Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd & Ors
[2013] HCATrans 124
[2013] HCATrans 124
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Sydney No S219 of 2012
No S1 of 2013
B e t w e e n -
APOTEX PTY LTD ACN 096 916 148
Applicant/Appellant
and
SANOFI‑AVENTIS AUSTRALIA PTY LTD
First Respondent
SANOFI‑AVENTIS DEUTSCHLAND GMBH
Second Respondent
AVENTISUB II INCORPORATED
Third Respondent
FRENCH CJ
HAYNE J
CRENNAN J
KIEFEL J
GAGELER J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON WEDNESDAY, 29 MAY 2013, AT 10.18 AM
(Continued from 28/5/13)
Copyright in the High Court of Australia
____________________
FRENCH CJ: Yes, Mr Jackson.
MR JACKSON: Your Honours, when the Court adjourned I was referring the Court to the reasons for judgment of Justice Gummow in the Rescare Case 101 ALR 205 and, your Honours, I had passed over for a moment what appears at the top of page 234, the extract from the Australian Patent Office Patent Examiner’s Manual. Could I give your Honours copies of that now? Your Honours should have that.
The relevant parts dealing with human beings are in paragraph 35.79, your Honours, and in the passage that goes through to 35.81. Your Honours will see in 35.79 some references and then 35.80 the reference to Schering A.G. and Bernhard Joos v Commissioner of Patents. Then your Honours will see paragraph 35.81; it is simply the fuller version, I think, of what his Honour extracted in that decision.
Your Honours, I took your Honours yesterday to the next part of his Honour’s reasons dealing with the Industrial Property Advisory Committee’s views. Could I take your Honours to page 235 about point 9, and your Honours will see commencing at the bottom of that page the discussion that goes on page 236 to page 237 of Maeder v Busch and the other two cases in the Court. Then, your Honours, could I come to page 237 about point 4 to the reference to the New Zealand decision in Wellcome Foundation v Commissioner of Patents?
Your Honours, I will not attempt to go through this in detail, but may I just invite your Honours to read the discussion by his Honour. Could I take your Honours particularly to the observation at page 238, about point 2 on the page, where Justice Gummow quoted the reference by Chief Justice Davison to:
the lack of logic in any distinction which produced the result that a product for treating the human body would be patentable but not a method of treating the human body.
Your Honours will see the reference to the reversal of that decision by the New Zealand Court of Appeal and, your Honours, about line 38, to his Honour Justice Gummow’s view of the Australian experience. Then your Honours, at page 239, your Honours will see at about point 3 on the page, I suppose, about line 15, a reference, a response to point 5, which is referred to in 9, an argument on the other side that the patentee would be able to refuse to license the invention, et cetera. His Honour dealt with that. His Honour also referred to submissions. In the paragraph commencing at line 22, your Honours will see the submissions made there. Your Honours will see, at about line 32 on the page, the acceptance of some submissions on behalf of the applicant. They are referred to in the preceding paragraph. Now, your Honours, if one goes to ‑ ‑ ‑
CRENNAN J: I think that lines 35 onwards are important in the context of the issue which faces us.
MR JACKSON: Yes, your Honour, that is so. The submission that – the two aspects of it, your Honour, the rejection of the concept of not being “an invention” and that “no normative distinction”, et cetera, as we see there. Could I go to the decision in the Full Court (1994) 50 FCR 1? Your Honours will see that Justice Lockhart, commencing at page 6, engaged in a discussion of the decisions and the practice in Australia and elsewhere. Could I note particularly, your Honours, at page 12 the commencement of the discussion of the cases in the United Kingdom. Your Honours will see that that includes at page 13, about letter E, the discussion of Re Upjohn to which your Honours were taken yesterday.
If one goes then, following the discussion in the other jurisdictions, to his Honour’s reasons at page 16 we would submit that the views expressed under the heading “Findings” and following - and I will come to them in a little more detail in just a moment - reflect the better approach to the issue. Could I just say if one goes to page 16, letter F, your Honours will see in the first paragraph there that there are decisions:
which go some distance towards recognising the patentability of methods of treatment of human beings which are no more than an application of old compounds for new therapeutic uses.
Your Honours will see in the next paragraph that his Honour refers to the fact that there is a “balancing exercise” involved.
HAYNE J: Is that an exercise which this Court must undertake?
MR JACKSON: Well, in our submission, no, your Honour. When his Honour says there is a balancing exercise, I think it right to say that his Honour is discussing the matter as a concept as distinct from saying which body should engage upon it. But may I just say, your Honour, coming to the present case, the answer is no because if one looks at the core provisions of the Act, and that is section 18(1), section 18(2), one sees section 13 and section 16 and the definition of “exploit”, they refer to methods and, your Honours, in relation to that what one does see is in the opening words of section 18(1) and in the words of section 18(2) that there has been attention paid by the legislature to the question of the extent to which treatments – and I use the term perhaps a little loosely – in relation to the human body has been dealt with by the legislature.
The point of all that, your Honour, in our submission, is that certainly the Court has a function, but what the function is, is to interpret what has been determined by the legislature, the legislature has cast its mind to the issue, and one has a situation where there is nothing in the Act which would affect the patentability of procedures, treatments of the kind with which this case is concerned. Your Honour, that is the Court’s function.
FRENCH CJ: Has the legislature left in a public policy boundary defined by the reference to general inconvenience in section 6?
MR JACKSON: No, your Honour, no.
FRENCH CJ: You say it is been swept away?
MR JACKSON: Yes, we agree with our learned friends. Your Honours, if I could go back to Justice Lockhart’s reasons, could I take your Honour, and this is in a sense in connection with what your Honour Justice Hayne was just asking me, to page 17, and between letters C and D, where his Honour said that he agreed with Chief Justice Davison that the decisions of the English courts seem to be based on:
grounds of ethics rather than logic, and they are not the subject of any fully developed reasoned considerations.
Your Honours will see that referred to also at about letter E, and if your Honours go to the first new paragraph under letter E, his Honour refers to:
The Australian experience with the decision in the NRDC case at its helm –
Then, your Honours, at about letter G on the same page:
There is no material before us which would suggest deleterious consequences –
Then your Honours will see at the top of page 19, just about beside letter B, where his Honour said that he agreed with Chief Justice Davison:
that in both cases the courts established distinctions without a difference, in order to allow a patent.
Your Honours will see that elaborated upon through the remainder of that paragraph. In the first new paragraph on page 19, his Honour refers to the absence of a “justification in law or in logic” between substances producing a cosmetic effect or a functional effect, and your Honours will see that elaborated upon through the remainder of that paragraph.
Your Honours will see that elaborated upon through the remainder of that paragraph. Your Honours will see in the paragraph commencing around D and then the view expressed in the paragraph commencing between E and F that there is no statutory provision prohibiting the grant of a patent for a process of medical treatment of a human ailment or disease in a human being, and his Honour said that it was noteworthy that the Parliament had the opportunity to exclude methods of treating the human body when it enacted the 1990 Act but the limit of the exclusion was section 18(2).
Could I just note, your Honours, in relation to 18(2), that 18(2) does itself refer to a process and, your Honours, I do not want to get too much out of 18(2) in a sense but what it is recognising is that what is patentable – what otherwise would be patentable are processes as well as other matters. Could I move ‑ ‑ ‑
FRENCH CJ: Justice Lockhart put to one side the generally inconvenient ground, did he not, without determining ‑ ‑ ‑
MR JACKSON: Yes, your Honour, yes. Your Honours, could I go from that to Justice Wilcox in that decision at page 42?
HAYNE J: Forgive me if I delay you a moment on Justice Lockhart and particularly what is said at the foot of page 19. His Honour says he does not need to go to whether general inconvenience is available, though as at present advised he would not accede to the argument that it is not available. Is that right?
MR JACKSON: Yes, that is what he says, your Honour, yes.
HAYNE J: How does that fit with the discussion we have earlier in the reasons about the availability of a patent for a method of medical treatment?
MR JACKSON: Well, what his Honour seems to be doing in a sense in the last paragraph on page 19 is to say there was an argument that you cannot – that “generally inconvenient” is not available under either Act:
at present advised I would not accede to the argument.
That seems to tie in, your Honour, in the sense with the earlier discussion about the criteria – sorry, considerations, if I could put it that way, one way and the other that might support the notion, if it is to be supported, that methods of treatment are not patentable in terms of section 6. Now, his Honour having dealt with that issue and treated it as one where he did not agree with, did not think it was supported by the statute, then in those circumstances did not need to deal with the question of general inconvenience because he had taken a view that was adverse to it in any event.
CRENNAN J: He took the view, and I think it is clear from the top of that page 19, the paragraph commencing “In my opinion, there is no justification in law or in logic”, and then the next paragraph, “Although a “mere new use”, his view was that a method of human treatment fell within the definition of a manner of manufacture.
MR JACKSON: Yes, your Honour.
CRENNAN J: There was no reason in logic why it should not and there was no distinction to be made between the method of treatment of the human body and a manner of manufacture that is a method for ridding crops of weeds.
MR JACKSON: So, your Honour, the issue in effect went away, if I could put it that way.
HAYNE J: Well, how did it go away, Mr Jackson? That is the point I am struggling with.
MR JACKSON: Well, your Honour, how did it go away in a sense? It went away in the sense that his Honour took the view that there was no reason which, in effect, could amount to anything that would be a general inconvenience in relation to it. I do not know that I can ‑ ‑ ‑
HAYNE J: That seemed to me to be implicit in what his Honour is saying. That there is no available argument that it would be generally inconvenient, I have looked at factors (a), (b), (c), (d). These are not of a kind which present an argument that would found a conclusion of general inconvenience”, but then why do we find what we find at the foot of 19? I do not need to think about it, but I think that general inconvenience is a question that may remain alive under the 1952 and the 1990 Act.
MR JACKSON: Well, your Honour, I suspect that the way in which his Honour put it there was because of the view taken by Justice Sheppard in dissent, that he dealt with the question on the basis of it being generally inconvenient. The underlying considerations to which he referred were ones with which Justice Lockhart did not agree and, having taken that view, it was not necessary for him to engage on the question whether general inconvenience was or was not further available.
HAYNE J: Because the further question that provokes is how could a court – stand apart from this case – how could a court embark upon examination of the question of general inconvenience in this general area?
MR JACKSON: Yes. Your Honour, could I start by saying that there are difficulties – it just is not of the same kind as questions of, for example, public interest which sometimes a court in particular contexts has to consider. But the problem that does arise in cases of this kind is that one can see that there are arguments perhaps which one can say militate in relation to there being freedom to use developments; on the other hand, arguments the other way, that there should be some reward for development.
