Court of Appeal clarifies - for utility the promise of the patent must be "clear and unambiguous"

Ryan Sheahan -

On July 24, 2013, the Federal Court of Appeal (FCA) issued its decision in Apotex Inc. v. Sanofi-Aventis, overturning a Federal Court decision invalidating Canadian Patent No. 1,336,777 (’777 Patent) - a patent owned by Sanofi claiming the active ingredient of the drug Plavix (clopidogrel bisulfate). This decision is the latest step in a lengthy history of proceedings between the parties, including an appeal to the Supreme Court of Canada (SCC), which held that the ’777 patent was valid. As that SCC decision was in the context of the Patented Medicines Notice of Compliance (PM(NOC)) proceeding, the finding was not (strictly speaking) binding on the Federal Court. It was still surprising that the Federal Court subsequently decided to invalidate the patent. The FCA decision points out the errors of the Federal Court and clarifies the law on the promise of the patent.

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White House pushes for innovation in U.S. patent system

On June 4, 2013, the President of the United States announced seven legislative recommendations to Congress and five executive actions designed to protect innovators from frivolous litigation and to better the quality of patents issued by the United States Patent and Trademarks Office. (The informal Executive Actions differ from Executive Orders in that they are not legally binding and are seen more as a way to signal a policy shift.)

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Supreme Court issues clear warning of need to respect the "Patent Bargain"

Ian P. Goodman -

On Thursday, November 8, 2012, a unanimous Supreme Court of Canada issued a decision with significant implications for those wishing to obtain or enforce Canadian patent rights.  Owners of issued patents seeking to enforce such rights should carefully scrutinize the disclosure and claims of their issued patents in light of this decision, and patent applicants should consider this decision when drafting the specifications of new applications.

The case of Teva Canada Ltd. v. Pfizer Canada Inc.  arose out of a Patented Medicines (Notice of Compliance) [PMNOC] proceeding in which Novopharm Limited (now, Teva Pharmaceuticals Limited) sought approval from Health Canada to market and sell a generic version of Pfizer’s Viagra-branded sildenafil tablets.  To obtain such approval, the decision-maker had to be convinced that Pfizer’s patent (the ‘466 Patent) was invalid. However, Teva was unsuccessful at both the Federal Court of Canada and the Federal Court of Appeal, each of which held that Teva’s allegations of invalidity were not justified.

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It's not over yet - Patent lapse due to clerical error may yet be saved

On July 27, 2012, the Federal Court of Canada - for the second time - quashed a decision of the Commissioner of Patents to refuse to correct a clerical error relating to Repligen Corporation’s Canadian Patent # 1,341,486.

In 2008, Repligen’s patent lapsed due to the inadvertent non-payment of its maintenance fees. Although the fees were sent to the Patent Office under Repligen’s name, they were sent with the wrong patent number. When Repligen’s new patent agents caught the mistake, they requested a correction under section 8 of the Patent Act. Section 8 gives the Commissioner the discretion to correct clerical errors in “any instrument of record in the Patent Office”. Although the Commissioner acknowledged that the error was clerical in nature, she refused to correct it. In 2010, Repligen succeeded in an application for judicial review of the Commissioner’s decision but their request for correction was again refused upon redetermination by the Patent Office.

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Federal Court prevents Minister of Health from allowing sale of generic version of immunosuppressive drug MMF

Geoffrey North & Lindsay Gwyer -

In an application pursuant to the Patented Medicines (Notice of Compliance) Regulations, Hoffman-La Roche sought an order preventing the Minister of Health from issuing a notice of compliance to Apotex for the drug mycophenolate mofetil (MMF), an immunosuppressive drug used primarily in organ transplants, until after the expiry of Canadian Patent No. 1,333,285. Seeking early market entry, Apotex on the other hand alleged that the ‘285 patent was invalid on the grounds of lack of utility and obviousness.

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Federal Court of Appeal confirms that Eli Lilly's patent to atomoxetine is invalid for lack of utility

Geoffrey North and Edwin Mok

The Federal Court of Appeal recently released its decision in Eli Lilly and Company v Teva Canada Ltd, confirming the trial court’s finding that Canadian Patent No. 2,209,735 (the 735 patent), which claims a new use for an old medicine that has long been in the public domain (the use of atomoxetine for treating attention deficit hyperactivity disorder (ADHD) in three of its manifestations among all age groups), is invalid. We reported the lower Court’s ruling in a previous blog.

This appeal raised three principle legal issues. Namely, did the Judge err by: (i) misconstruing the patent’s promise by finding an implicit promise that atomoxetine “will work in the longer term”; (ii) requiring too high a standard of proof for utility; and (iii) deciding that Lilly could not rely on the sound prediction of the utility of the invention because Lilly had not disclosed the factual foundation for that prediction in the 735 patent?

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Commissioner of Patents provides revised examination guidance to patent examiners in view of Amazon.com decision

As a result of the Federal Court’s decision in the infamous Amazon.com case, released October 14, 2010, the Commissioner of Patents has provided revised practice guidelines to Canadian patent examiners in relation to general approaches to examination.

Unfortunately, given that we are currently awaiting a decision on appeal from the Federal Court’s decision, the question begs whether these new guidelines will remain relevant for long.

Federal Court of Appeal refuses to set aside prohibition order even though untrue material allegations had been made in the invalid patent at issue

A recent decision of the Federal Court of Appeal represents a blow to generic pharmaceutical companies in their quest to seek compensation for the period of time that they were precluded from entering the market with a generic version of a drug as a result of an invalid patent and lengthy proceedings under the Patented Medicines (Notice of Compliance) Regulations (NOC Regulations).

