Offer to Supply after Patent Expiry can Infringe if made before Patent Expiry
In Apotex Pty Ltd v Warner-Lambert Company LLC (No 3) a Federal Court Judge confirmed that where an offer to supply after patent expiry is made during the patent term, such an offer will constitute infringement of the exclusive patent rights.
In earlier proceedings the Judge held that the patent was valid and that Warner-Lambert (as part of the Pfizer group of companies) is entitled to quia timet injunctive relief for threatened infringement. This judgment concerns the appropriate scope of the quia timet injunctive relief. Pfizer argued that the act of applying for a Pharmaceutical Benefits Scheme listing (PBS listing) constitutes an offer to supply and that Apotex should not be able to make such application until the patent has expired. The PBS is part of the National Health Act 1953. When a drug achieves a PBS listing its cost to the patient is subsidised and hence is more likely to be prescribed. However, achieving registration on the PBS obliges the registrant to be ready to supply the drug from the date of registration. A further feature of the PBS is that registration by a generic supplier can trigger an irreversible price drop for the originator. In light of this latter feature the Courts have readily granted interim injunctions to prevent generic companies from applying for PBS listing while the originator drug is still under patent.
In considering the broad question of whether an offer to supply which is made before patent expiry but which would only be effected after patent expiry constitutes an infringement, the Judge rejected UK precedent on the point. In Gerber Garment Technology Inc v Lectra Systems Ltd  RPC 383 the Judge held that an offer to supply a patented product made during the term of the patent was not within the scope of the patentee’s monopoly if the product was to be supplied after expiry of the patent. In rejecting that approach the Judge in this case held that when a person offers a patented product for sale during the term of the patent without the patentee’s consent that person infringes the patent even if no actual sale or delivery of the product occurs before patent expiry.
Nonetheless, the Judge held that the act of applying for a PBS listing is not of itself sufficient to constitute an offer to supply. Rather, it is just a preparatory step towards being able to supply. In conjunction with other factors the act of applying for a PBS listing can warrant a quia timet injunction so as to prevent a threatened act of infringement. However, the Judge did not consider it appropriate in this case, given the nearness of the patent’s expiry and the lack of likelihood that the PBS listing would be granted while Apotex is subject to an injunction restraining them from importing, supplying or offering to supply the infringing products until the patent has expired.
The judgment is also notable for distinguishing between methods of treatment and Swiss-style claims when considering whether an offer to supply can constitute infringement. The Judge held that an offer to supply cannot infringe method of treatment claims, since such claims can only be infringed by performing the method. By contrast offering to supply the product of a patented method of manufacture falls within part (b) of the definition of “exploit” and so Swiss-style claims can be infringed by an offer to supply.
United States of America
All Steps Do Not Need to be made by Single Actor for Induced Infringement
In Eli Lily and Company v Teva Parenteral Medicines Inc the Court of Appeals for the Federal Circuit (CAFC) upheld a finding that Teva infringed Eli Lily’s method patent even though no single actor performed all the steps of the method of treatment.
The patent covered the method of administering the chemotherapy drug pemetrexed after the patient has been pre-treated with vitamin B12 and folic acid, with the patient self-administering the latter while the physician administers the former two.
Following the CAFC’s en banc unanimous decision on divided infringement in Akamai Technologies Inc v Limelight Networks Inc a District Court held that Teva had induced infringement of the patent.
The CAFC upheld that decision holding that the District Court correctly applied the Akamai test for induced infringement, which requires an act of direct infringement. In particular, where no single actor performs all steps of a method claim, direct infringement only occurs if the acts of one are attributable to the other such that a single entity is responsible for the infringement. In this case this required establishing whether physicians direct or control their patients’ administration of folic acid. This in turn required establishing whether the physician (1) conditions participation the treatment upon the patient’s performance of one or more steps of a patented method, and (2) establishes the manner or timing of that performance. Both of these conditions were found to be satisfied by the record of evidence and so established direct infringement by the physicians. The physicians were themselves held to be induced into that infringement by Teva’s product literature, which clearly encouraged, recommended and promoted the infringing activity rather than just describing a possible course of action.
2. Trade Marks
Scope of Rights in Block Letter Registration Clarified
In Domaines Pinnacle Inc v Constellation Brands Inc the Federal Court of Appeal clarified the scope of a trade mark owner’s right to use their non-stylised word trade marks in any form.
Constellation Brands opposed Domaines Pinnacle’s application for a device mark containing the text DOMAINE Pinnacle below a black square which contains an apple partially covered by a snowflake, being used in relation to apple based alcoholic and non-alcoholic beverages and products. Constellation Brands based its opposition on their registration for the word mark PINNACLES in relation to (grape) wine. Constellation Brands argued that they should be able to use their mark in any form on the basis of the Supreme Court’s Masterpiece decision, which held that the likelihood of confusion needs to be assessed on the basis of hypothetical rather than actual use.