Now, that is an issue that is actually discussed by Justice Finkelstein in the later decision in the Full Court of the Federal Court in which he raises the question that your Honour put to me and says how can the court decide it? Now, presumably in theory, one might say, well, all you need is affidavits demonstrating – and when I say affidavits I mean cross‑examination of course if necessary – determining the size of the pharmaceutical industries, for example, in Australia, in other countries with different types of patent protection or not, and matters of that kind. But in the end one, in our submission, comes to great difficulty because there is some difficulty in a sense in the definition of the question.
The difficulty in the definition of the question arises because the Court would have to determine, first of all, is it all medical treatments, medical treatments excluding surgical treatments, ones that have certain effects that have in the past been distinguished; for example, contraception as against things of the present kind. So the first question, if I can put it this way, would be the definition of the issue. Having determined the issue, your Honour, one then considered the considerations one way and the other.
HAYNE J: One would end up comparing the incomparables of economic incentive and a value assigned to an outcome.
MR JACKSON: Yes, your Honour, and what I was going to ‑ ‑ ‑
CRENNAN J: It might be said that a very simple example of general inconvenience might be a surgeon having a monopoly on a lifesaving method of surgery that he has come upon.
MR JACKSON: Well, your Honour, one ‑ ‑ ‑
CRENNAN J: But beyond that, it is very difficult to see how the Court would deal with it.
MR JACKSON: Very difficult, your Honour, and the more one looks into the issue or issues the more, we would submit, one comes to the view that this is the area where Parliament has the ability to decide. Now, of course, I mean, difficult questions for Parliament. My learned friend spoke yesterday of Senator Harradine as if he were the only one responsible for section 18(2). I am going to come to that in a moment.
FRENCH CJ: A constitutional theory ‑ ‑ ‑
MR JACKSON: A voice of moderation in the Parliament as it turned out. But, your Honours, could I just say that it is the kind of issue where decisions have to be made, not necessarily entirely based on evidence, based on views and values and, your Honours, in the end in questions of this kind, they are better for Parliament, not the Court.
FRENCH CJ: Well, if you are wrong on the proposition that generally inconvenient has been swept away, and we have heard very little beyond assertion for that proposition, there is a public policy, as it were, perimeter around patentability, is there not?
MR JACKSON: Well, your Honour, in one sense. Yes, in one sense, but if one is trying to identify what that is one sees provisions such as those which say that things – say, in effect, that things are not patentable if they are contrary to law. There is a number of provisions of the Act one could go to that provide in reality what is the public policy bases.
CRENNAN J: The narrower question here is whether a particular drug therapy is a manner of manufacture.
MR JACKSON: Yes, your Honour. So the actual question before the Court in terms of the matter for ultimate decision is relatively narrow. The argument advanced by the appellant to support it is very broad indeed, and ‑ ‑ ‑
FRENCH CJ: There is no doubt that you could get into an area of inquiry – for example, the efficacy of the economic incentive of the grant of monopolies in encouraging research into new uses of old drugs on the one hand and the chilling effect on medical treatment discretions on the other. As Justice Hayne said, in a sense, they are incomparables and they involve, ultimately, some sort of policy decision. You might say that is a matter for the legislature, but the question is: is it still there as a matter for the Court?
MR JACKSON: In our submission, the answer is no. I will come to that a little later, if I may.
CRENNAN J: One difficulty is that sensibilities change over what it means to be a liberal profession and there is no doubt C & W was informed by a platonic notion of the medical profession, which may have changed today where research grants may be conditioned upon a medical inventor in fact making free for patent purposes whatever is the subject matter of, for example, a new drug therapy.
MR JACKSON: Yes, your Honour.
CRENNAN J: So there have been huge changes over the 100 years-plus in how the medical profession is seen.
MR JACKSON: Your Honour, and financing in a number of ways – conditional financing on the one hand. On the other hand, we in Australia live in a situation where the funding of medical practitioners is, to a very significant extent, supported by government grants in one form or another. I say “government grants”, I mean funding under Medicare and things of that kind. That provides for certain limitations. We simply do not live in an area where medical practitioners have the entire freedom that they had in the past.
The other feature about it is that one is not looking, for example, at the days when, as in the past, tar was used to combat psoriasis, as you will see from some of the material to which I will come. So one is living in an area where there are many, many drugs developed and it costs a great deal to develop them and have them approved for use. So, your Honours, it is difficult, and I am accepting what your Honour is putting to me, the doctors today – doctors live in a different milieu from that of 1914. The chemical industry –
GAGELER J: When did it change?
MR JACKSON: Gradually, your Honour. They have changed in a number of ways. One, your Honour, one might think, would be the war reparations after World War I, which resulted in, for example, the classic example, aspirin becoming non‑patented and being non‑patented in the German sense and being available to everyone. That brought about, together with the events of World War II, great developments in things like the use of penicillin and various other drugs and chemical industries growing much larger and becoming much more effective.
Now, what changed, when did it change? I cannot give your Honour an exact time, but what one can say is that the days when going to a medical practitioner in, say, the 1930s might have been, and I do not mean this in any way offensively, an exercise in applied primitivism, have moved on because what one sees is that there are many things that could be only cured by forms of surgery, purging or other things that seem somewhat unattractive today, that today can be cured by the application of drugs developed in circumstances where money has been expended to develop them. So, your Honour, I am sorry I cannot say nineteen something or other, but there certainly has been a change.
GAGELER J: Sorry, what lay behind my question was really the position as it appears to me have been quite well‑established in England in the 1970s was that a process of medical treatment was not patentable, so I have taken that as my starting point, but you perhaps say, well, that was itself a period of transition.
MR JACKSON: Yes indeed, your Honour, yes, and it was not the case. If one looks at the decisions in Australia the trend has been elsewhere, the other way. Your Honours, I was going to go, I think, to Justice Wilcox at page 42 of Rescare. Could I just say, your Honours, again, I may have given your Honours references to some particular passages in the course of this, at page 42 in the second paragraph of his Honour’s reasons he refers to the fact that there are different decisions on the issue in several countries, and there are some differences. Your Honours will see his Honour’s own view in the last paragraph on that page, and in particular the last three or four lines referring to Parliament, and referring, at the top of the next page to section 18(2), and his Honour in letter B on page 43 says that he believed:
in the face of apparently deliberate decisions by Parliament not to build this particular exclusion into its legislation, courts should be hesitant to introduce the exclusion by reference to those very general principles.
Your Honours, could I refer further down the page, near letter F, to the reference to NRDC and the test there adverted to that:
“offers some advantages which is material, in the sense that the process belongs to a useful art as distinct from a fine art –
Then, your Honours, on page 44 his Honour refers to the fact, about letter B, that Justices Graham and Whitford in the United Kingdom:
commented that a change in the existing policy “would appear to us to be sensible”.
His Honour expressed the view in the next paragraph that the principle in C & W was:
not so deeply embedded in Australian law as to preclude an appellate court departing from it.
He said:
The principle is, after all, a judge‑made exception to a general statutory right.
His Honour refers to the earlier cases and then goes on, your Honours, at page 45 to say in the first line that:
in the unusual circumstances of this case, these dicta should be given little weight. They assume the existence of an exception that was built into United Kingdom law because of a view about the meaning of “method of new manufacture” that the High Court has now held to be too limited.
His Honour said then, and in our submission it is correct, that:
once the rationale of the exception disappears, proper judicial policy requires that the courts reconsider the issue afresh.
Your Honours will see the remainder of that paragraph. Could I go, and again I will endeavour to do so as briefly as I can, to the other decision of the Full Court of the Federal Court prior to the present case in Bristol‑Myers Squibb Co v FH Faulding & Co Ltd (2000) 97 FCR 524. Your Honours will see that their Honours, Chief Justice Black and Justice Lehane, commenced to deal with this issue at page 528, about paragraph 7. In paragraph 8 they quoted from Justice Lockhart. Then your Honours will see paragraph 9, reference to the fact that it had been:
observed that there is no statutory provision in Australia prohibiting the grant of a patent for a process of medical treatment, and that it was noteworthy that Parliament had the opportunity to exclude methods of treating the human body when it enacted the 1990 Act, but that the limit of the exclusion was s 18(2) –
Your Honours will see in paragraph 12 on page 529 their Honours expressed the view that they:
should act in accordance with the views of the majority.
The first few lines of that paragraph seem directed to the question of whether the earlier decision was one binding on Justice Heerey who heard the case at first instance from which this was the appeal.
FRENCH CJ: Justice Heerey thought it was obiter, I think.
MR JACKSON: Yes, your Honour. It is an issue which would not bind your Honours in any event. I mention that simply to provide the context of what was said. Your Honours will see then at paragraph 15 their Honours said they:
should adopt and apply the view of the majority in Rescare –
which they discuss. They say:
we are fortified by two considerations. The first of these is what seems to us to be the insurmountable problem, from a public policy viewpoint, of drawing a logical distinction which would justify allowing patentability for a product for treating the human body, but deny patentability for a method of treatment.
In the next paragraph the second compelling reason was, to put it shortly, the limited view taken in relation to section 18(2). Your Honours, their Honours refer also in paragraph 17 about two‑thirds of the way through the paragraph to the difficulty which:
remains of drawing any logical distinction between a method of treatment and a patentable pharmaceutical product that produces the same beneficial results.
Spider bites are referred to.
FRENCH CJ: The reference to practice there, I think there was an Australian Patent Office set of guidelines in place which provided for assumed patentability of medical treatments. I am just wondering what the reference to practice was - paragraph 16 on page 530.
MR JACKSON: I gave your Honours this morning I think ‑ ‑ ‑
FRENCH CJ: Is that a reference back to that?
MR JACKSON: Your Honour, I think so. That was the 1984 practice and that was referred to then by Justice Gummow and then in this case also. Your Honours, could I move then to Justice Finkelstein at page 567? You will see that his Honour posed the question at paragraph 131 where he said:
may be “generally inconvenient”, that is to say, it may be contrary to public policy and be excluded for that reason.
Now, your Honours will see at paragraph 132 his Honour expressed the view that there:
appears to be general consensus that medical and surgical products are appropriate subject matter for patents -
which he discusses in that paragraph, and then in paragraph 133 refers to the fact that:
The opponents to the grant of a monopoly in respect of medical and surgical processes raise objections that can be put into two broad groups: (i) the adverse effects on the provision of medical care; and (ii) the adverse effects on medical progress and education -
and “the related ‘ethical’ question” to which he refers. Now, your Honours will see in paragraph 134 his Honour referred to what he put as the most emotive of the arguments and then goes on to deal in paragraph 136 with:
the other side of the debate is the underlying objective of patents –
You will see that he refers in paragraph 137 to the compulsory licencing procedures that can be found in the 1990 Act, may have some difficulties with them, but they are there. Your Honours will see if one goes to paragraph 139 that his Honour says:
Thus, patent protection provides some measure of guarantee that the public are not just the inventor will benefit from the invention.
