Can a Product Monograph Induce Infringement?

Apotex Inc v Nycomed Canada Inc / pantropazole 2011 FC 1441 Simpson J

In this decision Simpson J upheld a decision of Prothonotary Milczynski refusing to allow Nycomed to amend its counterclaim against two generics to allege contributory infringement “distinct from the ‘but for’ allegation of inducement” [2]. The patent at issue is for a combination of pantoprazole with a heliobacter inhibiting anti-microbial agent. The generics wish to sell generic pantoprazole. Nycomed wanted to allege that the generics contributed to infringing activities of third parties (such as physicians prescribing the combination) “through its product monograph, website and its marketing strategies to physicians and pharmacists” [2]. Nycomed acknowledged that the generics’ actions were not the “sole cause” of the infringing use [2]. This is presumably because the combination of an antibiotic with a proton pump inhibitor (PPI), such as pantoprazole, is now the “gold standard” for the treatment of ulcers caused by H pylori (see 2006 FC 1411 at [30]), so it is very likely that substantial infringement would occur regardless of the generics’ marketing. Simpson J refused to allow Nycomed to amend, on the basis that “contributory inducement is not a reasonable cause of action” [21]. 

I suggest that the facts alleged do disclose a reasonable cause of action, as the general factual allegations are not materially different from those in Abbott Laboratories Ltd. v. Novopharm / lansoprazole (NOC) 2006 FC 1411, [40]-[42] aff’d 2007 FCA 251, [26], similarly involving a PPI, in which the FCA specifically affirmed von Finckenstein J’s holding that Novopharm’s product monograph constituted “an encouragement to infringe” that was sufficient to establish inducement. Whether Nycomed would ultimately succeed would of course depend on the specific facts, and certainly von Finckenstein J’s finding was at the limit of what has been found to constitute inducement in Canada. Indeed, the question of what constitutes the exact bounds of inducing infringement is a difficult question as a matter of policy, and it may be that it would be desirable to have a strict rule that the claim at issue cannot succeed. However, in light of the lansoprazole decision, it is difficult to see how it can be said that Nycomed has no prospect of success on the facts alleged. 

I suggest that two points account for Simpson J's decision in this motion. First, no reference was made to the lansoprazole decision, from which I would infer that it was not argued. Secondly, Nycomed explicitly acknowledged that it could not establish "but for" inducement, and argued instead that contributory infringement should be recognized as a cause of action. The alternative arguement, which was successful in the lansoprazole decision, was to argue that the "encouragement" offered by the generics amounted to inducement. 

The framing of the cause of action reflects an underlying substantive difficulty, which is that the standard test for inducement, set out most recently in Corlac v Weatherford 2011 FCA 228 at [162], states what is on its face a “but for” test for causation as its second prong. However, “but for” causation is rarely a bright line in reality, and the courts have not been entirely consistent in cases that are close to the line: the lansoprazole decision in one instance in which the FCA has been willing to stretch the concept of “but for” causation, and MacLennan v Gilbert Tech Inc. 2008 FCA 35 rev’g 2006 FC 1038, is another. I suggest that the “but for” test is itself problematic, and the concept of contributory infringement is in need of conceptual clarification – but that is a topic for another day.

No Disgorgement of Profits in Federal Court in an Action Based on Section 8

Apotex Inc v Eli Lilly Canada Inc 2011 FCA 358 Noël JA: Dawson, Trudel JJA aff’g Heneghan J (unreported) aff’g 2009 FC 693, Pr. Tabib & Milczynski Pr (unreported)

A generic that is successful in NOC proceedings is entitled to damages under section 8 of the NOC Regulations as compensation for its losses from having been kept out of the market as a consequence of the statutory stay. The question in this motion to strike paragraphs of the statement of claim is whether the generic can also obtain a disgorgement of the excess profits earned by the patentee during that period, in an action where the sole “wrongful” act alleged is invocation by the patentee of the NOC Regulations. The FCA has held unequivocally that “the answer to this question is no” [18]. Consequently, Apotex’s claim “cannot possibly succeed” [23].

CGPA Lack of Standing Affirmed

Canadian Generic Pharmaceutical Association v. Canada (Health) 2011 FCA 357 Dawson JA: Noël, Trudel JJA aff'g 2011 FC 465 de Montigny J affm'g 2010 FC 1211 Lafrenière Pr

The FCA has affirmed that the Canadian Generic Pharmaceutical Association does not have standing to challenge the listing of a particular drug on the Register of Innovative Drugs, saying, from the Bench, that there was no error in the decisions below. The decision of de Montigny J is blogged here.

Holidays

I'm off for a week. I will be back blogging at the end of next week.

Enantiomers Are Per Se Ineligible for Data Protection

Takeda Canada Inc. v Canada (Health) / DEXILANT 2011 FC 1444 Near J  

I believe this is only the second judicial decision interpreting “innovative drug” in the Data Protection Regulations, and the first to interpret what constitutes a “variant” that is excluded from protection. In the DEXILANT decision, Near J held that the listed examples of variants in the definition of “innovative drug”, namely salts, esters, enantiomers, solvates and polymorphs, are excluded per se, regardless of whether extensive and costly trials were required to obtain an NOC.

Trial Date Backlog

Teva Canada Limited v Wyeth LLC 2011 FC 1442 Hughes J

While probably not a surprise to those of you in litigation, this statement, from Hughes J’s decision declining to set a trial date pending appeal, caught my eye: “A second reason respecting the trial date is that consideration must be given to the pressures on this Court to find trial dates for other litigants in other cases. Even now, some litigants are not expecting trial dates until 2015" [4]. I noted a few weeks ago that we have recently seen substantive patent decisions from three judges who are new to the patent roster: Rennie J, Scott J and Crampton J (who has just been appointed Chief Justice). I wonder if this represents an attempt by the FC to deal with the backlog of patent cases?

Sask CA Disagrees with FCA on Irreparable Harm in Interlocutory Injunctions

Mosaic Potash Esterhazy Limited Partnership v Potash Corporation of Saskatchewan Inc, 2011 SKCA 120

It is very difficult to obtain an interlocutory injunction in a patent case in the Federal Court, as the FCA jurisprudence uses irreparable harm as a strict threshold, in the sense that the balance of convenience stage will not be reached if the applicant cannot established that it will suffer irreparable harm, and the standard for establishing such harm is high: the applicant must show it “will actually” suffer irreparable harm on the basis of evidence that is “clear and not speculative.” For a critical review of the FCA jurisprudence, see my article Interlocutory Injunctions and Irreparable Harm in the Federal Courts, (2009) 88(3) Can Bar Rev 515. While not a patent case, or even an intellectual property case, Mosaic v PCS is an important appellate decision which fully considers the principles applicable to the grant of an interlocutory injunction, including a review of the leading authorities, and establishes an approach which is directly contrary to that used by the FCA. While the FCA is of course not bound by the SaskCA, this thorough and fully reasoned decision from an appellate court may give the FCA cause to reconsider its position when the occasion arises.