In this case, although Pfizer was successful in thwarting ratiopharm’s initial attempt to invalidate Canadian Patent No. 1,321,393 (the ‘393 Patent) under the regime of the NOC Regulations, ratiopharm was subsequently successful in a second “kick at the can” by invalidating the ‘393 Patent in an impeachment action (as reported in a previous post), which allowed ratiopharm to market its generic version of Pfizer’s drug NORVASC (amlodipine besylate).

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Federal Court grants rare motion to re-open patent infringement trial

Parties to a patent action often wonder after trial what the outcome would have been if they had just been able to locate that key piece of evidence they know is out there … somewhere …  What if, however, that evidence is actually located after the trial has concluded, but before judgment has been rendered?  That was the situation in Varco Canada Limited v. Pason Systems Corp., 2011 FC 467 and the question on motion before the Court was whether the trial should be re-opened in light of evidence that had been subsequently located.

Although there is a paucity of law in this regard, the Court stated that reopening a trial was a matter of broad discretion but one which must be exercised sparingly and cautiously.  As such, key factors which should be considered on such a motion include: 1) could the evidence, if it had been presented at trial, have had any influence on the result? (an inquiry as to materiality/relevance); 2) could the evidence have been obtained before trial by the exercise of reasonable diligence?; and 3) are there exceptional circumstances that would justify setting aside the “due diligence” test or at least reduce its overall importance in the exercise of discretion.

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Apotex denied damages for the delay it experienced in bringing its generic version of the medicine lovastatin to market

In a recent decision in Apotex Inc. v. Merck & Co., Inc., 2010 FC 1264, the Federal Court denied Apotex damages resulting from the delay it experienced in bringing its generic version of the drug lovastatin to market as a result of Merck’s prohibition application.  This is an important decision which resolves an action commenced nearly 10 years ago and will provide other pharmaceutical companies involved in similarly long-lasting litigation with insight into the scope of section 8 in the 1993 version of the Patented Medicines (Notice of Compliance) Regulations (NOC Regulations).

Both current and past versions of section 8 of the NOC Regulations purport to permit a company whose product has been kept off of the market due to a prohibition application to recover damages from the applicant for any loss resulting from the delay. Although Apotex’s statement of claim was filed in 2001, subsequent to significant amendments in 1998, the Court determined that the 1993 version of the NOC Regulations would apply. Section 8 was amended again in 2006 and 2010 and, as a result, will remain ripe for further litigation as to its interpretation. In any future disputes, it will be useful to note the preference demonstrated by the Court in this case for textual interpretations of the NOC Regulations’ technical provisions.

This case was heard contemporaneously with another case which we have discussed here

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Federal Court finds Apotex infringed Merck's product-by-process patent for Lovastatin

In Merck & Co. Inc. v. Apotex Inc., the Federal Court found Apotex to have infringed Merck’s Canadian Patent No. 1,161,380 (‘380 Patent), a product-by-process patent for the medicine lovastatin.

In arriving at its decision, the Court addressed key questions regarding standing, infringement and patent validity. The decision provides an interesting example of a plaintiff’s successful use of DNA and circumstantial evidence in establishing two separate sources of infringement. In addition, readers should take note of the Court’s finding that a pre-existing process will invalidate a product-by-process patent only where it necessarily produces the relevant product.  

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Supreme Court of Canada finds Patented Medicine Prices Review Board has jurisdiction over price of Thalomid in Canada

Geoffrey North & Catherine Newnham

The Supreme Court of Canada released a decision on January 20, 2011 in Celgene Corp. v. Canada (Attorney General), 2011 SCC 1 that may have a chilling effect on the availability of medicines under Health Canada’s Special Access Program (SAP).

The SAP

Most medicines are sold in Canada after Health Canada has satisfied itself as to the medicine’s safety and effectiveness, and has issued a notice of compliance (NOC) to the drug’s manufacturer. However, where Health Canada has not granted a NOC for a medicine, or where a manufacturer has not yet applied for one, medicines may in certain cases be sold to medical practitioners through an alternate route – the SAP – a program that allows access to drugs for the treatment of “serious or life-threatening conditions where conventional therapies have failed, are unsuitable, or are unavailable either as marketed products or through enrolment in clinical trials”.There is no limit on the period of time that a manufacturer may supply a medicine under the SAP, nor is there a limit on the volume of sales that can be made pursuant to the SAP.The manufacturer is simply authorized to sell the medicine for use by the specific patient or clinical trial identified in a special request, if Health Canada approves the request for sales pursuant to the SAP.

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Federal Court of Appeal upholds the Data Protection Regulations and its guaranteed eight-year period of market exclusivity for "innovative drugs"

The Federal Court of Appeal has upheld the validity of section 30(3) of the Food and Drugs Act and section C.08.004.1 of the Food and Drug Regulations (known as the Data Protection Regulations) in its decision in Apotex Inc. v. The Minister of Health, 2010 FCA 334

The Data Protection Regulations (DPR) were designed to clarify and implement Canada’s obligations under the data protection provisions of the North American Free Trade Agreement (NAFTA) and the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS). The DPR introduced a guaranteed period of market exclusivity of at least eight years for manufacturers of “innovative drug[s]”.  More particularly, the DPR prohibits a generic manufacturer seeking a notice of compliance (NOC) for a new drug “on the basis of a direct or indirect comparison  between the new drug and an innovative drug” from filing a New Drug Submission (NDS) “before the end of a period of six years after the day on which the first notice of compliance was issued to the innovator in respect of the innovative drug”.  In addition, the DPR prohibits the Minister of Health from issuing a NOC to a generic drug manufacturer “before the end of a period of eight years after the day on which the first notice of compliance was issued to the innovator in respect of the innovative drug”. Thus, generic drug manufacturers cannot obtain approval for their generic drug until the period of market exclusivity of the innovative drug has expired, even where there is no patent protection for that drug.

