Functional Analysis in Claim Construction

Valeant Canada v Ranbaxy Pharmaceuticals Canada, 2018 FC 847 McVeigh J
            2,524,300 / bupropion XL / WELLBUTRIN XL

This decision raises an interesting point about “functional” claim construction. In this NOC proceeding Valeant sought an order of prohibition to prevent Ranbaxy from launching its generic version of extended release bupropion. The only issue was infringement [6]. The 300 patent claimed a modified-release tablet comprising (i) a core, (ii) a control-releasing coat, and (iii) an outer moisture barrier comprising an enteric polymer, a permeation enhancer and optionally a plasticizer, wherein the permeation enhancer is about 20% to about 40% of the dry weight [8]. The key element at issue was (iii). The preferred permeation enhancer disclosed was silicon dioxide. Ranbaxy’s formulation also used silicon dioxide as a permeation enhancer, but in less than the claimed range (which was ultimately construed as being 18%-44% [103]). Ranbaxy’s formulation also polyethylene glycol [PEG] and triethyl citrate [TEC], which Ranbaxy characterized as plasticizers. Valeant argued that PEG and TEC should also be considered to be permeation enhancers, in which case the Ranbaxy formulation would fall within the claimed range [10]. The key question, therefore, was whether PEG and TEC could be considered to be permeation enhancers as a matter of claim construction.

My understanding is that PEG and TEC are conventionally used as plasticizers, and Valeant did not dispute this, but Valeant argued that the “practical reality is that PEG and TEC are permeation enhancers” [50]. So, Valeant’s experts testified that PEG served as a permeation enhancer in Ranbaxy’s product and that the term “permeation enhancer” should be construed to include PEG [52]-[53], [62]. McVeigh J held that this constituted a “functional approach” to claim construction, rather than a “purposive construction,” and this functional approach was an error of law [51], [52], [56], [61], [68].

As I understand it, in McVeigh J’s view, a functional approach is one that looks to the function of the claim element in the context of the invention, while a purposive construction looks to the language of the claim and the specification: see [57], [61], [68]. That is, the proper question is not whether PEG in fact serves as a permeation enhancer, but whether the 300 patent itself says that PEG serves, or can serve, as a permeation enhancer.

In my view, McVeigh J’s apparent refusal to consider evidence of the functional characteristics of PEG and TEC, in favour of an exclusive focus on the specification, is not consistent with purposive construction. A functional analysis is part of purposive construction, not an alternative to it. In Catnic [1982] RPC 183 (HL), the question was whether “extending vertically” should be construed to encompass a support angled at 6-8°. In holding in the affirmative, Lord Diplock emphasized, at 242-43, that “From the point of view of function a reduction of this order in vertical support provided for the upper horizontal plate is negligible.” In a famous passage at 244, he said (my emphasis):

It may be that when used by a geometer addressing himself to fellow geometers, such expressions descriptive of relative position as "horizontal", "parallel", "vertical" and "vertically" are to be understood as words of precision only; but when used in a description of a manufactured product intended to perform the practical function of a weight-bearing box girder in supporting courses of brickwork over window and door spaces in buildings, it seems to me that the expression "extending vertically" as descriptive of the position of what in use will be the upright member of a trapezoid-shaped box girder, is perfectly capable of meaning positioned near enough to the exact geometrical vertical to enable it in actual use to perform satisfactorily all the functions that it could perform if it were precisely vertical...

Note that in Catnic this functional analysis actually trumped the language of the specification. The courts below had held that the phrase meant exactly vertical, not primarily because that was the literal meaning, but rather because the claim itself distinguished between a member that extended “vertically” and one which was “inclined” with the latter being described in the disclosure as being an angle of only 13° from exactly vertical: Catnic, at 212–13, 228–29. That is, a focus on the language of the specification alone led to the conclusion that the term “vertically” did not include the inclined support, and Lord Diplock came to the opposite conclusion on the basis of the functional role of the support member. Thus, it is perfectly clear from Catnic that the function must be considered in addition to the language of the specification.

To take a hypothetical loosely modeled on the present case, suppose the presence of the specified ratio of permeation enhancer was the central inventive concept enabling effective extended release. Suppose PEG was conventionally used as a plasticizer, and the specification therefore discussed it solely as being a plasticizer, in the context of the control-releasing coat. The generic discovers that PEG actually is also an acceptable permeation enhancer – perhaps not as good as silicon dioxide, which is why it is not used as such, but good enough to get the job done. The generic uses PEG in its formulation of the outer moisture-releasing cost, solely as a permeation enhancer, since a plasticizer is not necessary in the outer coating at all. In that case, I would suggested that reading “permeation enhancer” to exclude PEG would be to improperly import a limitation from the disclosure into the claims, enabling the generic to take the inventive concept.