Your Honours will see that developed throughout that paragraph. Then one comes to the question that your Honour Justice Hayne put to me earlier, in paragraph 40:
How is a court able to resolve these competing contentions? None of them are supported by evidence. Some may not even be capable of proof. Even if evidence was called to make good the unsubstantiated assertions, on what basis is the court to decide how the public interest will best be served?
Your Honours will see then the reference to the Supreme Court of the United States observations in Diamond v Chakrabarty which are there set out. Then in paragraph 141 his Honour expressed the view that:
I do not believe that in a controversial issue such as is raised by the present argument, I would be abandoning my responsibility as a judge to follow this approach –
and say, to put it shortly, that is a matter should the exclusion ‑ should be a matter determined by Parliament. Your Honours will see in paragraph 142 that his Honour elaborated upon the difficulty issue, saying:
few of the arguments admit of a definitive answer. The area of controversy is great. Public interest groups, medical and professional associations, medical scientists and the pharmaceutical industry, among others, would need to be approached and their views ascertained before a court could ever hope to arrive at a reasoned conclusion, if it could ever do so. Indeed a court might well be asked to take account of ethical and moral considerations to arrive at a decision.
His Honour then expressed the view that you will see that:
medical treatment and surgical process are patentable under the legislation and, if public policy requires a different result, it is for the Parliament to amend the 1990 Act.
Now, his Honour then goes on to discuss the question whether the primary judge should have applied the earlier decision in the event – I will not deal with that.
GAGELER J: Mr Jackson, you drew attention to paragraph 133 where there is an identification of policy arguments. Is his Honour there referring to some body of literature that we should be aware of?
MR JACKSON: His Honour does not identify it, and I do not know that I could identify from the decision what his Honour was referring to. Your Honour, might I perhaps leave it on this basis, that we will endeavour to find out if there was material – what material there was before the Court that his Honour was there referring to. It seems likely, your Honour, in view of what he said in relation to – in view of what he said in paragraph 140 I think it unlikely that there was actually, your Honour, but ‑ ‑ ‑
FRENCH CJ: His Honour might have done a bit of his own research.
MR JACKSON: Possible, your Honour. Your Honour, it ‑ ‑ ‑
CRENNAN J: The Boral Case comes to mind?
MR JACKSON: Yes. What his Honour said is something that one might really work out oneself, sitting down without looking at books, one might think, but they are the types of – anyone reasonably familiar with current affairs would be aware that those types of issues are ones on which there would be various interest groups, or perhaps I could put it the other way, groups having or claiming to have an interest who might want to be heard on the issue.
CRENNAN J: Well, the issue has been discussed, both in the context of the deemed novelty provisions in the UK and also in the context of surgical processes raising difficulties in the US, so there is a huge amount of academic writing and so forth on these issues.
MR JACKSON: Yes, your Honour, and one sees in the ordinary media discussions that go towards the issue, for example, as items come off the period of exclusivity under the Act, and so on, and changes that may occur because of that. Now, your Honours, could I refer to University of Western Australia v Gray – your Honour had a very long decision to give, with some pressure of time I suspect, in relation to the matter – it is (2008) 246 ALR 603. Your Honours, we have given an extract from that, the extract contains paragraphs [1402] through to [1409] in which your Honour discusses the decisions in the matter, and your Honour’s conclusion is at page 938, lines 35 to 40.
Could I just say, your Honours, that your Honour’s view that the matter has not been determined by this Court, and your Honours will see that in paragraph [1402], does seem to be a little against the view advanced by our learned friends that the whole matter was determined, in effect, by the course of events that had taken place before the introduction of the 1990 Act. Could I also say, your Honours, that in our learned friend’s written submissions in‑chief you will see a reference to your Honour’s observation in that case which appears to adopt the view that the matter remained to be determined by this Court. Your Honours, could I come then to the present case, and your Honours will see that in the reasons for judgment of Justices Bennett and Yates at page 747 in volume 2, in paragraph 193, that they said that, in the first few lines:
We would not depart from the position represented by the dicta in this Court that support the patentability of methods of medical treatment, a position which we regard as representing orthodoxy in Australian patent law.
They refer to the fact that:
Experience shows that it is commonplace for patents to be granted in Australia that include claims for methods of medical treatment.
Your Honours will see the remainder of the paragraph. Could I refer to Chief Justice Keane dealing with the issue in a similar way at page 694 in paragraphs 19 through to 26, and your Honours will see at the end of paragraph 25 particularly, and then the expression in paragraph 26, halfway down:
There is now even more force in the views expressed by Lockhart and Wilcox JJ . . . that one cannot attribute to the Parliament the intention –
et cetera, in the light of the presence of section 18(2). Could I come then, your Honours, to the Patents Act. Your Honour, I know it has taken a long time to get there, perhaps atypically, but the Patents Act, in our submission, does make it clear, we would submit, that the methods and processes are patentable. We would submit two things. The first is that it was apparent from its form at the time of the grant of a patent and it is even more apparent now.
Your Honours, a starting point, section 13(1), which describes the rights given to a patent holder by the patent and that is the exclusive right to exploit the invention. “Exploit” is a term defined by the dictionary in Schedule 1, as is the term “invention”. Your Honours will see that paragraph (b) of the definition of “exploit” refers specifically to using a method or process. It recognises that the invention may be a method or process. You will see that paragraph (b) says:
where the invention is a method or process – use the method or process –
on the one hand –
or do any act mentioned in paragraph (a) in respect of a product resulting from such use.”
But it is really the first half of that to which we would refer. Your Honours, that definition was adverted to in the Court in Northern Territory v Collins (2008) 235 CLR 619 by Justices Gummow and Kirby first at page 623, paragraph 16. I think I have given your Honours the wrong reference. The passage really commences at page 623, paragraph 16, but may I go directly to a reference to “exploit” where it is said the reference to “exploit” in the definition “is as follows” and you will see it there set out.
Your Honours will see references also in paragraph 20 to a number of other provisions of the Act. Your Honours, one is section 16(2). Section 16(2) of the Act provides that where a patented product or the product of a patented method or process is sold, et cetera, and it recognises that a patent may be a patent for a method or process.
Your Honours will see too that section 119 of the Patents Act in the form – could I just say, your Honours, that in its original form, section 119 referred both to making a product and using a process described in a claim and your Honour Justice Crennan referred also to the defined term “exploit” at page 648 and paragraphs 123 to 127. I do not think I need take your Honours to the detail of it, but your Honours will see the reference there to “exploit”. Now, could I also mention while with that case that the reasons of Justices Gummow and Kirby at page 624 in paragraph 18 refer specifically to:
the understanding of the principles of patent law expounded by this Court in National Research Development Corporation v Commissioner of Patents (NRDC). The Court emphasised that over time the expression “manner of manufacture” in the Statute of Monopolies 1623 had been construed so as to include a practice of making, as well as the means of making and the product of making; there was, however, no necessity for the derivation of a “vendible product” in the literal sense, so that an artificially created state of affairs, such as (in NRDC itself) . . . would suffice. Hence the distinction now drawn in the definition of “exploit” in the Act between an invention which is a product, and an invention which is a method or process which may or may not yield a product.
Your Honours, in the 1990 Act in its original form there was no relevant statutory restriction on the nature of the method or process. There was however, importantly in our submission, the specific but limited exception contained in section 18(2). If I could go to that for just a moment, your Honours will see that section 18(2) says that:
Human beings, and the biological processes for their generation, are not patentable inventions.
Your Honours will see that nothing else is said in the Act about human beings or treatment of them or anything of that kind and one sees if one goes to subsection (1) that it says, “Subject to subsection (2)”, which is the limited exception to which I referred, and it then goes on.
Your Honours, in the absence of statutory words, we would submit why should one imply a restriction on the methods and processes which might be patented and why in particular should one do so when there is a provision which actually does deal with particular circumstances in which inventions in relation to the human body are not patentable? In doing so, your Honours, the presence of the opening words of subsection (1) and of subsection (2) demonstrate, we would submit, that Parliament had turned its attention to the question.
I do not want to trouble your Honours too much with what happened in Parliament, but your Honours should have two documents, one being the procedures in Parliament on the third line, 17 September 1990, a discussion of the Patent Bill in the Senate in Hansard. Now, you will see on the first page Senator Coulter moving that in relation to the definitions, that is various definitions are to be inserted, then you will see clause 18, it is about nearly halfway down the page:
before “A patentable invention”, insert “Subject to subsection (2).”.
Then you will see immediately below that the proposed subsection (2) that he had in mind. Now, your Honours will see “gene or genes”, “genome”, “altered organism . . . produced by having its genome manipulated” and so on. Your Honour, they relate to the same general area, of course, as what became section 18(2), and then some consequential amendments in relation to that. You will see a discussion ‑ ‑ ‑
HAYNE J: Sorry, did you say these relate to the same general area as 18(2)?
MR JACKSON: Yes, your Honour. Well, your Honour, I am putting it very loosely.
HAYNE J: I thought this was more about genetically modified crops as well as other things.
MR JACKSON: Well, your Honour, that, in effect, came later but the point I am trying to get to, your Honour, is that you will see, for example, in his suggested 2(c), “altered organism (human, plant”, et cetera, they are not just talking about plants, but, your Honours, what I was going to say was that in the end you will see the discussion going on for the next two pages.
Then, “In Committee”, three days later, which is the other document on 20 September, Senator Coulter’s proposals have not achieved the numbers, in effect, and the result was that a narrower version, namely that, and this is on the last page of the document, I think, which was put forward by Senator Harradine, was agreed to as the amendment, and there was some discussion about the proposals. Your Honours, I do not really want to make too much of the course of it through Parliament ‑ ‑ ‑
FRENCH CJ: Well, this would cover territory like cloning I suppose and generating embryos for commercial purposes and things of that sort. It is in a somewhat different area of discourse from what you describe as matters relating to the human body.
MR JACKSON: Your Honour, I appreciate that, that is one of the reasons why I say I do not want to make too much out of it, but what I do seek to make out of it though is that, first, in Parliament the issue of the application of the proposed law to human beings was considered. The second thing is a riposte to our learned friend, Senator Harradine’s amendment. Well, it may be right literally but Parliament was obviously considering several different proposals in the area and the kind of ethical in a way issues that Parliament can appropriately discuss. Your Honour, the third thing is really the result. The result is that one has the enactment of section 18 and the enactment of section 18 with the limited restriction contained in subsection (2).
