment of psoriasis. Her Honour considered that "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." It followed that Apotex's intended supply of its generic leflunomide product to treat PsA would infringe the Patent under s 117 of the 1990 Act. Her Honour also found that Apotex's approved product information document instructed rheumatologists to use Apo‑Leflunomide for the treatment of psoriasis, which brought its intended supply of the pharmaceutical substance within s 117(2)(c).
Full Court of the Federal Court
The Full Court (Keane CJ, Bennett and Yates JJ) unanimously dismissed the appeal.
Patentable invention?
Keane CJ observed that, having regard to the passage of time since the decision of the Full Court of the Federal Court in Bristol‑Myers Squibb, the federal Parliament had been afforded ample opportunity to amend the 1990 Act to exclude methods of medical treatment of the human body as proper subject matter for the protection of patent legislation, and had not done so.
Bennett and Yates JJ, in a joint judgment, refused to depart from the position expressed in obiter dicta in Rescare and Bristol‑Myers Squibb, that methods of medical treatment of the human body can be patented. That position was described by their Honours as "representing orthodoxy in Australian patent law." Bennett and Yates JJ also considered that it was "significant" that the federal Parliament had not been persuaded to amend the 1990 Act to give effect to policy considerations, to the extent that such considerations might tend against the patentability of methods of medical treatment of humans.
Infringement
Turning to the infringement issue, Keane CJ considered that the primary judge had erred in construing claim 1 of the Patent as the administration of leflunomide in an effective amount, so that a patient's psoriasis was prevented or treated. His Honour considered that this construction failed to recognise that claim 1 was for a method of treatment of a specific human ailment, which "necessarily presuppose[d] a deliberate exercise of diagnosis and prescription by a medical practitioner … and the consequent prescription of the application of leflunomide." Keane CJ held that the claim in the Patent was limited to the use of leflunomide as an agent for the prevention or treatment of psoriasis. It followed that the Patent, on its true construction, would not be directly infringed by the application of leflunomide to prevent or treat PsA.
Keane CJ went on to consider whether, despite his conclusions on the true construction of claim 1, Apotex would still be liable for infringement under s 117(1) of the 1990 Act. Based on the primary judge's findings of fact regarding Apotex's product information document, which engaged s 117(2)(b) and (c), his Honour found that the intended supply by Apotex of Apo‑Leflunomide to treat PsA would infringe the Patent.
Bennett and Yates JJ were satisfied that it was open to the primary judge to find that Apotex's product information document contained an instruction to use Apo‑Leflunomide to treat psoriasis, which engaged s 117(2)(c) of the 1990 Act. Their Honours also considered that there was no error in the primary judge's conclusions that Apotex had reason to believe that Apo‑Leflunomide would be used to treat psoriasis, engaging s 117(2)(b). It followed that, as s 117(1) was engaged against Apotex, the appeal on the question of infringement could not succeed.
Submissions
Before this Court, Apotex submitted that methods of medical treatment of the human body were not a "manner of manufacture" and, therefore, were not patentable inventions in accordance with the principles developed for the application of s 6 of the Statute of Monopolies. Apotex eschewed the "generally inconvenient" rationale, considered by Barwick CJ in Joos, as the preferable basis for excepting from patentability methods of medical treatment of the human body. This involved accepting that the requirements of novelty, inventive step and utility, and correlative grounds for revocation, subsume and embody what was once covered by the "generally inconvenient" ground for a refusal of grant.
Instead, relying on obiter dicta of this Court in the celebrated NRDC Case, Apotex argued that methods of medical treatment of humans are "essentially non-economic". Apotex contended that when the 1990 Act came into force, the established law in Australia and the United Kingdom was that a method (or process) of medical treatment of the human body is not a manner of manufacture and hence not a patentable invention. Apotex went on to submit that the abovementioned obiter dicta in the NRDC Case was insufficiently apprehended in Joos, Rescare and Bristol‑Myers Squibb. In the latter two cases, albeit also in obiter dicta, it was said that a method of medical treatment of the human body can be a "manner of manufacture" and hence a patentable invention. Apotex submitted that Rescare, followed in Bristol‑Myers Squibb, was in that respect wrongly decided.
Further, Apotex contended that the majority in Rescare failed to recognise that methods of medical treatment of the human body should not be regarded as "industrialised". That submission seemed to evoke public policy considerations in addition to the idea that methods of medical treatment of the human body are not capable of being industrially applied. An elusive distinction which Apotex ventured between a medicine (long considered a manner of manufacture, therefore an invention) and a method of treatment involving the administration of a pharmaceutical substance was that the latter improves the condition of a human being, which is not an article of commerce. For this reason, Apotex submitted that a method of medical treatment of the human body cannot be a patentable invention. In the alternative, Apotex contended that the administration of leflunomide (a known compound with prior therapeutic uses) for a hitherto unknown purpose is not a manner of manufacture within s 18(1)(a) of the 1990 Act.
On the infringement issue, Apotex submitted that the question before this Court was whether Apotex had "reason to believe" that medical practitioners would use Apo‑Leflunomide for the claimed purpose, being the prevention and treatment of psoriasis. It was contended that special leave should be granted to determine what constitutes the necessary "reason to believe" under s 117(2)(b) of the 1990 Act.
Sanofi submitted that the language and context of the 1990 Act made clear that the expression "manner of manufacture" in s 18(1)(a) included methods of medical treatment of the human body. Sanofi also relied on the circumstance that no decision of this Court has held that methods of treatment of the human body are not patentable. Further, Sanofi refuted the proposition that methods of medical treatment are excluded from patentability on the ground that they are "non‑economic". Sanofi contended that no point of principle was raised by the question of infringement under s 117(1) of the 1990 Act and that the Full Court's decision on this point was correct.