After considering the legislation and case law a hearings officer of the Opposition Board concluded that confusion was unlikely to occur on account of the low level of inherent distinctiveness and visual and conceptual differences. On judicial review of the Opposition Board decision the Federal Court held that the hearings officer had not properly applied the Masterpiece decision by considering the potential uses that might be made of the PINNACLES mark.
On appeal of the Federal Court’s judicial review decision, the Federal Court of Appeal first held that the Federal Court had stepped outside of its judicial review role by conducting a de novo rather than a reasonableness review of the Opposition Board’s decision. In making its own reasonableness analysis the Federal Court of Appeal held that the hearings officer’s application of the precedent to the facts of the case was not unreasonable.
Secondly it was held that the scope of the rights in the PINNACLES mark would not extend to use of the graphical elements in the DOMAINE Pinnacle mark, which are protected by copyright. Nor would they be likely to use an apple device given that the PINNACLES mark is used in relation to grape wine. Even if the PINNACLES mark was used in the same font as the DOMAINE Pinnacles mark the Opposition Board’s decision was held to be reasonable, given that the combination of word and device elements in the latter mark are sufficiently distinctive.
NZ Supreme Court Favours Narrow Rights Resulting from Trade Mark Use
In 2017 NZSC 14 Crocodile International PTE Ltd v Lacoste the Supreme Court revoked registration 70068 in the name of Lacoste for a device mark containing a stylised version of the word Crocodile and a left facing Crocodile.
Registration 70068 was initially registered by Crocodile Garments Ltd. However, Crocodile Garments Ltd never used that mark in New Zealand and in 1999 Lacoste filed a non-use revocation action, which resulted in settlement negotiations in which Crocodile Garments Ltd assigned 70068 to Lacoste. However, Lacoste has also not used the mark depicted in registration 70068, but claimed an intention to use based on use of its own right facing crocodile logo, which is the subject of several registrations. Lacoste’s contention in this regard was upheld by both the High Court and the Court of Appeal. In particular, the Courts held that use could be established through Lacoste’s use of other marks given that the central message is the same and that the differences are insignificant and do not alter the distinctive character of the mark depicted in registration 70068.
However, the Supreme Court rejected the lower Court’s ‘central message’ approach and instead applied a ‘global appreciation’ approach, as had been done by the Assistant Commissioner in holding that 70068 should be revoked. The Supreme Court considered that the ‘central message or idea’ approach risked being too narrow by ignoring or downplaying significant differences between marks. Such an approach could result in the register becoming clogged with marks that are not used, but which would be deemed to be used on account of co-owned marks that contain the same central message or idea. Such an enlarged ambit of protection would be counter to the public policy considerations which favour unused trade marks not remaining on the register, as they constitute a pointless hazard or obstacle for later traders. It was also noted that marks can be taken to have multiple meanings and that attempting to ascertain a central message can lead to uncertainty.
In undertaking its own global appreciation of the respective marks the Supreme Court accepted that they were conceptually similar, but noted the following differences on a visual comparison:
- The depiction of the word “Crocodile” in a cursive script and on an angle in trade mark 70068 is absent in the device and device-and-word marks as used by Lacoste.
- A stylised representation of the animal is used in the Lacoste marks, compared to the more realistic representation in trade mark 70068.
The Supreme Court concluded that the trade marks used by Lacoste are sufficiently different from trade mark 70068 such that the trade marks used by Lacoste cannot constitute use of trade mark 70068.
Application Refused Registration due to Mark Revoked with effect from 3-Days After Application Date
In 2017 NZIPOTM 4 SC Johnson & Son Inc v International Consolidated Business Pty Ltd an Assistant Commissioner held that an application can be cancelled if the applicant did not qualify as the owner as of the application date.
The proceedings are part of a wider battle between the parties for the ZIPLOC trade mark particularly in relation to plastic bags. SC Johnson had registrations for the mark, but these were cancelled in 2005, following which an application by International Consolidated Business (ICB) for the mark and goods was registered.
On the 22nd April 2013 SC Johnson filed a revocation action against ICB’s registration on the basis of non-use. In its revocation action SC Johnson requested that ICB’s registration be revoked from the date of application for revocation or the earliest possible date that the Commissioner finds that trade mark registration became vulnerable to removal on the ground of non-use. While not explicitly stated in the revocation application this was based on sections 68(2)(a) and (b) of the Trade Marks Act 2002. The Assistant Commissioner declined to revoke the application from an earlier date on the basis that a specific earlier date was not included and no explicit allegation was made that the grounds for revocation existed at an earlier date. Nonetheless, the revocation action was granted and ICB’s registration was revoked for non-use with effect from the 22nd April 2013.
Just 3-days prior to filing the revocation action SC Johnson filed its own application for the mark and goods. After SC Johnson’s application was accepted ICB opposed it on various grounds, with the primary ground being that SC Johnson was not the owner of the mark on the 19th April 2013 – being the date of application.
Despite the nearness of these dates the Assistant Commissioner held that the combined effect of the statutory provisions and case law prohibit SC Johnson’s application proceeding to registration, since ownership could not be proved at the date of application.