FCA Clarifies PM(NOC) Transitional Provisions

Merck Frosst Canada & Co v Apotex Inc / norflaxin (NOC) 2011 FCA 329 Stratas JA: Layden-Stevenson, Sexton JJA aff’g 2010 FC 287 O'Reilly J

Section 8 of the PM(NOC) Regulations, provides for compensation to a generic that has been denied entry as a result of a statutory stay. It was notoriously obscure as enacted in 1993 [59], and was amended in 1998. The transitional provision says that the 1998 version applies to an application that is “pending” when the 1998 Regulations came into force (March 11, 1998). The FCA has now clarified that an application is pending, and so the 1998 Regulations apply, when a final decision of the applications judge is under appeal: “the correct test for determining whether an application is “pending” is whether the application remains alive either at first instance, or on appeal” [17]. This effectively overrules the decision of Snider J in 2010 FC 1264 (blogged here), but I won’t go into the merits of the decision on this point. There were respectable arguments to be made on both sides as to the interpretation of “pending,” and what is important is that the FCA has given a clear and definitive answer.

The FCA also strongly implied that the whole debate was pointless, as the effect of the 1998 Regulations was to clarify rather than to change the law as intended under the 1993 Regulations. Merck had argued that if the 1998 Regulations applied, they were invalid as not being authorized by the enabling statutory provision, as they would retroactive deprive Merck of its vested rights. The FCA rejected this argument for a variety of reasons, of which two are of particular interest. First, section 8 of the 1998 Regulations is “a largely clarifying provision or a provision that largely attempts to declare what the law has been, [and so] is not retroactive or retrospective, nor does it interfere with earlier vested rights” [49]. Secondly, the original provision in the 1993 Regulations was so impenetrably obscure that Merck could not possibly have acted in reliance on the rights defined by that provision, as it was inevitable that substantial clarification would be required, either by case law, or, as it happened, through legislative amendment [64]-[67].

The Significance of Motive in an Obviousness Analysis

Allergan Inc v Sandoz Canada Inc / combigan (NOC) 2011 FC 1316 Crampton J

As noted in yesterday’s day post, combigan is Allergan’s brand name for a composition of two active ingredients, brimonidine and timolol, for the treatment of glaucoma, which was claimed as such in patent 2,440,764. In a curious twist in the combigan case, the Allergan, the patentee, argued that there was no motivation to develop combigan because the FDA was generally reluctant to approve fixed combination drugs for the treatment of glaucoma because of the fear of a mid-afternoon “trough” in efficacy: [115], [62]. This is curious because this type of argument is more usually raised by the defendant, as a rebuttal to the question “If it was so obvious, why was it not done before?” The answer in this case, would be, “why do what was obvious when everyone knew the FDA would not approve it?”

The "Inventive Concept" and the Problem-and-Solution Approach to Obviousness

Allergan Inc v Sandoz Canada Inc / combigan (NOC) 2011 FC 1316 Crampton J

The Federal Court seems to be expanding the roster of judges assigned to patent cases, as we have had three decisions recently that appear to be the first patent decision for the judge in question: Rennie J’s anastrozole (NOC) decision, Scott J’s decision in Hollick Solar and now this decision from Crampton J. The fresh eyes have brought a new perspective on some old problems: Rennie J set out a structured framework for determining the promise of a patent; Scott J resurrected the Improver questions for determining whether an element is essential to a claim; and in this case Crampton J has addressed whether the claims or the inventive concept are the focus of the obviousness inquiry. While Crampton J resolved the question correctly, in my view, I suggest that the difficulty which arose in this case reflects a problem with the Windsurfing / Pozzoli test itself. This problem could be avoided, and the analysis simplified, by invoking the problem-and-solution approach that is standard in the European Patent Office.

Patentability of Business Methods Unresolved by FCA Decision in Amazon.com

Amazon.com, Inc. v. Canada (Attorney General) 2011 FCA 328 Sharlow JA; Trudel, Stratas JJA var’g 2010 FC 1011 Phelan J rev’g Re Amazon.com, Inc. Patent Application No. 2,246,933 (2009) C.D. 1290, 75 CPR(4th) 85 (PAB & Com’r Pat)

In a thinly reasoned decision, the FCA has decided the Amazon.com appeal without deciding whether business methods are patentable subject matter in Canada. The central question, “Can a business method ever be patentable subject matter?” was dealt with in five paragraphs, in which the FCA applied its own prior decision on computer implemented inventions, Schlumberger Canada Ltd v Comm’r of Patents, [1982] 1 FC 845, 56 CPR (2d) 204 (CA), and held that the result turns on whether “the only inventive aspect of the claimed invention is the algorithm,” in which case it would be unpatentable, or whether the one-click shopping method at issue is “one of a number of essential elements in a novel combination” [63]. The FCA held that this was a matter of claims construction, and remanded the patent to the Commissioner for reexamination in accordance with the FCA’s reasons.

While the FCA disapproved certain aspects of the test applied by the Patent Office, the decision is a victory for the Commissioner, at least in the short term. Schlumberger was also thinly reasoned – it was two pages long and cited no case law whatever – and the practical result was to allow the Patent Office to deal with software patents as it saw fit. While the claims at issue in Schlumberger were refused, the Patent Office soon changed its mind, and ultimately interpreted Schlumberger so as to grant patents for inventions which were functionally indistinguishable: see eg Mobil Oil’s Application (1985), 24 CPR (3d) 571. The FCA’s reasons in Amazon.com are similarly ambiguous. Consequently, while the Patent Office will have to revise the complex test which it applied in Amazon.com’s Application, it will be able to follow its own policy with respect to business method patents. At present the Patent Office is firmly set against such patents, and it is a foregone conclusion that this particular patent will be refused on reexamination, but since claim construction is a matter of law to be reviewed without deference, Amazon.com will have a real possibility of having the Commissioner’s decision overturned, if it is prepared for more litigation. In the short term, then, business method patents will not be granted in Canada; in the longer term, unless the FCA decision is appealed to the SCC, we can expect a protracted period of uncertainty as the Federal Court judges struggle with the interpretation of the FCA decision in Amazon.com.

FCA Releases Amazon.com Decision

The decision of the FCA in Amazon.com 2011 FCA 328 has been released. It has not yet been posted on the FCA website, but Alan Macek has made the decision available at IPPractice.ca. I will have a post on this decision later today soon.

Test for a Stay Depends on Whether the Court is Enjoining Another Body, or Delaying Its Own Proceedings

Mylan Pharmaceuticals ULC v. AstraZeneca Canada, Inc. 2011 FCA 312, Stratas JA

In 2011 FC 1023 (blogged here and here), Rennie J granted an order of prohibition in respect of Mylan’s application for an NOC for anastrozole. Mylan is appealing this decision. In this motion, AstraZeneca sought to have the hearing of the appeal stayed until the decision of the SCC in Teva v Pfizer / sildenafil (SCC 33951). The legal issue raised was whether the applicable legal test was the tripartite test set out in RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 SCR 311 (the same test as for an interlocutory injunction). Stratas JA held that the RJR-MacDonald test applies only when the Court is enjoining another body from exercising its jurisdiction [5]. In the case where the Court is deciding whether to delay exercising its own jurisdiction, “the demanding tests prescribed in RJR-MacDonald do not apply,” [5] and the question is “whether, in all the circumstances, the interests of justice support the appeal being delayed” [14].

