Merry Christmas!

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Thanks for stopping by during the year.

IPwars has headed off into the summer sun. Hopefully to return in late January.

Wishing you the compliments of the Season and all the best for 2014!

3 stripes v 4 stripes: the remedies

4 stripes 3 stripes now the remedies

Following the decision a couple of months back that 3 of 12 Pacific Brands’s shoes had infringed adidas’ 3-stripes trade mark, Robertson J has now:

  1. made a declaration that Pacific Brands infringed;
  2. granted an injunction permanently restraining Pacific Brands from making or selling etc. 2 of the 3 shoes found to infringe;[1]
  3. awarded $20,000 damages; and
  4. ordered Pacific Brands to pay 30% of adidas’ costs.

The amount of damages was resolved between the parties. There are a couple of points of interest in the terms of the injunction and the costs order.

First, in relation to the injunction, adidas had sought an injunction which restrained Pacific Brands both in relation to the specific shoes found to infringe and also “from otherwise infringing” the 3-stripes trade mark. Robertson J refused this wider injunction. The practical reality of 9 styles either abandoned or found not to infringe served a telling warning against the injunction sought:

because, as these proceedings have shown, such an order would lack sufficient clarity and definition and the Court should not make an order in relation to conduct where a person would not readily know whether or not its proposed conduct breached the order. What is the appropriate relief must depend on the facts and on the underlying dispute and I do not derive much assistance from the form of relief granted in trade mark cases which concerned primarily words because infringements by words are generally clearer than by designs.[2]

His Honour also refused to include one of the 3 infringing styles in the order because the shoe had been taken off the market 7 years earlier and there was no sufficient risk of its reintroduction. While the other 2 infringing shoes had been taken off the market in 2009, an injunction was warranted. First, no unconditional undertaking had been given in relation to them. Secondly, while a broad undertaking had been given, his Honour considered the sale of these 2 styles after that undertaking was in place breached it. His Honour also considered that the evidence that Pacific Brands’ Global Trading division – the “division” which had sold the shoes – had been closed down was not “sufficiently cogent” to persuade him that there was no sufficient further risk of infringement.

Thirdly, the terms of the injunction extend also to authorising, directing or procuring other to make or sell the infringing shoes.

On the costs question, Robertson J considered the “old” rules which included an automatic one third reduction to the costs where less than $100,000 was recovered were applicable as the action started before the new, 2011, rules came into force. However, his Honour exercised his discretion not to apply that rule. The Federal Court was an appropriate forum to have brought the action in and damages were not the primary relief being sought. The costs were reduced, however, to reflect the degree of adidas’ success, particularly bearing in mind it had pursued 12 styles of shoe as part of an overall strategy to obtain broad injunctive relief. The little weight accorded to the survey having regard to the substantial amount of evidence it involved, in the face of Pacific Brands’ objections, was also a factor in the reduction of costs.

Adidas AG v Pacific Brands Footwear Pty Ltd (No 4) [2013] FCA 1335


  1. The terms of the injunction were:  ?

    The respondent, whether by its servants, agents or otherwise, be permanently restrained from:

    (a) manufacturing, procuring the manufacture of, importing, purchasing, selling, offering to sell, supplying, offering to supply or distributing footwear in the form depicted in any of Exhibits K or L in these proceedings, being the footwear depicted in Annexures B and C to these Orders;
    (b) authorising, directing or procuring any other company or person to engage in any of the conduct restrained by sub-paragraph (a).

  2. This may be contrasted with the typical injunction in a patent case that thou shalt not infringe the patent; leaving the infringer to run the gauntlet.  ?

Sanofi v Apotex – infringement

The previous post looked at the High Court’s ruling that Sanofi’s patent for a method of medical treatment was patentable subject matter as a manner of manufacture. This post looks at the infringement ruling.

You will recall that the patent for leflunomide itself has expired, but claim 1 of Sanofi’s relevant patent 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].

Dermatologists do not prescribe leflunomide for the treatment of psoriasis, but rheumatologists do prescribe leflunomide for the treatment of rheumatoid arthritis (RA) and psoriatic arthritis (PsA). Apparently, almost every person who has PsA will have, or will also develop, psoriasis. When leflunomide is prescribed for the treatment of PsA, “it is usually expected to also prevent or treat the patient’s psoriasis, if that person has a concurrent case of psoriasis.”[1]

Apotex had received marketing approval from the TGA for the treatment of RA and PsA (but not psoriasis specifically). Its product information stated:

“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 Federal Court – Jagot J at first instance and the Full Court had agreed with Sanofi that Apotex’ supply of leflunomide in these circumstances infringed s 117. While the reasoning was a bit different in each case, it essentially turned on 2 propositions:

First, s 117(2)(b): Apotex had reason to believe its leflunomide would be used to treat psoriasis because its administration to PsA sufferers would usually involve treatment of psoriasis too.

Secondly, s 117(2)(c): in any event, Apotex’ product information was an instruction to use leflunomide in the treatment of psoriasis when it was being prescribed to treat PsA.