Now, your Honours, since the Act came into being one can see that Parliament has continued to adopt the view that claims of the present kind can be made. That can be seen, in our submission, most obviously, from section 119A. Section 119A creates an exemption from patent infringement of any pharmaceutical patent, so acts undertaken for purposes solely in connection with gaining regulatory approval in Australia.
Your Honours will see that the provision relates to pharmaceutical patents. Paragraph (b) of the definition of “pharmaceutical patent” is the one of particular relevance and your Honours will see that it commences with the words:
a method, use or product relating to a pharmaceutical substance, including any of the following –
Now, your Honours, “pharmaceutical substance” is defined in Schedule 1 and I do not think I need to take your Honours to it. It is pretty much what one might expect a pharmaceutical substance to be defined as being. Perhaps I should go to “pharmaceutical substance”. It is defined as meaning:
a substance (including a mixture or compound of substances) for therapeutic use whose application (or one of whose applications) involves –
matters that are set out there and your Honours will see that the definition includes the term “use”. If I could go back to section 119A for a moment, your Honours will see that paragraph (b) gives three examples, paragraph (b)(i), (b)(ii) and (b)(iii). They do not exhaust the concepts set out in the opening words of (b). What I mean by that is that while the examples in (b)(i) - and one example in (b)(i) refers to “a method” whilst (b)(ii) and (b)(iii) refer to a product. None of the examples in (3)(b) concerns a claim to the use of a pharmaceutical substance and, of course, (b)(i) to (b)(iii) are preceded by the words “including”.
FRENCH CJ: But the reference to “use” in the definition of “pharmaceutical substance” and application in that definition does not seem to have a purposive element about it, but is purpose inescapable in relation to application of a known drug in a new use?
MR JACKSON: I am sorry, your Honour, there is the expression “for therapeutic use”.
FRENCH CJ: Yes.
CRENNAN J: You are content, I assume, with the construction of claim 1 advanced by the Full Court?
MR JACKSON: Yes, your Honour. If I could go back to the definition of “pharmaceutical patent” at paragraph (b) of section 119A(3)? Your Honours, it is difficult, with respect, to envisage what the legislature might have intended by referring to patents claiming a “use . . . relating to a pharmaceutical substance” if that concept did not include patents for the use of a pharmaceutical treatment in the treatment of a particular disease.
GAGELER J: Mr Jackson, in that respect, I am not sure which way this cuts, but the words “therapeutic use”, or the expression “therapeutic use” appears elsewhere in section 119A, and that is defined in the dictionary in a way that does pick up the medical administration of the drug. Do we read “use” in subsection (3), paragraph (b) as intended to pick up the defined expression “therapeutic use” or do we read it in some other way?
MR JACKSON: Well, your Honour, I think the expression “therapeutic use” is used in the definition of “pharmaceutical substance” and that means use for purposes in the definition of “therapeutic use”. Now, if one goes back to 119A, your Honour will see that the definition means “a patent claiming a pharmaceutical substance”, and then it refers also to a patent claiming “a method, use or product relating to a pharmaceutical substance”. Now, it may be there is a degree of overkill in that, but it clearly, in our submission, relates to something where there is a purposive element contained in it. I am not sure that answers what your Honour was asking me, but ‑ ‑ ‑
GAGELER J: Well, I was really asking you does the word “use” in 119A(3)(b) encompass “therapeutic use” as defined?
MR JACKSON: Well, the answer, your Honour, is yes.
HAYNE J: Do we not need to understand 119A knowing more – at least than I do – about how there may be an exploiting of the invention for purposes connected with obtaining inclusion in the Register of Therapeutic Goods? 119A(1) is the hinge about which the section turns, is it not?
MR JACKSON: Yes, your Honour.
HAYNE J: The rights are not infringed by a person exploiting an invention if the exploitation is solely for – and how would one otherwise be exploiting the patent for purposes connected with obtaining the inclusion in the Register of Therapeutic Goods?
MR JACKSON: The person might be someone who has a licence who wants to use it, your Honour.
HAYNE J: For inclusion in the register?
MR JACKSON: Yes, your Honour. Your Honour, this is a topic on which I would not pretend to be familiar in detail, but maybe look at the question and perhaps give your Honours a note about how that situation might arise.
HAYNE J: Of course.
MR JACKSON: Yes, perhaps I could do that. Your Honours will see the issue referred to. There is, your Honour, some ‑ ‑ ‑
FRENCH CJ: Is this directed to a concern that a mere application for registration could constitute a threatened infringement, or does it go further than that and pick up things like pre‑submission clinical tests and so forth?
MR JACKSON: Could I perhaps refer your Honours to a document that your Honours have, I think, which is the explanatory memorandum dealing with, amongst other things, section 119A. Your Honours will see that on the page numbered 42 and paragraph 147. One does need some background, I think, to understand it fully. Perhaps we could seek to give that to your Honours. Your Honours will see at paragraph 157 the definition of “pharmaceutical patent” includes, and it is set out, and then in paragraph 159 it is said:
The definition of ‘pharmaceutical patent’ is intended to cover all patents that a generic pharmaceutical company would need to exploit in order to seek inclusion of a good other than a medical device or a therapeutic device on the ARTG. It is intended that patents claiming the following methods, products and uses . . . would be covered –
Then your Honours will see in (c):
a method of use of a pharmaceutical substance –
and (d):
a method of administering a pharmaceutical substance –
are to be included. Your Honours, perhaps the reference in the opening words of 159 is really what is covered, I think, to put it shortly, by 119A(1), a generic substance. Getting a listing does not involve there being a breach or infringement of the patent, but other things may, of course.
Your Honours, in summary, we would submit that both before and after the amendments to the Patents Act the position in this country is that claims for patents in respect of medical treatments may be granted. Could we come then to our learned friend’s argument advanced both orally, I think, and at paragraph 24 of their written submissions in‑chief that methods of human treatment are essentially non‑economic? Your Honours, the test laid down in the NRDC Case 102 CLR 276 at about line 29, to which your Honours have been referred, I think, on a couple of occasions, that treating the word one is talking about “every end produced” but also:
treating the word “vendible” as pointing only to the requirement of utility in practical affairs –
Your Honours, we would submit that methods of treatment are in general and the treatment in issue in this case in particular cannot be characterised as non‑economic in that sense. It is very difficult to see that our learned friend’s argument on applying some non‑economic criterion could provide a sensible basis for drawing a distinction between, on the one hand, products for treating the human body such as pharmaceuticals, and on the other hand methods of treatment and, your Honours, it is not suggested, of course, that leflunomide itself is not inherently patentable.
Your Honours, the evidence in this case, if I could just take your Honours to one passage of it, did indicate that the method in suit had a form of economic utility in the sense to which I have referred. If I could take your Honours to volume 1 to the evidence of Dr Shumack at page 290 you will see this referred to in footnote 58 to our submissions in paragraph 51. It is a reference, your Honours, to paragraphs 11 to 27. Now, you will see in those paragraphs that he discusses the treatments that were available for psoriasis from 1993. What he says:
In 1993, there were a number of treatments used in Australia for psoriasis . . . topical agents, including steroid creams and tar.
Steroid creams he discusses in paragraphs 12 and 13, tar in paragraphs 14 and 15. Your Honours will see then the discussion that goes through to paragraph 19 about some light therapies and then your Honours will see in paragraph 20 what one might do if steroid creams, tar and light therapy were ineffective, the use of systemic drugs which affected the whole body, and he discusses Tigason and in paragraphs 21 and 22, another drug, methotrexate, in paragraph 23. Serious side effects with methotrexate, paragraph 24. Paragraph 25, a number of other drugs overseas and in paragraph 26, what was the position of the available agents and then paragraph 27, another drug that was there.
Now, your Honours could see from that history that the drug in question in the present case and its use for it is obviously something that is of use and economic at least, one might think, to the extent of the method in suit in NRDC for eradicating weeds from crops, the patentability of which of course was upheld. Your Honours, it was something that of its nature brought about a useful result of the kind referred to in NRDC.
Your Honours, the principle advanced by our learned friends also has some difficulties in its precise definition or application. It is not really clear where a method of treatment of the human body stops, although I might perhaps identify where it would start. Should it be limited to methods of surgery? That was the specific example referred to in NRDC at page 275. Should it extend to cosmetic or prophylactic methods, as discussed in Joos at page 623? Should it cover sunscreen – Joos at page 618 – and, your Honours, for those who go in the sun it might be a nice question whether the first hour in the sun is one for which the sunscreen is needed to prevent and after the first hour, your Honours, for those of us deficient in some respects, to cure.
Your Honours, the effect of our learned friend’s argument is really that no patent could be granted for a method which involves a therapeutic use of a pharmaceutical substance even if the method is novel, inventive, useful, fully described and otherwise satisfies the requirements of the Act as in this case, and, your Honours, there would not be an economic incentive for the development of new therapeutic uses after identification of the substance per se.
Your Honours, could we note also that the Act expressly incorporates a requirement of utility in section 18(1)(c) which was held to be satisfied in the present case and your Honours will see that referred to in the primary judge’s reasons in volume 2, page 572 in a long paragraph resulting in paragraph 245 at page 577.
You will see paragraph 246, but the reasons are set out in paragraph 245 which goes for the preceding couple of pages. Your Honours, could we just say that, as is apparent from Maeder, Justice Dixon, and as is apparent from NRDC, a widening conception of the notion of a manner of manufacture has been a characteristic of the growth of patent law. If methods of treatment were once thought to be non‑economic in that sense, that is no longer the case in the modern age, we would submit.
Could I mention, your Honours, the rather vivid argument about the surgeon’s scalpel that your Honours will see in paragraph 25 of our learned friend’s submissions. It is said to have affected overseas approaches and to be particularly apparent in circumstances where the claim is limited by the physician’s purpose.
Your Honours, the reference to the judgment of the surgeon with the scalpel does seem to relate to a surgeon who is or who is about to be engaged in conducting a surgical procedure. Now, your Honours, even in cases of emergency, as your Honours will know, if one goes to any hospital where surgical operations are conducted, they are usually planned, and in some considerable detail.
In the ordinary course of events, most hospitals, one would expect, have surgeons operating at particular times and particular days with a line‑up of patients moving one‑by‑one closer to the operating theatre and one‑by‑one from there to recovery. Anyone with the experience of it does not have quite the sense of immediacy that our learned friend’s arguments would suggest.
CRENNAN J: But in any event, it is not necessary to your success, is it, to persuade us that surgical know‑how, for example, is necessarily patentable?
