“Obvious to Try” Not Appropriate on the Facts in Wenzel

Wenzel Downhole Tools Ltd v National-Oilwell Canada Ltd 2012 FCA 333 Gauthier JA: Nadon JA; Mainville JA concurring in a separate opinion aff’g 2011 FC 1323 Snider J

As described in my post on the anticipation aspect of the FCA decision, this litigation involved a bearing assembly for use in downhole drilling motors in oil and gas wells. Snider J held that the invention was obvious, invoking an “obvious to try” analysis. I suggested in my post on that aspect of her decision that it was not clear why Snider J felt an obvious to try analysis was warranted, and despite her reference to that doctrine, it did not seem to make any difference to her reasoning. The FCA has taken the same view of this aspect of her decision. While noting that the “obvious to try” approach might in principle be applicable in a mechanical field, depending on the facts of the case [95], the Court, unanimously on this point [108], held that “it was not appropriate to refer to the obvious to try approach in this case” [100]. The FCA noted that the mere fact that the bearing assemblies were tested before use did not mean the field was one in which advances are won by experimentation [99]. Nonetheless, “despite her reference to the ‘obvious to try’ approach, the Judge undertook a careful and objective analysis of the relevant factors referred to in Sanofi,” [106] in coming to her conclusion, which was supported by the evidence [103]. Consequently the FCA affirmed Snider J’s holding that the invention was obvious.

Withdrawal of an NOA Normally Renders Application Moot

Eli Lilly Canada Inc v Teva Canada Ltd / pemetrexed (NOC) 2013 FC 28 Barnes J

            injectable pemetrexed disodium – Altima – 1,340,794

Lilly sought an order of prohibition in response to Teva’s NOA related to injectable pemetrexed disodium. Teva failed to file evidence in support of its allegation of invalidity, and subsequently withdrew its NOA. The question was whether an order of prohibition should be granted (Lilly’s position), or whether the application should be dismissed as moot (Teva’s position).

Barnes J held that the application should be dismissed for mootness. He acknowledged that it would be an abuse of process for Teva to withdraw its application solely to overcome its failure to file evidence, but he noted that there was no clear evidence as to what motivated Teva’s withdrawal in this case [10], and while “this Court could issue an Order of prohibition in circumstances similar to these. . . it is [generally] preferable to deal with abuse of process concerns as and when they arise” [13]. He noted that “[t]he withdrawal of a NOA renders the second person’s submission to the Minister for a NOC non-compliant,” so there is no risk that the Minister would issue the NOC despite the withdrawal if an order of prohibition were not granted. In response to Lilly’s concern about potential exposure to s 8 damages if a subsequent NOA were successfully filed, avoiding abuse of process concerns, he noted that the Court would be mindful of its obligations under subsection 8(4) and 8(5) [11]. Subsection 8(5) in particular provides that the Court may take account of all relevant matters, “including any conduct of the first or second person which contributed to delay the disposition of the application.” This implies that if the circumstances warranted, any s 8 damages would be assessed from the time of the filing of the second NOA.

Split FCA Affirms That Enantiomers Are Per Se Ineligible for Data Protection

Takeda Canada Inc. v. Canada (Health) / DEXILANT 2013 FCA 13 Dawson JA: Pelletier JA; Stratas JA dissenting, aff’g 2011 FC 1444 Near J (blogged here)

            dexlansoprazole – DEXILANT

It is now trite law that legislation is to be interpreted “as a harmonious whole,” in light of its text, context and purpose: Canada Trustco 2005 SCC 54 [10]. But as Sullivan on the Construction of Statutes, points out (5th ed at 3):

In an easy case textual meaning, legislative intent and relevant norms all support a single interpretation. In hard cases, however, these dimensions are vague or obscure and point in different directions. In the hardest cases, the textual meaning seems plain, but cogent evidence of legislative intent (actual or presumed) makes the plain meaning unacceptable.

Takeda / DEXILANT presents a “hard case” in Sullivan’s sense, if perhaps not “the hardest case,” and the panel has split on the interpretation of the definition of “innovative drug” in the Data Protection Regulations. The majority held that enantiomers, along with salts, esters, solvates and polymorphs, are per se ineligible for protection under the Regulations, regardless of the effort necessary to originate the regulatory approval data.

