Teva / Sildenafil Amended

Teva Canada Ltd v Pfizer Canada Inc, 2012 SCC 60, as amended, rev’g 2010 FCA 242 rev’g 2009 FC 638
            2,163,446 VIAGRA   Pfizer / sildenafil (NOC)

In its Teva / sildenafil decision the SCC held that the ‘446 patent is “void” [91], even though this was an NOC proceeding which normally has no in rem effect. In response, Pfizer moved under the SCC rules for rehearing or amendment. The SCC responded by amending its decision to make it clear the its holding does not have in rem effect. The new concluding paragraph [91] is “Therefore, I would allow the appeal with costs and hold that Teva established its allegation that Patent 2,163,446 is not valid, and dismiss Pfizer's application for an order of prohibition under s. 6(1) of the Regulations.” The full amending decision is available from Alan Macek's IPPractice site. This amendment is welcome, though not entirely surprising, as it would have been very unusual for the Court to overturn established law without argument, without mentioning that it was doing so, and without even being asked.

However, the is not the end of Pfizer’s troubles with this proceeding. In Apotex v Pfizer / sildenafil 2012 FC 1339 Zinn J granted summary judgment to Apotex in an impeachment action, holding the ‘446 patent to be of no force or effect, in part on the basis that the SCC had declared the ‘446 void. (In my previous comment on Zinn J’s decision, I focused on the question of whether the SCC had actually declared the patent void.) That point has now been clarified, but that was not the sole basis, or even the primary basis, for Zinn J’s decision. He held that

the determination by the Supreme Court in its Reasons that the ‘446 Patent fails to meet the requirement of sufficient disclosure pursuant to subsection 27(3) of the Patent Act is a legal determination binding on this Court and is dispositive of Apotex’s claim in this action that the ‘446 Patent is invalid due to insufficiency of disclosure, even if the Supreme Court grants Pfizer’s motion and deletes its declaration of invalidity from its Judgment [30] (my emphasis).

With respect, Zinn J must be wrong on this point. This holding a contrary to a very well established law at both the SCC and FCA level that NOC proceedings are not determinative of patent validity (see cases cited below). By holding that the SCC determination is dispositive, Zinn J’s determination effectively does an end-run around this line of cases. It implies that while the result in the NOC case does not directly invalidate the patent, that will be the practical effect because it determines the outcome of the subsequent infringement / impeachment action.

Zinn J did not directly address this line of cases, but instead referred to the rule that claim construction is a matter of law, and that the result turned on “three questions of law: (1) the determination of the invention or inventive concept of the patent, (2) the construction of the ‘446 Patent, and (3) whether the ‘446 Patent, properly construed, permitted the person of skill in the art ‘to make the same successful use of the invention as the inventor could at the time of his application.’”

There are two problems with this analysis. First, it seems to me that the first and third of these points must be questions of mixed fact and law. The inventive concept is the inventive technical contribution made by patentee over the state of the art. The state of the art is a question of fact, and the question of whether the contribution is inventive is mixed fact and law. What the “skilled person” could have taken from the invention requires evidence about the skilled person. I have argued that even the construction of the patent is really a question of mixed fact and law, since it requires factual evidence as to what terms would have meant to a skilled person. The reason the courts refer to it as a question of law is to reserve the ultimate question of claim construction to the court, rather than having to choose betweeen constructions provided by experts. This is entirely reasonable, but it does not mean that there is no factual underpinning to claim construction.

Moreover, I’m not sure I agree with Zinn J’s analysis of the Sildenafil decision. The decision is not easy to understand (I am just about finished a case comment), but my view is that it turned on the SCC's understanding that the other claims in the patent were invalid because the allegation of invalidity was not contested by Pfizer (because it was an NOC proceeding), or on the view that the patentee was trying to “game the system.” Both of these turn on factual issues that were not fully contested in the NOC proceeding.

And even if the determinations were in some sense a question of law, this misses the point of the case law holding that NOC proceedings are not determinative. The principle is based on institutional considerations, not whether a question of law is at issue. As the SCC said in Eli Lilly & Co v Novopharm Ltd [1998] 2 SCR 129, quoting Strayer J.A. in Pharmacia [1995] 1 F.C. 588, 600 (SCC emphasis):

If the Governor in Council had intended by these Regulations to provide for a final determination of the issues of validity or infringement, a determination which would be binding on all private parties and preclude future litigation of the same issues, it surely would have said so. This Court is not prepared to accept that patentees and generic companies alike have been forced to make their sole assertion of their private rights through the summary procedure of a judicial review application.

Similarly, in Lilly v Novopharm 2007 FCA 359 the FCA stated (my emphasis):

[41] NOC proceedings were never intended to be substitutes for an infringement action. Similarly, it is inappropriate to rely on NOC proceedings to set binding precedent on controversial and uncertain questions in patent law. NOC proceedings are supposed to be summary in nature and do not lend themselves to such determinations.