Gauthier J on Disclosure of Factual Basis for Sound Prediction

Sanofi-Aventis v Apotex Inc / clopidogrel 2013 FCA 186 Pelletier JA, concurred in by Noël, Gauthier JJA; separate concurring reasons by Gauthier JA, rev’g 2011 FC 1486 Boivin J
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In Lilly v Apotex / raloxifene 2009 FCA 97, [15] aff'g 2008 FC 142 [164], and subsequently in Novopharm v Lilly / atomoxetine 2011 FCA 220, [46-47] aff’g 2010 FC 915, [116-117], the FCA held that when utility is based on sound prediction, the factual basis for the prediction must be disclosed in the patent itself. The ultimate authority for this was a passage in the SCC decision in Wellcome / AZT 2002 SCC 77, [70]. In my article, “Must the Factual Basis for Sound Prediction be Disclosed in the Patent?” (2012) 28 CIPR 39 (draft version here), I argued that Wellcome / AZT did not mandate such a rule. I also argued that the requirement is unsound, in part because it creates a sharp distinction between demonstrated utility and sound prediction. Such a distinction cannot be supported on the Act, which contains only a single utility requirement.

The requirement to disclose the factual basis for sound prediction is conceptually distinct from the promise of the patent doctrine, but the two are linked in practice; the promise doctrine raises the bar for demonstrated utility, making it more likely that sound prediction will be invoked, and the factual basis doctrine makes it more difficult to establish sound prediction. This is illustrated by Boivin J’s decision at first instance in Clopidogrel. As explained here, because he held that the patent promised a relatively high level of utility, he found that the promise was not met. Boivin J held that there was, however, a good factual basis and sound line of reasoning supporting a sound prediction of utility, but the test for sound prediction was not satisfied because the factual basis was not disclosed in the patent itself. But for the promise doctrine, sound prediction would not have been raised, and but for the factual basis doctrine, the test for sound prediction would have been satisfied.

On appeal in Clopidogrel, the FCA interpreted the promise more modestly, and held that utility was demonstrated. The majority therefore did not discuss the question of whether the factual basis for sound prediction had to be disclosed. Gauthier J agreed that the question did not arise, but she nonetheless remarked that:

[132] If [the promise had not been met], then this case demonstrates the seriousness of some of the criticisms set out in Professor Norman Siebrasse’s article “Must the Factual Basis for Sound Prediction be Disclosed in the Patent?” (2012) 28 C.I.P.R. 39. In that article, Professor Siebrasse argues that Binnie J.’s brief statement at paragraph 70 of AZT is not a proper basis for the heightened level of disclosure applied in recent case law, especially in cases where no use or specific result is referred to in claims where the inventor defines the invention for which he is seeking a monopoly, or where a specific advantage/utility is required to support the right to claim a particular invention (selection).

I am of course very gratified that Gauthier J has engaged with my article and seen fit to cite it as raising a serious issue. I certainly don’t expect the courts to agree with everything I write, but I do hope to contribute to the debate.

But what do Gauthier J’s remarks mean so far as the law goes? Even Gauthier J has not said that she necessarily agrees with my analysis, but only that the criticisms are serious, and the majority does not refer to the issue at all. It might be that the majority agreed with Gauthier J, but thought it better not to address a question that was not necessary to dispose of the appeal; or it might be that the majority disagreed with her entirely, and simply declined to say so. Note that Noël J wrote the opinion of the FCA in Raloxifene, and concurred in the opinion in Atomoxetine.

On the whole, while I welcome Gauthier J’s remarks, I am not optimistic that the FCA will reverse its position. Its holdings in Raloxifene and Atomoxetine were very clear that the requirement to disclose the factual basis for sound prediction is the law; indeed, in Atomoxetine it was a determinative point. The FCA would have to expressly reverse itself to abolish the doctrine, and that is almost unheard of. (While I haven’t done an exhaustive search, I can’t think of any instance in which the FCA has explicitly reversed itself.) Atomoxetine is only two years old, and four of the five justices who sat in Raloxifene and Atomoxetine are still sitting.

In summary, then, despite Gauthier J’s remarks, the requirement to disclose the factual basis for a sound prediction remains the law, and it seems to me very unlikely that the FCA will reverse itself on this point. I suggest that the main practical effect of Gauthier J’s statement is to provide extra ammunition for a leave application asking the SCC to address this issue. I am not optimistic on that point either. The SCC does not grant leave merely to correct what are arguably errors of law in the courts below; leave is granted only when the question of law is of such public importance as to warrant decision by the Court: Supreme Court Act s 40. While requirement to disclose the factual basis is very important to the patent bar, I can imagine the SCC might consider it to be a narrow technical doctrine in a specialized area. I would not expect the SCC to grant leave on that question alone, though it might reach the SCC if raised in a case that also raised other issues of public importance. The most obvious such issue is the false promise doctrine itself, and given the SCC’s decision to deny leave in Olanzapine, it seems that the SCC may have decided that it has heard enough patent decisions for the time being.