No Vested Right to an NOC

Apotex Inc v Canada (Health)/ Apo-Omeprazole 2011 FC 1308, Barnes J

In March 2003 the Therapeutic Products Directorate advised Apotex that the examination of Apo-Omeprazole had been completed but Apotex’s application for a NOC was on patent hold. In the fall of 2009 the TPD revoked the approval status on the basis that the bioequivalence study filed by Apotex with its ANDS had not been appropriately conducted. The TPD refused to reconsider this decision (for a review of the facts see 2010 FC 1310, [3], a motion to strike on this application). Apotex challenged the TPD’s decisions by way of this application, which was dismissed as untimely under the Federal Courts Act s 18.1(2). On the only substantive point that was discussed, Barnes J held that there can be no vested right to an NOC:

[33] There is no legal significance attaching to an application for a NOC that has been placed on patent hold. The Minister is fully entitled to revisit scientific issues at any point in the process up to the actual issuance of a NOC. It is only at that point that the Minister’s examination is completed in accordance with C.08.004 of the Food and Drug Regulations, RSC 1985, c F-27. Indeed, given the lengthy delays that can arise, the Minister would be remiss if such applications were approved at the expiry of the patent hold period without further scrutiny.

This conclusion strikes me as neither surprising nor controversial.

Proving the Promise of a Selection Patent

Eli Lilly Canada Inc. v. Novopharm Ltd / olanzapine (No 2) 2011 FC 1288 O'Reilly J

2,041,113 – olanzapine – ZYPREXA

To repeat the introduction from yesterday’s post, in Eli Lilly Canada Inc. v. Novopharm Ltd. / olanzapine (No 1) 2009 FC 1018 O’Reilly J held Lilly’s olanzapine patent, 2,041,113, to be an invalid selection patent over the genus patent 1,075,687. On the appeal, the FCA held that invalid selection is not an independent basis upon which to attack the validity of a patent (2010 FCA 197, [27], [33], [90]), and that O’Reilly J’s finding of invalidity was fatally tainted by this error. The FCA held that the patent was neither anticipated nor obvious, nor was it invalid for double patenting, but it remitted the case to O’Reilly J on the issues of utility and sufficiency. O’Reilly J at [124], following the lead of the FCA at [99], construed the patent as promising superiority to (1) prior known antipsychotics; and (2) other '687 compounds, in particular flumezapine. O’Reilly J held that patent invalid for failure to fulfil these promises. Yesterday’s post discussed the first promise. This post discusses the second promise.

Olanzapine Patent Invalid on Remand: The Ad Hoc Nature of the Utility Determination

Eli Lilly Canada Inc. v. Novopharm Ltd / olanzapine (No 2) 2011 FC 1288 O'Reilly J

2,041,113 – olanzapine – ZYPREXA

In Eli Lilly Canada Inc. v. Novopharm Ltd. / olanzapine (No 1) 2009 FC 1018 O’Reilly J held Lilly’s olanzapine patent, 2,041,113, to be an invalid selection patent over the genus patent 1,075,687. On the appeal, the FCA held that invalid selection is not an independent basis upon which to attack the validity of a patent (2010 FCA 197, [27], [33], [90]), and that O’Reilly J’s finding of invalidity was fatally tainted by this error. The FCA held that the patent was neither anticipated and nor obvious, nor was it invalid for double patenting, but it remitted the case to O’Reilly J on the issues of utility and sufficiency.

On remand, O’Reilly J has held there was sufficient disclosure, but the 113 patent is invalid for lack of utility. As always in Canadian cases dealing with utility, the first question is construing the promise of the patent. Layden-Stevenson J giving the decision of the FCA in olanzapine (No 1) stated that she would be inclined to construe the patent as promising “that olanzapine, in the treatment of schizophrenia, shows marked superiority to flumezapine and other '687 compounds, has a better side effects profile than prior known antipsychotic drugs and has a highly advantageous activity level” [99]. She did not conclude the point as she did not have the benefit of the expert evidence, but she remitted this issue to O’Reilly J as part of the utility question. O’Reilly J has taken the hint and in effect construed the patent in exactly in this manner: [124]. Note that there are two distinct promises: olanzapine must be superior to (1) prior known antipsychotics; and (2) other '687 compounds, in particular flumezapine. These are distinct points because no '687 compound had been used as an antipsychotic. While O’Reilly J’s decision runs these two points together, as both are encompassed in the promise of the patent, it is convenient to treat them separately. I will deal with the second promise in a subsequent post.

“[T]he soundness of a prediction is a question of fact”

Sanofi-Aventis Canada Inc. v. Apotex Inc. / ramipril, 2011 FCA 300 Layden-Stevenson JA: Noël, Pelletier JJA aff’g 2009 FC 676 Snider J

In this brief decision, the FCA affirmed Snider J’s finding that Sanofi’s claims to ramipril were invalid on the basis that the inventors could not soundly predict the utility promised by the patent as of the filing date. The FCA stated at [5] that “the soundness of a prediction is a question of fact” which was therefore owed deference unless the trial judge had applied the wrong legal test. The FCA held that Snider J has applied the correct test, and her findings of fact were amply supported by her detailed review of the evidence.

While this conclusion is no doubt reasonable on the facts (which I have not reviewed in detail), I am concerned by the apparently blanket statement that “the soundness of a prediction is a question of fact.” If taken to an extreme, so that every case turns on its own facts, it will not be possible to develop guidelines that provide the legal predictability and certainty that is so important to an industry such as biotechnology, which requires massive investments in reliance on patent protection. This statement is also doubtful as a matter of principle. There is no sharp dividing line between questions of law and questions of fact. Legal principles may be stated at different levels of generality, and as principles become more detailed, they shade more closely into questions of fact.

Both of these points are illustrated by the recent decision of the UKSC in HGS v Eli Lilly [2011] UKSC 51 rev’g [2010] EWCA Civ 33 (blogged here, here and here), in which the EWCA distinguished a number of decisions from the EPO Technical Boards of Appeal dealing with very similar facts, essentially on the basis that each case turned on its own facts. That would have made is makes it difficult for patentees to determine whether their patent is valid, and more importantly, to determine how soon they can apply for a patent with confidence that its validity will be upheld. As explained by Lord Neuberger in HGS v Eli Lilly at [98], this predictability is very important in the pharmaceutical industry, which relies on patent protection to fund research. The patentee is caught in a squeeze between wanting to patent early, to protect its innovation in a competitive industry, and not patenting too early in order to ensure validity. Whether the line is drawn early or late is arguably less important than that it is drawn clearly, so that inventors can know, rather than guess, what point they have to reach in order to obtain a valid patent. The UKSC, which strongly emphasized the need for legal certainty, felt able to draw principles from the TBA decisions which the EWCA had viewed as turning on their own facts. Notably, the UKSC stated the governing principles at three different levels of generality: general principles; principles applicable to new proteins and their encoding genes; and principles applicable where the protein is said to be a family or superfamily member [107]. It was the willingness to set out principles applicable to a narrow class of cases, rather than simply saying that the cases turn on their own facts, that mark the difference between the EWCA and the UKSC, and which allowed the UKSC to state guidelines that enhance predictability.

I am not arguing that the FCA was wrong in holding that the question on appeal in the ramipril case was one of fact. It is not possible to state principles that will provide clear answers in all cases; to some degree each case must turn on its own facts. My concern is that a blanket statement that the soundness of a prediction is a matter of fact reflects an approach similar to that taken by the EWCA in HGS v Eli Lilly, and may consequently impede the development of detailed principles that would improve predictability.