The only authority cited by McVeigh J for rejecting functional considerations is the FCA decision in Eurocopter 2013 FCA 219, specifically [84], [96], cited by McVeigh J at [68]. Paragraph [84] simply endorses purposive construction, so the key discussion is at [96] (emphasis added, citations omitted):

Third issue: Did the Judge err by not considering the functional equivalency of the landing gear disclosed by the ‘787 Patent?

[95] However, Eurocopter’s submissions go far beyond the construction of the claims. It is also of the view that a party can be found to infringe a patent even though it omitted or changed an element that the patent itself identifies as essential. It submits that the invention should be considered and compared, for infringement purposes, from the perspective of its functional equivalence with other landing gears, such as Bell Helicopter’s Production landing gear: Eurocopter’s Memorandum at paras. 114 to 117, 123 and 129.

[96] This approach is clearly inconsistent with the teachings of Free World Trust since it fails to recognize the primacy of the language of the claims in determining the essential elements, which the Supreme Court has clearly indicated as the foundation of claims construction.

As the emphasized sentence makes clear, Eurocopter did not hold that functional characteristics are not to be considering in construing a claim, but rather than functional equivalence does not justify going beyond the claims.

While the details of Eurcopter’s submissions were not specified in the decision, they seem to have been quite extreme. The invention at issue in Eurocopter was “sleigh-type” landing gear, which the claims characterized as having an inclined transition zone “with double curvature.” The defendant Bell’s “Legacy” gear (ultimately held to infringe), did have this double curvature, but the “Production” gear (ultimately held not to infringe), did not. Eurocopter evidently wanted to argue that Bell’s Production gear should be held to infringe because it achieved the same functional landing characteristics, eg ground resonance, as Eurocopter’s patented gear. The FCA noted that

[97] As aptly noted by Binnie J. in Free World Trust at para. 32:

As stated, the ingenuity of the patent lies not in the identification of a desirable result but in teaching one particular means to achieve it. The claims cannot be stretched to allow the patentee to monopolize anything that achieves the desirable result. It is not legitimate, for example, to obtain a patent for a particular method to grow hair on bald men and thereafter claim that anything that grows hair on bald men infringes.

That is, Eurocopter had disclosed and claimed one way of achieving desirable landing characteristics. This did not justify it claiming a monopoly over a completely different way of achieving the same desirable landing characteristics.

No doubt in some cases there may be difficulties in deciding whether a functional analysis is being invoked to construe the claims, or go beyond them. But in most cases the distinction will be clear enough. Part of the problem is the level of generality at which “functionality” is defined. Eurocopter had been arguing for a functional analysis at a very high level of generality — did the Production gear perform the same function as the patented landing gear, such as effectively allowing a helicopter to land without excessive ground resonance? In Catnic, and in this case, the level of generality is much lower: is the support inclined at 6°functionally vertical within the context of the invention? Is the role of PEG in the moisture barrier functionally that of a pemeation enhancer? Ultimately, I would suggest that the correct level of generality turns on the nature of the inventive concept, and is related to the essentiality analysis, but that is more than I can discuss in this post.

This is not to say that the McVeigh J’s construction was wrong, as purposive construction also depends on the language of the claims and specification, not just on the function. Moreover, there is a separate factual issue as to whether PEG and TEC really do function as permeation enhancers [63]. My point is only that it is wrong to focus solely on the language of the specification, to the exclusion of functional considerations.

I should also say that my post on this aspect of the FCA Eurocopter decision largely missed the point being made by the FCA, particularly when the Court quoted Binnie J’s analogy to a patent for a particular method of growing hair on bald men. While I quibbled with this aspect of the FCA decision in that post, on re-reading it strikes me as straightforwardly correct.