Patentable invention?
The question posed by Apotex's claim for revocation of the Patent is whether, assuming all other requirements for patentability are met, a method of medical treatment of the human body can be a patentable invention. That question has not been decided by this Court. There being no express exclusion of such methods in the 1990 Act, the question of the construction of s 18(1)(a) is to be decided by reference to the principles developed for the application of s 6 of the Statute of Monopolies.
Whether a method of medical treatment of the human body is a proper subject matter for a grant of monopoly under a patent system has been considered by tribunals and courts in a number of major jurisdictions, some with patent legislation which similarly defines invention by reference to the expression "manner of manufacture" in s 6 of the Statute of Monopolies (as in the United Kingdom, until 1977, and New Zealand), and some with patent legislation which defines invention otherwise (as in the United States of America and Canada).
To speak of "methods of medical treatment of the human body" is to employ an expression of sufficient generality to encompass both drug therapies capable of industrial application and the know‑how involved in a medical practitioner's diagnosis and methods of treatment (including surgery) of patients. Distinguishing the two types of activity has proved problematic in many jurisdictions.
Irrespective of the differences in national patent legislation, a clear, perhaps insoluble, conflict has emerged between two relevant competing considerations. The first consideration is the undesirability of having a patent system intruding on the freedom of a medical practitioner to treat a patient, without being restrained by the need to consider whether a patent licence is necessary. The conflicting consideration is the desirability of having a logical patent system which encourages research and invention in relation to drug therapies, not only by granting monopolies for novel medicines (and for that matter novel medical implements), but also by not excluding from patentability hitherto unknown therapeutic uses of known compounds, where novelty requirements can most directly be satisfied by a claim to a method or process, which is in effect a claim limited to the hitherto unknown therapeutic use. Professor Cornish and his co‑authors have remarked:
"In the second half of the twentieth century, patent law in every industrial state had to develop in ways which mediated this conflict."
Relevant authorities
In Australian law, the starting point is the recognition in the NRDC Case that any attempt to define the word "manufacture" or the expression "manner of manufacture", as they occur in s 6 of the Statute of Monopolies, is bound to fail. Apotex agreed that "manner of manufacture" refers to a broad concept indicating "the scope of the permissible subject matter of letters patent", which has continually widened since 1795, when Boulton v Bull was decided. The continual widening of the concept reflects the growth of patent law as patent law, in turn, reflects scientific and technical developments. In Boulton v Bull, Eyre LCJ included in the concept of manufacture "new processes in any art producing effects useful to the public." The concept was widened when it was finally settled in 1842 in Crane v Price that a process may be an art for patent law purposes. The word "method" was also accepted as a synonym for "process". What remained unsettled before the NRDC Case was whether it was sufficient for a process to produce a useful result or whether it was necessary for a physical thing either to be brought into existence by the process, or to be so affected "as the better to serve man's purposes."
In contending that the 1990 Act must be construed as excepting or excluding methods of medical treatment of the human body from patentability, Apotex relied on obiter dicta in Maeder v Busch and the NRDC Case, and on various decisions in the United Kingdom pre‑dating the Patents Act 1977 (UK). The first three decisions discussed below form the backdrop to the reasoning and conclusions of this Court in the NRDC Case.
1914 - Re C & W's Application
In Re C & W's Application, Sir Stanley Buckmaster (as he then was), sitting as second law officer on an appeal from the refusal of a grant, decided that a process for extracting metals from living bodies, particularly from persons suffering from lead poisoning, was not a manner of manufacture and was therefore not an invention suitable for patent protection under the Patents and Designs Act 1907 (UK). That conclusion was underpinned by two considerations: first, the process under consideration was not used in the making of an object of commercial value, nor was it adapted to that end; and second, the process was not employed "in any form of manufacture or of trade", even though the process might be useful in improving the condition of humans.
1938 - Maeder v Busch
This Court's decision in Maeder v Busch concerned an application for grant in respect of a process for permanently waving human hair, which was found to be invalid for reasons of prior use. However, Sir Stanley Buckmaster's rationale was taken up, in obiter dicta, by Dixon J. His Honour said of a process or method of treatment of the human body, including a process or method for the relief of suffering by surgical or manipulative means:
"[T]he object [of the process or method] is not to produce or aid the production of any article of commerce. No substance or thing forming a possible subject of commerce or a contribution to the productive arts is to be brought into existence by means of or with the aid of the process."
1942 - GEC's Application
It seems that after 1914 in the United Kingdom, it was accepted as axiomatic that there could be no patents for methods of medical treatment of the human body. A broad rule, relying on Sir Stanley Buckmaster's approach, was formulated by Morton J in GEC's Application, seeking to draw a helpful (although not exhaustive) line between a method or process which is a manner of manufacture and one which is not. A method or process was said by Morton J to be a manner of manufacture if it (a) resulted in the production of some vendible product; or (b) improved or restored a vendible product; or (c) preserved a vendible product from deterioration. Whilst Morton J's rules were influential in both the United Kingdom and Australia, it was suggested in a series of subsequent cases in the United Kingdom that when the expression "vendible" is used in the context of a process, it is a reference to a capacity for commercial or industrial application.
1959 − The NDRC Case
The NRDC Case concerned an appeal from a decision of the Deputy Commissioner of Patents, directing that certain claims be deleted from the specification of an application on the ground that the method claimed was not a manner of manufacture because it did not result in any vendible product. In coming to his decision, the Deputy Commissioner had relied on Re C & W's Application and GEC's Application.
