Wednesday, September 17, 2014

What is "the" Inventive Concept?

Alcon Canada Inc v Apotex Inc 2014 FC 791 Kane J
            2,606,370 / travoprost formulation / TRAVATAN Z / NOC

The ‘370 patent relates to formulations of travoprost, an anti-glaucoma drug, with a non-conventional preservative system, based on zinc ions. The motivation for the invention was to avoid the potentially harmful effects on the cornea of conventional preservatives such as benzalkonium chloride (BAK). In this NOC proceding Apotex successfully attacked the ‘370 patent as being obvious, though a inutility attack failed.

The conclusion that the claims at issue were obvious ultimately turned on the facts. One of Alcon’s own prior art products, the tear replacement product Systane Free, also used a non-conventional preservative system which very similar, even in the specific components, to the claimed formulation [236], [342]. The evidence accepted by Kane J was to the effect that it would have been obvious to extend the same preservative system to travoprost, given the acknowledged motivation to avoid the use of BAK [348].

Inventive Concept
There is, however, one aspect of Kane J’s opinion which I find disquieting. A substantial part of the obviousness analysis concerned the identification of the inventive concept [163]-[197], including extensive testimony from the experts, and a thorough parsing of the specification. (Kane J noted that because the claims were to a bare chemical formula, the inventive concept cannot be identified without looking at the specification [180], which, in my view, is clearly correct.) Kane J’s ultimate identification of the inventive concept drew heavily from elements identified in the specification itself. 

None of this analysis is objectionable in principle; certainly, expert evidence and the specification should be considered in assessing the putative inventive contribution. But the overall tenor of the analysis suggests a focus on identifying “the” inventive concept from the specification, which then becomes the focus of the obviousness analysis. This would be problematic in two respects. First, by focusing on the specification, this analysis could turn the obviousness inquiry into a subjective analysis, in which the question is whether the inventive contribution identified by the applicant is obvious. This is contrary to the principle that the obviousness analysis is objective. It would be evidently be wrong to hold an invention to be non-obvious because the applicant asserts in the specification that it is a work of genius, but it is also wrong to hold a patent obvious because the contribution identified by the applicant turns out to be obvious. For example, the inventor may believe that she has discovered a whole new class of compounds with unexpected properties, and she has claimed both the genus and some particular species. It may turn out that the inventor had overlooked some relevant prior art, and in fact it was obvious or anticipated that some members of the class had the properties in question, but it was nonetheless surprising that the particular claimed species had those properties. The question is not whether what the inventor thought she had contributed is truly inventive; it is whether what she actually contributed is inventive: see Nichia Corporation v Argos Ltd[2007] EWCA Civ 741 at [14]-[19].

Second, as a corollary, it would be wrong to focus on identifying “the” inventive concept, which is thereafter the sole focus of the obviousness analysis. If a putative inventive concept is examined and found to be wanting, the objective nature of the obviousness analysis makes it necessary to ask whether some other aspect of the invention might be inventive. So, if an invention claims a solution to a problem, it may be non-obvious either because the solution was non-obvious, or because the problem itself was non-obvious; it is necessary to ask both questions, not just one. As the EPO Guidelines explain, the question is the formulation of the objective technical problem:

The objective technical problem derived in this way may not be what the applicant presented as "the problem" in his application. The latter may require reformulation, since the objective technical problem is based on objectively established facts, in particular appearing in the prior art revealed in the course of the proceedings, which may be different from the prior art of which the applicant was actually aware at the time the application was filed. In particular, the prior art cited in the search report may put the invention in an entirely different perspective from that apparent from reading the application only. Reformulation might lead to the objective technical problem being less ambitious than originally envisaged by the application.

It is true, of course, that the WindsurfingPozzoli approach as approved by the SCC in Sanofi 2008 SCC 61 [67] refers to identification of the inventive concept as one of the steps, but the inventive concept is by no means the focus of the analysis. Indeed, the test is very casual about the inventive concept: “Identify the inventive concept of the claim in question or if that cannot readily be done, construe it.” That is, don’t worry too much about the inventive concept – the crucial question [67(4)] is whether the differences between the state of the art and the invention as claimed were obvious.

This is a long-winded discussion for a point that probably had no real effect on the result, but there was a similar problem with Kane J’s analysis in the earlier Travoprost case, 2014 FC 699 discussed here. I am concerned that this may signal a new trend that has the effect of improperly turning the obviousness analysis into a subjective inquiry, in the same way that the promise doctrine has made utility a subjective inquiry.