MR JACKSON: No, your Honour.
CRENNAN J: There is a distinction, and I think you have made it, between surgical know‑how on the one hand and a substance to be administered. That is a distinction between what a surgeon does to a patient and claim 1 of this patent, which is covering a thing to be administered.
MR JACKSON: Yes, your Honour. One would think, if one took the case of the surgeon or took the case of the anaesthetist – take the case of either of them – that if the consequence of what they are doing, or part of what they are doing, is to administer a drug then in the ordinary course of events people know that they are likely to be patented or they may be patented and there need to be licences of various kinds if they are going to be used, or there needs to be a statutory provision. These things, in the ordinary course of events, are matters that are part of everyday life, one would think.
CRENNAN J: It is not difficult to understand the strength of the public policy argument in the context of a new surgical technique.
MR JACKSON: Well, your Honour, that is so and in relation to surgical techniques it may well be that the developers of them, as a matter of personal satisfaction and pride, do not want them to be the subject of patents in their favour or anybody else’s, but, your Honour, it is a ‑ ‑ ‑
CRENNAN J: Again, there is a distinction between a technique and an implement used during the course of surgery.
MR JACKSON: Indeed, your Honour, yes.
CRENNAN J: Mr Catterns would not disagree that an implement during the course of surgery is patentable just as a pharmaceutical substance is patentable.
MR JACKSON: Your Honour, if one looks at, say, artificial needs and things of that kind, maybe ‑ ‑ ‑
CRENNAN J: Provided they satisfy novelty and all the rest.
MR JACKSON: Yes, your Honour, but all sorts of things that can be inserted in the body or used in operations can be the subject to patents. There is nothing very new about that. Could we also say that if one looks at the – getting back to drugs for moment – that drugs such as leflunomide are administered for particular treatments following a process of diagnosis and prescription. You will see that described in passages to which I think your Honours have already been taken in the present case, Chief Justice Keane, volume 2, page 702, paragraph 40, Justices Bennett and Yates at page 739, paragraph 128.
Your Honours, could I come then to the second medical use argument. Our learned friends contend that a method of human treatment which is a second or subsequent use of a previously known product is not a patentable subject matter, the underlying rationale being, as we would understand it, not so much the second or the subsequent use factor but rather the contention that an invention limited by purpose is not patentable.
Your Honours, could we say first of all that there is simply no basis in the Patents Act and no reason disclosed by the evidence or any policy considerations for excluding the particular category of methods of treatment from being patentable. Your Honours, a second or subsequent medical use – to use our learned friend’s expression – can only be identified by considering what preceded the patent. It does not go at all to the inherent nature of the subject matter of what is claimed and one is speaking about the area of novelty on the one hand and inventive step.
CRENNAN J: Was there a first medical use in the prior art at the application date?
MR JACKSON: Your Honour will see that this is discussed at some considerable length in the reasons for judgment in first instance where it is said that there was not really the prior medical use for this purpose.
FRENCH CJ: There was a method claim, was there not, a claim for, I think, of the 341 patent which related to use of particular treatments?
MR JACKSON: Yes, but not for this.
CRENNAN J: Anti‑inflammatory effects or something. Anti‑inflammatory uses?
HAYNE J: More particular, I think.
MR JACKSON: It is discussed, your Honour, at page 748 in volume 2, paragraph 195. Your Honours will see the primary judge’s observation quoted and your Honours will see Justices Bennett and Yates’ observations preceding that and their conclusion.
Your Honours, the claim in this patent makes no reference to any second medical use. It is simply a method of treatment of a particular disorder involving the administration of a particular drug and the claim would be expressed in precisely the same way if it were the first medical use. We would submit that our learned friend’s second or subsequent medical use criterion does not provide any distinction from its primary arguments, and in particular, the incorporation of a requirement of purpose into the claim does not lead to invalidity, and it is, we would submit, perfectly capable of being applied in the manner referred to in the Full Court.
Your Honours, purpose one would think, one perhaps could use words that are synonymous with it, purpose is really inherent in a method or process claim. You are doing it for something, it is to achieve something. Your Honours, could we also say that the Full Court’s construction does not, in one sense, involve any inquiry into the subjective purpose or state of mind of the medical practitioner, but ‑ ‑ ‑
FRENCH CJ: Incidentally, claim 1 follows the same model, I think, as claim 4 under the 341 patent, except it just specifics the skin disorder, psoriasis.
MR JACKSON: Yes, that is right, your Honour, yes. Your Honours, could we give a reference in that regard to, I think, in two paragraphs in the Full Court I have mentioned before, paragraphs 40 and 126. Now, your Honours, could I come to the general inconvenience argument, which, your Honours, was not run below. It appears to have been expressly abandoned at trial by an amendment to the pleadings. Could I take your Honours to volume 1, page 41?
FRENCH CJ: Incidentally, when you speak of evidentiary consequences of running general inconvenience, are you speaking in terms of what we might loosely describe as legislative facts, matters which inform the policy judgments of the kind we have been talking about earlier?
MR JACKSON: Well, the answer is, yes, with a qualification, your Honour. The qualification arises because what your Honour put to me was legislative facts of the nature we were discussing earlier. Your Honour, what I am saying yes to is that it would involve material of the kind that was discussed in the discussion that was had, I think, particularly with Justice Hayne, but also what was referred to by Justice Finkelstein in parts of his – yes, that is what I am talking about, your Honour.
GAGELER J: Is material of that nature material that needs to be pleaded and proved?
MR JACKSON: Well, your Honour, as to the – there may be a distinction between the actual evidence and what it is being sought to prove. The second of those one would expect to be the matter being pleaded, but in support of that material one would have to be able to have it before the Court, and have it before the Court would involve a collection of materials and the materials would, your Honour, be ones on which one would expect there to be notice given by either side and then the ability on some occasions to call oral evidence dealing with issues, some of the issues that might arise.
Your Honour, I am putting it in a kind of compendious way, but it is not something that one would necessarily arrive at simply by saying these are the 10 articles on this point, 10 on this and so on. Some of the issues would be contentious and if the issue were to be decided by the Court they may well require there being oral evidence about it.
Your Honours, I was referring to paragraph 2 on page 41 where you will see that the pleading of general inconvenience struck out in the particulars, and if one goes to what was said by Chief Justice Keane at page 697 in volume 2, paragraph 23, you will see in the third line:
the appellant eschewed reliance on the ground of “general inconvenience” derived from s 6 –
and your Honours will see what is set out there. Now, your Honours, could I just say in relation to general inconvenience a couple of things? If it be that the Court were entering into the issue we would say that there is no foundation for any finding of general inconvenience. The long‑established practice in Australia, which at least dates from 1984, 29 years of granting such patents demonstrates that there is no general inconvenience.
Secondly, it is not by any means clear why monopolies for methods of human treatment should be regarded as generally inconvenient and the cases note that the grant of such patents may equally be seen to promote research and development into new treatments beyond the development of products per se to the general benefit of society. Could we refer to Bristol‑Myers 97 FCR at 569, paragraph 139?
We also say that there is an issue as to whether general inconvenience is a valid ground of objection in any event, given the terms of section 18 of the Act and its interrelationship with the proviso in section 6 of the Statute of Monopolies. It is not the part of section 6 picked up by section 18. Your Honours, that is the submission we make.
KIEFEL J: No decision of this Court or the Federal Court has ever ruled on that question.
MR JACKSON: I think the answer is yes. I am agreeing with what your Honour is putting to me, yes.
KIEFEL J: I think it was pointed out yesterday that in Advanced Building Systems v Ramset 194 CLR 171 at 190, paragraph 34, in discussion there about “generally inconvenient” being a footing for the view of the inappropriateness of certain methods of treatment of the human body for ground under the Act, their Honours do not seem to be alert to any difficulty in the statute but it was probably not argued.
MR JACKSON: Well, that is it, your Honour. This is very much a passing reference in the case and the issue, we would submit, has not been decided but, your Honours, as sometimes happens if the issue is not advanced the Court not need trouble itself with it. Your Honours, could I move then to – I am hoping to abbreviate some time with this. I have given your Honours a note on what we contend is the overseas position as to the patentability of methods of medical treatment and, your Honours, may I adopt it as part of our oral submissions?
HAYNE J: What do we take from the fact that it is dealt with thus overseas?
MR JACKSON: Well, your Honour, two things, I suppose. The first is what we have set out in the overview in paragraphs 1 and 2 and secondly, what we have in paragraph 26. The point that we would seek to make overall, your Honours, is this, that views differ in various countries but what one can see is that there is not a situation where there is some overarching view that methods of medical treatment should not be patentable in one form or another. One sees differing views taken in differing countries and we would say, as we have submitted earlier, that it demonstrates that each country has its own approach and the Australian approach is that which we have submitted.
HAYNE J: Can we at least take from the overseas experience that it is not universally accepted that, speaking very generally, it is inconvenient that?
MR JACKSON: Certainly, your Honour, yes. Your Honour, as a general proposition I accept that, and we simply seek to place before the Court our contentions as to this issue because what they do demonstrate is what your Honour has put to me a moment ago.
HAYNE J: But it may tend to suggest – I do not say it demonstrates – that a general inconvenience argument may have to be particularly focused upon Australian conditions as meriting the conclusion asserted.
MR JACKSON: Indeed, your Honour, and one does see that there has been in Australia a kind of scepticism from quite some time ago about the notions such as the C & W and, your Honours, if one goes to paragraph 26 of that document you will see that in the various jurisdictions we have referred to there they might not be too far from what we say is the Australian position.
Could I come then, your Honours, to the application for special leave and may I say a couple of things generally first, your Honours. We would submit that there are two reasons why special leave should be refused, and they are interrelated. The first is that the application raises no point of principle, but rather turns on facts peculiar to this case.
It raises no issue of construction of section 117, and the construction of section 117 was dealt with by the Court in Northern Territory v Collins (2008) 235 CLR 619. There is no question raised about the meaning of the term “staple commercial product” in section 117(2)(b). That was conceded in the Full Court. You will see that at volume 2, pages 734 to 735, paragraph 147. So the question under 117(2)(b) is simply whether in the particular circumstances of this case the appellant had reason to believe that its leflunomide product would be used in a manner that would infringe the claim, that is, used to treat psoriasis, and the answer to that question, your Honours, depends on findings of fact made by the primary judge and upheld by the Full Court. Again, in relation to section 117(2)(c), the only question is whether the product information document gave instructions for the use of its product to treat psoriasis, and again, that depends on findings made by the trial judge and upheld by the Full Court.
KIEFEL J: Is there not a question here though about whether or not the findings of infringement can be squared with the construction of the claim?
