Apotex Inc v Pfizer Canada Inc, 2014 FC 159 Aalto J
Atorvastatin / LIPITOR
In this decision Aalto J granted a novel bifurcation order sought by Pfizer, to the effect that the
issue of the start date for damages under s 8 of the NOC Regulations will be determined
separately from and prior to the other issues in the case. I won’t comment on the balancing of the
various factors considered by Aalto J, but I do note that determination of the start date has been
one of the more contentious issues in the recent spate of s 8 litigation.
Friday, May 30, 2014
Thursday, May 29, 2014
Authorized Generics Not Subject to PMPRB
Sandoz Canada Inc v Canada (Attorney General) 2014 FC 501 O’Reilly J rev’g
PMPRB-10-D2-SANDOZ
Ratiopharm Inc v Canada (Attorney General) 2014 FC 502 O’Reilly J rev’g PMPRB-08-D3-ratio-Salbutamol HFA-Merits
In these companion cases O’Reilly J has held that regulation of prices set by generics, including authorized generics, is not within the jurisdiction of the Patented Medicines Prices Review Board (PMPRB).
Novartis holds patents related to a number of medicines. Sandoz is a wholly owned subsidiary of Novartis, and was selling several of these medicines with Novartis’ authorization; that is, it was an authorized generic [8]. Sandoz related to an order by the Board that Sandoz provide the Board with information related to its prices pursuant to s 80 of the Act and related provisions. Sandoz objected to providing the information on the basis that the Board did not have jurisdiction over it.
Ratiopharm was selling ratio~salbutamol HFA, which is the generic equivalent of the GlaxoSmtihKline product Ventolin HFA. Both are covered by patents held by GSK [PMPRB 21]. Ratiopharm purchased the product under contract from GSK [1], and was selling its product with the consent of GSK [PMPRB 22]; in short, it was also an authorized generic. In Ratiopharm, the Board had found that Ratiopharm was selling ratio~salbutamol HFA at an inflated price, and ordered payments of damages of almost $66 million [2]. Ratiopharm challenges this and related decisions, again on the basis that the Board does not have jurisdiction. O’Reilly J’s reasons are substantially identical except for the recitation of the differing facts, and in the remainder of this post I will refer to the Sandoz paragraph numbers.
The Board's jurisdiction turned on the definition of “patentee” in s 79(1) of the Patent Act:
The Board’s view was essentially that an authorized generic is a “person entitled to exercise any rights in relation to that patent” – in short, a non-compulsory licensee – because it had a right to sell, which would be an infringement but for a licence [PMPRB ratio 27]. The AGs argued that they were not licensees because “ratiopharm has no entitlement to any right or interest in the Patents, express or implied, and is not entitled to the benefit of the Patents pertaining to GSK’s ratio HFA invention other than the right to market and sell ratio HFA” [PMPRB ratio 26], and “Sandoz does not own any patents, is not the express licensee of any patents . . .it has never behaved like a patent holder or licensee in any way, including the fact that it has never sued anyone for patent infringement or alleged that anyone is infringing a Novartis patent” [PMPRB Sandoz 16]. In my view, the AGs' arguments on this point are extremely weak. The patent right includes the right of “selling.” A non-authorized generic which sold patented medicines in Canada would be an infringer, even if it imported the drug from a third party which made it outside of Canada.
O’Reilly J nonetheless held that a generic is not a patentee. On the textual point he held that:
But, as I understand it, the Board did not argue that any company that enjoys any benefits of a patent is thereby a patentee, and I don’t see how using a patented medicine as a comparator for NOC purposes gives any rights in the patent.
It is true that Sandoz does not enjoy all of the rights that a patent holder enjoys, but the statute provides that a person is a patentee if it enjoys “any” of those rights.
But O’Reilly J did not rely primarily on a textual argument. These points were ancillary to his preceeding purposive analysis [24]. In that, he relied primarily on two points.
One point is that:
The difficulty with this point is that, as I understand it, the Board is not seeking to regulate the price of all generic versions of patented medicines, but only the price of authorized generics, who hold a licence from the patentee. Perhaps there is a constitutional problem even so, but if there is, it does not seem to be the problem identified by O’Reilly J.
The more important point is that the mischief aimed at by the provisions of the Act establishing the PMPRB is to prevent patent holders from taking “undue advantage of their monopolies” [20]. If there is no patent monopoly, the Board should not have jurisdiction:
While it is certainly true that generics create a competitive market, and it may often be true that an authorized generic only joins the market after the patent monopoly is lost, this not necessarily true. An innovator may launch an authorized generic prior to expiry of the patent, in order to build generic market share in anticipation of full generic competition prior to expiry. The AG competes with the brand, in the sense that it is priced below the brand price, but it does not price at the fully competitive price that would emerge in a long-established generic market. While the facts are not entirely clear, this appears to have been what happened in Ratiopharm, as Ratiopharm was selling its product prior to the expiry of the relevant patents. (See also PMPRM Ratio [63]-[64], which indicates that there were other products in the salbutamol MDI category, but without indicating whether they would have been covered by GSKs patents.) In any event, whether this is what happened on the facts in Ratiopharm, it is certainly a possibility.
On a related point, it is not entirely clear to me how O’Reilly J would define a “patentee” under s 79(1). The closest to an express definition is the passage in [29], quoted above. The first phrase “Sandoz enters the market only with the authorization of Novartis AG,” includes any licensee, and so is difficult to square with s 79(1), which clearly encompasses licensees. The second phrase, “ after Novartis AG has already lost its monopoly position,” seems to be the key. Similarly, “Sandoz generally operates in a market where no one holds a monopoly, and no one can take undue advantage of a monopoly position by charging excessive prices” [29]. This suggests that O’Reilly J’s definition turns on whether in fact there is competition in the market for the drug. Nor is it entirely clear what O'Reilly J means by "monopoly." If taken in the competition law sense, that is, defined according to a relevant market which may be broader than the product covered by a particular patent, then many patentees would not themselves by "patentees" within this definition, because patents do not necessarily give market power. More plausibly, it might mean that the particular patent has expired or been held invalid. But O'Reilly J did not directly address whether the patents in question were still in effect, so if this was intended as a definition, it was not applied on the facts. Either of these would be consistent with O'Reilly J's purposive analysis, but either is difficult to square with the text of the provision, and with the facts addressed by O'Reilly J.
I understand O’ReillyJ’s concern that the PMPRB should not be regulating prices in a competitive market that has arisen post-patent. But it is not clear to me that this is what the Board was actually trying to do. And I can certainly also see the Board’s concern that if authorized generics are excluded from its jurisdiction, a patentee can avoid price regulation simply by selling its product through an AG, even a wholly owned AG.
Ratiopharm Inc v Canada (Attorney General) 2014 FC 502 O’Reilly J rev’g PMPRB-08-D3-ratio-Salbutamol HFA-Merits
In these companion cases O’Reilly J has held that regulation of prices set by generics, including authorized generics, is not within the jurisdiction of the Patented Medicines Prices Review Board (PMPRB).
Novartis holds patents related to a number of medicines. Sandoz is a wholly owned subsidiary of Novartis, and was selling several of these medicines with Novartis’ authorization; that is, it was an authorized generic [8]. Sandoz related to an order by the Board that Sandoz provide the Board with information related to its prices pursuant to s 80 of the Act and related provisions. Sandoz objected to providing the information on the basis that the Board did not have jurisdiction over it.
Ratiopharm was selling ratio~salbutamol HFA, which is the generic equivalent of the GlaxoSmtihKline product Ventolin HFA. Both are covered by patents held by GSK [PMPRB 21]. Ratiopharm purchased the product under contract from GSK [1], and was selling its product with the consent of GSK [PMPRB 22]; in short, it was also an authorized generic. In Ratiopharm, the Board had found that Ratiopharm was selling ratio~salbutamol HFA at an inflated price, and ordered payments of damages of almost $66 million [2]. Ratiopharm challenges this and related decisions, again on the basis that the Board does not have jurisdiction. O’Reilly J’s reasons are substantially identical except for the recitation of the differing facts, and in the remainder of this post I will refer to the Sandoz paragraph numbers.