Turning then to utility, the issue turned entirely on the construction of the promise. Apotex argued that the patent promised minimization or reduction of side effects [352], while Alcon argued that the utility is simply to be useful and to meet the USP preservative efficacy testing standards [351]. Like O’Keefe J in the recent decision Dow v NOVA decision, 2014 FC 844 (blogged here), Kane J relied both on the leading FCA decision, Plavix 2013 FCA 186, for the proposition that the promised utility must be explicit [408], and that “not every statement of advantage in the specification rises to the level of promised utility” [356], and also on Zinn J’s statement in Fournier / Fenofibrate 2012 FC 741 (discussed here), for the proposition that the focus should be on the claims [360]. In light of this jurisprudence, and noting in particular the absence of any promise of reduced side effects in the claims [416], Kane J held in favour of Alcon’s interpretation of the promise [417]. This construction of the promise effectively decided the issue of utility in favour of Alcon, because Apotex’s argument was focused entirely on the promised utility as Apotex had construed it [427], and did not address the issue of demonstrated or soundly predicted utility from the perspective of “simple utility” [440]. The unchallenged evidence led by Alcon was therefore sufficient to establish utility on the basis of sound prediction [446].

Note: see also 2014 FC 699 in which the claims of a different patent, 2,129,287, were to the use of travoprost for the treatment of glaucoma, as opposed to the travoprost formulation. Kane J held the claims of the '287 patent were obvious and anticipated, though the utility attack also failed: see here.

Tuesday, September 16, 2014

Commissioner Not to Be Named as a Party in Appeals from Refusal of Application

Blair v Attorney General of Canada, 2014 FC 861 Strickland J
            Application 2,286,794 / “SUBWAY TV MEDIA SYSTEM”

The ‘794 application claims a subway car with video screens mounted at the junction of the sidewall and ceiling [6]. The Commissioner rejected the claims as being obvious, and Strickland J, applying a deferential standard of review to the Commissioner’s application to the facts of the (correct) obviousness test, affirmed.

The most interesting aspect of this decision is Strickland J’s holding that the Commissioner should not be named as a respondent in the appeal [42]. This seems to be a departure from past practice, though as Strickland J pointed out, in cases such as Harvard College v Canada (Commissioner of Patents), 2002 SCC 76, and The Attorney General of Canada and The Commissioner of Patents v, Inc 2011 FCA 328, the issue of the Commissioner being named as a party does not appear to have been disputed [49]. I don’t have a good sense of what the practical implications of this holding will be, but it was Attorney General which sought to have the Commissioner removed, so presumably the government is satisfied that it can properly conduct such appeals without the participation of the Commissioner.

Monday, September 15, 2014

Janssen Prima Facie in Concept of STELARA Injunction

Abbvie Corp v Janssen Inc / Contempt 2014 FC 863 Brown J
2,365,281 / anti-IL-12 antibodies / STELARA

After Janssen’s STELARA had been held to infringe AbbVie’s ‘281 patent (2014 FC 55, blogged here), Hughes J granted an injunction, with important exceptions, prohibiting Janssen from making, selling or promoting STELARA (2014 FC 489). In this decision, Brown J has held that Janssen is prima facie in contempt of that injunction. Brown J’s interpretation of the injunction strikes me as strict, but not unreasonable. If there is a general lesson here, it is perhaps that a limited injunction may be a better outcome for the defendant than a complete injunction, but compliance may be less straightforward, and it seems that the courts will not be inclined to give the infringer much leeway.

As discussed here, STELARA is used to treat psoriasis (as well as psoriactic arthritis). AbbVie sells HUMIRA, a competing product for psoriasis treatment, but HUMIRA has a different mechanism of action from STELARA. For most patients, the two drugs are equally effective, but for some patients STELARA may work when HUMIRA does not. Consequently, the injunction granted by Hughes J permitted Janssen to continue selling STELARA, but not to continue promoting its use [18]:

[2] The injunction set out in paragraph 1, above, shall not prohibit Janssen from:
. . .
B. doing any act solely intended to provide STELARA for the treatment of psoriasis to a person who has not previously received STELARA for that purpose, provided that such person’s own physician has determined that such treatment is necessary for that purpose.

Provided that Janssen shall not communicate directly or indirectly with any such physician for the purpose of influencing the decision to initiate or continue such treatment.