MR JACKSON: Well, not really, your Honour, because the findings of infringement that were made are ones, and I am going to come to them now, the findings of infringement that were made were ones that were made on the evidence and not depending on the slight difference in view in the two courts. But, your Honour, may I come to that?
The second thing I wanted to say, your Honours, more generally, was that the appeal, we would submit, in substance, on the section 117 point, could not succeed unless the appellant could overcome the two independent basis on which infringement, pursuant to 117, was found. Your Honours, will recall that there was a finding of infringement of (2)(b) in terms of (2)(b) and one also in terms of (2)(c) and either basis would be sufficient to maintain the finding of infringement.
Now, could I go first, your Honours, to 117(2)(c), and I go to the substance of the argument in relation to those. Section 117(2)(c) says that a reference in 117(1) to the use of a product by a person is a reference to the use “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” et cetera.
Your Honours, that means, relevantly, one looks to the instructions. I will come to those in just a moment. May we first say this, your Honours, that the findings made in the courts below were not based simply on the double negative statement contained in the product information document. That statement was significant and did support the findings, but those findings were also based on other parts of the product information document and some of the expert evidence.
Your Honours, the double negative statement appears in a number of places, but could I take your Honours to volume 1 where it appears at page 462. Now, your Honours, if one looks between 10 and 20 at the indications, the statement in the second dot point, that it “is indicated for the treatment of Active Psoriatic Arthritis” and “not indicated for the treatment of psoriasis that is not associated with manifestations of arthritic disease”.
Your Honour, that appears immediately after and, in effect, is part of the statement that the product is indicated for the treatment of psoriatic arthritis. Your Honours, read in context, we would submit the statement does proceed on the basis that the use of the product for the treatment of psoriatic arthritis will include or be accompanied by the treatment of psoriasis. Psoriatic arthritis is arthritis with psoriasis, to put it very shortly.
In those circumstances, the primary judge was correct, in our submission, at page 581, at paragraph 262, to say that there was a debate about the meaning of the phrase. Her Honour said we submitted – this is at the top of page 582 – that the phrase meant that it was:
indicated for the treatment of psoriasis that is associated with manifestations of arthritic disease.
Your Honour, it is as plain as could be, that is what it is intended for. It is intended for psoriatic arthritis, and it goes on to say, it is not intended for psoriasis only, to put it shortly. Your Honours, her Honour goes on to say that it “may be moot”, and she discusses other matters, but then at about line 25 says:
In the context of an indication for PsA, the statement [which she then quotes] can mean only that Apo‑Leflunomide is indicated for the treatment of psoriasis that is associated with manifestations of arthritic disease. Apotex’s argument to the contrary is not persuasive. It contradicts the ordinary meaning of the indication and is inconsistent with the undisputed medical evidence about the relationship between PsA and psoriasis.
Now, your Honours, referring to what your Honour Justice Kiefel asked me, that does not seem to turn at all upon any difference there might be between the construction of our claim.
CRENNAN J: Except one would have to say that in relation to the construction of the claim preferred by the Full Court, PsA was not part of the novelty claimed. I think that is what Justice Kiefel – I apprehended anyway, that was what Justice Kiefel was referring to.
MR JACKSON: Well, your Honour, could I just say that the issue under section 117(1) and (2) really arises because one is looking at the application of statutory tests in particular contexts. Now, what one sees in the claim – sorry, in the particular context one is looking at in relation to (2)(c) is what is in the product information document for present purposes, but if one looks at that document it says it is for, to put it shortly, treating psoriasis that is part of PsA.
CRENNAN J: Are not the two steps, the “novelty” does not include treatment for PsA, “novelty” is confined to treatment for psoriasis, the product information material confines the instructions to treatment of PsA, and the fact that Dr Brooks or Professor Brooks – I am not sure which, and I intend no disrespect by not remembering – is aware that it is possible that psoriasis would be alleviated when he is treating PsA, is really neither here nor there, is it? Dr Brooks would not be exploiting in terms of section 13 just by being aware of that.
MR JACKSON: Well, your Honour, the evidence did go a little bit further than that. I was going to say, your Honour, that your Honour will see, if I can go back first of all to page 582 and the fifth or sixth line:
The evidence establishes that psoriasis is a diagnostic criterion of PsA.
But, then her Honour goes on to say:
It further establishes that nearly every person with PsA has or will develop psoriasis. The evidence thus establishes that the administration of leflunomide to a person with PsA will treat that person’s PsA and psoriasis (if they have a concurrent case of psoriasis) or treat that person’s PsA and prevent psoriasis (if the person otherwise would have developed psoriasis).
Her Honour goes on to say, we would submit, correctly, that:
Apotex’s approved PI, on any view, instructs a medical practitioner (name, a rheumatologist) to use Apotex’s leflunomide product for the treatment of PsA. As almost all people with PsA have or will develop psoriasis, psoriasis being one of the diagnostic criteria of PsA, it is apparent that –
Your Honours, I will not read out the remainder of that paragraph.
HAYNE J: But are we not entering the maze at the wrong point, Mr Jackson? Do we not enter the maze at 117(1) by identifying the use that would infringe and then proceed to the claim and the claim is a method of preventing or treating psoriasis?
MR JACKSON: Yes, your Honour.
CRENNAN J: It is a bit hard to have it both ways, Mr Jackson. To get a purpose patent because it is a new use of a known substance or compound it is a downside, as it were, if the novelty is confined to that new use otherwise, presumably, your clients would have included PsA in the claim, the method claim.
MR JACKSON: Well, your Honour, we have a claim which is a claim for treatment of psoriasis. The finding made by the judge and agreed in by the Full Court was that the use of leflunomide for people with psoriatic arthritis would prevent or cure the psoriasis that is associated with manifestations of arthritic disease and there was evidence which appears to have been accepted that that was almost every case but also if someone presented with, I suppose, something that you could say is psoriasis there on the one hand and psoriasis associated with arthritis on the other and could separate them out that the drug would be applied for that purpose, too. You will see that in the evidence of Professor Brooks at page 99 in volume 1.
KIEFEL J: But does not reliance upon this medical evidence somewhat blur the distinction between the side effect of the pharmaceutical compound which is to say – which might have a – in the sense of a potential product to patent the effect of the product per se and a patent for method of treatment because the doctors are just talking about the effect of the compound when it is applied to treatment A whereas, as has been pointed out, the limitation on this particular type of patent is we are talking about treatment B?
MR JACKSON: Your Honour, the position, of course, is that the patent is – one might describe it as being for a method of treatment by the application of the drug. Inherent in that is it being applied for a particular purpose. The infringement will occur in terms of section 117 if the product is being used in a way that would infringe the patent and when I say “in a way” I mean as defined by subsection (2). Now, if the position is that the drug is being used or will be likely to be used in a way that would infringe the patent, the fact that it is being used for another purpose as well does not take away the infringement.
KIEFEL J: Being used to treat psoriatic arthritis, that is its purpose in that mode of treatment.
MR JACKSON: Yes, but, your Honour, it is inherent in the way in which – if one looks at the documents that are the product information statement – that it is being able to be used to alleviate psoriatic arthritis but also psoriasis itself.
KIEFEL J: Only because the compound has particular qualities that have this side effect. That is the distinction between the product and the treatment, is it not? That is the difficulty when you are talking about a method of treatment, is the two come so close in their potential uses.
MR JACKSON: Well, your Honour, they may indeed, but one has to look at the application of the statute to the circumstances and in the particular circumstances. Now, what you have in this case, and looking at subsection (2)(c), is if you use the product “in accordance with any instructions for the use of the product” would that be an infringement of the patent? Now, that says, your Honours, in effect, that one looks at the document, if someone is using it in accordance with the instructions does that contravene the patent? Now, if one is using it in accordance with the instructions one will be using it to cure psoriasis associated with psoriatic arthritis and also any other psoriasis that happens to be present. Your Honours will see, in our submission, that if one looks at the evidence of Professor Brooks, who is our learned friend’s expert, at page 99, from about line 8 to line 20 you will see he was asked:
If you were prescribing leflunomide, following this PI, for a patient with psoriatic arthritis, having concurrent psoriasis, you would expect the leflunomide to treat the psoriasis within the bounds of what has been put there –
Your Honours will see the next three questions and answers and, in particular, line 19:
And if you are administering leflunomide in the context of that PI, you would be intending to treat both?‑‑‑Yes.
CRENNAN J: The doctor in the product information document is being told to use the product for a use which is not novel. I just have a great deal of difficulty seeing how that could be seen to be an instruction to infringe the patent. I understand the evidence about the connection between the arthritic condition and the skin condition, but the fact is the novelty is for a method for treating psoriasis and the arthritic psoriasis is not novel, as one would discern it, from the way in which events have played out. The product information and the permission presumably given by the therapeutic goods instrumentality to Apotex is that they may only use it in relation to the treatment of the arthritic condition and that is the way the product information text has been drafted and approved.
MR JACKSON: Well, your Honour, could I just say a couple of things in relation to that? Your Honours, the evidence to part of which I referred was that rheumatologists do seek and will seek to treat both psoriatic arthritis and psoriasis when patients present with both, and could I give your Honours the reference to what the Full Court said about this at page 736 in volume 2, paragraph 154? Your Honours will see that their Honours say:
We do not read her Honour’s findings as being so limited.
That is, not one more broadly based that it involves the purpose of treatment of psoriasis as well. Now, your Honours will see that if one goes to paragraph 262 in the primary judge’s reasons at page 581 – and I have taken your Honours to part of that paragraph already, or parts of the paragraph – there was a finding that psoriasis was closely associated with psoriatic arthritis both as a diagnostic criterion and because nearly every person with psoriatic arthritis will develop psoriasis in the future.
Your Honours, the project information document contained more relevance than simply the statement of indications with the double negative observation in it. Your Honours, in particular it reported on the efficiency – on the efficacy, I should say – of the use of leflunomide for the treatment of psoriasis. You will see that in the table of PASI scores in volume 1 at page 461. You will see, your Honours, if I could perhaps go to page 460 first of all, about line 24, the heading of “Psoriatic Arthritis” and the efficacy of leflunomide dealt with there in relation to that. Then you will see on page 461 about line 20:
In a differing analysis which excluded some patients –
Then you will see, your Honours, what is set out there was an effect on psoriasis which was being used to assess the effect on psoriatic arthritis and, your Honours, that it is relating to psoriasis appears from paragraph 60 of the primary judge’s reasons – that is page 507. As your Honours will see in the reasons for judgment of Justices Bennett and Yates at page 734, paragraph 144, the position was that those PASI scores were “used as a measurement of the efficacy of treatment for psoriasis”. Your Honours, the reference, as one sees at page 734, paragraph 145, in Justices Bennett and Yates – sorry, if I can go to paragraph 144, page 734 your Honours will see the reference to the PASI index, and their Honours saying:
This index is used as a measurement of the efficacy of treatment for psoriasis, not PsA.