FCA Takes a Hard Line on Payment of Fees by the Wrong Agent

Excelsior Medical Corporation v. Canada (Attorney General) 2011 FCA 303 Pelletier JA: Noël, Layden-Stevenson JJA, aff’g 2011 FC 407 Hughes J

Patent Rule 6(1) states that the Commissioner shall only have regard to communications from the authorized correspondent. This means that if the patentee changes its agent, but does not notify the Patent Office of the change, the original agent remains the agent of record. In these circumstances the Patent Office will refuse payments made by the new agent. The result is that the patent may be deemed to be abandoned for non-payment of fees, even though payment has been tendered, albeit by the wrong agent. This point has recently been affirmed by the FCA in Unicrop.

In the decision under appeal in this case Hughes J had created a glimmer of hope for a patentee in this situation. He held that if the Patent Office accepts the fees from the wrong agent and sends a notice to the agent of record stating that the application had been reinstated, the application is thereby reinstated and the Commissioner cannot “undo” the reinstatement. In my post on that decision, I suggested that while this result seems fair, it is difficult to reconcile with the mandatory language of Rule 6(1), which states that the Commissioner “shall only have regard to communications from[] the authorized correspondent.” On appeal, the FCA extinguished that glimmer of hope, faint though it was:

The acceptance of maintenance fees, whether within or outside the reinstatement period, from someone other than the applicant’s authorized correspondent does not reinstate a patent application. Contrary to the application judge’s view, the Patent office’s acceptance of those fees did not create rights and its return of those fees did not extinguish rights. To hold otherwise would be to create a situation in which the Patent office’s administrative errors created or extinguished rights independently of the statutory scheme. [5]

Nor did the FCA show any sympathy for the patentee in this situation: “there is no basis for invoking the Federal Court’s equitable jurisdiction on the facts of this case. This is simply another in a line of case where the most elemental precautions were not taken when accepting a patent prosecution mandate” [8]. It is therefore clear that there is no prospect of judicial relief in cases in which fees have been paid by the wrong agent.

(Note that on the facts Hughes J refused to order the patent reinstated, as the new agent had subsequently requested and accepted a refund, and the application then became incurably dead. Thus the FCA dismissed the appeal.)

The Improver Questions Resurrected

Hollick Solar Systems Ltd v Matrix Energy Inc 2011 FC 1213, Scott J

In his first patent decision, Scott J has walked right into the morass of the essential elements doctrine. Moreover, he applied the three question test approved in Free World Trust 2000 SCC 66 at [55]-[56]. These questions are normally known as the Improver questions, after the case in which Hoffmann J first set out these questions, but they might now be known as the Improver “mangle,” the term used by Lord Hoffmann when, in Kirin-Amgen Inc. v Hoechst Marion Roussel Ltd [2004] UKHL 46 at [52], he repudiated his own test. The Improver questions were applied in a few cases soon after Free World Trust, but have been almost entirely ignored by the Federal Courts in recent years. (The last case I know to apply them was Halford Seed Hawk 2004 FC 88 at [140]ff, aff’d 2006 FCA 275, though with some criticism at [14]-[15].)

The invention at issue in Hollick v Matrix was a system for solar preheating of building ventilation air. It is the last in the series of three patents granted to the same inventor. As I read the patents, in the first, 1,196,825, the inventive concept was to pre-heat incoming ventilation air by passing that air through a solar panel on the sunny wall of the building, thereby capturing both solar heat and waste heat escaping through the wall of the building. The second, US Patent 4,774,932, is for an improved collector panel with vertical corrugations. This patent at issue in this case, 1,326,619, is for a further improvement to the invention disclosed in the US patent. It divides the vertical corrugations into a series of offset panels in order to improve efficiency by preserving laminar air flow. All of these patents specify that the heated air is removed into the building through a plenum at “the top” of the panels. The defendant’s device in this case placed this air intake at the bottom of the panel. The question therefore was whether the location of the air intake at the top of the panel was an essential element.

Post-Published Evidence in Europe

Human Genome Sciences Inc v Eli Lilly & Co [2011] UKSC 51 rev’g [2010] EWCA Civ 33 aff’g [2008] EWHC 1903 (Pat)

In HGS v Eli Lilly the UKSC, relying on case law of the EPO Technical Board of Appeal, held that post-filing evidence may be used to confirm the utility of a claimed invention, though such evidence cannot be the sole basis for establishing utility: [107(ix)]. The point is made most clearly in the TBA decision in T 0898/05 Hematopoietic receptor/ZymoGenetics:

Admittedly, no experimental evidence for the suggested role of the receptor and/or its ligands is made available in the application. Later evidence, however, confirmed this sort of "educated guess", which the examining division considered to be - in its own words - "reasonably credible".

(Note that the UKSC and the TBA in T 0898/05 refer to this as “later evidence,” but the TBA normally uses the term “post-published” evidence, as did Jacob LJ in the EWCA.)

The TBA case law is quite consistent on this point. Of the cases reviewed by the UKSC and EWCA in HGS v Lilly, T 0898/05 ZymoGenetics, T 1165/06 IL-17 related polypeptide/Schering, and T 0018/09 Neutrokine/Human Genome Sciences all rely on post-published evidence to establish that the claimed invention did indeed have the utility asserted in the patent. In some cases that evidence was published years after the filing date. Two more cases, T 0870/04 and T 1452/06 consider post-published evidence, though conclude it was not helpful on the facts. The case most hostile to post-published evidence was T 1329/04 Factor- 9/John Hopkins [sic] but even there the TBA did not dismiss such evidence outright, but said only at [12] that “even if supplementary post-published evidence may in the proper circumstances also be taken into consideration, it may not serve as the sole basis to establish that the application solves indeed the problem it purports to solve.”

Functional Limitations Need Not Be Express in the Claim

Delp v Fresh Headies Internet Sales Ltd 2011 FC 1228 Barnes J

This decision is a reasonably straightforward application of Burton Parsons [1976] 1 SCR 555 in the context of a motion for summary judgment. The claimed invention is for a method of extracting resins from plant materials without the use of chemicals, by chilling the plant material in cold water, which causes the resin to become brittle, and then agitating, which causes the brittle resin to break off the plant surface, after which it can be removed by filtration.

The problem faced by the patentee was a familiar one. The process can be made to work over a range of temperatures, though the efficacy drops off gradually at increasing temperatures. If the temperature is too high it will not work, though there is no strict cutoff point. Further, it will work for a variety of resinous plants, and the temperature at which the process becomes inoperative depends on the plant. A low temperature cutoff in the claim would risk excluding practically operable embodiments of the invention that could be used by competitors, but a cutoff that is too high risks encompassing inoperable embodiments.

What Does HGS V Eli Lilly Mean for Canadian Law?