Arbitrary Selection

Teva Canada Ltd v Janssen Inc 2018 FC 754 Locke J
            2,203,936 / 2,435,146 / 2,738,706 / bortezomib / VELCADE

Yesterday’s post focused on claim construction. Another point of considerable importance arose, almost in passing, in the obviousness discussion concerning the 936 patent. The 936 patent claims the compound bortezomib [41], and the key piece of prior art was an application disclosing a genus of compounds encompassing bortezomib. One of the points distinguishing bortezomib from that prior art was the selection of the amino acid phenylalanine (Phe) at P2 position of the peptide. It was agreed that several amino acids would work at P2, and the evidence was that a hydrophobic amino acid, such as Phe, would be preferred. The question was whether it was inventive to select Phe from the fewer than 10 hydrophobic amino acids. Crucially, there was no evidence that Phe was any better than any of the other options. Locke J held that the selection was obvious. In so holding he cited (at [198]) with apparent approval the decision of Jacob LJ in Actavis UK Ltd v Novartis AG, [2010] EWCA Civ 82 [36]-[37], discussing the “5¼ inch plate paradox.” As Jacob LJ explained:

[The paradox] runs like this. Suppose the patent claim is for a plate of diameter 5¼ inches. And suppose no-one can find a plate of that particular diameter in the prior art. Then (a) it is novel and (b) it is non-obvious for there is no particular reason to choose that diameter. The conclusion, that the plate is patentable, is so absurd that it cannot be so.

What then is the answer to the paradox? It is this: the 5¼ inch limitation is purely arbitrary and non-technical. It solves no problem and advances the art not at all. It is not inventive. And although "inventive step" is defined as being one which is not obvious, one must always remember the purpose of that definition – to define what is inventive. That which is not inventive by any criteria is not made so by the definition. Trivial limitations, such as specifying the plate diameter, or painting a known machine blue for no technical reason are treated as obvious because they are not inventive.

The principle, then, is that an arbitrary selection is not inventive. In my view, this principle is both sound and important, as it provides a principled basis for explaining why some selections which are not obvious, in the sense that a posita would not necessarily have routinely arrived at that particular selection, are nonetheless not inventive. I have previously discussed this reasoning (in the context of prior bortezomib litigation, as it happens), but I believe this is the first time it has been explicitly acknowledged in Canadian law.

When Is it Permissible to Look at the Disclosure to Interpret the Claims?

Teva Canada Ltd v Janssen Inc 2018 FC 754 Locke J
            2,203,936 / 2,435,146 / 2,738,706 / bortezomib / VELCADE

Bortezomib is the API in a pharmaceutical product used for treating certain blood cancers [7]. The 936 patent claims the compound bortezomib [41], the 146 patent claims a specific formulation, namely the lyophilized mannitol ester of bortezomib [51], and the 706 patent claims a process for “large-scale” production of bortezomib. In prior NOC proceedings, Barnes J had held the 936 and 146 patents invalid for obviousness: 2015 FC 184 (discussed here), and 2015 FC 247 (here). Teva then brought an action for s 8 compensation and Janssen defended and counter-claimed on the basis that Teva had infringed the 936, 146 and 706 patents. Locke J held that the 936 and 146 patents were invalid for obviousness [208], [287] and that the 706 patent was not infringed [337], [341-42]. The s 8 action was therefore dismissed granted.* Locke J’s decision turned on the facts. 

One legal issue of interest is that, as discussed here, there has been something of an ongoing debate as to whether recourse to the disclosure as an aid to construing the claims is always permissible, or is permissible only if the claims are ambiguous when read on their own. Locke J in particular has been concerned about this problem in prior decisions. On the one hand, it has been held that recourse to the disclosure is unnecessary where the words of the claim are plain and unambiguous, and in Mylan v Eli Lilly (CIALIS) 2016 FCA 119 [39] the FCA took that next step and held that “the judge erred in referring to the specification when construing the claims of the ‘377 patent. The rules of patent construction preclude reference to the specification when the claims are clear,” (my emphasis; and see similarly [43], cited by Locke J at [72]). On the other hand, the SCC said has a number of times that the claims must be construed in light of the specification as a whole, eg in Consolboard [1981] 1 SCR 504, at 520: “We must look to the whole of the disclosure and the claims to ascertain the nature of the invention and methods of its performance” (quoted at [75]). Locke J reviewed some of the relevant jurisprudence, noting the “potential for tension,” which he resolved by agreeing, at [74], with the assessment of Zinn J in Janssen-Ortho Inc v Novopharm Ltd 2010 FC 42 [115-116], [119 ].

In my view, with respect, the statement by the FCA in Mylan v Lilly that reference to the disclosure is impermissible when the claims are clear, is simply wrong. It is inconsistent with the statement by the SCC in Metalliflex [1961] SCR 117 , 122:

The claims, of course, must be construed with reference to the entire specifications, and the latter may therefore be considered in order to assist in apprehending and construing a claim, but the patentee may not be allowed to expand his monopoly specifically expressed in the claims "by borrowing this or that gloss from other parts of the specifications".