The Board's jurisdiction turned on the definition of “patentee” in s 79(1) of the Patent Act:
the person for the time being entitled to the benefit of the patent for that invention and
includes, where any other person is entitled to exercise any rights in relation to that patent
other than under a licence continued by subsection 11(1) of the Patent Act Amendment
Act, 1992, that other person in respect of those rights
The Board’s view was essentially that an authorized generic is a “person entitled to exercise any rights in relation to that patent” – in short, a non-compulsory licensee – because it had a right to sell, which would be an infringement but for a licence [PMPRB ratio 27]. The AGs argued that they were not licensees because “ratiopharm has no entitlement to any right or interest in the Patents, express or implied, and is not entitled to the benefit of the Patents pertaining to GSK’s ratio HFA invention other than the right to market and sell ratio HFA” [PMPRB ratio 26], and “Sandoz does not own any patents, is not the express licensee of any patents . . .it has never behaved like a patent holder or licensee in any way, including the fact that it has never sued anyone for patent infringement or alleged that anyone is infringing a Novartis patent” [PMPRB Sandoz 16]. In my view, the AGs' arguments on this point are extremely weak. The patent right includes the right of “selling.” A non-authorized generic which sold patented medicines in Canada would be an infringer, even if it imported the drug from a third party which made it outside of Canada.
O’Reilly J nonetheless held that a generic is not a patentee. On the textual point he held that:
[27] If the term “patentee” is interpreted too broadly so as to catch a company in the
position of Sandoz, there are likely few generic companies who would not be similarly
placed. Most generics enter the market by comparing their products against drugs that are
the subject of patents held by other companies. To that extent, they indirectly enjoy the
benefits of patents and, ultimately, may be regarded as having acquired rights in relation
to them. If Sandoz is a patentee, so are many other generic companies and possibly other
entities down the line of distribution.
But, as I understand it, the Board did not argue that any company that enjoys any benefits of a patent is thereby a patentee, and I don’t see how using a patented medicine as a comparator for NOC purposes gives any rights in the patent.
[28] I note that Sandoz cannot bring an action for infringement or seek an order of
prohibition keeping another company off the market. Sandoz simply does not enjoy the
special patent rights that inure to the benefit of the patent holder.
It is true that Sandoz does not enjoy all of the rights that a patent holder enjoys, but the statute provides that a person is a patentee if it enjoys “any” of those rights.
But O’Reilly J did not rely primarily on a textual argument. These points were ancillary to his preceeding purposive analysis [24]. In that, he relied primarily on two points.
One point is that:
while the federal government can regulate patents of invention, it has no overall
jurisdiction to regulate the price of generic versions of patented medicines. That
responsibility falls squarely on the provinces (Katz Group Canada Inc. v Ontario (Health
and Long-Term Care), 2013 SCC 64, at para 3). To expand the definition to include
generic companies who neither hold patents nor enjoy monopolies would expose the
legislation to an attack on constitutional grounds. [22]
The difficulty with this point is that, as I understand it, the Board is not seeking to regulate the price of all generic versions of patented medicines, but only the price of authorized generics, who hold a licence from the patentee. Perhaps there is a constitutional problem even so, but if there is, it does not seem to be the problem identified by O’Reilly J.
The more important point is that the mischief aimed at by the provisions of the Act establishing the PMPRB is to prevent patent holders from taking “undue advantage of their monopolies” [20]. If there is no patent monopoly, the Board should not have jurisdiction:
[26] Generally speaking, generic companies either help create or join a competitive
marketplace, which helps keep the costs of patented medicines down. Reviewing the
prices charged by generic companies who hold no patents and no monopolies, on its face,
appears to be beyond the Board’s mandate.
[29] Sandoz enters the market only with the authorization of Novartis AG, after Novartis
AG has already lost its monopoly position – that is, once other generics are already on the
market.
While it is certainly true that generics create a competitive market, and it may often be true that an authorized generic only joins the market after the patent monopoly is lost, this not necessarily true. An innovator may launch an authorized generic prior to expiry of the patent, in order to build generic market share in anticipation of full generic competition prior to expiry. The AG competes with the brand, in the sense that it is priced below the brand price, but it does not price at the fully competitive price that would emerge in a long-established generic market. While the facts are not entirely clear, this appears to have been what happened in Ratiopharm, as Ratiopharm was selling its product prior to the expiry of the relevant patents. (See also PMPRM Ratio [63]-[64], which indicates that there were other products in the salbutamol MDI category, but without indicating whether they would have been covered by GSKs patents.) In any event, whether this is what happened on the facts in Ratiopharm, it is certainly a possibility.
On a related point, it is not entirely clear to me how O’Reilly J would define a “patentee” under s 79(1). The closest to an express definition is the passage in [29], quoted above. The first phrase “Sandoz enters the market only with the authorization of Novartis AG,” includes any licensee, and so is difficult to square with s 79(1), which clearly encompasses licensees. The second phrase, “ after Novartis AG has already lost its monopoly position,” seems to be the key. Similarly, “Sandoz generally operates in a market where no one holds a monopoly, and no one can take undue advantage of a monopoly position by charging excessive prices” [29]. This suggests that O’Reilly J’s definition turns on whether in fact there is competition in the market for the drug. Nor is it entirely clear what O'Reilly J means by "monopoly." If taken in the competition law sense, that is, defined according to a relevant market which may be broader than the product covered by a particular patent, then many patentees would not themselves by "patentees" within this definition, because patents do not necessarily give market power. More plausibly, it might mean that the particular patent has expired or been held invalid. But O'Reilly J did not directly address whether the patents in question were still in effect, so if this was intended as a definition, it was not applied on the facts. Either of these would be consistent with O'Reilly J's purposive analysis, but either is difficult to square with the text of the provision, and with the facts addressed by O'Reilly J.
I understand O’ReillyJ’s concern that the PMPRB should not be regulating prices in a competitive market that has arisen post-patent. But it is not clear to me that this is what the Board was actually trying to do. And I can certainly also see the Board’s concern that if authorized generics are excluded from its jurisdiction, a patentee can avoid price regulation simply by selling its product through an AG, even a wholly owned AG.
Wednesday, May 28, 2014
Perfect Match Required for Listing on Patent Register for Medicine as Well as Formulation
ViiV Healthcare Ulc v Teva Canada Ltd 2014 FC 328 Milczynski J
abacavir & lamivudine. / KIVEXA / 2,289,753
In Purdue / TARGIN 2011 FCA 132 (blogged here) and Gilead / COMPLERA 2012 FCA 254 (blogged here), the FCA established what has been aptly called a “perfect match” requirement for listing a patent against a drug on the Patent Register, so as to require a generic to address the patent before obtaining an NOC. This decision reaffirms that the perfect match requirement applies under all branches of s 4(2)(a) of the NOC Regulations.
A perfect match requires that each medicinal ingredient be explicitly named in a claim; it is not enough that the generic product would necessarily infringe the claim, and it is not enough that all the ingredients are explicitly listed in the description. So, in this case, the 753 patent claims abacavir (Claim 1) [4], as well as abacavir in combination with any nucleoside reverse transcriptase inhibitor (NRTI) (Claim 32). The 753 patent also disclosed that abacavir can be used in combination with other therapeutic agents, specifically naming lamivudine, which is an NRTI [16]. KIVEXA is a fixed dose dual combination drug containing abacavir and lamivudine. Consequently, it is clear that a combination drug containing abacavir and lamivudine would infringe both Claim 1 and Claim 32. The 753 patent was listed on the Patent Register against KIVEXA
Teva argued successfully that the listing was improper, notwithstanding that a generic version of KIVEXA would necessarily infringe the 753 patent, because there was no claim that specifically named abacavir and lamivudine in the claim itself. It does not matter that Claim 32 specifies a class that uncontroversially includes lamivudine, and it does not matter that lamivudine was specifically named in the description.
In Teva / KIVEXA both the patentee and the Minister argued that a perfect match is not required for listing under s 4(2)(a) of the NOC Regulations. Ths Minister’s position in noteworthy because both of the FCA cases establishing the perfect match requirement arose from the Minister’s refusal to list a patent; in this case, in contrast, the Minister is of the view that the patent is eligible.
The Minister’s position was that a perfect match is required under para 4(2)(b), which applies to “a claim for the formulation that contains the medicinal ingredient,” but not under para 4(2)(a), which applies to “a claim for the medicinal ingredient” [22]. The Minister’s view is that a perfect match should not be required under 4(2)(a) because when the basic breakthrough is the identification of a new drug, it is normal that the treatment is subsequently refined by combining that drug with other ingredients, and the innovator should be able to list that basic breakthrough invention against the subsequent improvements [23]. In contrast, if the technical contribution is the particular combination, then there a perfect match should be required under 4(2)(b) [22]. This explains why the Minister refused listing in Gilead under 4(2)(b), but supports it now under 4(2)(a).
There is considerable logic to the Minister’s policy position, though I can’t agree with it entirely. If the technical contribution is the recognition that a particular known drug interacts advantageously with an entire class of other compounds, the innovation is a formulation, so it falls under 4(2)(b), and yet a perfect match requirement strikes me as too stringent; the effect is to require the patentee to list each complementary drug by name in the claim, rather than referring to the class as a whole, which strikes me as pointless formalism.
