Australia: More than just a Patent Infringement: potential causes of action against generic entrants

Last Updated: 10 October 2011
Article by Amanda Turnill and Simone Mitchell

The recent decision of Sanofi-Aventis Australia Pty Ltd v Apotex Ltd [2011] FCA 846 contains a veritable goody bag of potential claims that innovators may employ against generics. This decision covers a plethora of issues, including:

  • contributory infringement in the context of 'use claims' for pharmaceutical substances
  • discussion of whether a pharmaceutical substance is capable of being a 'staple commercial product'
  • whether a generic's product information that has been wholly or substantially replicated from the originator's product information can amount to copyright infringement
  • whether the failure to warn of potential patent infringement is a breach of the Trade Practices Act 1974 (Cth) (now the Competition and Consumer Act 2010 (Cth).

What makes this decision important is that in relation to a number of these issues there was previously no judicial consideration, particularly in the context of pharmaceutical products.


The patent in issue was entitled 'pharmaceutical for the treatment of skin disorders' (patent). Relevantly, it claimed 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 a active ingredient [leflunomide]'.

Sanofi markets leflunomide under the brand name Avara.

As the patent contained a 'use claim', it could not be argued that Apotex directly infringed the patent as Apotex did not use the pharmaceutical product but merely supplied it. Sanofi's case in infringement was dependent of section 117 of the Patents Act 1990 (Act).

Pursuant to section 117 of the Act, a person may, in certain circumstances, be liable for contributory (or indirect) infringement if that person supplies a product to another, where the use of that product would infringe a third party's patent rights.

Section 117(1) of the Act provides that where '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'. Further, section 117(2) describes what constitutes 'use of a product'. Relevantly, Sanofi relied on:

  • section 117(2)(b), which provides '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'
  • section117(2)(c), which provides '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'.

In assessing whether there was an issue of indirect infringement, the Court was required to determine whether:

  • use of Apotex's leflunomide product by a person would infringe the patent (section 117(1) of the Act); and
  • that use being:
    • where the product is not a 'staple commercial product', any use of the product if Apotex had reason to believe that a person would put it to an infringing use (section 117(2)(b)); or
    • use of the product in accordance with any instructions for the use of the product, in these circumstances, in accordance with the approved Product Information (PI) (section117(2)(c)).

Apotex's PI for its leflunomide product included an indication for the treatment of psoriatic arthritis. However, there were no clear instructions to use the product for psoriasis. However, the Court was persuaded by evidence that demonstrated that almost all people with psoriatic arthritis have or will develop psoriasis. On this basis, the Court held that the Apotex PI gave instructions to use the product for the treatment of psoriasis within the meaning of section 117(2)(c) of the Act.

In relation to 117(2)(b) of the Act, the Court held that Apotex's lefluomide product was not a 'commercial staple product'. A commercial staple product is 'one that is supplied commercially for various uses'1. The Court was not persuaded by Apotex's argument that leflunomide was a commercial staple product as it was indicated for a number of conditions. In fact, the Court held that there was only one use of Apotex's leflunomide product and that was 'oral administration to treat disease'.

On finding that Apotex's leflunomide product was not a commercial staple product, the Court went on to conclude that Apotex had reason to believe that the persons to whom it supplied the leflunomide, ie rheumatologists, would put the product to an infringing use. As noted above, Apotex knew that nearly every person who is treated for psoriatic arthritis by administration of leflunomide also has or will develop psoriasis, and by the administration of leflunomide such psoriasis will be prevented or treated.


This case also considered whether a generic's PI that has been reproduced in whole or a substantial part from the originator's PI constituted copyright infringement.

Apotex conceded that the Arava PI was a 'literary work' for the purposes of the Copyright Act 1968 (Copyright Act) and that it had reproduced the whole of

In relation to originality, Jagot J found that 'significant intellectual skill and knowledge is required to write product information documents'. Consequently, Product Information has sufficient originality for copyright to subsist. Further, Apotex appropriated that originality by reproducing the whole or at least a substantial part of the work.

In relation to the issue of authorship, Jagot J found that the Arava PI was the work of joint authorship entitled to copyright protection. Although it was not possible to identify, with precision, the employee who suggested or wrote every sentence, it was enough to identify all the members who contributed to the Arava PI.

For the reasons above, it was established that Apotex infringed copyright in the Avara PI.

As copyright has the duration of 70 years, this decision had the potential to impact, at least to some extent, on the availability of generic medicines past the expiry of the relevant patent. However, on 27 May 2011 the Therapeutic Goods Legislation Amendment (Copyright) Act 2011 (TGLA Act) was passed. It commenced on 28 May 2011.

The TGLA Act provides that certain acts are not in 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 that do not constitute a breach include the act of supplying, reproducing, publishing, communicating or adapting.

However, the operative provisions of the TGLA Act apply only to acts on or after the commencement, even though the PI may have been approved at an earlier time. Consequently, there still may be an issue of copyright infringement for acts that occurred prior to 28 May 2011.


In addition to the patent and copyright infringement claims, Sanofi argued that Apotex, in supplying and offering to supply its Apotex leflunomide product for treatment of psoriatic arthritis, was making misleading and deceptive representations to medical practitioners, pharmacists, patients and the Therapeutic Goods Administration (TGA).

Sanofi argued that Apotex, with the knowledge of the patent in suit, had not warned any of the recipients of Apotex's leflunomide product or the TGA that the use of the Apotex's leflunomide product for the treatment of active psoriatic arthritis will or may infringe the patent.

Jagot J noted that the Apotex PI did not contain such a warning and concluded that the failure of Apotex to warn its customers (being medical practitioners, pharmacists and patients) that the use of the Apotex product in a particular way might constitute an infringement of Sanfoi's patent constituted conduct in trade or commerce that is misleading or deceptive, or likely to mislead or deceive users. It therefore breached the section 52 of the Trade Practices Act (now section 18(1) of the Australian Consumer Law as set out in the Competition and Consumer Act 2010 (Cth)).

The issue of whether Apotex had misled or deceived the TGA was based on the certificate provided by Apotex to the TGA in relation to its leflunomide product pursuant to section 26B of the TGLA Act. This certificate certified that, acting in good faith, Apotex believed that on reasonable grounds that it was not marketing and did not propose to market its product in a manner or circumstances that would infringe a valid claim of the patent. Jagot J concluded that the representations contained in the certificate did not in fact amount to misleading and deceptive conduct as Sanofi had not proved that this certificate did not in fact represent Apotex's state of mind at the time of giving the certificate.


At the time of writing this article, no appeal has been filed but the time for filing an appeal has not expired. We will keep you informed of any developments.


1 Northern Territory v Collins (2008) 235 CLR 619

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