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In addition to finding Sanofi’s patent infringed, the Full Court affirmed Jagot J’s conclusion that Apotex had no implied licence to reproduce the copyright in Sanofi’s product information documents (PID).

Before a (medicinal) drug can be offered for sale in Australia, it must be registered in the Australian Register of Therapeutic Goods by the Therapeutic Goods Administration. One of the requirements for registration is the submission of a PID, describing the drug, what it can be used for and how and providing warnings about potential problems and risks.

Apotex argued that it was industry custom or usage for the suppliers of generic drugs simply to provide PID for their generic drugs in substantially the same terms as the originator’s PID. It provided evidence of many cases where this had happened, including a number of cases in which Sanofi’s generic arm had simply re-used a competitor’s original PID itself. This included:

13 drugs of which Sanofi-Aventis was the innovator and 22 generic versions of the same drug,
the top 10 drugs by value on the PBS and 62 generic versions of the same drug,
some eight drugs of which companies other than Sanofi-Aventis were the innovators and generic versions of those drugs of which Sanofi-Aventis was the issuer.

The TGA did not require PID submitted by generics to be in the same terms as the originator’s PID. If a generic’s PID was different in substance or terms, however, the TGA may require the generic to submit additional safety or efficacy data to support registration of its own formulation.

On the last day of trial, Sanofi was also allowed to introduce evidence showing that some generics did in fact prepare and register their own PIDs rather than just copy the originator’s PID.

In this state of affairs, the Full Court unanimously upheld Jagot J’s conclusion that the evidence of an implied licence was at best equivocal and so rejected the implication. (Keane CJ [80]-[81], Bennett and Nicholas JJ [98]-[208])

It is difficult to resist the impression that, if instead of being sober judges their Honours (at least Bennett and Nicholas JJ) were teenagers, the suggestion that a licence could be implied between parties who were not in any type of contractual or consensual relationship would have been met with:

rofl.

As to the public interest, Parliament was forced to intervene (at the legislative equivalent of the speed of light) and create yet another specific defence and, in due course, Jagot J found that Apotex could rely on it as a defence (for acts done after the amendment came into force).

So far, 2012 is not proving an easy year for those trying to claim they have an implied licence to protect themselves from infringement allegations.

Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd (No 2) [2012] FCAFC 102

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The Full Federal Court (Jacobson, Nicholas and Yates JJ) has largely upheld Jessup J’s ruling, but with a noteworthy limitation on the scope of implied licences.

Acohs and Ucorp both provide in competition with each other Material Safety Data Sheets (MSDSs) which are required by law to identify the properties, uses and hazards of dangerous chemicals.

At first instance, Jessup J found Acohs owned copyright in the MSDSs which had been written by its employees, but not by employees of third parties. His Honour also held that copyright did not subsist in the HTML source code of the MSDSs in its collection: the employees who prepared the software to generate the source code were not collaborating with those who subsequently entered the data in the sense necessary to constitute a work of joint authorship.

The Full Court has upheld these conclusions.

Jessup J also held that Ucorp could claim the benefit of an implied licence which permitted it to reproduce the MSDSs in which Acohs held copyright.

Acohs did not challenge the existence of an implied licence on appeal (after all, it has the benefit of a similar implied licence arising from the earlier litigation against Bashford). There was, however, an important difference in this case.

Ucorp copied several thousand MSDSs each week. At least some of these were made in response to requests from customers who had the benefit of an implied licence from Acohs. The copies made by Ucorp in response to such requests were protected by the implied licence.

However, Ucorp also “trawled” the internet looking for any other MSDSs and, when it found ones it did not already have stored, it downloaded them so as to have them available if a customer came along with a request for one. As these were not made in response to a request, but rather in anticipation of a request (which might never be made), they fell outside the scope of the implied licence. The Full Court reasoned that the licence that would be implied could be the bare minimum necessary and it was only necessary that a licence be implied in favour of customers who placed a request with Ucorp for a copy. The “trawling” could not be sanctioned.

Thus, Ucorp will be found liable for infringing the copyright in all those MSDSs which it reproduced without a specific request from a customer before the copy was made.

Two additional points:

First, Bennett J has adopted a similarly strict approach to the scope of the “interoperability” defence for infringement of copyright in computer programs. ISI made software that enabled users of CA’s Datacom database system to convert to IBM’s DB2 system. Section 47D protects reproductions made (for the relevant interoperability purpose) by the owner or licensee of copyright in a computer program or someone acting on their behalf. Bennett J found that ISI was not acting “on behalf” of such licensees when it made reproductions of “macros” used in the Datacom system for its commercial 2BDDB2 program as they were not made in response to specific requests from customers before the reproduction was made: CA Inc v ISI (starts around [334]).

Secondly, the Full Court does not appear to have been too happy with the licence Merkel J implied in the original Acohs v RA Bashford litigation at [108]:

The apparent acceptance by the parties of the correctness of Bashford has important ramifications for this appeal. As the parties conducted both the trial before the primary judge and the present appeal on that basis, the occasion does not arise for us to proceed otherwise than in accordance with, and to the extent of, that acceptance. In so proceeding, we do not wish to be taken as endorsing the correctness of all aspects of that decision.

Perhaps, the new reference to the ALRC cannot come soon enough.

Acohs Pty Ltd v Ucorp Pty Ltd [2012] FCAFC 16

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