In any event, while we can quibble about policy and logic, as a matter of law the Minister’s position runs squarely up against Gilead / COMPLERA. While the Minister in Gilead opposed registration under 4(2)(b), the FCA refused registration under 4(2)(a). Thus Gilead is not distinguishable from this case, and Milczynski J was right to hold that “The requisite degree of product specificity is the same for section 4(2)(a) of the PMNOC Regulations as it is for each of sections 4(2)(b), (c) and (d)” [29].
This decision makes no new law, but it does illustrate once again the absurd nature of the perfect match requirement.
abacavir & lamivudine. / KIVEXA / 2,289,753
In Purdue / TARGIN 2011 FCA 132 (blogged here) and Gilead / COMPLERA 2012 FCA 254 (blogged here), the FCA established what has been aptly called a “perfect match” requirement for listing a patent against a drug on the Patent Register, so as to require a generic to address the patent before obtaining an NOC. This decision reaffirms that the perfect match requirement applies under all branches of s 4(2)(a) of the NOC Regulations.
A perfect match requires that each medicinal ingredient be explicitly named in a claim; it is not enough that the generic product would necessarily infringe the claim, and it is not enough that all the ingredients are explicitly listed in the description. So, in this case, the 753 patent claims abacavir (Claim 1) [4], as well as abacavir in combination with any nucleoside reverse transcriptase inhibitor (NRTI) (Claim 32). The 753 patent also disclosed that abacavir can be used in combination with other therapeutic agents, specifically naming lamivudine, which is an NRTI [16]. KIVEXA is a fixed dose dual combination drug containing abacavir and lamivudine. Consequently, it is clear that a combination drug containing abacavir and lamivudine would infringe both Claim 1 and Claim 32. The 753 patent was listed on the Patent Register against KIVEXA
Teva argued successfully that the listing was improper, notwithstanding that a generic version of KIVEXA would necessarily infringe the 753 patent, because there was no claim that specifically named abacavir and lamivudine in the claim itself. It does not matter that Claim 32 specifies a class that uncontroversially includes lamivudine, and it does not matter that lamivudine was specifically named in the description.
In Teva / KIVEXA both the patentee and the Minister argued that a perfect match is not required for listing under s 4(2)(a) of the NOC Regulations. Ths Minister’s position in noteworthy because both of the FCA cases establishing the perfect match requirement arose from the Minister’s refusal to list a patent; in this case, in contrast, the Minister is of the view that the patent is eligible.
The Minister’s position was that a perfect match is required under para 4(2)(b), which applies to “a claim for the formulation that contains the medicinal ingredient,” but not under para 4(2)(a), which applies to “a claim for the medicinal ingredient” [22]. The Minister’s view is that a perfect match should not be required under 4(2)(a) because when the basic breakthrough is the identification of a new drug, it is normal that the treatment is subsequently refined by combining that drug with other ingredients, and the innovator should be able to list that basic breakthrough invention against the subsequent improvements [23]. In contrast, if the technical contribution is the particular combination, then there a perfect match should be required under 4(2)(b) [22]. This explains why the Minister refused listing in Gilead under 4(2)(b), but supports it now under 4(2)(a).
There is considerable logic to the Minister’s policy position, though I can’t agree with it entirely. If the technical contribution is the recognition that a particular known drug interacts advantageously with an entire class of other compounds, the innovation is a formulation, so it falls under 4(2)(b), and yet a perfect match requirement strikes me as too stringent; the effect is to require the patentee to list each complementary drug by name in the claim, rather than referring to the class as a whole, which strikes me as pointless formalism.
In any event, while we can quibble about policy and logic, as a matter of law the Minister’s position runs squarely up against Gilead / COMPLERA. While the Minister in Gilead opposed registration under 4(2)(b), the FCA refused registration under 4(2)(a). Thus Gilead is not distinguishable from this case, and Milczynski J was right to hold that “The requisite degree of product specificity is the same for section 4(2)(a) of the PMNOC Regulations as it is for each of sections 4(2)(b), (c) and (d)” [29].
This decision makes no new law, but it does illustrate once again the absurd nature of the perfect match requirement.
Tuesday, May 27, 2014
Miscellaneous Issues in Cobalt / moxifloxacin
Alcon Canada Inc v Cobalt Pharmaceuticals / moxifloxacin (NOC) 2014 FC 462 Phelan J
moxifloxacin / 1,340,114 – 2,342,211 – 2,192,418 / VIGAMOX
Previous posts have discussed the issues raised by the 114 patent. The issues raised by the 211 and 418 patents turned largely on the facts.
The 211 patent claimed the use of a specified concentration of moxifloxacin for use in the treatment and prevention of ophthalmic infections. The prior art, in particular the US 942 and 517 patents (full patent number not provided), disclosed the uses of a large class of compounds, including moxifloxacin, for the treatment of an extensive list of diseases, and disclosed a broad dosage range. Alcon in effect argued that the 211 patent was a selection patent over the 942 prior art [148]. The problem for Alcon was that a selection patent must disclose some special advantage over that which would be expected from mere membership in the class. Alcon appealed to reduced toxicity [160], and effectiveness against P aerugionosa, a particularly nasty eye pathogen [161], but on the facts, the lack of toxicity was not surprising [169], and special effectiveness against P aerugionosa was not disclosed [173]. Consequently, the invention was obvious [174]. It was what the Europeans would call an arbitrary selection: T 0939/92 Triazole / AgrEvo ¶ 2.5.3. While not framed as such, moxifloxacin (NOC) is an example of the obviousness requirement being used to police selection inventions.
The 418 patent claimed the monohydrate form of moxifloxacin (Claim 1) and the monohydrate in a specific crystalline form (Claim 2), which was said to have superior storage and manufacturability properties. The Cobalt product was in solution, not a solid form, so it was conceded that the product itself did not infringe, and the question was whether Cobalt’s process for making the product infringed [188]. Alcon’s infringement case failed for lack of evidence.
Phelan J held
In the result, Alcon simply failed to meet its burden of proof of establishing infringement [227].
moxifloxacin / 1,340,114 – 2,342,211 – 2,192,418 / VIGAMOX
Previous posts have discussed the issues raised by the 114 patent. The issues raised by the 211 and 418 patents turned largely on the facts.
The 211 patent claimed the use of a specified concentration of moxifloxacin for use in the treatment and prevention of ophthalmic infections. The prior art, in particular the US 942 and 517 patents (full patent number not provided), disclosed the uses of a large class of compounds, including moxifloxacin, for the treatment of an extensive list of diseases, and disclosed a broad dosage range. Alcon in effect argued that the 211 patent was a selection patent over the 942 prior art [148]. The problem for Alcon was that a selection patent must disclose some special advantage over that which would be expected from mere membership in the class. Alcon appealed to reduced toxicity [160], and effectiveness against P aerugionosa, a particularly nasty eye pathogen [161], but on the facts, the lack of toxicity was not surprising [169], and special effectiveness against P aerugionosa was not disclosed [173]. Consequently, the invention was obvious [174]. It was what the Europeans would call an arbitrary selection: T 0939/92 Triazole / AgrEvo ¶ 2.5.3. While not framed as such, moxifloxacin (NOC) is an example of the obviousness requirement being used to police selection inventions.
The 418 patent claimed the monohydrate form of moxifloxacin (Claim 1) and the monohydrate in a specific crystalline form (Claim 2), which was said to have superior storage and manufacturability properties. The Cobalt product was in solution, not a solid form, so it was conceded that the product itself did not infringe, and the question was whether Cobalt’s process for making the product infringed [188]. Alcon’s infringement case failed for lack of evidence.
Phelan J held
[225] I agree with Cobalt’s submission that based on Justice McGillis’ decision in
SmithKline, where the allegation is that a form of crystal will be present at some point in
the manufacturing process, it must be proven that this actually occurs rather than merely
raising it as a possibility.
[226] A possibility of infringement is not enough to rebut the presumption of truth of the
allegations contained in an NOA (Pfizer Canada Inc v Novapharm Ltd, 2005 FCA 270,
341 NR 330).
In the result, Alcon simply failed to meet its burden of proof of establishing infringement [227].
Monday, May 26, 2014
Emphasis on Good Faith in Teva / Sildenafil Duty to Disclose the Invention
Alcon Canada Inc v Cobalt Pharmaceuticals / moxifloxacin (NOC) 2014 FC 462 Phelan J
moxifloxacin / 1,340,114 – 2,342,211 – 2,192,418 / VIGAMOX
Friday’s post discussed the promise issue raised by the 114 patent. This post addresses the Teva / Sildenafil 2012 SCC 60 duty to disclose the invention, which was also raised in the context of the 114 patent. In my article “The Duty to Disclose 'The Invention': The Wrong Tool for the Job,” (2013) 25 IPJ 269, I argued that the SCC’s analysis was problematic because it used an objective requirement to disclose the invention under s 27 in addressing what was really an issue of subjective good faith. Phelan J’s moxifloxacin (NOC) decision may indicate a trend of emphasizing the good faith aspect of Teva / Sildenafil.