Then you will see a discussion of it and then in the next paragraph, 145:
The primary judge did not refer to this part of the Apotex product information . . . In our view it was not necessary for her Honour to do so, although we do note that her Honour specifically referred to the PASI analysis when considering whether Apotex had reason to believe that the persons to whom it wished to supply its product (relevantly, rheumatologists) would put it to an infringing use. Be that as it may, we are satisfied that Apotex’s statement of indications alone provided a sufficient basis for her Honour’s finding under s 117(2)(c). The reporting interpret he product information of the PASI analysis provides additional matter that fortifies that finding.
Now, your Honour, we would submit that there was support for the findings of fact in both courts that the product information document gave instructions for the use of the product to treat psoriasis in both of the ways referred to.
HAYNE J: Do you accept that the relevant use of the product to be considered in applying 117 is the use by prescribing the drug?
MR JACKSON: Yes.
HAYNE J: The relevant instruction is the instruction given in the product information document to the prescribing doctor.
MR JACKSON: Yes, your Honour, I accept that. Your Honours, could I submit also in relation to section 117(2)(b) the only question in the present case under 117(2)(b) was whether the appellant had reason to believe that its product would be used to treat psoriasis. Your Honours, I have referred to the various findings in relation to that, but could I refer particularly, your Honours, to the trial judge at page 583, paragraph 263; to Chief Justice Keane at page 707, paragraph 54 and to Justices Bennett and Yates commencing at page 735, paragraphs 148 to 152.
Your Honours, we would submit, with respect, that so far as the section 117 aspect is concerned, it is a case where no issue of law is involved. We would say there are concurrent findings of fact to the extent to which that phrase is appropriate in the two courts below and that the case is fundamentally one of fact, and involving no more than that, and one where it is submitted the decisions below are not demonstrated to be erroneous.
Your Honour, could I just mention one thing? Your Honour Justice Crennan said, I think, that the use of leflunomide to treat PsA was not novel. If that is what your Honour said, that is not, with respect, correct
because the prior patent did not disclose the use of leflunomide to treat PsA. It referred only to rheumatoid arthritis. You will see that in volume 2, page 743, paragraph 178. Your Honours, those are our submissions.
FRENCH CJ: The primary judge found that the prior patent did not cover treatment for PsA.
MR JACKSON: Yes, rheumatoid arthritis.
FRENCH CJ: Yes, Mr Catterns.
MR CATTERNS: May it please the Court, just answering the last topic, if I may, your Honours. We lost on novelty both at first instance and on appeal. It covered the PsA, but it did not sufficiently disclose within the law of novelty. I think if I may say so, with respect, your Honour Justice Crennan was picking up their Honours Justices Bennett and Yates’ reasoning at paragraphs 124 and 125 where their Honours referred to the asserted novelty on which the claim was fairly based as being psoriasis. There was no mention of psoriatic arthritis whatsoever in the patent.
Your Honours, returning to the first issue, the method of treatment, this is not a claim to a thing to be administered. It is a claim to a method of treating psoriasis by administering a thing. Our friends, we submit, and it is difficult to distinguish between them, tend to rely on that distinction.
Your Honours, first, his Honour Justice Gummow – I do not need to take the Court to it – at 111 ALR 234 quoted from IPAC and there is an elision in his Honour’s quotation, it is a long quotation but what he left out is significant. It is from page 40 of the IPAC Report which I will not take time now. May we give the Court Crier copies rather than take time, your Honours? But what happened is after referring to the:
Surgical and medical techniques for human therapy and mixtures of foods and medicines are regarded in many countries as being unpatentable on public interest grounds –
in various countries, and that the chemicals themselves were not patentable in a number of “less developed countries”, which is where his Honour stopped, the committee also referred to developed countries, including in particular Switzerland and at an earlier time the UK, not allowing patents for chemicals to protect nascent chemical industries. So then the committee considered whether that kind of thing ought to be done, considered tariffs, then considered positively granting patents for computer software or business methods to encourage it. The phrase a “blunt . . . instrument” related to that, namely, positive inclusions and exclusions, and as we know we ended up with relying on section 6.
CRENNAN J: It seemed more focussed on computer software than on chemicals.
MR CATTERNS: Yes, your Honour, of course. I respectfully agree. We have given the Court a reference to the explanatory memorandum invoking both the UK and Australian cases. That is with respect to the concept generally, but they include those, we submit, which recognise the exclusion that we advance. We submit this was recognised as the law in 1990. Of course, the High Court had not settled it. We recognise that they are dicta.
Your Honours, in the Schering Case that our learned friends took your Honours to in [1971] RPC, there was a discussion about a problem in logic of distinguishing between a product and a process. There has never been any problem in logic as a matter of patent law in distinguishing between them. For 200 years we have known the difference between a product and a process and our friends point out they are both recognised in the definition of “exploit” in little subparagraphs.
The problem in logic was the policy problem. Their Honours said there is a problem in logic in distinguishing between a policy of encouraging products or a policy in encouraging methods of treatment. That is at pages 340 to 341. But what their Honours did was, left that policy to Parliament and that continued all the way to the 1977 Upjohn Case where Justice Whitford, who was in the Schering – delivered the Schering decision, he was the judge at first instance who held that these were not within the ambit.
So, your Honours, as the Court knows, the UK Parliament maintained that exclusion as recommended by the Banks Committee. Your Honours, may we leave with the – it was on our list, there is a – just on the policy question, I think, including the kinds of things his Honour Justice Finkelstein may have been referring to in paragraph 133, there is an article by Patricia Loughlan, Dr Loughlan, and she – although she criticises the Rescare decision, discusses both sides of the policy.
There are books, as your Honour Justice Crennan pointed out, on the patentability of methods of treatment that doggedly set out both sides of the argument. Of course, just one tiny point, the reason the Court said in Schering that there is no High Court authority up to then is that the High Court judges sat in the Patent Appeal Tribunal, which is what Sir Garfield was doing under section 146 of the old form of the 1952 Act.
To answer a crucial question raised by the Court and also by his Honour Justice Gummow in Rescare, and that we think this is at the heart of the case, there is a normative distinction. This is it, and it is derived from Justice Dixon in Maeder, a claim to a method of treatment is not patentable because, quoting his Honour:
The aim is the alteration of some state or condition . . . belonging temporarily or permanently to a person.
That is the line. Your Honours, that was articulated in Re C & W by Justice Dixon at page 706. That is the footnote, page 706, cited at page 275 in NRDC, footnote 7, where their Honours say, essentially non‑economic.
CRENNAN J: But a pharmaceutical substance or composition for treatment does precisely that, has the same aim. Where is the logic for the distinction?
MR CATTERNS: Because, your Honour, that is a thing you can make and you can sell but you cannot sell the person – you cannot make the person.
CRENNAN J: The method for treatment which involves the administration of a substance or compound is very similar, is it not, to the compound itself? I am talking in terms of patent claims, subject to satisfying novelty and all the rest of it. As Justice Lockhart said, where is the logic of distinguishing between a pharmaceutical product being patentable and a new use of a known product being patentable through the method way of patenting?
MR CATTERNS: Well, your Honour, in terms of pure logic of encouraging innovation, with respect, your Honour might be right, but in terms of ‑ ‑ ‑
CRENNAN J: What about also in terms of the aims? The aims are to improve the treatment of a human disease.
MR CATTERNS: Inter alia, your Honour.
CRENNAN J: Inter alia.
MR CATTERNS: Professor Loughlan points out the countervailing…..encouraging competition, having a manageable health budget, et cetera ‑ ‑ ‑
CRENNAN J: Yes.
MR CATTERNS: ‑ ‑ ‑ leaving aside the doctor/patient relationship. Your Honour, our point is this is not a balancing exercise for this Court, with great respect. This is an inquiry into the established ambit which was recognised, we submit, by 1990, and your Honours know that is where we are apart. Your Honours, the only way that we can be wrong in that, with respect, is to follow Chief Justice Barwick’s suggestion that NRDC ‑ Justice Wilcox’s words – swept away those earlier dicta, and we respectfully submit it did not because those dicta were not based on a narrow idea of Justice Dixon or the Solicitor‑General, they were not based on some narrow idea of vendible product.
Of course, one would not need to change more than a syllable or two of those judgments to make them perfectly applicable today. They stand against the NRDC Case and those great judges, with respect, at 276 to 277 created their test in the ratio of the…..Case, but gave their obiter, citing Maeder v Busch on the very point.
We respectfully submit, as I submitted about Justice Wilcox’s reasons, that it takes a deliberate policy decision to include methods of treatment, and picking up a question asked by his Honour Justice Hayne, the Court should not engage in that balancing exercise of convenience or not. The normative distinction is drawn in the TRIPS agreement by saying you can rule out methods of treatment as not being of industrial applicability. That is the way they did it initially in the European convention and in the UK Act. So, your Honours, as your Honours know, we have not run an argument on ‑ ‑ ‑
CRENNAN J: But on that point, provided you put up front in your claim the product, even if it is a known product, for a new therapeutic use, it is patentable. This is on the industrial application point. It is just a claiming technique that is utilised to avoid the exclusion of medical treatment.
MR CATTERNS: They expressly allow it, but they put aside medical treatment for a normative reason, which is the one I have submitted. In short, human beings are not in the discourse of industrial applicability, to use their phrase. These used to be called industrial property ‑ ‑ ‑
CRENNAN J: But pharmaceutical compositions, subject to novelty claims and so on, are frequently for the treatment of human beings, frequently.
MR CATTERNS: No doubt, your Honour.
CRENNAN J: There is no problem about it.
MR CATTERNS: Exactly, your Honour, but Sir Owen saw a difference, with respect. I cannot articulate it any better than his Honour does at page 706. There has got to be an entity and we are not entities. Your Honours know that is where we are at issue.
GAGELER J: The Canadians come at it slightly differently. Mr Jackson’s note refers to a number of recent Supreme Court decisions there, and the view that seems to have prevailed is that a method of medical or surgical treatment is essentially non‑economic because it relates to an area of professional skills.
MR CATTERNS: Yes, your Honour, exactly.
GAGELER J: But that rationale has been seen in Canada not to apply to a new use of a known compound.
MR CATTERNS: Your Honour is referring to our learned friend’s ‑ ‑ ‑
GAGELER J: Apotex in particular. I am just wondering what is wrong with that rationale, seeing as surgical technique, for example, as really relating to an area of professional skill.