Crennan and Kiefel JJ (with whom French CJ and Gaegeler J agreed) rejected both bases and held that Apotex did not infringe.

The patent gave Sanofi a very limited monopoly – use of leflunomide for a particular purpose. This appears to have led to an important point of policy at [302]:

…. 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.

Notwithstanding the interpretation of the product information reached by all four Federal Court judges below, there was no instruction or recommendation of the kind required by s 117(2)(c). Bearing in mind the regulatory regime imposed by the TGA at [303]:

…. 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. ….

It was simply an instruction to use leflunomide for the treatment of PsA or RA. Nor was s 117(2)(b) engaged. Rather than looking to the effect of the administration of Apotex’ leflunomide, it was necessary to look at the purpose it was being prescribed for: in the relevant cases, the treatment of PsA. At [304] therefore:

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.

This suggests that it will be very difficult to establish infringement of a claim to the use of a medicine for a patented purpose where the therapeutic compound itself is no longer patented and the the patented purpose is not one of the indications for which the supplier has obtained TGA approval. One might wonder about the situation where the supplier / respondent was aware of significant off-label use. In this case, however, the High Court seems to have characterised the infringing effect as purely incidental. That was no doubt supported by the different specialists who might prescribe leflunomide for the different purposes.

The High Court did not find it necessary to discuss the trial judge’s finding [2] that leflunomide was not a staple commercial product so that s 117(2)(b).

So, after all that, Apotex did not infringe the patent. We at least have a clear ruling (albeit obiter dicta in that special High Court way) about the patentability of methods of medical treatment so far as the courts (and the current High Court) are concerned. I wonder how much the pecuniary remedies for Apotex’ infringement of copyright in the product informtion is worth?

Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd [2013] HCA 50


  1. Crennan and Kiefel JJ at [182].  ?
  2. Sanofi v Apotex (No 2) at [270] – [273], on the footing that the relevant product for the purposes of s 117(2)(b) was the product as supplied by Apotex (and not leflunomide generally), which could be supplied and traded only for the 2 limited purposes indicated in the product information.  ?

Apotex v Sanofi: manner of manufacture

As briefly noted last week, the High Court handed down its ruling in Apotex’ appeal. Although the case will be mainly remembered because Apotex lost its challenge to the patentability of Sanofi’s method of medical treatment, Apotex actually won on the patent infringement point. (As there was no appeal on that point, however, it was still liable for infringing the copyright in Sanofi’s product information.)

Claim 1 of Sanofi’s relevant patent 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 patent for leflunomide itself has expired.

Apotex had received marketing approval from the TGA for the treatment of rheumatoid arthritis (RA) and psoriatic arthritis (PsA).

By a majority of 4 – 1,[1] the High Court held that:

  1. a a method of medical treatment is indeed patentable subject matter – a manner of manufacture[2] – under Australian law;
  2. a second or subsequent use of a known substance could also be patentable subject matter; but
  3. Apotex did not infringe by selling or supplying its generic leflunomide according to its product information.

manner of manufacture

All 5 judges accepted the orthodoxy of the NRDC decision as defining the approach to whether a claim was to a manner of manufacture. And all 5 judges accepted it was a broad and widening concept.

Crennan and Kiefel JJ identified NRDC as essentially requiring 2 conditions to be satisfied. For example, at [235], their Honours quoted the Wellcome case:

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. (Crennan and Kiefel JJ’s emphasis)

At [278] – [285], their Honours identified 7 reasons why a method of medical treatment could be patentable. Gaegler J agreed with these 7 reasons and proposed an eighth.[3] Given the broad scope of the concept, Crennan, Kiefel and Gaegler JJ considered the crucial consideration was that there was no economic or ethical basis for distinguishing between the patentability of a pharmaceutical (or other medical) product and a method.[4] French CJ’s reasoning was similar to this point; considering the historical exclusion from patentability to be an anomaly for which no clear and consistent foundation had been established.[5]

In contrast, Hayne J in dissent considered at [143] – [150] that it could well be possible to distinguish between patenting medical products and methods of treatment. Instead, his Honour considered that a process would only be patentable if the product (in the sense of the result, outcome or effect) of the process, and not just the process itself, had economic utility. Hayne J considered that a method of medical treatment did not satisfy that criterion because (at [163]):

The effect of using the process is personal to the individual. It is not an effect which the person who owns the right to use the process, or any person other than the individual who has been treated, can turn to economic account in any way, whether directly or indirectly. If the individual who has been treated can turn the effect to economic account, he or she can do so only indirectly: by taking advantage of better health to make a more valuable contribution to national production. The individual is not a subject of commerce. The product of the process in the individual (having better health than might otherwise have been the case) cannot be sold. ….

