Burden in Summary Trial Clarified

Janssen Inc v Pharmascience Inc 2022 FC 62 Manson J

Janssen Inc v Apotex Inc 2022 FC 107 Manson J

             2,655,335 / paliperidone palmitate / INVEGA SUSTENNA / NOC

These are effectively companion cases, in which the underlying actions were brought by Janssen under the new NOC regulations against Pharmascience and Apotex, respectively, on the basis that their proposed paliperidone palmitate products would infringe Janssen’s 335 patent. In response, both Pharmascience and Apotex brought motions for summary trial, seeking a declaration that their products would not infringe. The key issues were the same in both cases: was the matter appropriate for summary trial; and was the second prong of the Corlac test for inducement satisfied. The outcome was also the same in both cases: summary trial was appropriate, and infringement was established. The summary judgment point is better developed in the Pharmascience case, but some of the substantive arguments are easier to understand in the Apotex case. Unless otherwise indicated, paragraph numbers refer to the Pharmascience decision, just because I happened to read it first. Heavy redactions in both cases make it difficult to fully understand a number of substantive issues.

On the procedural issue, the main point of note is that Manson J clarified the burden on a summary trial:

[57] [W]hile on a motion for summary trial, the burden is on the moving party to demonstrate that a summary trial is appropriate, once the onus of the merits of the matter, in terms of either infringement or validity, are before the Court for determination, the burden and onus of proof of the underlying action applies.

This seems right to me on the authorities reviewed by Manson J, and as a matter of policy. A summary trial is a procedural means for expeditious resolution of a matter, and if the burden were different from the underlying action, it might instead be used strategically to affect the substantive outcome.

On the substantive point, the 335 Patent relates to a dosing regimen for long-acting injectable paliperidone palmitate formulations for the treatment of schizophrenia and related disorders. It claims a dosage regimen comprising a first loading dose of 150 mg-eq of paliperidone palmitate administered into the deltoid muscle on day 1; a second loading dose of 100 mg-eq on day 8; and subsequent maintenance doses of 75 mg-eq monthly thereafter [19]. There are various types of claims, including product claims to prefilled syringes adapted for administration accordingly, use of the dosage form, Swiss-form claims, and claims to the dosage form adapted for administration accordingly [10].

Janssen conceded that the defendants would not directly infringe, because their product does not contain one of the essential elements of the claimed invention—though we don’t know which element, because of the redactions.

Janssen therefore relied entirely on inducement [89]–[90]. The standard Corlac 2011 FCA 228 test for inducement has three parts: (1) direct infringement by a third party; (2) the inducer influenced the third party to the point that the infringing act would not have occurred without the influence; and (3) the defendant knew that its influence would bring about the infringing act: [93].

On the first part, Janssen argued that the direct infringement will occur by prescribing physicians. The main issue on this point relates to the absence of the essential element from the generic product. I gather that the generic products would be packaged without one of the essential elements, but the missing element would be supplied at the point of administration: [JvA 119]. (This is one of the points that is difficult to understand because of redactions.) The generics apparently argued that the first prong of the Corlac test was not established in such circumstances. Manson J disagreed:

[JvA 116] The first prong of the inducement test requires that the “act of infringement must have been completed by the direct infringer” [Corlac at paragraph 162].

No direct contact is required between the inducer and the direct infringer [citing Hospira 2020 FCA 30 [26].

There is also no requirement that the alleged inducer supply all components or elements of the claimed invention [citing Copeland-Chatterson (1906), 10 Ex CR 224; MacLennan 2008 FCA 35, MacLennan v. Produits Gilbert Inc., 2008 FCA 35 [MacLennan]; Hospira FC 2018 FC 259; Janssen v Apotex / ZYTIGA 2019 FC 1355

This is straightforward—if the defendant supplied the whole invention, it would typically be a direct infringer. The doctrine of inducement was developed precisely to address the situation when the defendant does not supply all the components of the invention; the factual basis of an action for inducement is typically supply of an unpatented product by the indirect party, which is then used by the direct party to infringe the patent at issue. So, in MacLennan the patent claimed “a saw tooth and tooth holder combination” and the defendant supplied only the tooth, and, as Manson J put it, “the Court found liability for inducement despite the inducer supplying only one-half of the claimed invention” [102].

The key issue was the second prong of the Corlac test. In my view there is some uncertainty as to the whether strict “but for” causation is required on the second step. Manson J discussed this issue in Janssen v Teva 2020 FC 593, which dealt with the same patent, concluding that strict “but for” causation is indeed required: see here. Unsurprisingly, in this decision, Manson J reaffirmed that strict “but for” causation is required for inducement [123]–[124]. An appeal of Janssen v Teva is pending [19], so we may learn more in due course.

The only act of inducement alleged was the product monograph, as is typical in these pharma inducement cases. An initial question is whether the defendants’ PM instructed an infringing use of the defendants’ product. Manson J answered in the affirmative on the facts, though the reasoning is impossible to follow due to the redactions.

A second point arose because the experts all agreed that the ultimate dosing decision is based on physician skill and judgment, not the language in the product monograph [JvA 132], and the question was whether this precluded a finding of inducement. A third point is whether the physicians actually pay any attention to the PM—this is a factual point that has been contentious in a number of recent inducement cases. Again, the details of Manson J’s reasoning on these points is difficult to follow due to the redactions, but he did ultimately find on the facts that“[n]otwithstanding the exercise of skill and judgment by prescribing physicians in selecting the dosing regimen for patients, the evidence before the Court in this case establishes that acts of infringement will be influenced by the acts of the alleged inducer, Apotex, to the point that, without the influence, direct infringement will not take place” [JvA 147] and he was satisfied that Janssen had proven that “at least some prescribers” will be sufficiently influenced by PM to establish inducement [JvA 148].

There are a couple of noteworthy developments on the third prong, the knowledge requirement. Manson J noted that knowledge is not restricted to actual knowledge “but also what Apotex [the alleged inducer] ought to know” [JvA 159]. This is consistent with Hospira 2018 FC 259 [334]–[335], but I am not aware of any other caselaw on this point.

Manson J went on to say that in any event “Apotex can now ‘reasonably be expected’ to have the required knowledge given that Janssen’s experts have stated that some physicians will be influenced by the Apotex product monograph to infringe the claims of the 335 Patent” [JvA 159]. This implies that in any case in which the first two prongs are established, including actual influence, and the allegation of inducement fails only on the knowledge prong, the plaintiff will not be entitled to damages for past infringement, but it will nonetheless normally be entitled to injunctive relief to prevent any future infringement.

Thus Manson J has lowered the bar on the knowledge requirement in these respects, or more precisely, has clarified that the bar is low. A low bar on the third prong is broadly consistent with the existing jurisprudence: I am not aware of any case of inducement which has failed solely on the knowledge prong, if the first and second prongs were satisfied.