MR CATTERNS: Your Honour, as we have put in our written submissions, involving the doctor’s surgical or medical decision is no doubt an important consideration in the Canadian jurisprudence but, your Honour, the one our friend quotes in paragraph 19, that is a clear claim to a product.
CRENNAN J: But methods of medical treatment, that is a very broad expression. It covers on the one hand, as I think Justice Gageler was putting to you, surgical knowhow, but that is quite different from a drug therapy.
MR CATTERNS: Yes, your Honour, and ‑ ‑ ‑
CRENNAN J: Drug therapy involves administering a substance or compound to somebody to make them better.
MR CATTERNS: Yes, your Honour, but to make them better ‑ ‑ ‑
CRENNAN J: And you do not interfere with the doctor, do you, if you have a patent which claims a treatment for making a person better, versus interfering with a doctor if – possible interference with a doctor if you permitted surgical knowhow to be patentable.
MR CATTERNS: Your Honour, that is one of the reasons we do not run a general inconvenience argument.
CRENNAN J: Yes, I thought it might be.
MR CATTERNS: Practically in section 4A – as a matter of practice doctors do not get sued under either regime. Our friend made more of surgery than we do. It is easy to exclude surgery and this is not a ‑ ‑ ‑
CRENNAN J: Well, as a matter of practice, too, that probably turns on what “exploit” really means.
MR CATTERNS: Yes, your Honour, and this is not a surgery case, of course.
CRENNAN J: No.
MR CATTERNS: But, your Honours, we respectfully submit – by the way, may we again hand the Court Crier without taking the Court time? Our friends in their paragraph 20 refer to the manual in Canada. It clearly says methods of treatment are not patentable. Now, they draw some distinctions that we cannot understand, but what is clear there is methods of treatment are not patentable. Your Honours, I fear I have got about another 10 minutes – whatever is more convenience to the Court.
FRENCH CJ: We will sit on.
MR CATTERNS: Thank you, your Honour, I will certainly finish before 1. Your Honours, her Honour Justice Kiefel asked – and I think his Honour the Chief Justice also asked about references in decisions to “generally inconvenient”.
His Honour Justice Gummow at page 237 in 111 ALR lines 10 to 15 said, although his Honour was following the Joos suggestion of “generally inconvenient” said at that page – these have been, to put it shortly, pardon me.
FRENCH CJ: Sorry, what was the page number again?
MR CATTERNS: I am sorry, your Honour, page 237.
FRENCH CJ: Thank you.
MR CATTERNS: It is lines 10 to 15. After saying that he was going to approach it in that way, the Joos way if I may call it that:
it is to be noted that previously the ground of general inconvenience in the Statute of Monopolies had been regarded as absorbed into the grounds of inutility and lack of novelty.
which is the submission I made yesterday:
In 1912 it was said that there was no recorded case in modern times –
The Rolls Royce Case which was about the pilot throttling back, a patent idea for the pilot throttling back in, I think, 1946 RPC’s, the ground of general inconvenience was raised. His Honour Justice Lockhart dealt with it briefly in the matter that his Honour Justice Hayne drew attention to at page 19 at 50 FCR. We have given the Court in our list of authorities a paragraph in Blanco White’s 4th edition at paragraph 1‑212 where he says that these are provisos on the grant which is what I submitted yesterday, not something that, my phrase “travelled with” the concept of a manner of manufacture or what an invention is. Section 18(2), as our friend readily accepted, was a special provision relating to cloning and invitro‑fertilisation.
As we know, and as the materials our friends handed up, that was becoming a real possibility, the human genome project was underway, as was IVF, and Parliament made a decision not to leave that to section 6, and it is established, and we readily accept, developing ambit. There is a clear specific policy to nip it in the bud in terms of patenting. I say this from the Bar table, but we read in the last few days there is a controversy about the grant in the US of a method for determining which fertilised embryo to choose based on certain criteria relating to the speed of division. They were the kinds of things now, and were foreseen in 1990. Of course there is no express restriction of fine arts nor mere discoveries, nor playing cards, et cetera.
Your Honours, in section 199A the – perhaps if our friends would not mind just showing us their document before they hand it up and we will try and make it an agreed document rather than weary the Court with various iterations. Your Honours, in the former section 78, which is in the bundle of materials which I do not need to go to, there was what is called a springboarding exception which allowed generic companies for purposes other than sale, in other words for purposes of getting regulatory approval, to do acts which would otherwise infringe the definition of “exploit” to obtain regulatory approval during the extended term of the patent. Patents were given an extra five years because of the regulatory delay. The policy – and this is an example, we submit, of Parliament fine‑tuning policy – in section 119A, Parliament fine‑tuned that policy by extending it to all patents and not just the extended term.
Subsection (2) allows export during the extended term but, as was pointed out by the Court, section 119A gives a defence against infringement for purposes relating to the generic drug getting registered. The explanatory memorandum our friends handed up explains that policy in detail at pages 18 and 19.
Her Honour Justice Jagot – I do not need to take the Court to it – explained at page 595, paragraph 287, the system. In short, generic companies do not have to engage in the long process of clinical trials involving a method of treatment that our friends do. We have to prove, in short, this is not in every case but usually, by our equivalents. You prove by our equivalents, not by treating someone’s psoriasis, partly in vitro but also by giving it to healthy volunteers.
If I could go to section 119A(3), what happens is we measure the amount of the drug in the person’s bloodstream and/or its metabolites and/or its derivatives and demonstrate to the TGA that we are by our equivalent to our learned friend’s drug and the regulatory regime allows the TGA to use our learned friend’s clinical trial information, metres thick, to approve our drug as far as safety and efficacy goes.
CRENNAN J: You are allowed to springboard unlike devices.
MR CATTERNS: Exactly, your Honour. So, your Honours, we submit that a method used or a product relating to a pharmaceutical substance in that context is you use the method to make the substance, you might use the – when it says “a raw material needed to produce the substance”, there is no infringement by needing. There is an infringement by using the raw material to make the substance. The pro‑drug is a drug that might give rise to what the real drug is in your body, as in the case of the Merrell Dow Case terfenadine which was made in your liver.
Now, your Honours, we must face up to the fact that the explanatory memorandum lists in paragraphs (c) and (d) methods of treatment but, your Honours, we respectfully submit it is now a nearly 30 year practice, as our friends have well and truly demonstrated, and the legislature in drafting – in writing the EM – and we accept that subsection (3) would cover them, cover the full ambit of the types of patent that have been granted. To coin Justice Wilson and Dawson’s phrase in Babaniaris v Lutony Fashions (1987) 163 CLR 1, it is asking too much of the legislative process to read this as an endorsement of giving the answer to today’s question.
Your Honours, I think I have dealt with our friend’s document in relation to the overseas position, and just to say that as we submitted the Canadian approach seems garbled but we have made submissions on the others. So, your Honours, we respectfully submit this is not a case where the Court should craft an inclusion into the concept, the developed established ambit of manufacture, on policy grounds one way or the other. It is not, with great respect, for the Court to weigh up the convenience in encouraging innovation, and the inconvenience of competition, interference in the doctor patient relationship et cetera on the other side and, as we have submitted, the question is an inquiry into the established ambit.
Those considerations have not changed in a way since Re C & W or indeed since 1795, when Justice Buller said, you cannot patent the use of the arsenic to cure the ache. Justice Sheppard discussed those considerations in detail. A change since then is very obvious legislative effort to encourage generic, a competition of which section 119A is a part. Your Honours, finally, on section 117, we submit it is a significant matter of principle involved, where you have reason to believe the unexamined limb of section 117(2)(b), I mean, the limb not examined in Collins,
the question of reason to believe that somebody would, the person to whom you supply it, would, when there is a claim limited by purpose, that is the way we have run this case since day one.
We have said these claims must be limited by purpose. If they are limited by purpose we only infringe if we indicate in the former way in the statutory regime. Your Honours, I went a little too quickly yesterday and I will not take the Court back to it, to paragraph 262 of her Honour Justice Jagot’s reasons where she, in effect, coined a phrase which was the relationship between PsA and psoriasis. Then her Honour says, the evidence established – my word – three elements to that relationship.
First, as our friends point out, psoriasis is a diagnostic criterion of PsA, they present together. Secondly, and no dispute, nearly every person with PsA has or will develop psoriasis, but thirdly, at the beginning of that passage at 262, the administration of leflunomide to a person with PsA will treat that person’s PsA, or prevent, and their psoriasis. That is the effect, in fact, construction, rejected by the Full Court.
Then her Honour said if it “is not moot” and then her Honour discussed what we have called the double negative. We respectfully submit that that expression, the relationship between PsA and psoriasis, with those three elements including the effect in fact, pervades her Honour’s reasoning and the Full Court’s reasoning when their Honours ‑ ‑ ‑
CRENNAN J: The Full Court does not deny that, but is it not more that the Full Court finds novelty is confined to the treatment for psoriasis?
MR CATTERNS: Yes, your Honour, as a matter of construction of the patent.
CRENNAN J: That is right, the purpose is confined.
MR CATTERNS: Precisely, your Honour. I respectfully agree. So, your Honour, before I finished, may I just correct one error in answering – and I misunderstood what your Honour asked me. Your Honour Justice Crennan asked me about whether Sanofi was using this product according to the claim method and the PI. I only answered the PI part of that.
Our friends are answering it yes – that is the answer I gave in terms of the PI, because they sell it with the same PI as us that we have copied for rheumatoid arthritis and psoriatic arthritis. They do not – this is my correction – sell it for psoriasis, nobody does, and her Honour at paragraph 27 at page 496 quotes Dr Shumack as never having prescribed it for psoriasis. Dr Shumack the dermatologist has never prescribed it for psoriasis. That is why we have made, as I have submitted, such an emphasis on the question of purpose in our running of this case. Thank you very much for that indulgence, your Honours. May it please the Court.
FRENCH CJ: Yes, thank you.
MR JACKSON: May I mention two administrative matters? One is a question of the time for some material we said we would give the Court. Would it be possible for us to make it 7 June, Friday week?
FRENCH CJ: Yes.
MR JACKSON: Your Honour, the second matter is that in the document I handed up relating to overseas patentability methods, I meant to say that if the Court wanted us to provide all or any of the actual materials referred to, we would be happy to do so, and if the Court wishes us to do so, we will.
FRENCH CJ: I do not think we are going to make such a direction at the moment.
MR JACKSON: No, your Honour.
FRENCH CJ: Thank you. The Court will reserve its decision. The Court adjourns until 10 o’clock tomorrow morning.
AT 12.57 PM THE MATTER WAS ADJOURNED
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