[3] For greater certainty and without restricting the generality of the injunction provided herein:
A. Janssen shall not, directly or indirectly, detail, advertise, promote or make any representations or claims, in Canada, respecting the use of STELARA for the treatment of psoriasis;
. . .

[4] For greater certainty, and without restricting the generality of the injunction provided herein:
. . .
D. Janssen’s Medical Information Group may respond to enquiries about STELARA;

After the injunction was granted, Janssen anticipated that its sales representatives (“detailers”) who had previously been marketing STELARA to dermatologists would be asked about STELARA by those physicians. Janssen accordingly prepared a “script” to be used by detailers in responding to such inquiries. The script was to be proactively delivered by detailers (apparently by reading it verbatim), on their next visit with the dermatologist [30].

The script referred to the litigation, and stated that detailers could not provide much information, though information could be provided by Janssen’s Medical Information Group [29]. The script also contained the following contentious language:

It is important to note that this court order does not impact your ability to prescribe STELARA® to your patients. The product itself has not changed and there are no changes from a safety and efficacy standpoint. The court order does not impact the BioAdvance® program.

(The BioAdvance program helped patients secure funding to cover the cost STELARA.)

After a complaint by AbbVie, that language was changed to the following [33]:

It is important to note that this court order permits your existing Stelara patients (those that have already received at least one injection of Stelara) to continue to receive Stelara. Patients who have not previously received Stelara for the treatment of psoriasis may receive Stelara if you determine that Stelara is necessary for the treatment of their psoriasis.

The product itself has not changed and there are no changes from a safety and efficacy standpoint. The court order does not impact the BioAdvance® program.

Brown J held that all of these statements constituted a prima facie contempt [59]. He held, in effect, that whether or not these statements were true [68], there were representations that were promotional and marketing in nature because they sought to influence the physician’s treatment decisions [67], contrary to the terms of the injunction. The fact that Janssen took a proactive approach and that it was the detailers that delivered the message, also appears to have been important [63].

While Brown J’s decision strikes me as a reasonable interpretation of the terms of the injunction, I wonder how Janssen should have handled the anticipated inquiries by dermatologists. It is clear that the sales representatives should not have broached the subject at all. Since Janssen’s Medical Information Group was expressly permitted to respond to enquiries about STELARA, presumably, if asked about STELARA, a sales representative would be permitted to instruct a dermatologist to call the Information Group. But what would the Information Group be permitted to say? Would the statements made in the script constitute contempt if made by the Information Group in response to a physician inquiry? It seems to me they would still be representations intended to influence the physician’s prescribing practices, no matter who makes them. While it is true that Hughes J’s order was intended to stop Janssen from promoting STELARA, it was also clearly intended that dermatologists could and should prescribe STELARA when medically necessary: As Hughes J said:

[66] I propose to have faith in the integrity of our medical profession in Canada. New patients may be prescribed STELARA, provided that such patient's own physician has determined that prescribing STELARA is necessary for treatment of the patient's psoriasis. I will not require that the physician sign a form or check off a box.

Presumably someone should be permitted to tell physicians that they can prescribe STELARA if necessary, but it is not clear to me how that information can be communicated, and by whom.

Friday, September 12, 2014

"Scintilla" Standard for Utility Applied

The Dow Chemical Co v NOVA Chemicals Corp 2014 FC 844 O'Keefe J
            2,160,705 / film-grade polymers / ELITE SURPASS

In this action, O’Keefe J found Dow’s ‘705 patent related to film-grade polymers to be valid and infringed by Nova. The result turned largely on the evidence, and no novel points of law were raised. The decision does exemplify a modest approach to the construction of the promise of the patent – indeed, O’Keefe J held that there was no promise at all, and the “scintilla” standard for utility should be applied – and the treatment of the inventive concept of the patent in the context of obviousness is also of some interest.

Claim Construction and Infringement
Dow’s ‘705 patent relates to film-grade polymers, used to make products such as plastic bags. Toughness is a desirable property of such films, and the patent taught that a blend of two different types of polymers would produce compositions with good properties. The claims were to a polymer composition, comprising a blend of homogeneously branched polymers (with specified properties) and heterogeneously branched polymers (also with specified properties).

