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.