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Health Canada has released its statistical report for 2009 on the Patented Medicines (Notice of Compliance) Regulations and Data Protection provisions of the Food and Drug Regulations

Geoffrey North

Health Canada has released its statistical report for 2009 in respect of the administration of the Patented Medicines (Notice of Compliance) Regulations (the PM(NOC) Regulations) and data protection provisions of the Food and Drug Regulations. These statistics provide interested parties and policy makers alike with information concerning the effects of Canada’s IP regime on therapeutic medicines.

The PM(NOC) Regulations are designed to balance the competing interests of effective patent enforcement over new and innovative medicinal drugs against the timely entry of lower priced generic competitors. The Food and Drug Regulations prescribe that innovative drugs are to receive an eight year guaranteed minimum period of market exclusivity (data protection provisions). Together, these measures ensure a minimum period of protection for medicinal drugs while maintaining a reasonable ceiling on the maximum protection available.

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Federal Court of Appeal refuses a patent to a compound already the subject matter of product-by-process patent

On October 20, the Federal Court of Appeal put an end to the disparity in the jurisprudence surrounding whether a patentee could obtain a patent to a medicine subsequent to obtaining a patent to a process for producing the medicine by dismissing Bayer’s appeal in the case of Bayer Schering Pharma Aktiengesellschaft v. The Attorney General of Canada. The case stems from May 2008, when the Commissioner of Patents refused to grant Bayer a patent to a pharmaceutical compound per se because a previous patent had already been issued to it for the same compound when made by a particular process (product-by-process patent).  After Bayer’s appeal to the Federal Court was dismissed, it appealed to the Federal Court of Appeal.

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Dedication of Merck Patent Insufficient to Defeat Allegation of Double Patenting

A recent decision of the Federal Court expounded on the harm that can occur if two patents issue for the same invention.  The Honourable Mr. Justice O'Reilly effectively quashed any suggestion in prior case law that patentees could use public dedications to overcome the effects of double patenting, which would otherwise allow them to extend their monopoly.

In Merck & Co. Inc. v. Canada (Health), Merck brought an application under the Patented Medicines (Notice of Compliance) Regulations (SOR/93-133) (the NOC Regulations) seeking an order prohibiting the Minister of Health (the Minister) from issuing a notice of compliance (NOC) to Apotex Inc. (Apotex) for the medicine dorzolamide, used in the treatment of glaucoma, until after the expiry of Canadian Patent No. 1,329,211 (the ‘211 Patent). 

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Apotex succeeds in getting a NOC despite itself

Geoffrey North

A recent Federal Court decision highlighted the differences in prohibition proceedings under the Patented Medicines (Notice of Compliance) Regulations (the NOC Regulations) and impeachment actions under the Patent Act.  It is yet another example of how every case is to be determined on the specific evidence adduced before the Court.

In Eli Lilly Canada Inc. v. Apotex Inc, the Court dismissed Eli Lilly’s application under the NOC Regulations for an order prohibiting the Minister of Health (the Minister) from issuing a notice of compliance (NOC) to Apotex in respect of the medicine atomoxetine until after the expiry of the ‘735 Patent.  However, the dismissal was based on mootness alone, as the Court would have allowed the application had it not invalidated the ‘735 Patent entirely in a related impeachment action brought by Novopharm.

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CEPLENEĀ® not an "innovative drug" under the Data Protection Provisions of the Food and Drug Regulations

Epicept Corporation v. The Minister of Health and Canadian Generic Pharmaceutical Association (Intervener)

The Federal Court recently dismissed Epicept Corporation’s (Epicept) application for judicial review of a decision of the Minister of Health (the Minister).  The Minister had decided that Epicept’s drug product CEPLENE® (histamine dihydrochloride), which is used for remission maintenance therapy in the treatment of acute myeloid leukemia, was not an “innovative drug” pursuant to subsection C.08.004.1(1) of the Food and Drug Regulations (the Regulations).  This meant that the drug was therefore not able to receive the benefit of a period of market exclusivity under the data protection provisions of the Regulations.  Epicept’s application sought to reverse the Minister’s decision.

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Federal Court holds "business methods" patentable in Canada in decision over Amazon.com "one click" patent

Geoffrey North

In a decision reminiscent of the recent In re Bilski decision in the U.S., the Federal Court of Canada has found that patents relating to “business methods” can constitute patentable subject matter in the highly anticipated decision of Amazon.com v. The Commissioner of Patents.  In his decision dated October 14, 2010, the Honourable Mr. Justice Michael Phelan discusses differing laws and disparate judicial decisions respecting the patentability of “business method” patents across the globe, and is a necessary read for those wishing to implement a cogent global IP strategy.

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Eli Lilly patent for atomoxetine for use in treating ADHD invalid for lack of utility

Novopharm Ltd. v. Eli Lilly and Company 2010 FC 915

Novopharm Limited (now known as Teva Canada Limited but hereafter referred to as Novopharm) sought a declaration under s. 60(1) of the Patent Act, R.S.C. 1985, c. P-4 that Eli Lilly and Company’s (Lilly’s) Canadian Patent No. 2,209,735 (the ‘735 Patent) was invalid and void. The ‘735 Patent claimed the use of the medicine atomoxetine for treating attention deficit hyperactivity disorder (ADHD) in three of its manifestations among all age groups (children, adolescents and adults). The ‘735 Patent did not claim the compound atomoxetine but only its use to treat ADHD.

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Court holds business methods patentable in Canada

Amazon.com, Inc. v. The Attorney General of Canada, and The Commissioner of Patents   2010 FC 1011

Canada’s Federal Court has released its long awaited decision in the patentability of Amazon.com’s one-click order process.  This was an appeal from the decision of the Commissioner of Patents denying Amazon's patent for a "business method", having found that it was not patentable subject matter under s. 2 of the Patent Act.