Cobalt argued that “like the Sildenafil patent, the 114 Patent claims millions of compounds but obscures the identity of the compound that is the subject of this proceeding” [90]. Phelan J held that
This is indeed an important distinction. As I argued in my “Wrong Tool for the Job” article, the Teva / Sildenafil doctrine will be most problematic when the patentee believes that its invention is a class of compounds with similar properties, so that it does not specifically identify any particular compound, but then it turns out that most of the compounds are not patentable. The patentee will have failed to disclose the true invention – the compound that was in fact patentable – even though it made a good faith disclosure of what it knew at the time. The real test of what Teva / Sildenafil means will come on those facts: if the duty is really to disclose the objective invention, the patent will be invalid, but if the duty is to make good faith disclosure, the patent will be valid. Because, in this case, all the key compounds were useful, this problem did not arise. The true invention really was the class of compounds. This means that moxifloxacin (NOC) does not address this problematic case, which has not yet arisen post-Sildenafil.
With that said, Phelan J strongly emphasized the good faith disclosure aspects of Teva / Sildenafil. After the statement quoted above, he immediately went on to say
There are similar references to “improper purpose” [92], “intentionally. . . misleading” [97], “mislead[ing] the public” [98], “bad faith” [100]. In the absence of evidence the patentee withheld information in order to mislead, Phelan J held that the patent was not invalid for inadequate disclosure [98]. I’m not sure that we can really say that this emphasis on good faith disclosure is a trend in the application of Teva / Sildenafil, but it is at the very least consistent with the previous cases.
In my view the emphasis on good faith disclosure is the best interpretation of Teva / Sildenafil, because the alternative approach, which views it as imposing an objective duty to disclose the compound which ultimately turns out to be the true patentable invention, places an impossible burden on the patentee, and eviscerates s 58 of the Act. With that said, the emphasis on good faith disclosure has its own problems, namely that it is unclear how the Teva / Sildenafil duty of good faith disclosure interacts with the wilful misleading provision in s 53, which on its face addresses the same problem. It seems that Teva / Sildenafil has created a new freestanding duty, and it will take some time to ascertain its limits. But that is certainly no criticism of Phelan J’s decision, which takes one step along that path of discovery.
moxifloxacin / 1,340,114 – 2,342,211 – 2,192,418 / VIGAMOX
Friday’s post discussed the promise issue raised by the 114 patent. This post addresses the Teva / Sildenafil 2012 SCC 60 duty to disclose the invention, which was also raised in the context of the 114 patent. In my article “The Duty to Disclose 'The Invention': The Wrong Tool for the Job,” (2013) 25 IPJ 269, I argued that the SCC’s analysis was problematic because it used an objective requirement to disclose the invention under s 27 in addressing what was really an issue of subjective good faith. Phelan J’s moxifloxacin (NOC) decision may indicate a trend of emphasizing the good faith aspect of Teva / Sildenafil.
Cobalt argued that “like the Sildenafil patent, the 114 Patent claims millions of compounds but obscures the identity of the compound that is the subject of this proceeding” [90]. Phelan J held that
[91] Sildenafil is distinguishable from the case at hand in several important respects.
Firstly, in that case only sildenafil of the many claimed compounds had been shown to
have the promised effect in the treatment of erectile dysfunction. In the case at hand, all
of the Example compounds have the promised high antibacterial activity to some degree.
This is indeed an important distinction. As I argued in my “Wrong Tool for the Job” article, the Teva / Sildenafil doctrine will be most problematic when the patentee believes that its invention is a class of compounds with similar properties, so that it does not specifically identify any particular compound, but then it turns out that most of the compounds are not patentable. The patentee will have failed to disclose the true invention – the compound that was in fact patentable – even though it made a good faith disclosure of what it knew at the time. The real test of what Teva / Sildenafil means will come on those facts: if the duty is really to disclose the objective invention, the patent will be invalid, but if the duty is to make good faith disclosure, the patent will be valid. Because, in this case, all the key compounds were useful, this problem did not arise. The true invention really was the class of compounds. This means that moxifloxacin (NOC) does not address this problematic case, which has not yet arisen post-Sildenafil.
With that said, Phelan J strongly emphasized the good faith disclosure aspects of Teva / Sildenafil. After the statement quoted above, he immediately went on to say
More importantly, in Sildenafil there was evidence of bad faith; Pfizer was aware there
was only one effective compound and hid it within a larger class in order to mislead” [91,
my emphasis].
There are similar references to “improper purpose” [92], “intentionally. . . misleading” [97], “mislead[ing] the public” [98], “bad faith” [100]. In the absence of evidence the patentee withheld information in order to mislead, Phelan J held that the patent was not invalid for inadequate disclosure [98]. I’m not sure that we can really say that this emphasis on good faith disclosure is a trend in the application of Teva / Sildenafil, but it is at the very least consistent with the previous cases.
In my view the emphasis on good faith disclosure is the best interpretation of Teva / Sildenafil, because the alternative approach, which views it as imposing an objective duty to disclose the compound which ultimately turns out to be the true patentable invention, places an impossible burden on the patentee, and eviscerates s 58 of the Act. With that said, the emphasis on good faith disclosure has its own problems, namely that it is unclear how the Teva / Sildenafil duty of good faith disclosure interacts with the wilful misleading provision in s 53, which on its face addresses the same problem. It seems that Teva / Sildenafil has created a new freestanding duty, and it will take some time to ascertain its limits. But that is certainly no criticism of Phelan J’s decision, which takes one step along that path of discovery.
Friday, May 23, 2014
Another Restrained Construction of the Promise post-Plavix
Alcon Canada Inc v Cobalt Pharmaceuticals / moxifloxacin (NOC) 2014 FC 462 Phelan J
moxifloxacin / 1,340,114 – 2,342,211 – 2,192,418 / VIGAMOX
Phelan J’s Cobalt / moxifloxacin (NOC) decision doesn’t make new law, but it does confirm two significant emerging trends. The first, which is the subject of this post, is the trend to construing the promise of the patent modestly, following the FCA decision in Plavix 2013 FCA 186 (blog) (leave to appeal to SCC granted). The second is that the duty to disclose the invention established by the SCC in Teva / Sildenafil 2012 SCC 60, is generally being construed as a requirement of subjective good faith disclosure.
Cobalt sought to market a generic version of VIGAMOX, which is an antibacterial eye drop containing moxifloxacin [1]-[2]. The promise and disclosure issues were raised in respect of the 114 patent, which has compound claims to all four stereoisomers of moxifloxacin (Claim 8) and to the two “cis” isomers (Claim 13) [42]. Infringement was conceded and the main attack on validity turned on the promise of the patent [53].
Cobalt’s main submissions were that the patent promised low toxicity and antibacterial activity against a broad spectrum of bacteria [54], based on statements in the description that
The affirmative language, “can be treated,” “having” low toxicity, might well have lent itself to being interpreted as a promise pre-Plavix, but Phelan J interpreted both modestly, replying on the expert evidence and the text. He held that “For example” indicated that the first passage did not indicate effectiveness against all listed diseases, but rather some degree of activity against some of the diseases [60]. He found the toxicity passage to be not sufficiently explicit [64]. This is formally consistent with the pre-Plavix cases, in that the promise is construed on the basis of the text and expert evidence, but his analysis and conclusions clearly show the impact of the FCA’s direction in Plavix that any promise must be explicit, and that it should not be assumed that every patent has a promise. In this respect, Phelan J’s decision is consistent with Harrington J’s recent decision in celecoxib (NOC) 2014 FC 314, as discussed here.
Phelan J also made two statements of general interest. First:
This follows (without citing), statements to the same effect made by Hughes J, 2011 FC 547 [247], 2011 FC 239 [116]. As discussed in my post on Harrington J’s celecoxib (NOC) decision, this is in tension with some prior SCC authority, but it now seems to be established, based on Wellcome / AZT, that notwithstanding the prior cases, proof of lack of toxicity is not necessary to demonstrate utility. In my view, this is entirely sound, both in principle and on the basis of Wellcome / AZT. Toxicity is a relative term. Many cancer drugs are toxic in any ordinary sense of the term – indeed, that is how they work – and yet they are approved for treatment. A drug might be too toxic for one indication, and yet approved for another. With the rise of personalized medicine, we may find drugs that are toxic to one person and therapeutic to another. Toxicity is best left to the regulatory process, which is the implication of Wellcome / AZT that is made express in the subsequent FC cases.