A large part of the case is taken up with claim construction. Dow prevailed on all points. No new points of law were raised. O’Keefe J applied the established principle of claim consistency, that is, the same words are given the same meaning throughout the claims [45]. He also adopted the standard interpretation of the term “comprising,” as meaning "including but not limited to" [54]. This is particularly welcome in light of the FCA’s disappointing holding in Purdue Pharma 2011 FCA 132 that “comprising” does not have a standard meaning (see here).

O’Keefe J then held that NOVA’s product infringed. A variety of issues were raised in the infringement context, but these were all resolved either on the basis of the claim construction, or on the facts.

Turning to validity, the key question with respect to utility, not surprisingly, was the construction of the promise of the patent. While O’Keefe J’s opinion does not make new law, it is noteworthy in not only construing the promise modestly, but in expressly holding that there is no promise at all, so that the “scintilla” standard is applicable.

The key phrase in the specification was [185]:

Surprisingly, we have now discovered compositions useful in films and molded parts having synergistically enhanced physical properties, which compositions comprise . . .

The question was whether this constituted a promise of “synergistically enhanced physical properties.” O’Keefe held it did not. He quoted the leading FCA decision, Plavix 2013 FCA 186, but he relied particularly on Zinn J’s statement in Fournier / Fenofibrate 2012 FC 741, discussed here. As O’Keefe J accurately summarized it:

[183] The Fournier case and other cases tell us that we should look for the elevated promise or claimed utility in the claims of the patent. Further, any statement found elsewhere should be taken as a mere statement of advantage unless the inventor clearly and unequivocally states that it is part of the promised utility of the invention.

O’Keefe J concluded that the statement in question was not a promise; nor was there an promise anywhere else in the patent [192]. This is significant, because the phrase in question is the kind of statement which might well have been construed as being a promise under a more aggressive approach. In my view, the the introductory word “surprisingly” makes it clear that this statement is intended to identify why the invention is non-obvious, and not to make a promise of utility. However, it should be emphasized that O’Keefe J’s conclusion that the patent did not make any promise was not a matter of law. As is standard in construing the promise, extensive evidence was heard from experts, and this evidence was reviewed at length by O’Keefe J.

O’Keefe J then held that:

[195] Since I have found that the inventors did not make an explicit promise of a specific result, the test for utility will be a “mere scintilla” of utility.

This is significant, because in prior cases, even post-Plavix, which take a modest approach to the construction of the promise, the general practice has been to assess utility against a modestly construed promise, rather than expressly holding that the scintilla standard applies.

This conclusion with respect to the promise of the patent was determinative of utility, as all of NOVA’s arguments that the invention lacked utility turned on its claim of an enhanced promise [197].

Overbreadth and Anticipation
Attacks based on overbreadth and anticipation were rejected largely on the facts.

One point of some interest relates to the prior art Garza patent. As noted, the 705 patent claimed a blend of homogeneously and heterogeneously branched polymers. As O’Keefe J explained

[214] The Garza patent provides the reader with a broad description of compositions and asks the reader to pick polymers from a number of broad categories to make the blend.

[215] Indeed, by making a choice of certain polymers, a person would obtain a composition that was outside the claims of the ‘705 Patent.

O’Keefe J held that this did not make the Garza patent anticipatory, because “the jurisprudence explicitly states that the prior patent must disclose subject matter that if performed would 'necessarily result in infringement of that patent.' In this case, you could perform the Garza patent and not arrive at the invention of the ‘705 Patent” [217]. This conclusion is entirely in accordance with the established jurisprudence cited by O’Keefe J, and it would not be in the least noteworthy, but for Kane J’s recent holdings to the contrary (see here and here).

O’Keefe J’s conclusion that the claimed invention was not obvious turned largely on the facts, and on his identification of the inventive concept:

[244] In my view, the inventive concept of the ‘705 Patent is that you can use the SHC [of strain hardening coefficient] characteristic of the polymer used as component A in the claims of the ‘705 Patent, to predict that the composition would have the desired characteristics.

This statement of the inventive concept is interesting, as it is very far from the mere paraphrase of the claims which we often see. My own view, stated in previous posts, is that it is normally necessary to look to the disclosure, and indeed to the common general knowledge, to properly identify the inventive concept. It seems that this is what O’Keefe J has done. Unfortunately, it is not clear, at least to me, how he arrived at this inventive concept. My sense is that it turned on the expert evidence (see eg [261], [269]). I would consider this to be sound, but it would have been useful if O’Keefe J had elaborated on how he had arrived at this statement of the inventive concept.

