Infringement by Supply of Products| Section 117 of the Patents Act

Legal books on a shelfPhoto by Iñaki del Olmo on Unsplash

The intention of Section 117 of the Patents Act is to protect a patentee from infringement of their patent by a party who may not necessarily directly manufacture, import or sell a complete product that infringes the patent but, rather, who provides the means to another party, such as an end user, to infringe the patent.  Other terms that are used to describe the type of conduct captured by Section 117 include indirect infringement or contributory infringement.

Where the end users are consumers it is not practical for the patentee to pursue each consumer for individual acts of patent infringement. Section 117 is intended to provide an avenue to the patentee to pursue the supplier of the means of infringement and stop it at its source.

Section 117 of the Patents Act

Section 117 of the Patents Act provides that “if the use of a product by a person would infringe a patent, the supply of that product by one person to another is an infringement of the patent by the supplier”. A reference in Section 117 to “use” of a product by a person is a reference to: (a) use of the product where the only reasonable use for the product is an infringing use; (b) any use of the product, if the supplier had reason to believe that the person would put it to an infringing use; or (c) use of the product in circumstances where the supplier provided instructions or an inducement to use the product in an infringing manner.

A decision of the Australian Federal Court in Generic Health Pty Ltd –v- Otsuka Pharmaceutical Co. Ltd, Bristol – Myers Squibb Company [2013] FCAFC 17 provides guidance in relation to the applicability of section 117 of the Patents Act.

This decision related to an appeal of a decision to grant an interlocutory injunction preventing the supply of the drug aripiprazole by Generic Health on the basis that the supply of the drug would amount to indirect infringement of Otsuka’s patent.  Aripiprazole is marketed by Otsuka and Bristol-Myers Squibb under the trademark “Abilify”.

The patent related to an invention involving a method of treating a patient suffering from a disorder of the central nervous system associated with the 5-HT1A Receptor using a drug aripiprazole. As only the doctor who administered the drug could ultimately infringe the method of medical treatment claims of the patent, Otsuka and the exclusive licensee Bristol-Myers relied on the indirect infringement provisions of s.117.

Expert evidence suggested that aripiprazole was used as a medication for schizophrenics who failed to respond to typical antipsychotic drugs. In granting an injunction, the judge at first instance concluded that in supplying aripiprazole Generic Health had reason to believe that a person to whom it was supplied, namely doctors, would put it to an infringing use, namely administering it to schizophrenics for the treatment of psychosis. Accordingly, the primary judge ordered that Generic Health be restrained from supplying aripiprazole in Australia.

Section 117 (2)(b) Staple commercial product? Reason to Believe?

It was conceded by Generic Health that aripiprazole was not a staple commercial product thus potentially enlivening the provisions of s 117(2)(b) of the Act.  In appealing the decision to grant an injunction, Generic Health argued that, based on the evidence, the second limb of s 117(2)(b) was not met, namely there was no prima facie case to suggest that in supplying aripiprazole Generic Health had “reason to believe” that a recipient would put it to an infringing use.

In the appeal, further evidence regarding aripiprazole was considered including that it was registered on the Australian Register of Therapeutic Goods (ARTG) for the treatment of schizophrenia and that this was the only indicated use for the product. Otsuka and Bristol-Myers argued that the only reasonable use for arapiprazole was for the treatment of schizophrenics. As such, according to Otsuka and Bristol-Myers, parts (a) and (b) of section 117 were satisfied and only one of these needed to be satisfied for the activity of Generic Health to amount to indirect infringement of the patent.

Generic Health argued, on the contrary, that there was no evidence of any actual knowledge on the part of Generic Health that the aripiprazole they supplied would be put to an infringing use. Generic Health’s evidence included that they did not provide any product information or instructions in conjunction with the supply of aripiprazole.

In the decision on the appeal, it was held that there must be a reasonable belief of a sufficient likelihood that a person would put a product to an infringing use for a supply of that product to be considered contributory (indirect) infringement under section 117. If Generic Health believed that an event, namely an infringing use of its product, was a low likelihood of occurring then this would probably not be sufficient to amount to indirect infringement. However, in the present case, the judges concluded that the evidence supported a conclusion that Generic Health had good reason to believe that its products containing aripiprazole would be used or deployed by clinicians for use by patients in the treatment of schizophrenia.

Section 117 and Pharmaceutical Patents

The concept of contributory or indirect infringement under Section 117 of the Patents Act is important in the context of pharmaceutical patents given the prevalence of claims for new methods of treatment using known substances or “swiss-style claims” in the pharmaceutical field.

However, apart from indirect infringement under Section 117, in Australia, there are two more potential causes of action available to a patentee by the supply of a generic pharmaceutical.  One such cause of action is joint tortfeasorship which is where the act of supplying the generic drug amounts to inducing or procuring infringement by doctors or patients who use the products according to the patented method.  Another is on the basis of company supplying the generic is authorising the exploitation of the invention which is an exclusive right of the patentee under Section 13 of the Patents Act.

For more information about indirect infringement and Section 117 of the Patents Act please contact Daniel McKinley.

Further reading
Broadly Speaking - Breadth of Goods and Services Specifications in AU and NZ Trade Marks
Read more
Microorganism Deposits - Extension of Time to File Deposit Refused
Read more