The case concerned Amazon.com's simplified "one-step" ordering method and system which uses stored information and "cookies" to enable customers to order items over the internet simply by "clicking on them".   The Court found that the system claims clearly disclose a machine which is used to implement Amazon.com's one-click ordering system and a machine is patentable under s. 2 of the Patent Act.   The Court also found the method, when viewed as a whole, to be patentable as an "art" and a "process" because:


[The method is] not simply a scheme, plan or disembodied idea; it is a practical application of the one-click concept, put into action through the use of cookies, computers, the internet and the customer's own action.   Tangibility is not an issue.   The 'physical effect', transformation or change of character resides in the customer manipulating their computer and creating an order.   It matters not that the 'goods' ordered are not physically changed.

The Court concluded that there is no exclusion for "business methods" in Canada.   Business methods are to be assessed for patentability like any other method.

Edit: a more substantial analysis has been completed.  Please view it here

Quia timet counterclaim allowed in the context of an action for a declaration of non-infringement

Apotex Inc. v. H. Lundbeck A/S, 2010 FC 807

The generic pharmaceutical manufacturer Apotex Inc. (Apotex) commenced an action seeking declarations of invalidity and non-infringement with respect to Canadian patent no. 1,339,452 (the ‘452 patent), owned by H. Lundbeck A/S (Lundbeck),  relating to the medicine escitalopram.  During the course of these proceedings, Apotex brought a motion for an order striking Lundbeck’s counterclaim, or, in the alternative, requiring that Lundbeck provide security for costs.

Lundbeck’s counterclaim was in the nature of a quia timet action on infringement (essentially an injunction to restrain threatened and imminent patent infringement that has not yet commenced). While Lundbeck admitted that such action would be improper and subject to being struck if brought as an independent action, it argued that its counterclaim should be saved and allowed to proceed on the basis that it was brought in response to an action seeking a declaration of non-infringement. If the counterclaim was permitted to proceed, Lundbeck further argued that it should not be required to post security for costs or, in the alternative, that the amount requested by Apotex was unreasonable.

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"Grave consequences" defence may be asserted against a generic in a section 8 action under the PM(NOC) Regulations

Apotex Inc. v. Shire Canada Inc., 2010 FC 828

In an action brought by Apotex Inc. (Apotex) to recover damages under section 8 of the Patented Medicines (Notice of Compliance) Regulations (SOR/93-133) (Regulations) in respect of the medicine modafinil, Shire Canada Inc. (Shire) brought this motion for leave to amend its statement of defence, alleging two new defences. Apotex opposed Shire’s motion, arguing that the proposed amendments did not disclose a reasonable defence and ought not to be permitted. The prothonotary struck out the first proposed amendment, finding that a defence based on the outcome of a separate infringement action to which Shire was not a party would be speculative and hypothetical, but permitted the second proposed amendment which alleged a “grave consequences” defence.

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"Frozen Register" concept renders Janssen's disclaimer irrelevant

Janssen-Ortho Inc. v. Apotex Inc. , 2009 FC 650

This was a motion brought by Apotex pursuant to section 6(5)(b) of the Patented Medicines (Notice of Compliance) Regulations (Regulations) to dismiss Janssen’s prohibition application on the basis that it was “redundant, scandalous, frivolous, or vexatious or otherwise an abuse of process”.   The motion raised a unique issue which appears not to have been decided in any prior proceeding under the Regulations.   In particular, the issue was whether a generic manufacturer was required to respond to claims in a patent which changed as a result of a disclaimer filed by the innovator subsequent to service of the generic’s notice of allegation (NOA) and prior to the commencement of an application to prohibit the issuance of a notice of compliance (NOC).  Or, in the words of the prothonotary hearing the motion, “using a football analogy, does the field goal count if the goalposts are moved after the ball is in the air?”

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Court finds AstraZeneca patent to esomeprazole (NEXIUM) invalid for lack of sound prediction and obviousness

AstraZeneca Canada Inc. v. Apotex Inc., 2010 FC 714

This was an application brought by AstraZeneca under the provisions of the Patented Medicines (Notice of Compliance) Regulations for an order prohibiting the Minister of Health from issuing a notice of compliance to Apotex for 20 and 40 mg esomeprazole magnesium tablets until after the expiry of Canadian Patent No. 2,139,653 (the ‘653 patent).  If successful on the application, this would have prevented Apotex from marketing a generic version of NEXIUM in Canada for treating conditions wherein a reduction of gastric acid secretion is required until May 27, 2014.  Apotex, on the other hand, sought early market entry by arguing that the ‘653 patent was invalid for lack of sound prediction, anticipation (or lack of novelty), and obviousness.

The ‘653 patent relates to an improved process for preparing highly optically pure esomeprazole, one of the enantiomers of the racemate omeprazole, that is stable against racemisation (i.e. recombination).  Claim 8 was the claim at issue and could be read as claiming a salt (e.g. magnesium) of esomeprazole having an optical purity of 99.8% or greater.  There was no provision as to utility (or use of the invention) in claim 8.  This was an important fact, as the Court noted that where the invention relates to a new compound, utility does not need to be included in the claim, so long as it is described in the description portion of the patent.  On the other hand, when the patent relates to a new use for an old, known compound, that new use must be set out in the claims.  In this case, claim 8 was not directed to a new compound; it was directed to a previously known compound having a particular purity.