No Vested Right to an NOC When Health and Safety is in Issue

Apotex Inc v Canada / omeprazole 2012 FCA 322 Dawson JA: Sharlow, Trudel JJA aff’g 2011 FC 1308 Barnes J (blogged here)

            omeprazole magnesium tablets

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, while the application was still on patent hold, 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 an application. Barnes J dismissed the application as untimely under the Federal Courts Act s 18.1(2), and he held that time should not be extended. On the only substantive point that was discussed, Barnes J held that there can be no vested right to an NOC. The FCA has now affirmed the decision of Barnes J. Again, the important substantive point was whether Apotex had a vested right to an NOC. The issue was fully argued [21], and therefore, like Barnes J, the FCA gave full consideration to the point, notwithstanding its conclusion that the motion should be dismissed as being out of time.

The SCC Did Not Hold the Viagra Patent to Be Void in Rem

Apotex v Pfizer / sildenafil 2012 FC 1339 Zinn J
             2,163,446 / VIAGRA

In this decision in an impeachment action brought by Apotex, Zinn J granted a motion for summary judgment that the ‘446 patent is invalid, on the basis that the SCC had declared the ‘446 patent to be invalid with in rem effect in its Pfizer / sildenafil 2012 SCC 60 decision. (This decision was released in late November and posted by Alan Macek on IP Practice. I missed it as I was away on vacation at the time. It is still not posted on the FC website.) It seems to have been accepted by Pfizer that the SCC did hold the ‘446 patent invalid with in rem effect when it held at [91] that “Patent 2,163,446 is void.” So in this motion, Pfizer argued that the SCC exceeded its jurisdiction, and has filed a motion seeking amendment of the judgment, or for a rehearing on the issue of remedy [10]. Pfizer also argued that “as a consequence of the Judgment of the Supreme Court declaring the ‘446 Patent void,” the impeachment action is moot [15]. Pfzier also argued that the questions at issue were questions of mixed fact and law, and so were not binding [32]. All of these arguments take it for granted that the SCC held that patent void with in rem effect. I do not agree. The question is, what did the SCC mean when it said the patent is “void”? Did it mean “void in rem,” or “void inter partes”? In my view, it is very clear that the SCC intended the latter.

Disgorgement of Profits in NOC S 8 Claim Not Available in Ontario

Apotex Inc v Abbott Laboratories Ltd / lansoprazole 2013 ONSC 356 Quigley J

The FCA has held definitively that disgorgement of the patentee’s profits is not available as a remedy in a claim under s 8 of the NOC Regulations: Apotex Inc v Eli Lilly Canada Inc 2011 FCA 358 blogged here.  Apotex hoped to have better luck by bringing an action in the Ontario courts. That hope was kept alive when the Ontario courts dismissed a motion to strike Apotex’s claim is this case: Apotex v Abbott Labs / lansoprazole 2010 ONSC 6909, Whitaker J blogged here aff’d 2011 ONSC 3988 (Div. Ct.). Swinton J. But that hope has been now dashed by Quigley J’s long and thorough summary judgment decision on the merits, dismissing Apotex’s claim for disgorgement of Abbott and Takeda’s profits from the sale of lansoprazole [2], [212].

"Available" to the Public

Wenzel Downhole Tools Ltd v National-Oilwell Canada Ltd 2012 FCA 333 Gauthier JA: Nadon JA; Mainville JA concurring aff’g 2011 FC 1323 Snider J (blogged here)

2,026,630

The decision of the FCA in Wenzel Downhole Tools illustrates the difficulty of determining when a prior use of an invention make that invention “available" to the public so as to be anticipatory prior art.

The ‘630 patent was for a bearing assembly for use in downhole drilling motors in oil and gas wells. The prior art was the so-called 3103 bearing assembly. It was found as a fact at trial, and accepted on appeal, that the 3103 bearing embodied all the essential elements of the ‘630 patent, so that it would have infringed if it had been used after the ‘630 patent had issued [FC 102]. Prior to the filing date of the ‘630 patent, three 3103 bearings had been rented by their developer to a drilling company and used on a drilling job in Texas. The bearing assembly was enclosed in a metal casing giving no hint of what was inside. Had the user opened the casing and inspected the assembly, it would have been able to discern the essential elements of the invention [60]. However, it would not have been usual or easy for the user to open the casing and on the facts the user made no effort to do so [154]. The question was whether this was enabling disclosure, or, as the Act puts it, whether this made the invention “available to the public,” so as to anticipate the ‘630 patent. It was undisputed that the user “was free at law and in equity to use whatever information was available from the product it rented” [59], so that the user qualified as “the public.” The question therefore was whether the invention had been “made available.” Snider J at trial thought it had, and Gauthier JA, for herself and Nadon JA agreed. Mainville JA, however, penned a strong dissent on this point. (Mainville JA concurred in the result on the ground that the invention was obvious; the Court unanimously agreed with Snider J that issue.)