There are a couple of other points of interest. One is that while O’Keefe J adverted to the controversial (in my view) proposition that so-called secondary factors such as commercial success should be given less weight in assessing obviousness [252], he nonetheless said that “one cannot ignore”the fact that NOVA had designed the infringing product in response to Dow’s patented product [252]. In my view, he was right to do so: see Secondary” Evidence of Obviousness is Not Secondary, (2012) 28 CIPR 279.
On another point, O’Keefe J held that an expert witness for NOVA, Dr Speed, has applied the wrong standard in his analysis because in response to the question as to whether the notional skilled work “has an imagination,” Dr Speed replied “I expect so.” [240]. O’Keefe J held this was inconsistent with the Beloit description of the “notional person” as a “technician skilled in the art but having no scintilla of inventiveness or imagination” [241]. While O'Keefe J was right as a matter of law, I have considerably sympathy for Dr Speed, who was tripped up by a conceptual problem with the standard obviousness analysis. On the one hand, it purports to be an essentially factual inquiry as to whether a person with certain characteristics – in this case at least an undergraduate degree in chemical engineering or a related field, and two years experience – would in fact have arrived at the invention without difficulty. This is nominally a factual inquiry, which turns on expert evidence. And yet, it is clear enough that no actual skilled person with an engineering degree and two years experience would be without any scintilla of imagination. Engineering, and science generally, are not fields in which automata can keep a job for two years, except perhaps as bottle washers. Dr Speed’s assessment that a skilled person, as defined in this case, would have some imagination, was no doubt correct as a matter of fact, but it was not right as a matter of law – which highlights the artificiality of the inquiry. 
Dow was successful in establishing that its patent was valid and infringed. O’Keefe J allowed Dow to elect between an accounting and damages [283.2], without making any comment. An accounting is discretionary, and while it was for a long time allowed routinely, some recent cases have suggested that it should not be granted as a matter of course. O’Keefe J’s willing to grant an accounting so readily may be significant, though it may simply be that the request was not opposed.

Thursday, September 11, 2014

Cause of Action for Class Action for Excessive Prices due to Invalid Patent

Low v Pfizer Canada Inc, 2014 BCSC 1469

There is an interesting policy question as to whether a patentee should be somehow held accountable for higher prices charged for a product that is protected by a patent which is ultimately held to be invalid. The basic argument in favour of such liability is that if the patentee can retain the excessive profits made between the time of grant and the time the patent is held invalid, it will have substantially benefited from patent protection without having delivered a new, useful and non-obvious invention which is the quid pro quo for patent exclusivity. Some form of liability for invalid patents will provide an incentive for the patentee to take care to ensure that any patents it does obtain and enforce really are valid. The basic counter-argument, as I see it, is that patent examination already provides substantial protection against the issuance of invalid patents, and liability on top of that protection would create uncertainty that would chill legitimate use of the patent system.

This question is raised in class action proceedings in Low v Pfizer. Pfizer’s patent for Viagra has been held to be invalid: Pfizer v Apotex 2014 FCA 13 (here). This implies that until the patent was invalidated, and Pfizer lowered its prices to match those of the generics, the price of Viagra in Canada was higher than it would have been had the patent never been granted. The plaintiff in Low v Pfizer seeks to certify a class action against Pfizer to recover the loss to the class members due to the higher price and seeking disgorgement of Pfizer’s profits under a waiver of tort theory.

The sole issue in the application was whether the plaintiff’s claim discloses a cause of action for the purposes of s. 4(1)(a) of the BC Class Proceedings Act [3]. The threshold is low [54]; the test is satisfied unless, assuming all facts pleaded to be true, it is “plain and obvious” that the plaintiff’s claim cannot succeed [20].

Three causes of action were pleaded [18]:

i. unlawful interference with economic relations;
ii. waiver of tort; and
iii. unjust enrichment.

Smith J held that the first and third points disclosed a cause of action for the purposes of certification, but that it is plain and obvious that a claim in waiver of tort could not succeed [72].

With respect to unlawful interference with economic relations, the SCC in Bram 2014 SCC 12, [86], held that the defendant’s means are unlawful if “they support a civil action for damages or compensation by the third party, or would do so except for the fact that the third party did not suffer any loss as a result of the defendant's acts” [(quoted at [41]). Smith J held that in this case this requirement was “arguably” [44] satisfied by the patentee’s potential liability to the generic under s 8 of the NOC Regulations.