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Court of Appeal rejects Pfizer's alleged factual and legal errors and upholds invalidity of Pfizer's patent to NORVASC

Pfizer Limited V. Ratiopharm Inc. (2010 FCA 204)

Pfizer appealed from a decision of the Federal Court declaring Pfizer’s Canadian Patent No. 1,321,393 ( ‘393 Patent) relating to the medicine amlodipine besylate (NORVASC) invalid for obviousness. 

Amlodipine is a calcium channel blocker and anti-hypertensive compound, but had originally been formulated in the form of the maleate salt.  However, when problems with stability and processability arose during the regulatory approval process, Pfizer began to search for a different salt through an accepted process known as salt screening.  During this process, Pfizer tested seven other salts, and decided to proceed with the besylate salt.  Pfizer then filed a patent application directed to the besylate salt of amlodipine based on its alleged unique combination of properties that made it particularly suitable for preparing formulations of amlodipine.  This application subsequently issued as the ‘393 Patent. 

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Conditions for a valid selection patent does not constitute an independent basis for attacking validity

Eli Lilly Canada Inc., Eli Lilly and Company, Eli Lilly and Company Limited and Eli Lilly SA v. Novopharm Limited (2010 FCA 197)

Eli Lilly, the plaintiff in a patent infringement action, was successful in appealing a decision of the Federal Court which had found Eli Lilly’s Canadian Letters Patent No. 2,041,113 (the ‘113 Patent) relating to the medicine olanzapine (Zyprexa) invalid on the basis that it was not a proper selection patent.  The core issue on appeal raised a single question: do the conditions for a valid selection patent constitute an independent basis upon which to attack the validity of a patent?

Eli Lilly had previously received a patent (the ‘687 Patent) in 1980 covering approximately 15 trillion thienobenzodiazapine compounds, the properties of which were said to be useful for treating mild anxiety and certain psychotic conditions.  Although olanzapine was encompassed within the scope of the ‘687 Patent, it was not specifically disclosed.  Following the issuance of the ‘687 Patent, Eli Lilly eventually ceased its studies on the compounds specifically identified in that patent, but began to synthesize seven new compounds, of which olanzapine was the most promising.
 

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Court finds that invalid disclaimers invalidates the claims.

Shmuel Hershkovitz, Paradox Security Systems Ltd. and Pinhas Shpater v. Tyco Safety Products Canada Ltd.

This decision underscores the importance of filing proper disclaimers to patent claims.  Disclaimers may be filed with the patent office by a patentee after the issuance of a patent to unilaterally renounce or disclaim those portions of the claimed invention that were inadvertently included within the scope of the claims as a result of mistake, accident or inadvertence.  Disclaimers therefore have the effect of narrowing the scope of the claims (i.e. the area where competitors may not tread).  Disclaimers that attempt to broaden the scope of a claim are invalid.

In the present case, soon after the issuance on October 5, 1999 of Canadian patent number 2,169,670 (the ‘670 patent) relating to telephone line couplers used to connect electronic equipment to phone lines while providing electrical isolation, the appellant patentee Paradox Security Systems Ltd. (Paradox) sent a demand letter to the respondent Tyco Safety Products Canada Ltd. (Tyco) alleging  patent infringement.  Tyco denied all allegations of infringement and asserted that the ‘670 patent was invalid.  On October 6, 2003, Paradox filed a disclaimer to certain claims.

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Patent abstracts must be made available in both official languages

Picard v. The Commissioner of Patents and the Canadian Intellectual Property Office, 2010 FC 86

Frédéric Picard brought an application in the Federal Court under subsection 77(1) of the Official Languages Act (Act) against the Canadian Intellectual Property Office and the Commissioner of Patents claiming that patents and patent applications must be bilingual to meet the requirements of the legislation.  He sought an order requiring the Patent Office to make certain parts of patents and patent applications available in both official languages and a declaration of invalidity of all patents available in one official language only, to be suspended to allow the Patent Office to make the invalidated patent applications and patents available in both languages.  Justice Tremblay-Lamer found that the Patent Office had not met the requirements under section 44 of the Act relating to the duty of all federal institutions to take positive measures to foster “the full recognition and use of both English and French in Canadian society.”  She concluded that “the fact that patents exist only in one official language deprives Canadian who do not speak that language of information that is important in both legal and scientific terms.”  In considering the appropriate remedy for this violation, she acknowledged the cost associated with translating all patents and applications.  The Federal Court therefore ordered that the Commissioner must at least “make available an unofficial translation of the abstract of all patents he issues” to be in compliance with the Act.  While the Court was not prepared to require that all aspects of the patent be translated, abstracts will have to be prepared in both official languages.

Federal Court of Appeal upholds narrow claim construction but overturns decision re obviousness for combination patent

Bridgeview Manufacturing Inc. v. Duratech Industries International, Inc., 2010 FCA 188

Bridgeview Manufacturing Inc. (Bridgeview) and Highline Manufacturing Ltd. (Highline) brought an action against Duratech Industries International, Inc. (Duratech) et al. for infringement of claims 1, 2 and 4 of Canadian Patent No. 2,282,334 (the 334 patent) relating to bale processors, machines designed to disintegrate or break up large bales of straw, hay or other crop material.  Duratech denied infringement and counterclaimed alleging invalidity of the 334 patent.  The judge dismissed Bridgeview’s claim and allowed Duratech’s counterclaim, finding that the 334 patent was invalid for obviousness.  This was an appeal of that decision.