Human Genome Sciences Inc v Eli Lilly & Co [2011] UKSC 51 rev’g [2010] EWCA Civ 33 aff’g [2008] EWHC 1903 (Pat)  

Wednesday’s decision of the UKSC in Human Genome Sciences Inc v Eli Lilly is very interesting in its own right, but what impact will it have on Canadian law? In broad terms it demonstrates that there is a clear functional parallel between the European requirement of “industrial application” and the Canadian utility requirement; both deal primarily with the question of how far upstream in the innovation process a patent may be granted. We can no longer say that Europe has done away with the utility requirement; to a large extent they have just renamed it. This means that in principle Canadian courts and the Patent Office can look to UK and European law on industrial applicability for guidance in respect of questions of utility. The SCC, of course, has in recent years relied heavily on UK law in a number of important decisions. CIPO is also in the habit of looking to foreign law, particularly European law, for guidance in contexts where there is little Canadian case law. HGS v Lilly means that this course remains open in respect of utility.

With that said, at the intermediate level of the specifics of doctrine, there are very significant differences between European and Canadian law that mean the specific holdings of UK courts of the EPO Boards of Appeal may not be directly transferable to the Canadian context. In particular, Canadian law on how far upstream a patent may be granted has developed through the doctrine of sound prediction. European law has no such doctrine. While it came to us from the UK, it was abandoned there with the Patents Act, 1977 which implemented the European Patent Convention. Paradoxically, this arguably makes HGS more relevant than it might initially appear. In stating the principles applicable where a patent discloses a new protein and its encoding gene, the UKSC held that “[a] ‘plausible’ or ‘reasonably credible’ claimed use, or an ‘educated guess’, can suffice” to establish industrial applicability [107(viii)]. This may appear to set a different, perhaps lower, standard than the requirement of “sound” prediction that is established in Canadian law. However, the UKSC principles are not directed to a predicted use at all, as sound prediction is not a basis for demonstrating industrial applicability. The UKSC held that a “plausible” use is sufficient to establish what would in Canada be called a demonstrated use, not merely a sound prediction.

How Far Upstream May a Patent Be Granted?

Human Genome Sciences Inc v Eli Lilly & Co [2011] UKSC 51 rev’g [2010] EWCA Civ 33, aff’g [2008] EWHC 1903 (Pat)

Today the UKSC released an important decision on industrial applicability which raises in pure form the difficult question of how far upstream in the innovation process a patent should be granted.

The facts are quite simple. The patent disclosed and claimed the DNA sequence for Neutrokine-α, which was described, correctly, as being a member of the TNF family of cytokines. It was common general knowledge that all known members of the TNF family had in common certain biological activity related to immune and inflammation responses, so a skilled person would expect Neutrokine-α to have the same activity. Little else was disclosed or known about Neutrokine-α at the time of the application. The question is therefore whether the known activity of the TNF family was sufficient to satisfy the requirement of industrial applicability. 

Repeating the Claims is Not an Adequate Pleading of Material Facts

Bertelsen v. Automated Tank Manufacturing 2011 FC 1219, O’Keefe J
 
The issue in this motion is the particularity required of the pleadings. The allegation of material fact in the pleadings specified the city in which the infringement was alleged to have taken place and a rough date range, but otherwise simply repeated the claim verbatim as constituting the specific acts of infringement. O’Keefe J, reviewing a decision of the prothonotary de novo as being vital to the final issue in the case, refused to allow the amendment to the statement of claim (which would have been the third amendment) and consequently dismissed the action on the basis that the pleadings did not disclose a cause of action. This appears to be a reasonably straightforward application of Dow Chemical Co v Kayson Plastics & Chemicals Ltd (1996), 47 CPR 1 (Ex Ct) and Precision Metalsmiths Inc v Cercast Inc (1966), 49 CPR 234 (Ex Ct). While the claims themselves describe elements which are factual in nature, e.g. “providing a vertical shaft extending below ground,” what is required is “a description of the particular process that the defendants are alleged to have made or used” (Precision Metalsmiths at 247). It is true that if the defendant did infringe, then the specific acts carried out by the defendant will be described by the claims, so in that sense repeating the claims would describe the defendant’s acts. However, the broader principle appears to be the same as is applied in discovery, namely that litigation cannot be used as a fishing expedition: see eg 2008 FCA 287. The facts pleaded must therefore relate to specifically identifiable acts by the defendant.

Amalgamation, Equitable Election, and Section 8 Claims

Teva Canada Limited v Wyeth LLC, 2011 FC 1169, Hughes J

The issue in this case is narrow and tricky, but it is also novel and interesting: what is the effect of a merger of generics when one of the generics was a licensee of the brand, and the other had a valid section 8 claim?

Wyeth entered into authorized generic agreement with Novopharm under which Wyeth licensed Novopharm to sell a generic version of a Wyeth drug. To protect Novopharm’s position as the authorized generic, Wyeth also agreed to make commercially reasonable efforts to enforce the patent against third parties. Ratiopharm then served an NOA on Wyeth. At Novopharm’s request pursuant to the agreement, Wyeth instituted NOC proceedings against ratiopharm. Wyeth lost, and ratiopharm brought a section 8 claim against Wyeth. So far there is nothing out of the ordinary. However, after Novopharm changed its name to Teva, Teva and ratiopharm amalgamated. What is the effect of Novopharm’s agreement with Wyeth on ratiopharm’s section 8 claim, in light of the amalgamation?

Double Costs under Rule 420 in Respect of Counterclaim

Eli Lilly Co. v. Apotex Inc. / cefaclor, 2011 FC 1143 Gauthier J (Costs)

This is a decision on costs related to 2009 FC 991 aff’d 2010 FCA 240, in which Gauthier J held in favour of Lilly in an infringement action against Apotex, and against Apotex in its Competition Act counterclaim against Lilly and Shionogi.

Gauthier J dealt with costs in the main action and the counterclaim separately. With respect to costs in favour of Shionogi on the counterclaim, the main question whether particular settlement offers triggered doubling of costs under Rule 420. Gauthier J affirmed that Rule 420 as amended requires only that the offer remain open until the start of the trial or hearing [25]-[36], and not until the matter is taken under advisement or judgment is rendered. Note that an offer that does not trigger Rule 420 may nonetheless be considered under the general Rule 400(3)(e).

Further, in an apparently novel point of general interest, Gauthier J held that “although there was only one scheduling order issued for the trial of the various proceedings in T-1321-97, the main action and the Competition Counterclaim were two completely distinct proceedings.” Consequently, a settlement offer in respect of the Competition Counterclaim had to remain open not just until the start of the trial as a whole, but until the start of the portion of the trial dealing with the counterclaim [27].

On the facts, one settlement offer made by Shionogi triggered Rule 420. Gauthier J declined to exercise her discretion to lower the amount payable under that Rule. She noted that Apotex had added Shionogi as a defendant two years after instituting the Competition Counterclaim against Lilly, and it had apparently done so primarily to get evidence from Shionogi [40]. Gauthier J stated that

[41] The Court should not be taken as condoning the practice of suing a party solely to facilitate the acquisition of evidence or to put pressure on a third party. There are more appropriate means to obtain evidence from a non-party, including a foreign company.

Gauthier J also noted that the Shionogi evidence was ultimately not particularly helpful [42], and while Apotex was entitled to “insist on the strict application of the rules of evidence with respect to the filing of documents,” and to obtain a procedural advantage in order to settle its Competition Counterclaim with Shionogi,” such decisions might have costs consequences: “it cannot expect to impose its choices on Shionogi or Eli Lilly” [49].