Smith J pointed out that this tort has an intent element, which may be difficult to establish at trial [52]-[53]. Nor is it entirely clear that this claim will succeed as a matter of law, as there is some question as to whether the statutory cause of action will support this tort. Smith J stated that “the claim now advanced arguably falls precisely into the category of “parasitic” claims referred to in Bram” [44, my emphasis], and similarly he was “not satisfied that the requirement in Bram that there be a ‘civil action’ available to the third party necessarily excludes a purely statutory cause of action” [49, my emphasis]. I take this to mean the point is arguable as a matter of law.

One implication of this analysis is that this cause of action can only be raised against pharmaceutical patentees. An invalid granted patent in any field of technology can result in artificially high prices and exactly the same kind of harm to consumers that is alleged in Low, but because only pharmaceutical patentees are liable under s 8, other patentees do not face the statutory liability to third party that would allow this type of “parasitic” action. Whether or not recovery against patentees for losses caused by invalid patents is desirable from a policy perspective, as a matter of policy and principle, it is troubling that substantively the same complaint could be tortious or not depending on the field of technology. Also, the liability under this cause of action would be limited to period for which NOC liability arises, which is only the period starting when the generic is placed on “patent hold,” and not the entire period for which excessive prices were charged [43]. To the extent that the policy rationale for patentee liability for invalid patents is to ensure that patentees have an incentive not to abuse the patent system, this temporal limitation on recovery, which is a direct consequence of the parasitic nature of the action, is unsound.

Smith J also held that the pleadings disclosed a cause of action in unjust enrichment. This cause of action, if established, would not be confined to pharmaceutical patentees, nor would it be limited to the period during which the generic would have been subject to a statutory stay under the NOC Regulations. Again, even though Smith J held that a cause of action was disclosed for the purposes of certification, it is not clear that this cause of action will be ultimately be sustained as a matter of law. The key issue is whether there was a “juristic reason” for the patentee’s enrichment, and Smith J noted that “The fact that the defendant was operating under statutory rights or authority will usually, but not necessarily, provide a juristic reason” [80]. Whether reliance on the patent system provides an adequate juristic reason will no doubt be a central issue on the merits.

Smith J also noted that “The question of whether Pfizer’s reliance on the patent provides a juristic reason may involve a fact specific inquiry into Pfizer’s knowledge and intention” [84]. This will involve an investigation into the patentee’s good faith and intent [84]-85].

Thus, either of the certified causes of action, if sustained as a matter of law, will lead to a fact specific inquiry into the patentee’s subjective motivation and intent. From a policy perspective, this has two drawbacks. One is that the prices charged under an invalid patent are excessive regardless of the patentee’s intent, and strict liability would provide a strong incentive for patentees to take care that the patents are valid. Another problem is that the fact specific nature of the inquiry means that the litigation will be expensive and protracted. On the other hand, despite these drawbacks, an intent-based approach may be necessary to prevent a chilling effect on legitimate use of the patent system.

This litigation raises a number of very difficult legal and policy problems, from the high level question of whether such liability is sound at all, to the details of how it should be implemented if it is indeed desirable. This will be interesting and important litigation.

Wednesday, August 27, 2014

Construction of the Inventive Concept is Determinative of Obviousness

Alcon Canada Inc v Apotex Inc 2014 FC 699 Kane J
            2,129,287 / travoprost / TRAVATAN Z / NOC

Patent law is a technical area of law, and no doubt always will be, but at times it seems that the conceptual apparatus we deploy make the field even more complex than necessary. In this case, the concepts of selection patents and the inventive concept have generated some problematic analysis.

Travoprost is the isopropyl ester of (+)-fluprostenol [8]. It is a synthetic analogue of PGF, which is a naturally occurring prostaglandin. The claims of the ‘287 Patent at issue (12, 27, 35 and 46) relate to the use of a therapeutically effective amount of travoprost for the treatment of glaucoma and ocular hypertension [123]. (The claims are all to a relatively small class of compounds encompassing travoprost – none relates solely to travoprost – but nothing turns on this.) The claims were held invalid as being anticipated and obvious, but an attack based on lack of utility failed.

There was considerable dispute as to whether the ‘287 patent was a selection patent over European Patent application EP 0 364 417. Kane J held that it was not a selection patent [152], but that even if it was the result would have been the same for all three grounds of attack [153]. I have suggested previously that the concept of selection patents generates more heat than light, and should probably be abandoned. Kane J’s Travoprost decision seems to me to reinforce this view, but given that the selection patent issue did not make any difference, I will refrain from further comment on this aspect of the decision. It is in any event clear that the ‘417 application, which discloses the use of a large class of prostaglandin derivatives, encompassing travoprost, for the treatment of glaucoma and ocular hypertension, was highly relevant prior art.