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Federal court confirms requirement of patent specificity for listing patents on the patent register

Purdue Pharma v. The Minister of Health, 2010 FC 738

Purdue Pharma sought judicial review of a decision of the Office of Patented Medicines and Liaison (OPML) in which the OPML determined that one of Purdue’s patents (the 738 Patent) was not eligible for listing on the Patent Register maintained in accordance with the Patented Medicines (Notice of Compliance) Regulations (Regulations) in respect of the drug TARGIN.  TARGIN is a controlled-release drug in tablet form that contains two medicinal ingredients: oxycodone hydrochloride (a painkiller), and naloxone hydrochloride, which counteracts certain side effects of oxycodone.  The 738 Patent contemplates a controlled-release technology for delivering oxycodone, and contains 28 claims, none of which mention naloxone.  Claim 5 was particularly at issue, and claims, “A solid controlled release oral dosage form, comprising oxycodone or a salt thereof … an effective amount of a controlled release matrix … and … a suitable amount of a suitable pharmaceutical diluent …”

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Federal court confirms decision to withhold designating notice of allegation as a confidential document

Pfizer Canada Inc. et al. v. Novopharm Limited et al., 2010 FC 668

Even though generic pharmaceutical companies invest significant time and funds into the preparation of notices of allegations (“NOA”s), the Federal Court has confirmed that such documents should remain available to the public and not be designated as confidential information under the terms of a protective order.

In an application under the Patented Medicines (Notice of Compliance) Regulations (the “Regulations”) in relation to the drug pregabalin, the Honourable Mr. Justice Crampton dismissed an appeal from a decision of Madam Prothonotary Milczynski dismissing a motion by Novopharm Limited (“Novopharm”), which sought a protective order designating, among other things, its NOA as confidential pursuant to Rule 151 of the Federal Courts Rules.

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Double patenting issue must be considered at time of Hearing of Application under the PM(NOC) Regulations

Sandoz Canada Inc. v. Abbott Laboratories, 2010 FCA 168

The Federal Court of Appeal rendered a decision that will have important implications on the litigation strategy of pharmaceutical companies.

Although the Federal Court issued an order under the Patented Medicines (Notice of Compliance) Regulations (the “Regulations”) prohibiting the Minister of Health from issuing a notice of compliance (“NOC”) to Sandoz for its clarithromycin extended release 500 mg tablets until after expiry of the 266 patent (a decision appealed by Sandoz), Abbott also cross-appealed from this decision.  The court found that Abbott had failed to adequately respond to Sandoz’ allegation of invalidity with respect to double patenting of claim 22 of the 395 patent over the 541 patent.  Accordingly, Abbott sought that the court’s decision dismissing an order of prohibition in relation to the 395 patent be set aside.

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Prothonotary dismisses Motion to Strike Res Judicita Pleadings from Statement of Defence in Impeachment Action

Apotex Inc. v. Pfizer Ireland Pharmaceuticals, 2010 FC 633

In an action commenced by Apotex to impeach Pfizer’s ‘446 patent relating to the drug Viagra (medicinal ingredient sildenafil citrate), Apotex brought a motion seeking to strike those portions of Pfizer’s statement of defence pleading res judicata and abuse of process.  The motion was surprisingly dismissed by the court.

Background

Apotex had previously sought to invalidate Pfizer’s ‘446 patent in proceedings commenced by Pfizer under the Patented Medicines (Notice of Compliance) Regulations (“Regulations”).  On September 27, 2007, however, Mr. Justice Mosley upheld the ‘446 patent, and granted an order prohibiting the Minister of Health from issuing a notice of compliance to Apotex.  This decision was upheld by the Federal Court of Appeal on January 16, 2009, and leave to appeal to the Supreme Court of Canada was not sought.

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Revatio patent ruled invalid for lack of sound prediction and obviousness

Pfizer Canada Inc.  v. Ratiopharm Inc. and The Minister Of Health, 2010 FC 612

In an application under the Patented Medicines (Notice of Compliance) Regulations (“Regulations”), Pfizer sought an order prohibiting the Minister of Health (“Minister”) from issuing a notice of compliance (“NOC”) to Ratiopharm for a generic version of the drug REVATIO (containing the medicine sildenafil citrate (“sildenafil”) – the same medicinal ingredient contained in VIAGRA) until after the expiry of the 324 patent.  Ratiopharm alleged that the 324 patent was invalid for lack of soundly predicted utility, obviousness, and anticipation, and therefore that a generic version of REVATIO should immediately be allowed on the Canadian market for use in the treatment of pulmonary hypertension.  Ratiopharm was ultimately successful on the first two grounds.

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Section 8 Damages under the PM(NOC) Regulations not available when patent subsequently invalidated in Impeachment Action

Apotex Inc. v. Syntex Pharmaceuticals International Inc. and Hoffman LaRoche Limited, 2010 FCA 155

Apotex was unsuccessful in its attempt to recover damages under section 8 of the 1993 version of the Patented Medicines (Notice of Compliance) Regulations (the “Regulations”) in relation to its naproxen slow release tablets. 

Background

In 1996, Syntex Pharmaceuticals International Inc. (“Syntex”) and Hoffman LaRoche Limited (“Roche”) were successful in obtaining an order under the Regulations prohibiting the Minister of Health (“Minister”) from issuing a notice of compliance (“NOC”) to Apotex with respect its naproxen slow release tablets until after the expiration of the 671 patent.  Apotex did not challenge the validity of the 671 patent at that time.  An appeal and cross-appeal from this decision was dismissed.  Apotex subsequently commenced an action seeking to impeach (invalidate) the 671 patent, and on April 19, 1999, the court found that Apotex’s formulation was non-infringing and that the 671 patent was invalid.  No appeal was taken from that judgment.