No New Cases for Weeks of 23 December, 6 January

No new patent / NOC / data protection cases were posted on the Federal Courts' websites for the weeks of 30 December, 2012, or 6 January, 2013.

Easterbrook J on Issue Estoppel Based on Foreign Proceedings

In Apotex v AstraZeneca / omeprazole 2012 FCA 68 Stratas JA: Dawson, Trudel JJA aff’g 2011 FC 598 Mosley J, aff’g 95 CPR(4th) 414 Lafrenière Pr (blogged here), the FCA refused to strike a pleading raising issue estoppel based on foreign litigation. In catching up on my law review reading, I came across the decision of Easterbrook J (sitting by designation) in Vas-Cath Inc. v. Mahurkar 745 F Supp 517 (ND Ill 1990), rev'd in part on other grounds, 935 F 2d 1555 (Fed Cir 1991), which actually applied issue estoppel based on the Canadian decision by Strayer J in Mahurkar v Vas-Cath of Canada Ltd(1988), 18 CPR(3d) 417 as determinative of some issues in the US litigation between the same parties involving the corresponding patent. In light of the recent FCA decision, I thought Easterbrook J’s decision was worth raising, as I do not believe it has been cited in the previous Canadian cases on this point.

In deciding to apply issue estoppel (or issue preclusion, the US terminology), Easterbrook J remarked

I do not read the Federal Circuit's cases as compelling courts of the United States to ignore informed decisions rendered abroad; the judges of that distinguished court are not xenophobes. Decisions from the Federal Circuit instead reflect the legitimate concern that, when considering what the first case settled, courts not disregard differences in law. If a foreign court renders judgment on a question of fact with significance in each system of law, there is no reason not to take over that decision. Despite Judge Weinstein's omens, I propose to do just that: to examine the Canadian judgments, to learn what has been decided, and to apply those decisions to this litigation to the extent-and only to the extent-they are legally relevant, and the findings are free of the influence of legal differences.

            . . .

I do not think it important that Canada does not afford parties the same discovery rights as the Federal Rules of Civil Procedure. Preclusion survives substantial differences in the rules of procedure (provided the differences are not so great that the original judgment was obtained without due process of law, as we understand that phrase). Even within the United States, some states are more stingy with discovery than are federal courts, yet their judgments are honored. Vas-Cath does not contend that the system of litigation in Canada is uncivilized or unlikely to produce sound judgments. Most nations of the world view our system of discovery as uncivilized. No case I could find declined to give force to a Canadian judgment on the ground that Canadian procedural rules differ from ours. Vas-Cath has not pointed to any fact that it wanted to bring to the Canadian court's attention but could not because of procedural rules. Even after extensive discovery in this case, Vas-Cath has not identified any fact that could have made a difference, if only it had been found in time for presentation to the Canadian court.

Easterbrook J’s analysis seems to be consistent with the approach adopted in prior Canadian cases refusing to strike pleading based on foreign issue estoppel, such as those reviewed by Layden-Stevenson J inJohnson & Johnson Inc v Boston Scientific Ltd, 2008 FC 552 at [260]-[268] (and see also my post here discussing a variant of this issue.) The difference is that Easterbrook J went so far as to actually apply the doctrine.

I came across Easterbrook J’s decision in Kyle Grimshaw, International Upheaval: Patent Independence Protections and the Hague Conference, 2001 Duke L. & Tech. Rev. 20. Grimshaw argues that Easterbrook J was wrong, and issue estoppel based on foreign decisions should not be allowed, on the basis that foreign substantive and procedural rules may be different. While that is true, both of these concerns were acknowledged by Easterbrook J, who held, in effect, that this would not preclude the application of issue estoppel if these differences were not significant in the context of the case at hand.