Kane J held the ‘287 patent to be anticipated in light of the ‘417 application, despite the fact that the travoprost was nowhere specifically disclosed in the ‘417 patent, on the basis that the compounds disclosed by the ‘417 patent encompassed travoprost [371].  In my view, Kane J’s holding with respect to anticipation is clearly wrong. It is the same error as was evident in her Valganciclovir decision, 2013 FC 718, as discussed here. I expect that in due course Kane J will be corrected by the FCA on this point, though not soon, as both Valganciclovir and Travoprost are NOC applications so cannot be appealed by the patentee. Kane J did state that “[a] person carrying out the prior disclosure in the ‘417 would, on a balance of probabilities, infringe the claims at issue of the ‘287" [371]. However, I can see no support in her reasons for this proposition. The ‘417 patent encompassed billions of compounds [269], and, as just noted, travoprost was not specifically described or made. Nothing in Kane J's decision explains why a person carrying out the disclosure of the ‘417 patent would make travoprost rather than one of the other billions of compounds encompassed by the disclosure.

With respect to utility, Apotex argued that the patent promised both greater inter-ocular pressure reduction and reduced side effects as compared with the compounds of the ‘417 application [202], [205]. Alcon argued that the patent promised only that travoprost would be useful or therapeutically effective for the treatment in humans, without any promise that it would be better than the compounds of the ‘417 patent [188]. Kane J held in Alcon’s favour [241]. She emphasized in particular Zinn J’s statement in Fournier / fenofibrate (NOC) 2012 FC 741 [126] that a utility not expressed in the claim portion of the specification “should be presumed to be a mere statement of advantage unless the inventor clearly and unequivocally states that it is part of the promised utility" [181-82], [244]. The claims in question were to the use of travoprost in the treatment of glaucoma and ocular hypertension, without any mention of reduced side effects [185], and this was construed as the promise. Given this modest promise, utility was held to be soundly predicted.

Perhaps the most interesting part of the decision relates to obviousness. The ‘287 patent asserted [70] that

It has now been unexpectedly found that [the claimed compounds] show significantly greater IOP reduction than the compounds of [the ‘417 application] while having a similar or lower side effect profile.

Kane J held that the patent was obvious whether or not it was in fact true that the properties of the claimed compounds were unexpected. This is because she found that the inventive concept was simply that travoprost will be therapeutically effective in the treatment of glaucoma and ocular hypertension [461, 167], and it is the inventive concept, and not the disclosed properties of the invention, which are the focus of the obviousness analysis [463]. (See similarly [468-69].) Because the ‘417 application disclosed that all the disclosed compounds were effective in the treatment of glaucoma and ocular hypertension, and the compounds of the ‘287 patent were encompassed by the ‘417 application, it follows straightforwardly that it was obvious that the compounds of the ‘287 patent would be effective in the treatment of glaucoma and ocular hypertension.

This conclusion is striking. On Kane J’s holding, even if the claimed compounds were in fact substantially more effective than the prior art, and had fewer side effects, and no skilled person could have predicted this, the claims would still be obvious. In my view, this conclusion is wrong because Kane J’s identification of the inventive concept is wrong. In assessing the inventive concept Kane J focused on the fact that the claims did not refer to the purported advantages such as increased efficacy and fewer side effects [167], but, as the SCC has pointed out “The inventive concept of the claims is not readily discernable from the claims themselves. A bare chemical formula in a patent claim may not be sufficient to determine its inventiveness” Sanofi 2008 SCC 61 [77]. As the Court’s example indicates, it is the properties of a new chemical compound that will determine whether it is obvious, but these properties will not be set out in the claims, because if the compound is new, the patentee is entitled to claim the compound itself. For that reason it is necessary to look to the disclosure to identify the inventive concept. (See also COMBIGAN 2012 FCA 308 , blogged here.) It is true that in this case, the claims are to the use of travoprost, not to the compound itself, but the principle is the same: "[p]atents are essentially about information as to what to make or do" Aerotel [2006] EWCA Civ 1371, Jacob LJ [32]), and as Lord Hoffmann said in Biogen [1996] UKHL 18, [14], "[w]henever anything inventive is done for the first time it is the result of the addition of a new idea to the existing stock of knowledge." The quid pro quo for a patent is not the thing claimed, but the information disclosed in the specification: Consolboard [1981] 1 SCR 504, 517. Consequently, it is the information in the patent that makes the invention obvious or not, and information is found in the disclosure. The claims merely define the scope of the patent exclusivity.