In determining that a novel use of known substances (for the eradication of weeds from crops) was a patentable invention, this Court (Dixon CJ, Kitto and Windeyer JJ) decided that it was not essential that a process produce or improve a vendible article. Their Honours explained, by reference to the doctrine of analogous uses set out in BA's Application:
"If ... the new use that is proposed consists in taking advantage of a hitherto unknown or unsuspected property of the [known] material ... there may be invention in the suggestion that the substance may be used to serve the new purpose; and then, provided that a practical method of so using it is disclosed and that the process comes within the concept of patent law ultimately traceable to the use in the Statute of Monopolies of the words 'manner of manufacture,' all the elements of a patentable invention are present ... It is not necessary that in addition the proposed method should itself be novel or involve any inventive step".
Their Honours went on to decide that a hitherto unknown use of a (known) material can qualify as a manner of manufacture if the process "offers some advantage which is material", in the sense that the process belongs to a useful art (as distinct from a fine art), and has "value to the country … in the field of economic endeavour."
Parenthetically, citing Re C & W's Application and Maeder v Busch, their Honours noted "[t]he need ... to put aside, as they apparently must be put aside, processes for treating diseases of the human body". The rationale assumed for the exclusion from patent protection of "methods of surgery and other processes for treating the human body", now relied on by Apotex, was that "the whole subject is conceived as essentially non‑economic".
1971 - In re Schering AG's Application
In In re Schering AG's Application, the Patents Appeal Tribunal (Graham and Whitford JJ) allowed an application for a contraceptive to proceed to grant on the ground that a contraceptive was strictly distinguishable from a method of medical treatment of the human body. The Tribunal accepted that although the Patents Act 1949 (UK) did not, in terms, exclude from patentability methods of medical treatment of humans, so much inferentially appears to have been in the contemplation of Parliament at least since enacting s 41 of the Patents Act 1949. Reference was also made to the 50 year old practice of the Patent Office of refusing such applications (first referred to in Re C & W's Application). Since novel therapeutic products and curative devices could secure patent protection, the Tribunal noted that, despite the strong support to be found in s 41 for excluding processes for medical treatment from patentability, the exclusion appeared to be based on ethics rather than logic. That reasoning was affirmed subsequently in Eli Lilly & Co's Application.
1972 - Joos
In Joos, decided under the 1952 Act, Barwick CJ sat on an appeal from a refusal of grant in respect of a method or process for the treatment of hair and nails. His Honour referred to In re Schering AG's Application with approval and went on to distinguish medical prophylactic or therapeutic methods or processes from cosmetic methods or processes, both of which applied to the human body. Although his Honour said it was not necessary for him to identify the basis for excepting the former class of method or process claims, if an exclusion from patentability were to be maintained it should be on "public policy [grounds] as being, in the language of the Statute of Monopolies, 'generally inconvenient'". In expressing that opinion, the Chief Justice rejected "[p]art at least of the premises on which the observations [by Dixon J in Maeder v Busch] were made ... that surgery or other processes for treating the human body were of their nature essentially non‑economic." The possibility that such treatments might have economic utility, or commercial or industrial application, seemed obvious to his Honour, given the economic impact of worker's compensation, invalid pensions and repatriation costs. As explained above, Patent Office practice was altered after Joos so as to permit applications for patents which claimed methods or processes of medical treatment of the human body.
1980 - Wellcome Foundation v Commissioner of Patents
Following developments in the United Kingdom, in Wellcome Foundation Ltd v Commissioner of Patents this Court determined that novel packaging, containing directions for using a known substance or compound for a hitherto unknown use or purpose, may be a "manner of manufacture". In so doing, the Court elucidated the expansion of the concept of "manner of manufacture" decided in the NRDC Case, distilled thus:
"This principle [in the NRDC Case] extends to a process which does not produce a new substance but results in 'a new and useful effect'. If 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". (emphasis added)
Such was the relevant case law concerning methods of medical treatment of the human body before the passage of the 1990 Act.
Rescare and Bristol-Myers Squibb
At first instance in Rescare Ltd v Anaesthetic Supplies Pty Ltd, the patent in suit contained method claims as well as product claims. The primary judge (Gummow J) rejected a claim for revocation of the method claims for treatment of the human body on the basis that they did not claim an "invention" (within the definition of "invention" in the 1952 Act). His Honour accepted the suggestion made by Barwick CJ in Joos, that the only basis upon which the exclusion from patentability of methods of medical treatment of humans could be continued (if it should be) was "general inconvenience". This was essentially because there was no logical distinction to be made between a patent for a method or process for treatment of the human body and a product for the same.
To ensure that the method claims were fairly based, his Honour was prepared to allow amendments to those claims, to claim a treatment of obstructive sleep apnoea in humans. Like Barwick CJ in Joos, his Honour did not accept the generality of the obiter dicta in Maeder v Busch, repeated in the NRDC Case, that methods of medical treatment of the human body are "essentially non‑economic". The method claims with which his Honour was dealing did not involve surgery and there does not appear to have been any suggestion that the claims, as amended, would lack commercial application.
On appeal, a majority of the Full Court of the Federal Court (Lockhart and Wilcox JJ, Sheppard J dissenting) upheld the primary judge's reasoning and decision in respect of methods of medical treatment of the human body, although their Honours found that the method claims in issue were not fairly based on the provisional specification.
In the majority, Lockhart J found that once the notion of the necessity for a vendible product (as in Re C & W's Application) is eliminated (as it was in the NRDC Case), there is no distinction in principle between a product for treating humans and a method for treating humans. His Honour considered that the distinctions between a contraceptive and other methods of treatment of the human body (In re Schering AG's Application), and between processes which produce a cosmetic result and processes which produce a curative result (Joos), were distinctions without a difference which could not sustain a principle distinguishing what is an invention and patentable from what is not. His Honour said:
"I see no reason in principle why a method of treatment of the human body is any less a manner of manufacture than a method for ridding crops of weeds as in NRDC. Australian courts must now take a realistic view of the matter in the light of current scientific development and legal process; the law must move with changing needs and times ...