Perhaps reflecting Hayne J’s approach to some extent, Crennan and Kiefel JJ at [287] did consider that there was a distinction to be drawn between uses of therapeutic substances and the activities and procedures of doctors when treating patients on the basis that the latter are “non-economic”:

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”.[6]

French CJ, however, at [1] and [44] expressly included surgical procedures in his Honour’s finding in favour of patentability.

second use of a known substance

As Crrennan and Kiefel JJ pointed out, NRDC itself involved a second or subsequent use of a known substance, the hitherto unsuspected properties of which squarely satisfied the requirements for inventiveness. Apotex’ reliance on this basis, therefore, failed at [291] in succinct terms.

the infringement question

… will have to wait for another day.

Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd [2013] HCA 50


  1. French CJ, Crennan, Kiefel and Gaegler JJ; Hayne J dissenting.  ?
  2. Patents Act 1990 s 18(1)(a). The claim would, of course, also have to satisfy the other requirements including novelty, inventive step, utility etc.  ?
  3. Gaegler J appears to be alone in attributing weight to the potential disruption to business investments if the endorsement by Bristol-Myers v Squibb of the patentability of methods of medical treatment was overturned after 13 years.  ?
  4. See [282] for Crennan and Kiefel JJ; [314] for Gaegler J.  ?
  5. At [50]. See also [44] – [49].  ?
  6. Earlier, at [266] – [271], their Honours had noticed that Congress amended the US Patents Act to include §287(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“.”

Alice corp

The Full Federal Court has reserved its decision in Research Affiliates’ appeal; the Commissioner’s appeal in RPL Central is still pending.[1]

In the USA, Alice Corp. had a patent for a computerised method of reducing “settlement risk”, a type of escrow arrangement: the 10 judges in the Federal Circuit Court of Appeals came up with 5 different opinions of which Justice Newman memorably said:

[The 5 judgments have] propounded at least three incompatible standards, devoid of consensus, serving simply to add to the unreliability and cost of the system of patents as an incentive for innovation. With today’s judicial deadlock, the only assurance is that any successful innovation is likely to be challenged in opportunistic litigation, whose result will depend on the random selection of the panel.

Now, the US Supreme Court has agreed to try to sort it out.

ALICE CORPORATION PTY. LTD. V. CLS BANK INTERNATIONAL, ET AL., Docket No. 13–298 (Supreme Court 2013) via Patently-O


  1. The Full Court has also reserved in Cancer Voices re isolated DNA (although one might think there’s little scope for that to get up after Apotex v Sanofi.  ?

Copyright and the ALRC

The Copyright Society reports that Senator Brandis (the Commonwealth Attorney-General) has confirmed to the Senate that:

  1. the ALRC did submit its final report on Copyright in the Digital Economy on Monday; and
  2. the ALRC has recommended:

It has recommended the introduction of a flexible fair-use exception as a defence to copyright infringement. It has also recommended retaining and reforming some of the existing specific exemptions and introducing certain new specific exemptions; amending the act to clarify the statutory licensing scheme; limiting the remedies available for copyright infringement to encourage the use of orphaned works; reforming broadcasting exemptions and amending the act to limit contracting-out terms.

According to the ALRC, it received over 860 submissions and anticipates that the Final Report will be tabled in Parliament within 15 sitting days after its delivery.

Senator Brandis indicated the Government would respond in the New Year.

In response to a further question, Senator Brandis re-affirmed the Government’s commitment to “the content industries” and stated:

It is the government’s strong view that the fundamental principles of intellectual property law, which protect the rights of content creators, have not changed merely because of the emergence of new media and new platforms. The principles underlying intellectual property law and the values which acknowledge the rights of creative people are not a function of the platform on which that creativity is expressed. The principles did not change with the invention of the internet and the emergence of social media. So in this changing digital world, the government’s response to the ALRC report will be informed by the view that the rights of content owners and content creators ought not to be lessened and that they are entitled to continue to benefit from their intellectual property.

Read the Copyright Society’s report here.

 

Update:

Zdnet reads Senator Brandis’ remarks as indicating the Government will not adopt the ALRC’s recommendations.

 

Lid dip: Peter Clarke, barrister

Apotex v Sanofi

The High Court has upheld the patentability of methods of medical treatment.

High Court’s summary

Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd [2013] HCA 50

Analysis to follow (once digested)

auDA reviews whoIS policy

auDA, the body which administers the domain name system in the .au (i.e. Australia) space (OK, ccTLD) has embarked on a review (pdf) of its WhoIS policy.

There are 2 main issues:

  1. Should there be any changes to auDA’s WHOIS Policy covering the collection, disclosure and use of WHOIS data for .au domain names?
  2. Should access to .au domain name data (other than via WHOIS) be opened up?

Apparently, there was a workshop in October 2013 where these issues were canvassed (and you can view a video online – it does go for 1 hour and 25 minutes).

I think if you are a trade mark owner, or act for trade mark owners, you would be well-advised to be making submissions to at least retain the basic information you need to identify the registrant if you want to challenge the registration as conflicting with your trade mark.

I am also not sure why the WhoIS information does not include the date the current registrant became the registrant.

auDA has called for submissions to be made by 31 January 2014.

Link to the Issues Paper (pdf again)