On the main action, Gauthier J was not able to assess whether Rule 420 was triggered. Rule 420 turns on a comparison between the offer and amount awarded, and at this point it remained too difficult to estimate the quantum [65]. Gauthier J noted that “in the context of bifurcated action, the application of Rule 420 can be difficult and will require more judicial consideration” [66].

Hints on Validity as a Defence to a Section 8 Action

Apotex Inc v Shire Canada Inc / modafinil (NOC) 2011 FC 1159 Near J aff’g 2011 FC 436 Tabib Pr

This motion raises, albeit tangentially, the important question of whether infringement is available as a defence to an action for section 8 damages under the PM(NOC) Regulations. By way of background, Cephalon is the owner of the patent in question and Shire is a licensee. Both were parties to NOC proceedings, 2008 FC 538, in which Apotex prevailed. Cephalon has since commenced an infringement action against Apotex (T-609-09), but Shire is not a party to that action [5]. Apotex is now seeking section 8 damages from Shire, and this motion arises from those proceedings. Shire had previously tried to raise infringement as a defence, but had wanted to base the defence entirely on the outcome of the Cephalon action, without bringing any independent evidence in the section 8 damages proceeding. This amendment was not permitted (2010 FC 828 affm’d 2010 FC 1001), on the basis that the Shire had not pleaded any material facts on which the court could make any direct determination. 

Shire then sought to amend its Statement of Defence to plead infringement as a defence and counterclaim. Prothonotary Tabib refused to allow this amendment on the basis that the amendment had not been sought in a timely matter. She therefore made no comment as to whether such a defence would be permitted substantively (see my post on that decision). In this decision, Near J, reviewing the matter de novo as raising a question vital to the final issue [16], has affirmed the decision of Tabib Pr, again primarily on the basis that Shire should have brought forward the issue of infringement earlier [24]. However, Near J also hinted at the substantive point, stating “the infringement aspect is not necessarily the ‘true substance’ of section 8 proceedings directed at damages of Apotex being kept off the market. Any potential basis for infringement could be pursued by way of a separate action or by Shire joining the Cephalon proceedings already in progress without delaying a section 8 resolution” [21]. This suggests that even if Shire had pleaded infringement as a defence in a timely manner, the pleading might have been struck. However, Near J also remarked that “Shire should have brought the issue of infringement forward in its initial pleadings” [24], suggesting that this defence would have been permitted if pursued in a timely manner.

Interlocutory Injunctions in Australia

Apple v Samsung Electronics [2011] FCA 1164 (Aus)

In my article Interlocutory Injunctions and Irreparable Harm in the Federal Courts, 88(3) Can Bar Rev 515, I argued that the threshold for irreparable harm imposed in the Federal Courts is too high. My review of the Chancery cases in which the concept developed showed that adequacy of damages did not have a distinct role: “[w]hen the courts of equity declined to provide a remedy to the plaintiff, they would often say that this was because the remedies at law were adequate, but this was in effect a statement of the conclusion on the balance of convenience, rather than a distinct condition precedent to taking jurisdiction.” Accordingly, it would be preferable to abandon the requirement of irreparable harm entirely.

Because my review was historical, I neglected comparative law. In particular, I am embarrassed to admit that I was entirely unaware of the extremely interesting approach long taken by the High Court of Australia, which was brought to my attention by the recent decision of the Australian Federal Court in Apple v Samsung Electronics [2011] FCA 1164, reported by IPKat here. The law applied in that case derives from the decision of the High Court in Beecham Group v Bristol Laboratories [1968] HCA 1, a patent case. Beecham established a two-part test for an interlocutory injunction, which considered the probability of success and the balance of convenience; irreparable harm is not a factor at all. It is notable that this test was based directly on an analysis of the original Chancery jurisprudence. In Australian Broadcasting Corporation v O’Neill [2006] HCA 46 Gummow and Hayne JJ at [65]-[72] affirmed this test. Their opinion explained further that the assessment of the merits did not require a showing that it was more likely than not that the plaintiff would succeed; in this the decision was consistent with Lord Diplock’s speech in Cyanamid [1975] A.C. 396. However, the High Court expressly rejected Lord Diplock’s holding that the court need only be satisfied that the plaintiff’s claim is not frivolous or vexatious, for the very good reason that Lord Diplock’s statements “obscure the governing consideration that the requisite strength of the probability of ultimate success depends upon the nature of the rights asserted and the practical consequences likely to flow from the interlocutory order sought.”

In my Irreparable Harm article I argued that the correct overarching principle is the “lower risk of injustice” stated by Hoffmann J in Films Rover International v Cannon Film Sales [1986] 3 All E.R. 772 at 780 (Ch.):

The principal dilemma about the grant of interlocutory injunctions. . . is that there is by definition a risk that the court may make the ‘wrong’ decision. . . . A fundamental principle is therefore that the court should take whichever course appears to carry the lower risk of injustice if it should turn out to have been ‘wrong.’

The general Australian approach, as I now understand it, is consistent with this principle, and seems entirely sound. The Beecham decision also had some very interesting specific guidelines regarding patent cases in particular. I regret that neglected this important jurisprudence when I wrote my article.

Relevance of Simultaneous Invention to Obviousness

Apotex inc. v. Warner-Lambert Company LLC 2011 FC 1136 Pinard J

This is an appeal from an order of Prothonotary Milczynski, compelling the defendant patentee to disclose when it became aware of patent filings by others that including claims related to the patentee’s invention. The grounds for the order were that such information was relevant to the prior art, and, more interestingly, that “one element of the obviousness of the patents in suit is the fact that other scientists in the field came to the same invention in and around the same time” [7]. In other words, the order raises the question of the relevance of simultaneous invention to the question of obviousness.

As I argued a post last week, so-called “secondary” evidence is not substantively secondary. With that said, not all secondary evidence is made equal. Failure of others is especially compelling evidence of inventiveness. As the High Court of Australia noted in Lockwood v Doric(No 2) [2004] HCA 58 at [119], “When skilled, non-inventive persons, and in this case also a skilled inventive person, looking for improvements, fail to arrive at the invention, it is impossible to suggest that it would have been obvious to the skilled and not necessarily inventive person.” The combination of long-felt need and commercial success, traditionally the strongest secondary evidence, is ultimately derived from this point, as those circumstances permit the inference that others tried and failed.

However, the converse is not true. Success of others – simultaneous invention – in itself, does not generally establish obviousness, as those others may also be inventive, particularly since invention does not require genius. As the English Court of Appeal noted in Mölnlycke v Procter & Gamble Ltd, [1994] RPC 49 (CA) at 132 “The inventive step may not have been large and it is not surprising to us that more than one inventor may have had broadly the same idea at around the same time.” This is especially likely in an active area of research. When several companies are pursuing a lucrative goal with talented researchers, it should not be surprising that several may arrive at the same solution, even though it requires invention. This is implicit in the old system of first-to-invent: as the Fed Cir has said 620 F.2d 1247 (1980): “Nothing should be more clear in the law of patents than the concept that the same patentable invention may be contemporaneously made by more than one inventor,” noting “The statute establishing interferences in the PTO, 35 U.S.C. s 135, is entirely premised on the concept that the same nonobvious invention may be contemporaneously made by a plurality of inventors.”