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". (emphasis added)
That reasoning is correct. In agreeing with Lockhart J, Wilcox J noted Parliament's deliberate decision not to exclude methods of treatment of humans from patentability in the 1990 Act. His Honour considered that courts should hesitate to introduce the exclusion, especially given the developments in the application of the concept of "manner of new manufacture", which widened rather than narrowed the concept.
Before turning to consider briefly the position elsewhere, it can be noted that in Bristol‑Myers Squibb, decided under the 1990 Act, a Full Court of the Federal Court, following Rescare, overturned a finding that the patents in suit claiming a method of administering an anti‑cancer drug were invalid on the grounds of "general inconvenience". Black CJ and Lehane J acknowledged "the difficulty ... of drawing any logical distinction between a method of treatment and a patentable pharmaceutical product that produces the same beneficial results." Agreeing with the joint reasons, Finkelstein J referred to the TRIPs Agreement and took the view that if public policy required medical treatment and surgical processes to be excluded from patent protection, it was for Parliament to amend the 1990 Act.
The position elsewhere
Decisions from overseas, including those of the European Patent Office, are of course not binding on this Court. The Court has noted the existence of significant divergences between the case law concerning the 1952 Act and the 1990 Act, and patent legislation in the United Kingdom in 1949 and 1977, in relation to the patentability requirements of obviousness and inventive step. However, the theory and purpose of patent legislation everywhere have much in common, and the 1990 Act includes provisions designed to "harmonise [Australian patent law] with the laws of Australia's major trading partners" and to ensure compliance with Australia's international obligations under the TRIPs Agreement. The question of whether methods of medical treatment of humans can (or should) be patented does not turn on any express or implied exclusion in the 1990 Act, or on any normative distinctions to be drawn from its provisions. Further, an understanding of the position in Europe and the United Kingdom informs Apotex's second attack on the validity of the Patent. The TRIPs Agreement, to which there are 159 contracting States including Australia, has influenced the developments described below in Europe, the United Kingdom and New Zealand.
Europe
As a prelude to discussing an express exception to patentability of methods of medical treatment of the human body in the EPC, the general position in relation to hitherto unknown therapeutic uses is set out in Terrell's textbook:
"Historically, the first inventor of a new product suitable for use in medical treatment was entitled to a claim to the product per se. This remains the case. Difficulties arise where the product is already known and the invention resides in the discovery of a novel medical use (first medical use), or where, although known for medical use, the invention resides in the discovery of a novel second medical use."
In conformity with Art 27(1) of the TRIPs Agreement, Art 52(1) of the EPC provides that "patents shall be granted for any inventions, in all fields of technology, provided that they are new, involve an inventive step and are susceptible of industrial application." Article 53, headed "Exceptions to patentability", provides for heterogeneous exceptions to that general approach to patentability.
Relevantly, an exception for methods of treatment of the human body is set out in Art 53(c):
"European patents shall not be granted in respect of ...
(c) methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practised on the human or animal body; this provision shall not apply to products, in particular substances or compositions, for use in any of these methods."
Article 54(4) ameliorates the effect of that exception: a substance or compound is deemed novel in respect of a new therapeutic use. That such use of a (known) substance or compound is not denied novelty is squarely within the general principle established in the NRDC Case, that the discovery of a new use of a known substance which has both an artificial effect and economic utility can be a "manner of manufacture", and therefore a patentable invention.
Claims for a second (or subsequent) hitherto unknown therapeutic use of a known compound were not expressly permitted under the original (1973) EPC but came to be allowed in a decision of the Enlarged Board of Appeal of the European Patent Office ("EPO") in Eisai/Second medical indication approving "Swiss type" claims. A "Swiss type" claim is generally in the form of a claim to "the use of [known] compound X in the manufacture of a medicament for a specified (and new) therapeutic use", the Swiss Federal Intellectual Property Office having first instituted a practice of allowing such claims in 1984.
The essential purpose of a "Swiss type" claim was described by Jacob J in Bristol‑Myers Squibb Co v Baker Norton Pharmaceuticals Inc:
"By taking the [Swiss] form ... the claim is trying to steer clear of two obstacles to patentability, namely the requirement of novelty and the ban on methods of treatment of the human body by therapy."
Of the sophistry involved, Jacob J said:
"[I]f one accepts that a patent monopoly is a fair price to pay for the extra research incentive, then there is no reason to suppose that that would not apply also to methods of treatment. It is noteworthy that in the US any such exception has gone, and yet no‑one, so far as I know, suggests that its removal has caused any trouble."
Inevitably, the monopoly granted in respect of such claims is limited given that the substance has prior therapeutic uses.
Following Eisai, in Mobil/Friction reducing additive an Enlarged Board of Appeal upheld a claim to the use of a specified lubricant for the reduction of friction in engines, even though it had previously been used as a rust inhibitor. In Merrell Dow Pharmaceuticals Inc v HN Norton & Co Ltd, Lord Hoffmann noted the difficulties which this type of claim might cause in respect of infringement but refrained from holding that a claim in that form was invalid.
Article 54(5) of the (2000) EPC now deems novel second (and subsequent) therapeutic uses in respect of (known) substances or compounds.