The second interesting statement is this:
This makes the very good point that making an explicit promise is never in the patentee’s interest, so perhaps it should be presumed that the patentee did not intend to make any promise.
Phelan J concluded that “To the extent the patent promises anything, it is limited to a promise that the class as a whole will have in vitro activity against a broad spectrum of bacteria. Accordingly, based on Plavix the question becomes whether there is a scintilla of utility” [71]. The first sentence indicates that there was a promise, albeit a modest one, while the second sentence indicates that there was no promise at all, a result which is theoretically possible in Canadian law, but which has rarely been observed since the promise doctrine emerged. In any event, it was conceded that utility had not been demonstrated, because moxifloxacin had not been synthesized or tested as of the filing date, but on the facts Phelan J held that its utility was soundly predicted based on its similarity with compounds which had been tested and disclosed. The question of whether the factual basis for sound prediction must be disclosed in the specification did not arise, because the factual basis that was disclosed was a sufficient basis for a sound prediction.
moxifloxacin / 1,340,114 – 2,342,211 – 2,192,418 / VIGAMOX
Phelan J’s Cobalt / moxifloxacin (NOC) decision doesn’t make new law, but it does confirm two significant emerging trends. The first, which is the subject of this post, is the trend to construing the promise of the patent modestly, following the FCA decision in Plavix 2013 FCA 186 (blog) (leave to appeal to SCC granted). The second is that the duty to disclose the invention established by the SCC in Teva / Sildenafil 2012 SCC 60, is generally being construed as a requirement of subjective good faith disclosure.
Cobalt sought to market a generic version of VIGAMOX, which is an antibacterial eye drop containing moxifloxacin [1]-[2]. The promise and disclosure issues were raised in respect of the 114 patent, which has compound claims to all four stereoisomers of moxifloxacin (Claim 8) and to the two “cis” isomers (Claim 13) [42]. Infringement was conceded and the main attack on validity turned on the promise of the patent [53].
Cobalt’s main submissions were that the patent promised low toxicity and antibacterial activity against a broad spectrum of bacteria [54], based on statements in the description that
For example, local and/or systemic diseases caused by the following pathogens or by
mixtures of the following pathogens can be treated and/or prevented: [long list of
pathogens] [60].
The compounds according to the invention, while having a low toxicity, exhibit a broad
antibacterial spectrum against Gram-positive and Gram-negative germs. [63]
The affirmative language, “can be treated,” “having” low toxicity, might well have lent itself to being interpreted as a promise pre-Plavix, but Phelan J interpreted both modestly, replying on the expert evidence and the text. He held that “For example” indicated that the first passage did not indicate effectiveness against all listed diseases, but rather some degree of activity against some of the diseases [60]. He found the toxicity passage to be not sufficiently explicit [64]. This is formally consistent with the pre-Plavix cases, in that the promise is construed on the basis of the text and expert evidence, but his analysis and conclusions clearly show the impact of the FCA’s direction in Plavix that any promise must be explicit, and that it should not be assumed that every patent has a promise. In this respect, Phelan J’s decision is consistent with Harrington J’s recent decision in celecoxib (NOC) 2014 FC 314, as discussed here.
Phelan J also made two statements of general interest. First:
[65] The notion of toxicity relates to safety and potential commercial success; not
patentability. As held in Apotex Inc v Wellcome Foundation Ltd, 2002 SCC 77, [2002] 4
SCR 153 [AZT], proof of lack of toxicity at this stage of analysis is not necessary to show
utility.
This follows (without citing), statements to the same effect made by Hughes J, 2011 FC 547 [247], 2011 FC 239 [116]. As discussed in my post on Harrington J’s celecoxib (NOC) decision, this is in tension with some prior SCC authority, but it now seems to be established, based on Wellcome / AZT, that notwithstanding the prior cases, proof of lack of toxicity is not necessary to demonstrate utility. In my view, this is entirely sound, both in principle and on the basis of Wellcome / AZT. Toxicity is a relative term. Many cancer drugs are toxic in any ordinary sense of the term – indeed, that is how they work – and yet they are approved for treatment. A drug might be too toxic for one indication, and yet approved for another. With the rise of personalized medicine, we may find drugs that are toxic to one person and therapeutic to another. Toxicity is best left to the regulatory process, which is the implication of Wellcome / AZT that is made express in the subsequent FC cases.
The second interesting statement is this:
[68] In light of the finding in Consolboard Inc v MacMillan Bloedel (Saskatchewan) Ltd,
[1981] 1 SCR 504, and more recently in Plavix that there is no requirement to make a
promise, but if made the patentee is held to it, there is no evidence of advantage to
making a promise. To read in a promise in these circumstances would be to inject
meaning for the purpose of defeating the 114 Patent.
This makes the very good point that making an explicit promise is never in the patentee’s interest, so perhaps it should be presumed that the patentee did not intend to make any promise.
Phelan J concluded that “To the extent the patent promises anything, it is limited to a promise that the class as a whole will have in vitro activity against a broad spectrum of bacteria. Accordingly, based on Plavix the question becomes whether there is a scintilla of utility” [71]. The first sentence indicates that there was a promise, albeit a modest one, while the second sentence indicates that there was no promise at all, a result which is theoretically possible in Canadian law, but which has rarely been observed since the promise doctrine emerged. In any event, it was conceded that utility had not been demonstrated, because moxifloxacin had not been synthesized or tested as of the filing date, but on the facts Phelan J held that its utility was soundly predicted based on its similarity with compounds which had been tested and disclosed. The question of whether the factual basis for sound prediction must be disclosed in the specification did not arise, because the factual basis that was disclosed was a sufficient basis for a sound prediction.
Friday, May 16, 2014
In a Bifurcated Trial, What is the Proper Approach to a Stay of the Remedial Inquiry Pending Appeal of the Liability Phase?
Janssen Inc. v. AbbVie Corporation 2014 FCA 112 Stratas JA
2,365,281 / anti-IL-12 antibodies / STELARA
This decision raises basic issues regarding the proper approach to a stay of the remedies phrase of a bifurcated trial pending appeal of the liability decision. AbbVie sued Janssen for patent infringement. On Janssen’s motion, the trial was bifurcated into liability and remedy phases. AbbVie was successful at the liability stage, and that decision is under appeal to the FCA. On a subsequent motion a Prothonotary further ordered the remedial phase bifucated into a phase on injunctive relief, and a phase on damages. Janssen has appealed this second bifurcation [10]. Janssen is therefore now facing two appeals, and if either is successful, the trial on injunctive relief should not go ahead, or should not go ahead separately from the damages phase [11]. Janssen sought a stay of the remedies phase.
The parties agreed that the test for whether a stay should be granted is the three-part test from RJR-MacDonald [1994] 1 SCR 311 that also governs an interlocutory injunction: a serious issue to be tried, irreparable harm, and the balance of convenience. The FCA held that each of these tests is a separate threshold, so that each must be answered in the affirmative in order for a stay to be granted [14]. Stratas JA pointed out that “[e]ach branch of the test adds something important” [19]. While that is true, it does not follow that each must be satisfied individually. The alternative is that all are balanced together. That balancing approach has been endorsed by Sharpe on Injunctions and Specific Performance, ¶2.90-2.100, and by Sask CA in Mosaic v PCS 2011 SKCA 120 [57] (blogged), and by Hoffmann J in Films Rover International Ltd v. Cannon Film Sales Ltd. [1986] 3 All ER 772 at 780 (Ch), who explained:
Stratas JA pointed out that it would be strange if a stay could be granted “in the face of a laughably weak or hopeless case,” [23], or on the basis of “vague assumptions and bald assertions” [24]. That is true, but that does not justify a threshold approach; a laughably weak case, and vague assumptions, would not support a stay under a balancing approach either, as they would be given very little weight. Stratas JA reviewed a number of FCA cases which use the irreparable harm requirement as a threshold test [24]. While I have not reviewed these cases in detail, that is certainly consistent with the approach taken to interlocutory injunctions in the patent context: see my article Interlocutory Injunctions and Irreparable Harm in the Federal Courts, (2010) 88 Can Bar Rev 517. While the FCA has been internally consistent in this respect, it should be recognized that it is increasingly out of step with other courts in Canada and elsewhere.
Having decided that each step is separate, the FCA refused the stay based solely on the irreparable harm branch, saying that
This does not strike me as persuasive. As I understand it, an order for bifurcation isn’t a favour granted to one party, but an assessment by the court that the interests of the efficient administration of justice are best served by bifurcation. There is at least an argument to be made that the efficient administration of justice would also be served by a stay; Stratas JA never addressed this point because he never reached the balance of convenience. It is not clear to me why a concern for the efficient administration of justice should be disregarded, merely because the party raising the issue had previously raised another issue regarding the efficient administration of justice. In the bigger picture, the money that the parties spend in wasted legal fees are not just a cost to the parties; they are a cost to society as a whole. The money has to come from somewhere, whether it is reduced research expenditure, or higher consumer prices.