With that said, evidence of simultaneous invention may be relevant in light of the details of the circumstances of the invention. If all inventors had difficulty in arriving at the invention, simultaneous invention may reinforce a conclusion of non-obviousness; on the other hand, if several others arrived easily at the invention, this would be evidence of obviousness, even though the patentee might have struggled.

“Secondary” Evidence of Obviousness Is Not Secondary in Importance

Two types of evidence are normally adduced in the obviousness inquiry: evidence relating to the circumstances of the invention, such as long-felt need and commercial success, and evidence of expert witnesses as to how a person skilled in the art at the time would have approached the problem. It is now normal to refer to the former as “secondary” evidence. There is nothing wrong with this as a label, but in Mölnlycke v Procter & Gamble Ltd, [1994] RPC 49 (CA) at 113, the English Court of Appeal stated that “[t]he primary evidence will be that of properly qualified expert witnesses who will say whether or not in their opinions the relevant step would have been obvious to a skilled man having regard to the state of the art. All other evidence is secondary to that primary evidence,” and that secondary evidence “must be kept firmly in its place. It must not be permitted, by reason of its volume and complexity, to obscure the fact that it is no more than an aid in assessing the primary evidence.” In other words, “secondary” is not merely a label, but indicates that such evidence is intrinsically of lesser significance than the evidence of expert witnesses. This view, which has since been repeated in a some English decisions, is wrong both in principle and as a matter of Canadian law. The true rule, in Canada, as well as Australia, and indeed in England, is that the court must consider all relevant factors including circumstantial evidence, giving weight to each according to the circumstances of the case: see e.g. 2007 FCA 217 at [27]. It is nonetheless useful to distinguish these two types of evidence, as each is subject to different frailties: assessment of obviousness based on the evidence of expert witnesses is subject to the hindsight bias, while establishing causation is the main problem with circumstantial evidence. While there is no formal hierarchy of evidence in Canadian law, the general tendency is the opposite of that suggested by the “primary / secondary” labels. When circumstantial considerations point strongly in the direction of inventiveness, an argument in favour of obviousness based on expert opinion evidence will rarely prevail.

Computer Implemented Inventions in the UK

Halliburton Energy Inc’s Patent [2011] EWHC 2508 (Pat) Birss J

This recent decision of Birss J in the English Patents Court on the patentability of computer-implemented inventions is of some interest in light of the appeal pending before the FCA in Amazon.com 2010 FC 1011 under appeal A-435-10. While Amazon.com is about business methods, the decision of the FCA in Schlumberger 56 CPR (2d) 204 (CA), which dealt with computer-implemented inventions, it is relevant for its general approach to patentable subject matter, and it appears that the FCA in Amazon.com will consider the implications of Schlumberger: see communication of 2011-07-07. While Birss J’s decision is not high authority in itself, Birss J undertook a thorough review of the UK and EPO jurisprudence, which makes it clear that the application which was denied in Schlumberger would now be granted in England, despite the fact that the UK Patents Act, 1977 s 1(2)(c), following the EPC Art 52(2), expressly provides that “a program for a computer” is not patentable “as such.”

Because of the statutory difference, this conclusion is not directly relevant to Canadian law. Nonetheless, it is not unreasonable to look to international law, whether statutory or otherwise, as a guide to general principles. The Commissioner did exactly this in the decision under appeal in Schlumberger, CD 441. Because of the paucity of Canadian case-law, the Commissioner’s decision was based primarily on US Supreme Court decisions. In an article in the forthcoming issue of the CIPR (which has just gone to press), “The Rule Against Abstract Claims: A Critical Perspective on US Jurisprudence,” (2001) 27(1) C.I.P.R. 3 (draft here), I argue that Schlumberger was wrongly decided because the USSC decisions on which it was based are inconsistent with SCC jurisprudence. The Commissioner in Schlumberger also pointed at p.16 to the statutory restriction in English law as supporting its conclusion, upheld by the FCA, that a restrictive approach to computer-implemented inventions should be adopted. It is now clear that the Commissioner’s interpretation of the English provisions was overly simplistic, and consequently incorrect. That English law has now adopted a generous approach to the patentability of computer-implemented inventions, despite the statutory restriction, reinforces the conclusion that Schlumberger was wrongly decided.

Connection Between Patent Remedies and Competition Act Claims

Dywidag Systems International, Canada, Ltd. v. Garford Pty Ltd. 2011 FCA 264 Mainville J

I don’t normally comment on procedural matters, but there haven’t been many substantive decisions lately, so I thought I would summarize this motion.

Garford sued Dywidag on the basis of patent infringement and under the Competition Act. Dywidag obtained an order for bifurcation of liability and monetary remedy, which order was set aside by Zinn J 2010 FC 581, essentially solely on the basis that the financial information necessary at the remedy phase overlapped with the financial information necessary to prove liability under the Competition Act claim. Dywidag appealed (the Bifurcation Appeal). Subsequently, Russell J 2010 FC 996 granted a motion for summary judgment on Competition Act claim on the basis that the limitations period had run. That decision has also been appealed (the Competition Act Appeal).

In the present motion Dywidag sought to amend its Notice of Appeal in the Bifurcation Appeal, presumably to account for the implications of Russell J's Competition Act decision, and to ensure that the Bifurcation Appeal would be heard immediately after the Competition Act Appeal, even though the proceedings in the Bifurcation Appeal were much further advanced, and, but for the order sought, would be heard first. In light of the close connection between Zinn J's refusal of the bifurcation order and the Competition Act claim, Mainville J granted the orders sought by Dywidag.

Week of 18 September - No Decisions

No patent decisions were released on the Federal Courts' websites for the week of 18 September.

The Argument in Favour of the False Promise Doctrine

I have been critical of the false promise doctrine in past posts, but few arguments are entirely one-sided. The argument in favour of the false promise doctrine is obscured because the traditional justification is based on the theory that the Crown has been deceived in the grant. This theory is unpersuasive in the modern patent system in which a patent is obtained as of right for an invention that is substantively patentable. So, Blanco White §4-403 cites Hatmaker v Nathan (1919) 36 RPC 231 (HL) for the proposition that “where a patentee promises (expressly or impliedly) the attainment of a certain result, and this is not obtained, . . .the patent will be invalid: for ‘protection is secured by the promise of results; it does not, and ought not to, survive the proved failure of the promise to produce the results,’” and then in the footnote he remarks acerbically that “It is not, of course, in actual fact; but the House of Lords has repeated this dictum until it is of unimpeachable authority.”

The better defence of the doctrine is based on the modern understanding of the purpose of the utility doctrine, which is to govern how far upstream in the R&D process an invention may be patented.

Week of 11 September - No Decisions

No patent decisions were released on the Federal Courts' websites for the week of 11 September.

A Limit on the Windsurfing / Pozzoli Obviousness Framework in Pharmaceutical Cases

Astrazeneca Canada Inc. v. Mylan Pharmaceuticals ULC / anastrozole (NOC) 2011 FC 1023 Rennie J

The four-step Windsurfing/ Pozzoli approach to the obviousness determination, endorsed by the Supreme Court in Sanofi 2008 SCC 61 at [67], is now routinely used, but it is no more than a framework that need not, and should not, be used when it is not helpful: Sanofi [61], [63]; Weatherford 2011 FCA 228 [67]. Astrazeneca / anastrozole (NOC) illustrates one context in which the limits of the Pozzoli framework are reached. As is common, the claimed compound, anastrozole, was developed by modifying a lead compound in an attempt to improve its properties. Rennie J held that there was no obvious lead compound, and that was sufficient reason to find that the invention was not obvious, whether or not the subsequent modifications were obvious [214]. If indeed the selection of the lead compound is not obvious, the non-obviousness of the claimed invention follows, whether or not the lead compound is part of the prior art. (Note that the non-obviousness conclusion was supported by compelling secondary evidence [221]-[227]).