In describing the relevant amendments to the EPC in 2000 (including the redrafted Art 54(5)), an Enlarged Board of Appeal in Abbott Respiratory/Dosage regime stated that excluding methods of treatment of the human body from patentability (as in Art 52(4) of the original (1973) EPC) on the basis of the "fiction" that such methods were incapable of industrial application became untenable, when the real reason for the exception was "socio-ethical and public health considerations." The Board said that the limited purpose of the exception from patentability in Art 53(c) (and its predecessor, Art 52(4)) is to free from restraints a medical practitioner's diagnosis and treatment of patients, which the Board described as "non‑commercial and non‑industrial medical … activities". The Board also considered relevant extrinsic material and stated that amendments permitting the patenting of second (and subsequent) uses of known substances and compounds rendered the EPC "TRIPs‑compliant" in respect of Art 27(1). Such claims must, of course, still satisfy the requirements of novelty and inventive step, and be capable of industrial application. For the sake of completeness, it can also be noted that key expressions in the exception in Art 53(c), "surgery", "therapy" and "diagnostic methods" (followed in the cognate s 4A(1) of the Patents Act 1977 (UK)), have all been subject to decisions or considerations turning on fine, and some have said troubling, distinctions.
The current position in Europe is set out in the EPO Guidelines for Examination 2012. As a result of the amendments to the EPC in 2000, claims for second (or subsequent) hitherto unknown uses of known substances or compounds may be drafted more simply and directly than "Swiss type" claims (now not permitted) as "substance X for use in the treatment of disease Y".
United Kingdom
Since the passage of the Patents Act 1977 (UK), law and practice in the United Kingdom have followed that in Europe.
The former definition of an invention as a "manner of new manufacture" in the Patents and Designs Act 1907 (UK) has been replaced by statutory requirements for patentability set out in ss 1(1) to 1(4) of the Patents Act 1977 (UK). A patent may only be granted if four conditions are satisfied. Two of the four conditions relevant for present purposes are that an invention must be capable of industrial application and must not be otherwise excluded under the Act, including under s 4A. It can be noted that before amendments were made to the EPC in 2000, as described above, s 4(2) of the Patents Act 1977 (UK) (now repealed) employed the "fiction" criticised in Abbott's Case by providing that a method of treatment of the human body by surgery or therapy or a method of diagnosis "shall not be taken to be capable of industrial application."
Section 4(1) of the Patents Act 1977 (UK) provides that an invention shall be taken to be capable of industrial application if it can be made or used in any kind of industry, including agriculture.
Section 4A(1) of the Patents Act 1977 (UK) excludes from patentability:
"(a) a method of treatment of the human or animal body by surgery or therapy, or
(b) a method of diagnosis practised on the human or animal body."
Relevantly, s 4A(2) excludes from the exception "a substance or composition for use in any [excluded] method"; s 4A(3) deems novel a known substance or composition in respect of a first hitherto unknown therapeutic use; and s 4A(4) essentially deems novel a known substance or composition in respect of a second (or subsequent) hitherto unknown therapeutic use, in each case by the legislative technique of "deeming" novel the known substance or composition.
The decision in Eisai was followed by the English Court of Appeal in Actavis UK Ltd v Merck & Co Inc. The Court of Appeal confirmed that "[n]ovelty of purpose for use can confer novelty even if the substance is old and unpatentable as such." The Court of Appeal also said that the difficulties concerning infringement with such "purpose" claims, referred to by Lord Hoffmann in the Merrell Dow Case, were ameliorated in the pharmaceutical industry by the strict regulation of the manufacture and sale of pharmaceutical products.
New Zealand
Section 2(1) of the Patents Act 1953 (NZ) defines "invention" in terms of s 6 of the Statute of Monopolies. Methods of treatment of the human body are not expressly excluded from patentability. Such methods were, however, held by the Court of Appeal of New Zealand not to be patentable in Wellcome Foundation Ltd v Commissioner of Patents and Pfizer Inc v Commissioner of Patents. The exclusion from patentability reflected a longstanding practice in the New Zealand Patent Office of refusing grants for such methods.
Notwithstanding the exclusion, in Pharmaceutical Management Agency Ltd v Commissioner of Patents the Court of Appeal of New Zealand approved a Practice Note of the Commissioner of Patents to the effect that "Swiss type" claims would henceforward be permitted. In doing so, the Court of Appeal followed the reasoning in Eisai. In reviewing developments in Europe, and in the United Kingdom both before and after the Patents Act 1977 (UK), the Court of Appeal said:
"[I]t seems that the exclusion from patentability of methods of medical treatment of humans is now supported only on ethical grounds. Yet patents are granted for pharmaceutical and surgical products.
As Davison CJ concluded in the Wellcome case[], there is little logic in maintaining the exclusion ...
[I]t no longer can be said that a method of treating humans cannot be an invention. To the extent that [appellate] judgments in Wellcome[] express that view we depart from them. The exclusion from patentability of methods of medical treatment rests on policy (moral) grounds. The purpose of the exclusion is to ensure that medical practitioners are not subject to restraint when treating patients. It does not extend to prevent patents for pharmaceutical inventions and surgical equipment for use in medical treatment."
The Court of Appeal concluded that once it is accepted that a hitherto unknown use of a (known) compound could be an invention (as has been held in Europe and the United Kingdom), the Patents Act 1953 (NZ) should, if possible, be construed to have that effect, thereby discharging the obligations which New Zealand had undertaken by its accession to the TRIPs Agreement, particularly under Art 27(1). The Court of Appeal pointed out that a more logical approach, leading to the same result, would be to permit claims to extend to a method of treatment, by using the compound or composition, but to require from the patentee a disclaimer of any right to sue the medical practitioner.
United States of America
Article 1, s8, cl 8 of the Constitution of the United States empowers Congress to legislate:
"To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries".
Section 101 of the Patents Act 1952 defines patentable subject matter:
"Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title."