All this is not to say that I disagree with the result. Notwithstanding that the SCC in RJR-MacDonald did equate the test for a stay and an interlocutory injunction, the two situations are quite different. In an application for an interlocutory injunction, the court has only summary information on which to base any assessment of the merits. That is what led the House of Lords in Cyanamid [1975] UKHL 1 to downplay the importance of the merits in an interlocutory injunction application. (There is a strong argument to be made that in an appropriate case the merits deserve more weight than Cyanamid would give them, but that is a different issue.) In contrast, on an application for a stay, the court has a fully reasoned decision of a trial judge on a full evidentiary record. For that reason (as Professor Vaver pointed out to me), the UK courts do not treat a stay and an interlocutory injunction equivalently. In Virgin Atlantic [2009] EWCA Civ 1513 [22] Jacob LJ noted that
Stratas JA gave great weight to the importance of “The binding, mandatory nature of law – which I shall call ‘legality’ Indeed, it is an aspect of the rule of law, a constitutional principle.” [20], and he referred to the granting of a stay as a “temporary suspension of legality. ” [21]. I am not comfortable with that characterization. If in the end, if an appeal court holds that the trial judge was wrong on a matter of law, then it seems to me that legality would be temporarily suspended by refusing a stay, rather than by granting it. But without raising it to the level of a constitutional principle, the underlying notion that the fully reasoned decision of the trial judge is entitled to considerable deference is surely correct.
Even this does not mean that some kind of threshold test should be adopted. Jacob LJ was of the view that the question “remains one of a balance of convenience,” though the trial judge’s decision on the merits is given great weight.
I note also that a key aspect of the UK approach is that while the remedial phase will normally not be stayed pending appeal, if the appellant is successful, it will be awarded not just its costs on the appeal, but also the costs incurred in the remedial inquiry:
While I am not familiar with the Canadian practice on this point, and Stratas JA, made no reference to costs of the remedial inquiry in dismissing the motion for a stay, the UK approach does strike me as a sensible one.
2,365,281 / anti-IL-12 antibodies / STELARA
This decision raises basic issues regarding the proper approach to a stay of the remedies phrase of a bifurcated trial pending appeal of the liability decision. AbbVie sued Janssen for patent infringement. On Janssen’s motion, the trial was bifurcated into liability and remedy phases. AbbVie was successful at the liability stage, and that decision is under appeal to the FCA. On a subsequent motion a Prothonotary further ordered the remedial phase bifucated into a phase on injunctive relief, and a phase on damages. Janssen has appealed this second bifurcation [10]. Janssen is therefore now facing two appeals, and if either is successful, the trial on injunctive relief should not go ahead, or should not go ahead separately from the damages phase [11]. Janssen sought a stay of the remedies phase.
The parties agreed that the test for whether a stay should be granted is the three-part test from RJR-MacDonald [1994] 1 SCR 311 that also governs an interlocutory injunction: a serious issue to be tried, irreparable harm, and the balance of convenience. The FCA held that each of these tests is a separate threshold, so that each must be answered in the affirmative in order for a stay to be granted [14]. Stratas JA pointed out that “[e]ach branch of the test adds something important” [19]. While that is true, it does not follow that each must be satisfied individually. The alternative is that all are balanced together. That balancing approach has been endorsed by Sharpe on Injunctions and Specific Performance, ¶2.90-2.100, and by Sask CA in Mosaic v PCS 2011 SKCA 120 [57] (blogged), and by Hoffmann J in Films Rover International Ltd v. Cannon Film Sales Ltd. [1986] 3 All ER 772 at 780 (Ch), who explained:
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.’
Stratas JA pointed out that it would be strange if a stay could be granted “in the face of a laughably weak or hopeless case,” [23], or on the basis of “vague assumptions and bald assertions” [24]. That is true, but that does not justify a threshold approach; a laughably weak case, and vague assumptions, would not support a stay under a balancing approach either, as they would be given very little weight. Stratas JA reviewed a number of FCA cases which use the irreparable harm requirement as a threshold test [24]. While I have not reviewed these cases in detail, that is certainly consistent with the approach taken to interlocutory injunctions in the patent context: see my article Interlocutory Injunctions and Irreparable Harm in the Federal Courts, (2010) 88 Can Bar Rev 517. While the FCA has been internally consistent in this respect, it should be recognized that it is increasingly out of step with other courts in Canada and elsewhere.
Having decided that each step is separate, the FCA refused the stay based solely on the irreparable harm branch, saying that
Janssen brought the motion to bifurcate the liability and remedies issues. It got the order
it sought. . . . In short, Janssen got what it wanted and what it could reasonably expect -
the prompt beginning of a remedial phase that would cause it to incur management time
and legal and other costs. To the extent that this is harm, it is harm it brought upon itself
by asking for bifurcation in these circumstances. It is avoidable harm [29]-[30].
This does not strike me as persuasive. As I understand it, an order for bifurcation isn’t a favour granted to one party, but an assessment by the court that the interests of the efficient administration of justice are best served by bifurcation. There is at least an argument to be made that the efficient administration of justice would also be served by a stay; Stratas JA never addressed this point because he never reached the balance of convenience. It is not clear to me why a concern for the efficient administration of justice should be disregarded, merely because the party raising the issue had previously raised another issue regarding the efficient administration of justice. In the bigger picture, the money that the parties spend in wasted legal fees are not just a cost to the parties; they are a cost to society as a whole. The money has to come from somewhere, whether it is reduced research expenditure, or higher consumer prices.
All this is not to say that I disagree with the result. Notwithstanding that the SCC in RJR-MacDonald did equate the test for a stay and an interlocutory injunction, the two situations are quite different. In an application for an interlocutory injunction, the court has only summary information on which to base any assessment of the merits. That is what led the House of Lords in Cyanamid [1975] UKHL 1 to downplay the importance of the merits in an interlocutory injunction application. (There is a strong argument to be made that in an appropriate case the merits deserve more weight than Cyanamid would give them, but that is a different issue.) In contrast, on an application for a stay, the court has a fully reasoned decision of a trial judge on a full evidentiary record. For that reason (as Professor Vaver pointed out to me), the UK courts do not treat a stay and an interlocutory injunction equivalently. In Virgin Atlantic [2009] EWCA Civ 1513 [22] Jacob LJ noted that
It should be noted the question [of a stay of an injunction pending appeal] is not the same
when one is considering what to do on an application for an interim injunction pending
trial. In that case the patentee has yet to establish his right, whereas after successful trial
he has prima facie done just that. So in general, when an appeal is pending, the patentee
will get his injunction provided he gives a cross-undertaking in damages against the
possibility that the defendant's appeal would be successful. The question, however,
remains one of a balance of convenience.
Stratas JA gave great weight to the importance of “The binding, mandatory nature of law – which I shall call ‘legality’ Indeed, it is an aspect of the rule of law, a constitutional principle.” [20], and he referred to the granting of a stay as a “temporary suspension of legality. ” [21]. I am not comfortable with that characterization. If in the end, if an appeal court holds that the trial judge was wrong on a matter of law, then it seems to me that legality would be temporarily suspended by refusing a stay, rather than by granting it. But without raising it to the level of a constitutional principle, the underlying notion that the fully reasoned decision of the trial judge is entitled to considerable deference is surely correct.
Even this does not mean that some kind of threshold test should be adopted. Jacob LJ was of the view that the question “remains one of a balance of convenience,” though the trial judge’s decision on the merits is given great weight.
I note also that a key aspect of the UK approach is that while the remedial phase will normally not be stayed pending appeal, if the appellant is successful, it will be awarded not just its costs on the appeal, but also the costs incurred in the remedial inquiry:
The general rule is that a successful claimant is entitled to pursue an inquiry for damages
even if there is a possibility of an appeal. He normally does so at his own risk as to costs
if the decision on liability is reversed on appeal” Virgin Atlantic [4].
While I am not familiar with the Canadian practice on this point, and Stratas JA, made no reference to costs of the remedial inquiry in dismissing the motion for a stay, the UK approach does strike me as a sensible one.
Wednesday, May 14, 2014
Another Application of the Duty to Disclose the Invention
Pfizer Canada Inc v Apotex Inc / celecoxib (NOC) 2014 FC 314 Harrington J
2,177,576 / celecoxib / CELEBREX
I blogged yesterday about the promise of the patent in Apotex / celecoxib. This post concerns the second main issue, which is the duty to disclose the invention. There are several points of interest, though none represent major legal developments.