An Emerging Framework for Construction of the Promise of the Patent

Astrazeneca Canada Inc. v. Mylan Pharmaceuticals ULC / anastrozole (NOC) 2011 FC 1023 Rennie J

Construction of the promise of the patent is currently a hotly contested area of Canadian patent law, as a valuable and otherwise valid patent may be held invalid for promising too much. Despite this, there is little jurisprudence on how to construe that promise, as Hughes J noted in GlaxoSmithKline / rosiglitazone, 2011 FC 239 at [83]. Rennie J’s debut decision in substantive patent law marks a significant advance in developing a coherent jurisprudence on this point, that is consistent with general principles of claim construction and statutory interpretation. I would say that Rennie J’s decision is a large step in the right direction, except that my own view, expressed in a number of previous posts, is that the entire false promise doctrine is misguided. But Canadian law, and FC judges, are stuck with this doctrine until a higher court rules otherwise, and Rennie J’s opinion is certainly a most welcome contrast to the very disappointing analysis of the FCA in Pfizer v Apotex / latanoprost (NOC) 2011 FCA 236, that I blogged about two weeks ago.

The Rule Against Abstract Claims in the Federal Circuit post-Bilski

Classen Immunotherapies, Inc. v. Biogen Idec (Fed. Cir. 31 Aug 2011)

As the Federal Courts have been quiet recently, I thought I’d take the opportunity to comment on the decision of the US Federal Circuit in Classen Immunotherapies, remanded to the CAFC by the USSC for reconsideration in light of Bilski. Classen is very interesting for two reasons: it is a rare instance of the correct application of the rule against abstract claims to hold a claim invalid; and it provides contrasting interpretations of Bilski in the majority dissenting opinions.

The three patents at issue where based on the purported discovery that early immunization reduces the risk of immune-mediated diseases, including eg diabetes. The district court had granted summary judgment that all of the claims in the patents were invalid as being directed to an abstract idea. Two of the patents claimed a method of comparing two immunization schedules, choosing the one with lower risk, and immunizing according to the lower risk schedule: see claim 1 of the ‘739 patent. The third ‘283 patent claimed a method of determining whether an immunization schedule affects the risk of immune-mediated disease by comparing the incidence of such diseases in two groups of mammals treated with different immunization schedules. Thus both types of claim were based on the discovery that the immunization schedule affects the risk of immune-mediated disease, but the first type of claim included the step of actually immunizing a patient according to the preferred schedule.

Promise of the Patent Determined Without Reference to the Description

Pfizer Canada Inc. v. Apotex Inc. / latanoprost (NOC) 2011 FCA 236 Trudel JA; Sharlow, Stratas JJA rev’g 2010 FC 447 Heneghan J 

There is not much new law in the FCA’s latest latanoprost decision, but it is significant nonetheless for an extremely aggressive application of the false promise doctrine; the FCA construed the promise of the patent without any reference to the description, and, on the basis of this construction, reversed the Applications Judge and held the claims at issue invalid.

The key claims in the patent at issue, 1,339,132, were a compound claim for latanoprost, a prostaglandin derivative, and a claim for the use of latanoprost in the treatment of glaucoma or ocular hypertension. Prostaglandins had previously been of interest in treating glaucoma, but most (or all) of the prior art prostaglandins were of limited practical use for that purpose because of side effects, primarily ocular irritation.

A crucial issue on appeal was the construction of the promise of the patent. According to standard Canadian law, the utility of the invention is measured by the promise of the patent. This means that even if the invention is sufficiently useful to warrant a patent, the patent will nonetheless be invalid for lack of utility if it promises more than it delivers. At the first instance, Apotex’s argument, which was rejected by Heneghan J, was that the patent promised that side effects would be eliminated or substantially reduced in chronic treatment of glaucoma [FC 69, 192]. The issue was significant because the inventors had only conducted “single dose” studies of eye irritation caused by latanoprost. If the patent promised reduced irritation when given as a single dose, then, as Heneghan J held, demonstrated utility was established. This was not disputed on appeal. Thus it is clear that the invention had that “scintilla” of utility that is accepted as being adequate to satisfy the utility requirement if no higher degree of utility is promised. But if, as Apotex argued, the patent promised that irritation would be reduced even with chronic use, utility depended on sound prediction. The Court of Appeal agreed with Apotex as to the promise of the patent, and in the second issue on appeal, went on to hold that the factual basis for a sound prediction was not established by the single dose studies, and consequently the claims in question were invalid.

So, validity turned on the construction of the promise of the patent, and specifically whether the patent promised that irritation would be minimal even with chronic use. The FCA reviewed the question for correctness as a matter of law [17], and having determined that Heneghan J erred in her interpretation of the promise, came to its own conclusion based on the record, without remitting the matter to Heneghan J [20].

Is Claim Construction Really a Question of Law?

Phostech Lithium Inc v Valence Technology, Inc 2011 FCA 237 Pelletier JA: Noël, Mainville JJA, affirming 2011 FC 174, Gauthier J 

The trial decision of Gauthier J in Valence v Phostech turned primarily on the facts, and it is no surprise that the FCA has affirmed, in an appeal that “raises no novel questions of law” [1].

The invention in question was for a method for making lithium mixed metal cathodes for lithium ion batteries by using “carbothermal reduction” (CTR). The main issue at trial was whether the process used by Phostech, the defendant, used CTR. As a matter of science it was difficult to determine whether the conditions inside the closed industrial kiln used by Phostech would actually result in CTR, but the question, which Gauthier J decided against Phostech, was purely factual. Phostech chose, no doubt wisely, not to even raise this point on appeal.

Instead Phostech focused on a claim construction point. As the FCA noted, claim construction is a question of law, so the standard of review is correctness [26]. While this point is well settled, this characterization of claim construction has always struck me as a bit odd. The claim is construed as it would be understood by a person skilled in the art, which means that the trial judge must receive expert testimony as to the meaning of various terms and the background necessary to understand the technology, then use this factual information to put herself in the shoes of a skilled person reading the claims, before determining the meaning of the claims. This looks to me quite a lot like a question of mixed fact and law. In Phostech this FCA squared this circle by noting that “[w]hile the interpretation of the [term in issue] is a question of law, it must be construed in the light of the evidence as to its meaning to the person skilled in the art” [29]. The FCA then noted that the trial judge heard conflicting expert evidence, and preferred that of the plaintiffs’ [30], and after two paragraphs quoting from the trial judge’s summary of the evidence, concluded “the trial judge’s interpretation of the [term in issue], resting as it does on the evidence which she accepted as to the person skilled in the art’s understanding of the term, is unassailable” [33]. This looks quite a bit like a deferential review that would be applied to a question of mixed fact and law.

My thanks to Alan Macek and his very useful site IPPractice.ca for bringing this case to my attention before it was released on the FCA website.