The position in the United States has changed over time. Early decisions which held that methods of medical treatment (including surgery) of the human body were not patentable were distinguished or overruled in 1954 in Ex parte Scherer.
In Scherer, the Board of Appeals of the Patent Office stated:
"[I]t cannot be categorically stated that all ... methods [of treatment of the human body for some medical or surgical purpose] are unpatentable subject matter merely because they involve some treatment of the human body."
In Diamond v Chakrabarty, it was decided that live, human‑made microorganisms were patentable subject matter within the statutory requirements of the Patents Act 1952. This was because the bacterium was new and had "markedly different characteristics from any found in nature". In the course of delivering the opinion of the Court, Burger CJ stated that although s101 may have been intended to "include anything under the sun that is made by man", three implied exceptions, the laws of nature, physical phenomena and abstract ideas, constrained what was patentable.
A method or process of medical treatment of the human body, dependent on the laws of nature, will not be "patent‑eligible" if a claim does no more than simply recite or describe, rather than apply, a law of nature. Absent claims, including method claims, applying a law of nature, even a medically significant discovery or breakthrough may fall within the laws of nature exception to patentability. For example, composition claims to a naturally occurring deoxyribonucleic acid (DNA) segment, focussing on the genetic information encoded in two genes associated with certain cancers, have been held to claim subject matter falling within the exception, even though such important and useful genes had never before been located, or isolated from surrounding genetic material.
It appears that significant numbers of patents have been granted in the United States in respect of methods of medical treatment of the human body (including surgery). Sanofi was able to point to an example where a method of treatment claim was in similar form to claim 1 of the Patent.
However, after an eye surgeon sued other surgeons for patent infringement in respect of a new technique for cataract surgery, the Patents Act 1952 was amended by the inclusion of s287(c), the effect of which is to permit the patenting of surgical methods to continue but to bar actions for patent infringement against medical practitioners (and "related health care entit[ies]") for "the performance of a medical or surgical procedure on a body".
Canada
Section 2 of the Patent Act defines an "invention" as "any new and useful art, process, machine, manufacture or composition of matter, or any new and useful improvement in any art, process, machine, manufacture or composition of matter". It contains no express exclusion from patentability of methods of medical treatment of the human body.
The Supreme Court of Canada has held that such methods are not patentable. However, a novel use of a known compound is considered patentable subject matter. Applying that approach, in Apotex Inc v Wellcome Foundation Ltd the Supreme Court upheld a claim to the use of a known drug, AZT, in the following form:
"A pharmaceutical formulation comprising an amount of (AZT) effective for the treatment or prophylaxis of an AIDS infection, in association with a pharmaceutically accepted carrier."
Canada's Manual of Patent Office Practice states that such "use" claims are permitted, as long as they do not include a medical or surgical step. For example, a claim to the "[u]se of compound Y as an antiarrhythmic agent" is considered acceptable. However, a claim encompasses non‑patentable subject matter when it "covers an area for which a physician's skill or judgment is expected to be exercised".
Sanofi submitted that in these overseas jurisdictions the subject matter of claim 1 would be patentable, either directly as a method of treatment or through one of the drafting devices referred to above.
Can methods of medical treatment of the human body be patentable inventions?
Claim 1, for a method of preventing or treating psoriasis, claims a hitherto unknown therapeutic use of a pharmaceutical substance which was first disclosed, together with prior therapeutic uses, in Patent 341 (now expired).
Apotex's submissions, derived from obiter dicta in the NRDC Case, that the subject matter of claim 1 is "essentially non‑economic" must be rejected.
First, in the context of patent law, the expression "essentially non‑economic" takes its meaning from the long‑understood requirement that the subject matter of a patent (whether a product, or a method or process) must have some useful application, that is, must be capable of being practically applied in commerce or industry. A requirement that an invention have "economic utility" raises the same considerations as the requirement in the Patents Act 1977 (UK) and the EPC that an invention must be susceptible or capable of industrial application. So much is apparent from the definition of "exploit" in the 1990 Act, referring to products and to methods or processes, and the case law developed and applied for a very long time in respect of the requirement of utility, now found in ss 18(1)(c) and 18(1A)(c).
Secondly, the 1990 Act contains no specific exclusion from patentability of methods of medical treatment of the human body, nor can any be implied. Section 133, which provides for compulsory licensing, is in general terms and covers both patented articles and patented methods or processes. Section 70, providing for extensions of term in respect of pharmaceutical substances that are defined in terms of effects on the human body, infers that patents which claim a method of treatment of the human body can be granted, but not extended. Section 119A, the operation of which has been explained above, defines a "pharmaceutical patent" to include method patents for using or administering a pharmaceutical substance.
Parliament accepted the IPAC's recommendation that the 1990 Act should not include a codification of requirements for patentability. Section 119A, described above, was introduced in 2006. It can be noted that Parliament has amended the 1990 Act 24 times since its enactment, including 20 times since the TRIPs Agreement entered into force on 1 January 1995. Relevantly, amendments to the 1990 Act following the TRIPs Agreement did not enact Art 27(3) into Australian domestic law. That Article gives contracting States the option to exclude methods of medical treatment of the human body from patent protection. However, to construe s 18(1)(a) of the 1990 Act as excluding methods of medical treatment of the human body would be to introduce a lack of harmony between Australia and its major trading partners, where none exists at present.
Thirdly, as noted by the primary judge in Rescare Ltd v Anaesthetic Supplies Pty Ltd, there is no normative distinction to be drawn from the provisions of the 1990 Act between methods of treatment of the human body which are cosmetic and those which are medical.