Apotex made three submissions regarding sufficiency of disclosure [43]:
Taking the second point first, Pfizer effectively conceded, for the purposes of this application, that the compounds were not useful for treating colorectal cancer [46]. But Pfizer has only to establish that one valid claim is infringed in order to obtain an order of prohibition [45], and so Pfizer accordingly argued that the validity of Claim 16 was not determinative of the application, because s 58 provides that claims stand or fall independently. Apotex responded by arguing that the utility of the invention, which is found in the disclosure, is inherent in every claim, and if Claim 16 is invalid, the entire patent falls. Apotex’ argument is set out only summarily by Harrington J, but it is presumably based on on the SCC Teva / Sildenafil 2012 SCC 60, in which a claim to a useful compound was struck down because other claimed compounds lacked utility. I can’t speculate on how exactly Apotex felt that Sildenafil applied to the facts at hand, but in my article The Duty to Disclose “The Invention”: The Wrong Tool for the Job, (2013) 25 IPJ 269, I did argue that the Sildenafil decision eviscerates s 58. Harrington J rejected Apotex’ allegation on this point, holding simply that the submission “is not in accord with s. 58 of the Patent Act and the decision of the Supreme Court in Teva (Sildenafil/Viagra)” [47]. While Harrington J did not elaborate further on the relationship between Sildenafil and s 58, it is clear that he views the two as consistent. While this is contrary to the argument I made in my article, I am nonetheless very pleased by this holding, because I felt that the SCC was wrong to undermine s 58. I said in my article that “I hope that I have misunderstood the court’s holding; I have certainly not found it easy to interpret.” Harrington J’s holding on this point, while not fully reasoned, is a welcome indication that I was indeed wrong in my interpretation of Sildenafil.
The first point, regarding the utility of Claim 5, similarly appears to be relevant only because of its effect on Claim 4, and would also be susceptible to being answered by s 58. But Harrington J addressed the point more directly, holding that
There is a certain tension here with the SCC statement in Tennessee Eastman [1974] SCR 111 that
We might distinguish this on the basis that Tennessee Eastman refers to “therepeutic” [sic] doses, while in this case the toxicity was revealed at “high” doses. However, I think it is more realistic to say that Harrington J’s holding relfected the point made that in Cameron ed Canadian Patent Law Benchbook at §4.8.1.2 that “some care must be exercised in the application of [the Tennessee Eastman] principle].” Apotex Inc / celecoxib should be added to the several cases cited therein as illustrating the conservative interpretation the courts have given to that principle.
I would note also that the view that the claimed compound must be nontoxic in therepeutic doses was obiter in Tennessee Eastman, and it was also obiter in Ciba v Commissioner of Patents [1959] SCR 378, which was relied on in Tennessee Eastman. Ciba in turn cited the decision of Jekins J in Re May & Baker Ltd (1948) 65 RPC 255 (Ch). In May & Baker there was no evidence at all of any utility for the substantial majority of the compounds of the claimed class (p287), which is quite different from a situation, as in this case, where the compounds clearly have a therapeutic effect, and the question is whether side effects would make them not clinically useful in practice. With that said, Jenkins J’s opinion does have statements which might suggest that therapeutic utility in humans, including lack of toxicity, is necessary to support a patent (see esp p 284); but such a suggestion is inconsistent with the holding in Wellcome / AZT 2002 SCC 77 [3] that regulatory approval is not the measure of patentable utility. I note also that the invention at issue in May & Baker was effectively a type of selection invention (p 282-83), so that the claimed compounds had to exhibit some advantage or lack of disadvantage as compared with the prior art compound, which was therapeutically useful, and this may justify the requirement for therapeutic utility on the particular facts.
The third point gets to the heart of the Teva / sildenafil duty to disclose the invention. Apotex argued that Pfizer failed to disclose that the true invention was celecoxib, with respect to which it had already formed the intention to seek regulatory approval [43]. Harrington J readily distinguished Teva / sildenafil from the facts at hand; in the SCC case, the utility of the individually claimed compounds, other than sildenafil itself, had not been established, whereas in this case the utility of all three of the individually claimed compounds was established [59]. Consequently, “[t]he true invention was the class of compounds” [59]. This distinction is, in my view, entirely sound. It is quite similar to, and consistent with, Snider J’s holding in Teva / imatinib 2013 FC 141 (blog). A more difficult question would have arisen had Harrington J come to the opposite conclusion with respect to the compound of Claim 5, so that it could not be said that the true invention was the whole class. In my view, that scenario is where there is a tension between s 58 and Teva / sildenafil. But given Harrington J’s holding that Claim 5 was valid, that tension will have to be resolved on another day.
One point of general importance is that “[t]here was no obligation upon Searle at the time the patent was filed to disclose therein its hope to commercialize Claim 4" [60]. This implies that “the invention” is determined by patentability criteria, and not by business intent. In my view, this holding is entirely consistent with both the Act and Teva / sildenafil.
Finally, Harrington J [50]-[52] also applied the FCA’s direction in Pfizer v. Novopharm / sildenafil (NOC) 2010 FCA 242 [72], to hold that the best mode requirement applies only to machines, notwithstanding Thorson P in Minerals Separation [1947] Ex CR 306, 12 CPR 102, that “the inventor must act uberrima fide and give all information known to him that will enable the invention to be carried out to its best effect as contemplated by him.” While Harrington J was bound to apply the law as set out by the FCA, in a recent article, Best Mode Disclosure in Canadian Patents 25 IPJ 303 (2013), Professor Vaver has argued that on the contrary, the express inclusion of a best mode duty for machines does not impliedly exclude the same duty for all inventions.
2,177,576 / celecoxib / CELEBREX
I blogged yesterday about the promise of the patent in Apotex / celecoxib. This post concerns the second main issue, which is the duty to disclose the invention. There are several points of interest, though none represent major legal developments.
Apotex made three submissions regarding sufficiency of disclosure [43]:
(1) that one individually claimed compounds (Claim 5) was toxic and therefore useless;
(2) Claim 16, to the compounds for use in the prevention of colorectal cancer is
unfounded; and
(3) Pfizer failed to disclose that the true invention was celecoxib, (Claim 4) with respect
to which Pfizer had already formed the intention to seek regulatory approval.
Taking the second point first, Pfizer effectively conceded, for the purposes of this application, that the compounds were not useful for treating colorectal cancer [46]. But Pfizer has only to establish that one valid claim is infringed in order to obtain an order of prohibition [45], and so Pfizer accordingly argued that the validity of Claim 16 was not determinative of the application, because s 58 provides that claims stand or fall independently. Apotex responded by arguing that the utility of the invention, which is found in the disclosure, is inherent in every claim, and if Claim 16 is invalid, the entire patent falls. Apotex’ argument is set out only summarily by Harrington J, but it is presumably based on on the SCC Teva / Sildenafil 2012 SCC 60, in which a claim to a useful compound was struck down because other claimed compounds lacked utility. I can’t speculate on how exactly Apotex felt that Sildenafil applied to the facts at hand, but in my article The Duty to Disclose “The Invention”: The Wrong Tool for the Job, (2013) 25 IPJ 269, I did argue that the Sildenafil decision eviscerates s 58. Harrington J rejected Apotex’ allegation on this point, holding simply that the submission “is not in accord with s. 58 of the Patent Act and the decision of the Supreme Court in Teva (Sildenafil/Viagra)” [47]. While Harrington J did not elaborate further on the relationship between Sildenafil and s 58, it is clear that he views the two as consistent. While this is contrary to the argument I made in my article, I am nonetheless very pleased by this holding, because I felt that the SCC was wrong to undermine s 58. I said in my article that “I hope that I have misunderstood the court’s holding; I have certainly not found it easy to interpret.” Harrington J’s holding on this point, while not fully reasoned, is a welcome indication that I was indeed wrong in my interpretation of Sildenafil.
The first point, regarding the utility of Claim 5, similarly appears to be relevant only because of its effect on Claim 4, and would also be susceptible to being answered by s 58. But Harrington J addressed the point more directly, holding that
[44] The fact that tests had revealed high doses of the compound in Claim 5 were toxic in
rats does not detract from the fact that Claim 5 works as an anti-inflammatory. There was
no promise it would receive regulatory approval.
There is a certain tension here with the SCC statement in Tennessee Eastman [1974] SCR 111 that
There is no doubt that when a new substance is claimed as an invention of a "medicine",
it has to be shown that it is active and nontoxic in therepeutic doses. Otherwise the patent
fails for lack of utility and this is so if a class of substances is claimed some of which are
useful as a "medicine", some of which are not.