This statement was re-affirmed in Whirlpool 2000 SCC 67 [52], and is consistent with the passage from Consolboard quoted above. Similarly, in Minerals Separation [1950] SCR 36, 56, the SCC quoted with approval from the leading UKHL decision in EMI v Lissen (1939) 56 RPC 23 at 39, in which Lord Russell said

The claims must undoubtedly be read as part of the entire document and not as a separate document; but the forbidden field must be found in the language of the claims and not elsewhere.

The SCC in Minerals Separation then confirmed that “The claims then define and limit the ambit of the invention and may be read with the disclosure in the earlier part of the specification ‘in order to understand what the former says’.” (The above passage from Metalliflex was also quoted by Zinn J in Janssen-Ortho v Novopharm 2010 FC 42 and properly emphasized by Locke J in this case [74].)

The contrary rule, expressed by the FCA in Mylan v Eli Lilly, stems from a summary of the law provided by Urie JA in Procter & Gamble v Beecham 61 CPR(2d) 1, 11 (FCA):

In summary, the principles which I derive from the above-mentioned authorities as well as from others referred to in argument, to which further reference need not be made here, are that in construing the claims in a patent, recourse to the remainder of the specification is (a) permissible only to assist in understanding terms used in the claims; (b) unnecessary where the words of the claim are plain and unambiguous; and (c) improper to vary the scope or ambit of the claims.

It is (b) that has caused the problems. In itself, (b) is not strictly inconsistent with the SCC precedent, in that when the words of the claim are plain and unambiguous, reading them in light of the disclosure is unlikely to change much. But it is a short step from there to saying that it is impermissible to consider the disclosure except when the claims are unambiguous — a step which the FCA took in Mylan v Eli Lilly. Various problems ensue, such as whether it is permissible to look at the disclosure to decide whether the words of the claims are ambiguous.

What did Urie JA mean by part (b) of his summary statement? He began the discussion which led to that summary by citing the SCC in Minerals Separation as saying that the claims may be read with the disclosure, and then went on to quote from EMI v Lissen, which, as just noted, clearly endorses reading the entire specification to understand the claims. It seems that (b) was derived from the following passages in EMI, which are the only places in Urie JA’s review referring to “unambiguous” claims:

But I know of no canon or principle which will justify one in departing from the unambiguous and grammatical meaning of a claim and narrowing or extending its scope by reading into it words which are not in it;

If the patentee has done this in a claim the language of which is plain and unambiguous, it is not open to your Lordships to restrict or expand or qualify its scope by reference to the body of the specification.

Neither of these statements says that it is impermissible to read the disclosure to understand the claims, if the claims are plain and unambiguous. Rather, they both say that it is impermissible to use the disclosure to change the meaning of the claims. That, I suggest, is the real import of part (b) of Urie JA’s summary.

This view is consistent with Dableh v Ontario Hydro [1996] 3 FC 751 (FCA), which quoted Urie JA’s summary, as in Dableh the trial judge had in effect impermissibly restricted the scope of the claims to the specific embodiment of the invention set out in the description. Even in Mylan v Eli Lilly, the putative error was “of no consequence” [43].

*It's my practice not to change my posts once posted without notice, except for typographical or grammatical errors. This was a substantive error - I'd meant to say that Janssen's counter-claim was dismissed. Note that the parties had agreed on the quantum [6], so the only issue was whether the s 8 action should be allowed.

No new cases

No new substantive patent cases were released last week.

No new cases

No new substantive patent cases were released last week.

Note that I generally only blog on substantive patent cases. A new decision in the ongoing saga between Apotex and Health Canada regarding Apotex's Indian facility was released: Apotex Inc. v. Canada (Health), 2018 FCA 147. To keep abreast of new decisions like this one, as well as procedural decisions and copyright and trade-mark cases, I recommend subscribing to the Daily Intellectual Property News service from Alan Macek's IPPractice.

Is the Law of Collocation Separate from Obviousness?

Eli Lilly Canada Inc v Apotex Inc 2018 FC 736 Manson J
            2,432,644 / prasugrel / EFFIENT / NOC

The claims at issue in this NOC application were to the combination of prasugrel and aspirin for treating blood clots [5], [13], [65], [66]. Manson J held the claims to be obvious, while rejecting attacks based on patentable subject matter, sufficiency and overbreadth. The obviousness holding turned on the facts, but the “subject matter” attack is of some general interest.