Fourthly, and critically, the subject matter of a claim for a new product suitable for therapeutic use, claimed alone (a product claim) or coupled with method claims (combined product/method claims), and the subject matter of a claim for a hitherto unknown method of treatment using a (known) product having prior therapeutic uses (a method claim), cannot be distinguished in terms of economics or ethics. In each case the subject matter in respect of which a monopoly is sought effects an artificially created improvement in human health, having economic utility. It could not be said that a product claim which includes a therapeutic use has an economic utility which a method or process claim for a therapeutic use does not have. It could not be contended that a patient free of psoriasis is of less value as a subject matter of inventive endeavour than a crop free of weeds. Patent monopolies are as much an appropriate reward for research into hitherto unknown therapeutic uses of (known) compounds, which uses benefit mankind, as they are for research directed to novel substances or compounds for therapeutic use in humans. It is not possible to erect a distinction between such research based on public policy considerations.
Fifthly, leaving aside, for the moment, the relevant obiter dicta in the NRDC Case, a method claim in respect of a hitherto unknown therapeutic use of a (known) substance or compound satisfies the general principle laid down in the NRDC Case. Such a method belongs to a useful art, effects an artificially created improvement in something, and can have economic utility. The economic utility of novel products and novel methods and processes in the pharmaceutical industry is underscored by s 119A of the 1990 Act and by their strict regulation in the Therapeutic Goods Act 1989 (Cth) ("the TGA").
Sixthly, while not determinative of the construction issue, the practice of the Australian Patent Office, following Joos (which practice was in evidence in Rescare, and about which there was no negative evidence led in this case), is consonant with Art 27(1) of the TRIPs Agreement.
Seventhly, the obiter dicta in the NRDC Case, upon which Apotex relied, conveys some hesitation about "putting aside" methods of treatment of the human body. That hesitation arose in circumstances where this Court was not called upon to decide whether the position under the 1952 Act, in relation to methods of medical treatment of humans, differed from the position in the United Kingdom under the Patents Act 1949 (UK) and case law in the United Kingdom following Re C & W's Application. In other respects, the decision in the NRDC Case diverged from the case law in the United Kingdom, not only in respect of a "vendible product" requirement for a patentable process, but also in respect of the eligibility of agricultural products for patenting. The obiter dicta plainly refers to medical treatments, which are readily distinguishable from therapeutic uses of pharmaceutical substances as defined in the 1990 Act.
Conclusion on patentability
Assuming that all other requirements for patentability are met, a method (or process) for medical treatment of the human body which is capable of satisfying the NRDC Case test, namely that it is a contribution to a useful art having economic utility, can be a manner of manufacture and hence a patentable invention within the meaning of s 18(1)(a) of the 1990 Act.
There is, however, a distinction which can be acknowledged between a method of medical treatment which involves a hitherto unknown therapeutic use of a pharmaceutical (having prior therapeutic uses) and the activities or procedures of doctors (and other medical staff) when physically treating patients. Although it is unnecessary to decide the point, or to seek to characterise such activities or procedures exhaustively, speaking generally they are, in the language of the NRDC Case, "essentially non‑economic" and, in the language of the EPC and the Patents Act 1977 (UK), they are not "susceptible" or "capable" of industrial application. To the extent that such activities or procedures involve "a method or a process", they are unlikely to be able to satisfy the NRDC Case test for the patentability of processes because they are not capable of being practically applied in commerce or industry, a necessary prerequisite of a "manner of manufacture".
Apotex's claim for revocation of the Patent, on the ground that claim 1 does not disclose a patentable invention, cannot succeed and should stand dismissed.
Construction of claim 1
Claim 1 is recognisably a claim limited to the specific purpose of preventing and treating psoriasis. Given the prior art, any novelty and inventive step reposes in, and is confined to, that hitherto unknown therapeutic use of leflunomide. The compound (with prior therapeutic uses) was disclosed in Patent 341. The monopoly granted in respect of claim 1 is limited to the purpose (hitherto undiscovered) for which the (known) compound can be used.
Drawing on jurisprudence in Europe and the United Kingdom, Apotex contended that in Australia, a hitherto unknown therapeutic use of a substance (having prior therapeutic uses) is not a manner of manufacture. This appeared to be a reinvigorated attack on novelty, or a suggestion of obviousness, in the guise of a s 18(1)(a) objection, stimulated by the construction of claim 1 favoured by the primary judge. Reliance was placed on the circumstance that there is no equivalent in the 1990 Act to sub-ss (3) and (4) of s 4A of the Patents Act 1977 (UK), which "deem" novel known substances and compounds in respect of their first and subsequent (hitherto unknown) therapeutic uses. Those deeming provisions are the legislative response in the United Kingdom to the express exclusion from patentability of pharmaceutical method patents, from which the 1990 Act is free.
Novelty of purpose can confer novelty even if a substance is known, a principle determined in the NRDC Case, which can be seen in the relevant passages extracted above. Provided a hitherto unknown therapeutic use of a pharmaceutical substance or compound can satisfy the requirements of novelty and inventive step and is not obvious, such a use can be an invention within the meaning of s 18(1)(a) of the 1990 Act, irrespective of whether it is a first or subsequent novel use.
It is true, as noted above and as contended by Apotex, that a claim in a patent specification limited to a hitherto unknown use of a substance (with prior therapeutic uses) may pose difficulties in the context of infringement, as observed by Lord Hoffmann in the Merrell Dow Case. Nevertheless, for the reasons given, Apotex's second attack on the validity of claim 1 of the Patent must also be rejected.
Infringement
Infringement proceedings may be brought to enforce the exclusive rights granted to a patentee under s 13 of the 1990 Act to "exploit" an invention, as that term is defined in Sched 1, for the term of the patent. Infringement is determined by reference to those exclusive rights.