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Confidentiality Order Appropriate to Conceal Subject-Matter of Novopharm's Abbreviated New Drug Submission

Novopharm Limited v. The Minister of Health, 2010 FC 566

Novopharm filed an abbreviated new drug submission (ANDS) for a generic version of a drug, and represented to the Minister of Health that the ANDS did not attract the application of the Patented Medicines (Notice of Compliance) Regulations (and therefore the requirement to address patents listed on the patent register thereunder), since the patents were added after Novopharm had purchased the Canadian Reference Products and completed its clinical studies.  The Minister disagreed however, and required Novopharm to address a specific patent listed on the patent register before it would issue a notice of compliance (NOC) allowing Novopharm to commence marketing its drug.  Novopharm took issue with this decision, and accordingly commenced an application for judicial review of the Minister’s decision.  The application identifies the patents and drugs at issue by letter (i.e. Drugs A and B and Patents X and Y) in order to maintain confidentiality over the drug submission.

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Court questions expert's credibility in patent infringement finding

Weatherford Canada Ltd. et al. v. Corlac Inc. et al., 2010 FC 602

Justice Phelan of the Federal Court of Canada released a 119-page judgment in respect of Canadian Patent No. 2,095,937 (the “’937 Patent”) relating to a seal assembly combination designed to fix the problem of leaking stuffing boxes on rotary progressive cavity pumps – a problem that has troubled all the heavy oil producers since the early 1980’s.

The plaintiffs alleged that the defendants had been directly infringing the ‘937 Patent since at least 1999 as a result of manufacturing and selling drive systems for rotary oil well pumps that included the patented assembly for restraining oil leakage.  They also alleged the Defendants had induced and procured others including their customers to infringe the '937 Patent.

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Bifurcation Order not appropriate in action involving patent infringement and breach of Competition Act

Garford Pty Ltd. v. Dywidag Systems International, Canada, Ltd., et al., 2010 FC 581.

The plaintiff, Garford, appealed from an order of a prothonotary allowing bifurcation (separate trials) of the issue of liability from the issues of damages or accounting of profits in an action alleging patent infringement and breach of the Competition Act.

Bifurcation orders are only allowed where the Court is “satisfied, on a balance of probabilities, that bifurcation is more likely than not to result in the just, most expeditious and cost-effective determination of the proceeding.” Factors taken into account when determining whether bifurcation is appropriate include:

(i) The nature of the action and whether issues for the first trial are relatively straightforward

(ii) the extent to which the issues proposed for the first trial are interwoven with those remaining for the second;

(iii) whether a decision from the first trial regarding liability is likely to put an end to the action altogether;

(iv) the extent to which the parties have already devoted resources to all of the issues;

(v) the possibility of delay;

(vi) any advantage or prejudice the parties are likely to experience; and

(vii) whether the motion is brought on consent or over the objection of one or more of the parties.

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Drug-related patent held invalid for double patenting and anticipation, but not obviousness

Merck v. Pharmascience, 2010 FC 510 (Federal Court).

In a decision rendered May 11, 2010 under the Patented Medicines (Notice of Compliance) Regulations, Justice Hughes of the Federal Court of Canada found Canadian Patent No. 2,173,457 (the ’457 Patent) to be invalid, and accordingly dismissed an application by Merck which sought to prohibit the Minister of Health from issuing a notice of compliance to Pharmascience, allowing Pharmascience to market its generic version of the medicine finasteride for treating male pattern baldness.

Claim 5, a “Swiss-type” claim, was the only claim at issue and was construed by the court as claiming “the use of finasteride for the preparation of a medicament adapted for oral administration useful for the treatment of male pattern baldness in a person and wherein the daily dosage is about 1.0mg.”Although this claim in the corresponding European patent had been upheld by the UK Court of Appeal, counsel for Pharmascience, Stikeman Elliott LLP, was successful in invalidating claim 5 on two grounds: double patenting and anticipation.

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Court disallows expert disbursements in patent case

Counsel should be prudent in determining when it is appropriate to retain experts and have them incur costs on your client’s behalf.

In a decision determining allowable costs of the respondent Pharmascience in a proceeding discontinued by the applicant Sanofi-Aventis under the Patented Medicines (Notice of Compliance) Regulations, an assessment officer sought to determine whether expert witness disbursements totalling $17,000 could be claimed in the circumstances.

The three part test for the allowance of expert disbursements requires that:

(1) The disbursement for an expert must be prudent and reasonable in the circumstances existing at the time it was incurred;

(2) The terms of engagement must not constitute a blank cheque; and

(3) The extent of reliance on the expert by the trial judge should be a factor.

As per the third part of the test, disbursements cannot be disallowed based solely on the fact that a matter is discontinued (and thus never heard by a judge), as this would require hindsight. However, they must be reasonably incurred in the circumstances.In this case, a majority of the experts’ fees were incurred prior to the initial case management conference to set a schedule for the exchange of evidence, and were not even alleged to have been incurred in support of an early motion to dismiss. As a result, given that the ultimate burden of proof rested with the applicant Sanofi, the experts’ fees were found to be premature and therefore not allowed.

Federal Court examines "good faith" in patent prosecution

In Lundbeck Canada Inc.  v. Ratiopharm Inc., 2009 FC 1102 (F.C. Nov. 23, 2009), the Federal Court provided guidance on the requirement to deal in good faith with the Patent Office during patent prosecution. Since 1996, s. 73(1)(c) of the Patent Act has required that applicants reply in “good faith” to any request by a patent examiner. However, until now the scope of that requirement had been somewhat uncertain.

Justice Mactavish took this opportunity to clarify that an applicant must not provide information that could mislead the Patent Office. The case involved a patent for a combination of drugs used in treating dementia. To meet the requirement of non-obviousness, it was necessary to show that this combination of drugs led to a result that was new and unexpected in light of the state of knowledge of researchers at the time. Lundbeck, in support of the patent, indicated to the patent agent that prior articles taught that this combination was ineffective. However, Lundbeck did not point out that one significant study (of which they were aware) stated that only certain subsets of the combinations in question were ineffective, but that others could be. Mactavish J. held that the omission of this information was misleading and thus a breach of the duty of good faith. In addition, Mactavish J. equated this obligation to the Patent Office with obligations to the court in an ex parte proceeding.