We might distinguish this on the basis that Tennessee Eastman refers to “therepeutic” [sic] doses, while in this case the toxicity was revealed at “high” doses. However, I think it is more realistic to say that Harrington J’s holding relfected the point made that in Cameron ed Canadian Patent Law Benchbook at §4.8.1.2 that “some care must be exercised in the application of [the Tennessee Eastman] principle].” Apotex Inc / celecoxib should be added to the several cases cited therein as illustrating the conservative interpretation the courts have given to that principle.
I would note also that the view that the claimed compound must be nontoxic in therepeutic doses was obiter in Tennessee Eastman, and it was also obiter in Ciba v Commissioner of Patents [1959] SCR 378, which was relied on in Tennessee Eastman. Ciba in turn cited the decision of Jekins J in Re May & Baker Ltd (1948) 65 RPC 255 (Ch). In May & Baker there was no evidence at all of any utility for the substantial majority of the compounds of the claimed class (p287), which is quite different from a situation, as in this case, where the compounds clearly have a therapeutic effect, and the question is whether side effects would make them not clinically useful in practice. With that said, Jenkins J’s opinion does have statements which might suggest that therapeutic utility in humans, including lack of toxicity, is necessary to support a patent (see esp p 284); but such a suggestion is inconsistent with the holding in Wellcome / AZT 2002 SCC 77 [3] that regulatory approval is not the measure of patentable utility. I note also that the invention at issue in May & Baker was effectively a type of selection invention (p 282-83), so that the claimed compounds had to exhibit some advantage or lack of disadvantage as compared with the prior art compound, which was therapeutically useful, and this may justify the requirement for therapeutic utility on the particular facts.
The third point gets to the heart of the Teva / sildenafil duty to disclose the invention. Apotex argued that Pfizer failed to disclose that the true invention was celecoxib, with respect to which it had already formed the intention to seek regulatory approval [43]. Harrington J readily distinguished Teva / sildenafil from the facts at hand; in the SCC case, the utility of the individually claimed compounds, other than sildenafil itself, had not been established, whereas in this case the utility of all three of the individually claimed compounds was established [59]. Consequently, “[t]he true invention was the class of compounds” [59]. This distinction is, in my view, entirely sound. It is quite similar to, and consistent with, Snider J’s holding in Teva / imatinib 2013 FC 141 (blog). A more difficult question would have arisen had Harrington J come to the opposite conclusion with respect to the compound of Claim 5, so that it could not be said that the true invention was the whole class. In my view, that scenario is where there is a tension between s 58 and Teva / sildenafil. But given Harrington J’s holding that Claim 5 was valid, that tension will have to be resolved on another day.
One point of general importance is that “[t]here was no obligation upon Searle at the time the patent was filed to disclose therein its hope to commercialize Claim 4" [60]. This implies that “the invention” is determined by patentability criteria, and not by business intent. In my view, this holding is entirely consistent with both the Act and Teva / sildenafil.
Finally, Harrington J [50]-[52] also applied the FCA’s direction in Pfizer v. Novopharm / sildenafil (NOC) 2010 FCA 242 [72], to hold that the best mode requirement applies only to machines, notwithstanding Thorson P in Minerals Separation [1947] Ex CR 306, 12 CPR 102, that “the inventor must act uberrima fide and give all information known to him that will enable the invention to be carried out to its best effect as contemplated by him.” While Harrington J was bound to apply the law as set out by the FCA, in a recent article, Best Mode Disclosure in Canadian Patents 25 IPJ 303 (2013), Professor Vaver has argued that on the contrary, the express inclusion of a best mode duty for machines does not impliedly exclude the same duty for all inventions.
Tuesday, May 13, 2014
Restrained Construction of the Promise post-Plavix
Pfizer Canada Inc v Apotex Inc / celecoxib (NOC) 2014 FC 314 Harrington J
2,177,576 / celecoxib / CELEBREX
Apotex / celecoxib raised two main issues, one relating to the promise of the patent, and the other to the disclosure of the invention. On the first issue, Harrington J followed the guidance of the FCA in Plavix 2013 FCA 186 (blog) (leave to appeal to SCC granted 30 Jan 2014) and construed the promise modestly, with the result that Apotex’ allegation of invalidity failed on this issue. I will discuss the second issue in tomorrow’s post.
The ‘576 patent has a number of cascading compound claims, including four claims to individual compounds, of which Claim 4 is to celecoxib, as well as claims for use in treating inflamation, and claim 16, for use in preventing colorectal cancer [26]. The two promise issues were whether the patent promised the compounds would be useful as anti-inflammatory agents in humans [27], and whether it promised reduced side-effects as compared with other NSAIDs.
In concluding that there was no promise of utility in humans, Harrington J did not engage in the fine parsing of the specification which was normal in pre-Plavix cases. He noted that competing arguments [27], and held that “that there was no clear promise that Celebrex® would be useful in treating inflammation in humans. That may have been a wish, an aspiration, a goal, a target or an advantage, but basing myself on the two decisions of the Federal Court of Appeal to which I have just referred, there was no actual promise” [28]. With respect to reduced side effects, Harrington J noted one sentence stating “The compounds are useful as antiinflammatory agents, such as for the treatment of arthritis, with the additional benefit of having significantly less harmful side effects” [30], and a contrasting statement that “Such preferred selectivity may indicate an ability to reduce the incidence of common NSAID-induced side effects” (his emphasis) [31]. He adverted both to the word “may” and to expert evidence in concluding that the reference to reduced side-effects “connotes a possibility, and does not constitute a promise” [35], but he also referenced the general principle expressed by Zinn J in Fournier / fenofibrate (NOC) 2012 FC 741 [126] (blog) “that a utility not expressed in the claim portion of the specification ‘[…] should be presumed to be a mere statement of advantage unless the inventor clearly and unequivocally states that it is part of the promised utility’” [36], and he noted that “a mere statement of advantage, or a target, without more, is not a promise” [40].
Thus on both points, Harrington J adopted a restrained approach to construing the promise, under which a promise must be clear and explicit. This is consistent with the recent case-law cited by Harrington J, in particular the Plavix FCA decision. It is also consistent with Harrington J’s own prior approach to the promise of decision in Mylan / celecoxib 2014 FC 38 (blog); that case involved the same patent, and while the result was the same, the more important point is the consistency in the restrained approach to construction of the promise.
2,177,576 / celecoxib / CELEBREX
Apotex / celecoxib raised two main issues, one relating to the promise of the patent, and the other to the disclosure of the invention. On the first issue, Harrington J followed the guidance of the FCA in Plavix 2013 FCA 186 (blog) (leave to appeal to SCC granted 30 Jan 2014) and construed the promise modestly, with the result that Apotex’ allegation of invalidity failed on this issue. I will discuss the second issue in tomorrow’s post.
The ‘576 patent has a number of cascading compound claims, including four claims to individual compounds, of which Claim 4 is to celecoxib, as well as claims for use in treating inflamation, and claim 16, for use in preventing colorectal cancer [26]. The two promise issues were whether the patent promised the compounds would be useful as anti-inflammatory agents in humans [27], and whether it promised reduced side-effects as compared with other NSAIDs.
In concluding that there was no promise of utility in humans, Harrington J did not engage in the fine parsing of the specification which was normal in pre-Plavix cases. He noted that competing arguments [27], and held that “that there was no clear promise that Celebrex® would be useful in treating inflammation in humans. That may have been a wish, an aspiration, a goal, a target or an advantage, but basing myself on the two decisions of the Federal Court of Appeal to which I have just referred, there was no actual promise” [28]. With respect to reduced side effects, Harrington J noted one sentence stating “The compounds are useful as antiinflammatory agents, such as for the treatment of arthritis, with the additional benefit of having significantly less harmful side effects” [30], and a contrasting statement that “Such preferred selectivity may indicate an ability to reduce the incidence of common NSAID-induced side effects” (his emphasis) [31]. He adverted both to the word “may” and to expert evidence in concluding that the reference to reduced side-effects “connotes a possibility, and does not constitute a promise” [35], but he also referenced the general principle expressed by Zinn J in Fournier / fenofibrate (NOC) 2012 FC 741 [126] (blog) “that a utility not expressed in the claim portion of the specification ‘[…] should be presumed to be a mere statement of advantage unless the inventor clearly and unequivocally states that it is part of the promised utility’” [36], and he noted that “a mere statement of advantage, or a target, without more, is not a promise” [40].
Thus on both points, Harrington J adopted a restrained approach to construing the promise, under which a promise must be clear and explicit. This is consistent with the recent case-law cited by Harrington J, in particular the Plavix FCA decision. It is also consistent with Harrington J’s own prior approach to the promise of decision in Mylan / celecoxib 2014 FC 38 (blog); that case involved the same patent, and while the result was the same, the more important point is the consistency in the restrained approach to construction of the promise.
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