Prasugrel is a member of class of compounds known as “thienopyridines” which also includes ticlopidine and clopidogrel, all of which were known to have antiplatelet aggregation activity [11], [49]. Aspirin is well-known compound, which was also known to have antiplatelet activity, though it is not a thienopyridine. Ticlopidine and clopidogrel had previously been combined with aspirin to treat blood clots: Ticlopidine with aspirin was a standard antiplatelet therapy after stent implantation, and clopidogrel with aspirin had been shown to be even better, and was widely used [108], [117]. It was also known that clopidogrel with aspirin, at least, had synergistic effects [116]. The question was whether this made it obvious to try the new member of the class, prasugrel, in combination with aspirin for the same purpose. Manson J held on the facts that it was self-evident to try the combination, and that there was a reasonable expectation of success. The claims at issue were therefore invalid for obviousness [115], [121], [122].

What was referred to as the “subject matter” argument turned on the proposition that “it is essential to the validity of a patent for a combination that the combination should lead to a unitary result, and that such result should be different from the sum of the results of the elements,” [72], citing R v American Optical Co (1950), 13 CPR 87 at 98-99 (Ex CR). On the facts, this question turned into a debate as to whether the effect of the combination was additive or synergistic. The point of more interest is whether such a requirement is sound, at least as distinct from the requirement of obviousness. Certainly, there is ample support for the proposition. American Optical held that

It is essential to the validity of a patent for a combination invention, apart from considerations of novelty and inventive ingenuity that the combination should lead to a unitary result rather than a succession of results, that such result should be different from the sum of the results of the elements and that it should be simple and not complex. The elements may interact with one another provided they combine for a unitary and simple result that is not attributable to any of the elements but flows from the combination itself and would not be possible without it.

Essentially the same proposition has been recently affirmed by the House of Lords in Sabaf SpA v MFI Furniture Centres Ltd, [2004] UKHL 45, [24], [26]. The body of law to the effect that there is a distinct requirement of this type for a combination to be patentable is sometimes referred to as the “law of collocation.”

I must say that I find the EWCA decision in Sabaf [2002] EWCA Civ 976, [43], which held that “there is no separate law of collocation,” to be more persuasive, even though it was disapproved by the House of Lords on this point. In a seminal passage on the patentability of combinations, Green LJ in Albert Wood & Amcolite Ltd v Gowshall Ltd (1936), 54 RPC 37, 40 (CA) stated that “The real and ultimate question is: Is the combination obvious or not?” This passage has often been cited with approval by the Canadian courts, including the SCC in Wandscheer v Sicard Ltd, [1948] SCR 1, 12, and many times since. If the obviousness of the combination is truly the real and ultimate question, it is difficult to see how there can be a separate rule against collocation. As the Court of Appeal pointed out in Sabaf, [43]-[44], it is well accepted that “the act of combining known concepts may itself involve an inventive step,” but if there is a separate and prior step of determining whether the claimed invention is a true combination or a mere aggregation, a court may conclude that the claim is invalid without even considering whether it is obvious, thereby bypassing the real question. To the extent that the collocation analysis is a short-cut to the obviousness inquiry, it is a dangerous short-cut. Of course, it might be that Green LJ was wrong, and the real question is not simply whether the combination was obvious. But to my mind, neither Sabaf nor American Optical provides an adequate justification for a distinct requirement that has the effect that a combination that is new, useful and non-obvious invention should nonetheless be held to be invalid. The HL in Sabaf asserted that if there is no interaction or synergy, then the separate parts of the combination are separate inventions, and the obviousness inquiry should therefore be applied to each part separately. But I cannot see how this is consistent with the principle that a combination of known parts may be an invention if it would not have been obvious to combine them. Green LJ’s statement that the real question is the obviousness of the combination, was intended precisely as a warning against the danger of a “dissection of a combination into its constituent elements and the examination of each element in order to see whether its use was obvious or not.” As he pointed out, it is “the obviousness or otherwise of each act of selection” that is at issue in a combination invention, and not the obviousness of the individual components. To my mind, Sabaf does not respond adequately to Green LJ’s point.

In any event, the point is moot in the context of this particular case, as Manson J concluded that the 644 patent did disclose an effect that is “more than the mere sum of the effects of the two agents taken alone” [90].