Claim 1, for a hitherto unknown therapeutic use of a pharmaceutical substance (having prior therapeutic uses), is limited to the purpose of treating or curing psoriasis and cannot be directly infringed by the exploitation of leflunomide for the treatment of PsA.
However, Sanofi's claim of infringement rests on s 117 of the 1990 Act, headed "Infringement by supply of products", which sets out the conditions under which a supply of a product will constitute an infringement of an indirect or contributory kind. Section 117 relevantly provides:
"(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) ...
(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."
The TGA must also be considered in the context of the claim of infringement under s 117. The TGA provides for the establishment and maintenance of a national system of controls relating to the quality, safety, efficacy and timely availability of therapeutic goods that are used in Australia, whether produced in Australia or elsewhere, or exported from Australia. "Therapeutic goods" are goods likely to be taken to be for "therapeutic use", which is, in turn, defined to include use in or in connection with "preventing, diagnosing, curing or alleviating a disease, ailment, defect or injury in persons". Therapeutic goods which are entered on the ARTG are taken to be "separate and distinct" from other therapeutic goods if they have "a different name", "different indications", or "different directions for use", amongst other things.
Section 23(2)(ba) of the TGA provides that an application for registration or listing of therapeutic goods on the ARTG, in the case of a restricted medicine (which leflunomide is), must be accompanied by product information in the form approved under s 7D. Appendix 8 of the Therapeutic Goods Administration's Australian Regulatory Guidelines for Prescription Medicines (2004) (which the parties agreed were applicable) stated that a product information document:
"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."
In relation to its supply of Apo‑Leflunomide, Apotex's approved product information document contains the following statements:
"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."
As mentioned, the primary judge held that despite those instructions, Apotex's approved product information document instructed rheumatologists to use leflunomide to treat psoriasis, thus engaging s 117(2)(c) of the 1990 Act.
Turning to s 117, the legislative history of that section was outlined by this Court in Northern Territory v Collins. The difficulties of enforcing a patentee's rights against indirect or contributory infringers under the common law rules, described by Dixon J in Walker v Alemite Corporation, were also considered by the IPAC report, to which reference has already been made. Recommendation 33 of the report, subsequently accepted, stated that "in general the supply of goods whose only use would infringe a patent, or which are accompanied by a positive inducement for the ultimate consumer to perform actions which would innocently or knowingly infringe a patent should itself be an infringement of the patent" (emphasis added). Whether a supply of a product is an infringement under s 117 depends on the nature of the product and the use or uses to which it is put.
A decision of the Supreme Court of the United States, Dawson Chemical Co v Rohm & Haas Co, is illustrative of the scope of s 117(2)(b) and (c) of the 1990 Act and was used by the IPAC to illustrate the need for relieving a patentee from indirect or contributory infringement. The patentee in Dawson (the respondent on appeal to the Supreme Court) owned a patented method claim for the use of an unpatented product to inhibit the growth of certain weeds. The appellants supplied the unpatented product to persons (which was not a direct infringement of the method patent) with instructions to apply the product in accordance with the patented method. Unanimously, the United States Court of Appeals for the Fifth Circuit found that the appellants' conduct constituted contributory infringement of the patent. That finding was not disputed on appeal to the Supreme Court.
Having regard to the definition of "exploit" in relation to a "method" in the 1990 Act, which must be read with s 117, a person who supplies Apo‑Leflunomide, but does not use the patented method to do any act set out in the definition of "exploit" referable to method patents, does not directly infringe the method patent. It is difficult to understand how the supply of an unpatented product, the use of which by a supplier would not infringe a method patent, can give rise to indirect infringement of a method patent by a recipient of the unpatented product from the supplier. The difficulty reflects the prior art and Sanofi's limited novelty in the hitherto unknown therapeutic use of the pharmaceutical substance, which is the claimed subject matter of the Patent.
Further and separately, as an item registered on the ARTG, Apo‑Leflunomide is a therapeutic good registered for its indicated uses, which specifically exclude use of the patented method identified in claim 1. In light of the provisions of the TGA, to which reference has been made, the expression "indication" in the product information document is an emphatic instruction to recipients of Apo‑Leflunomide from Apotex to restrict use of the product to uses other than use in accordance with the patented method in claim 1. Apotex's approved product information document does not instruct recipients to use the unpatented pharmaceutical substance, which it proposes to supply, in accordance with the patented method, and therefore the product information document does not engage s 117(2)(c) of the 1990 Act.
For the purposes of the application of s 117(2)(b), it was not shown, nor could it be inferred, that Apotex had reason to believe that the unpatented pharmaceutical substance, which it proposes to supply, would be used by recipients in accordance with the patented method, contrary to the indications in Apotex's approved product information document.
Conclusion on infringement
For the reasons given, Apotex's proposed supply of Apo‑Leflunomide does not engage s 117(2)(b) and (c). Thus, Sanofi's claim of infringement, resting on s 117 of the 1990 Act, fails.
Orders
We would make the following orders.
Matter No S1 of 2013
Appeal dismissed with costs.
Matter No S219 of 2012
- Special leave to appeal on ground 3 of the Draft Notice of Appeal filed on 10 September 2012 granted.
- Appeal allowed with costs.
- Set aside the orders of the Full Court of the Federal Court of Australia made on 18 July 2012 and, in their place, order that:
(a) the appeal be allowed in part;
(b) orders 2, 3 and 6 of the Federal Court made on 18 November 2011 be set aside;
(c) order 1 of the Federal Court made on 24 February 2012 be set aside; and
(d) so much of the Amended Application dated 22 September 2009 as made in paragraphs 14 to 22 be dismissed.
- Remit the matter to the Full Court on the questions of the costs of the appeal to that Court and the costs of the trial (which latter question may, at the discretion of the Full Court, be remitted to the primary judge).