Federal Court Upholds Constitutionality of Drug Data Protection Rules

In Canadian Generic Pharmaceutical Association v. The Minister of Health et al., (2009) FC 725, Justice Mandamin of the Federal Court upheld the constitutional validity of the data exclusivity protection rules found in the Food and Drug Regulations (Data Protection Rules). The Data Protection Rules were enacted pursuant to subsection 30(3) of the Food and Drugs Act in 2006 and provide new drugs with a guaranteed minimum period of market exclusivity of eight years. The Data Protection Rules also provide that a generic manufacturer, seeking to copy an innovative drug, will not be permitted to file a new drug for a period of six years. The Federal Court found the enactment of the Data Protection Rules to be a valid exercise of the federal power to regulate trade and commerce in that the Data Protection Regulations are “adjunct” to the federal regulatory scheme for marketing drugs in Canada and bring the approval of generic drugs into conformity with Canada’s data protection obligations in NAFTA and the World Trade Organization's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

Amazon appeals rejection of its "One Click" patent

On September 3, 2009, Amazon.com filed an appeal to the Federal Court in respect of the decision of the Commissioner of Patents to refuse to grant a patent pursuant to Canadian Patent Application No. 2,246,933 (the '933 Application).

The '933 Application involved the use of "cookies" (which save an IP address and personal information) to allow an Internet shopper to click just once to purchase an item of interest. Amazon.com claimed that their cookies were a new and non-obvious method to hasten and simplify online ordering. The Examiner had initially rejected the application on the grounds that the claimed invention was obvious (and therefore not inventive) and also that the application sought to patent unpatentable subject matter.

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Door still open for Competition Act challenges to patent settlement agreements

In June 2009, the Federal Court of Appeal (FCA) upheld the Federal Court of Canada's decision in the patent infringement case of Laboratoires Servier v. Apotex Inc., ([2008] F.C.J. No. 1094, aff'd [2009] FCA 222). In its decision, the Court dismissed a counterclaim by the defendant, Apotex, alleging that the settlement agreement leading to the relevant patent's issuance constituted a conspiracy to lessen competition and an offence under Canada's Competition Act. Although in this case the Court held that the defendant had failed to support its allegations with sufficient evidence, it specifically contemplated that under the right circumstances, a patent settlement agreement might amount to a conspiracy under the Competition Act.

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CIPO announces three new Patent Prosecution Highway programs

The Canadian Intellectual Property Office (CIPO) has entered into agreements with the Japan Patent Office(JPO), the Danish Patent and Trademark Office(DKPTO) and the Korean Intellectual Property Office (KIPO) to launch two-year pilot Patent Prosecution Highway (PPH) programs, each commencing October 1, 2009.

These pilot programs can be compared to the PPH pilot program between CIPO and the United States Patent and Trademark Office initiated on January 28, 2008 and extended for a period of two years ending on January 28, 2011.

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Federal Court of Appeal decision clarifies effects of partial waiver of privilege

On January 30, 2009, the Federal Court of Appeal (FCA) clarified the circumstances under which a partial waiver of privileged material can result in an implied complete waiver of privilege. The FCA's decision in Merck & Co. Inc. et al. v. Apotex Inc. et al. (2009 FCA 27) was an interlocutory decision in a patent infringement case.

The issue arose in the context of examination for discovery in respect of the patent dispute, which relates to the manufacture of a drug called lovastatin. This drug is produced by certain micro-organisms, and the production of lovastatin from the Aspergillus terreus micro-organism is covered by a Canadian patent owned by the plaintiff, Merck & Co. Inc. (Merck). Merck had apparently carried out some tests, for the purpose of the litigation, to improve its understanding of the process used by the defendants. As the tests were conducted for the purpose of the litigation, information about the tests qualified for protection under the litigation privilege. The purpose of the litigation privilege is to create a zone of privacy in relation to pending or apprehended litigation, to facilitate investigation and preparation of a case for trial by the adversarial advocate.

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Canada-U.S. Patent Prosecution Highway pilot program extended

The Canadian Intellectual Property Office (CIPO) and the United States Patent and Trademark Office (USPTO) have extended the pilot Patent Prosecution Highway (PPH) program for another two years until January 28, 2011. The PPH program, begun on January 28, 2008, provides for significantly accelerated examination of patent applications by CIPO if examination work has already been conducted at the USPTO.

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Bilski applied: The start of the ripple effect

As reported in our April 2008 IP Update, the United States Court of Appeals for the Federal Circuit issued an en banc Order in the spring of 2008 that required the full Court to rehear the appeal of In Re Bernard L. Bilski and Rand A. Warsaw.

In U.S. Court of Appeals practice, an en banc rehearing is typically granted only where a case is considered unusually important.  The U.S. Court of Appeals for the Federal Circuit had expressly raised the possibility of overruling its own prior decisions on business-method patents, namely State Street Bank & Trust Co. v. Signature Financial Group Inc., 149 F.3d 1368 (Fed. Cir. 1998) and AT&T Corp. v. Excel Communications, Inc., 172 F.3d 1352 (Fed. Cir. 1999).

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The impact of new material contract filing requirements on existing licenses to use patents or trade name

As a consequence of the new amendments to National Instrument 51-102 Continuous Disclosure Obligations coming into force on March 17, 2008, a reporting issuer will have to disclose on SEDAR any new or existing “franchise or licence or other agreement to use a patent, formula, trade secret, process or trade name” not entered into in the ordinary course of business. Further information about this amendment can be found in Stikeman Elliott LLP’s article on “New material contract filing requirements in force March 17, 2008 and impact on existing material contracts”.