I cannot criticize Kane J too much for this, as the concept of the “inventive concept” has been cloudy from the outset: the SCC in Sanofi could not even decide whether it is necessary to identify the inventive concept in order to assess obviousness. As I have suggested before, I am increasingly inclined to think that the European problem-solution approach would provide a more structured way of identifying the inventive concept for the purposes of the obviousness analysis. The problem in this case was clearly to find a prostaglandin analogue with improved properties, and the question should be whether travoprost solved that problem, ie whether it in fact had improved properties.

With that said, Kane J’s decision suggests that travoprost might well have been held to be obvious even if the inventive concept had included its properties. In particular, the ‘417 application disclosed utility for treating glaucoma, the “Woodward” prior art suggested improved properties [418], [435], [472], and the combination might have made the improved properties of the ‘287 patent obvious. That is of course just speculation without an express finding to that effect; I only want to be clear that I am not saying that the ‘287 patent was necessarily non-obvious, but only that the analysis was not properly focused.

Friday, August 15, 2014

Reasonable Royalty in CSIRO v Cisco

Today I have a guest post on Professor Tom Cotter's Comparative Patent Remedies blog, dealing with the reasonable royalty calculation for a standard essential patent in CSIRO v. Cisco, Case No. 6:11-cv-00343-LED  (E.D. Tex. 2014).

I will be taking an end of summer vacation until August 27th, and I won't be blogging during that period. I will start back with posts on any decisions I missed, including the recently released Travoprost decision 2014 FC 699, at the end of that week.

Thursday, August 7, 2014

A Principled Approach to Prejudgment Interest

Teva Canada Limited v Pfizer Canada Inc 2014 FC 634 Zinn J [Venlafaxine Quantum]
            1,248,5402,199,778 – venlafaxine – EFFEXOR XR

Pre-judgment interest can be a substantial part of a damages award when many years pass between a cause of action arising and the final judgment: in this case, $32m on top of $92m in damages. Yet pre-judgment interest has tended to be assessed on a fairly mechanical basis of the bank rate + 1%, not compounded (see here). This approach certainly has the advantage of simplicity, and when the quantum of interest is low it may be the most efficient approach. With recent awards in the region of $100m, interest becomes more important, and we may expect to see more attention paid to the details of interest calculations. This is evident in Zinn J’s Venlafaxine Quantum decision.

In his reasons for judgment in the NOC s 8 damages action in Teva v Pfizer / venlafaxine 2014 FC 248 [262] Zinn J was unable to finalize the quantum of damages, and directed the parties to attempt to do so in light of his reasons. The parties agreed on the quantum of principal, but were unable to agreed on the calculation of pre- or post-judgment interest, which were addressed in Venlafaxine Quantum (along with costs).

Section 8 damages compensate a generic which has been successful in an NOC proceeding for having been wrongly kept out of the market by the statutory stay triggered under s 7(1)(e) by the patentee’s application for an order of prohibition. The generic’s loss stems from its failure to make sales which it would otherwise have made during the relevant period, which, in this case was from January 2006 to August 2007 [11]. The lost sales were assessed on a monthly basis [1]. The plaintiff (generic) sought prejudgment interest on the full amount of the damages, running from January 2006 [12]. The patentee responded that the generic would not have been able to earn interest on profits it had not made, so interest should be awarded on profits as they would have arisen, over the entire 19 month period [11].

In holding for the patentee on this point, Zinn J, citing Bank of America Canada v Mutual Trust Co, [2002] 2 SCR 601 (often referred to as Clarica Trust), emphasized the compensatory nature of prejudgment interest [9-10]. Zinn J particularly relied on the OCA decision in Celanese Canada v CNR [2005] OJ No 1122, 2005 CanLII 8663 (OCA) which held that prejudgment interest should not result in a windfall to the plaintiff [10], [15]. He therefore held:

[16] In my view, where the damages claimed are for pecuniary loss that accrues over a period of time, it is appropriate when calculating prejudgment interest to do so in a manner that prevents overcompensating the plaintiff and that recognizes that the loss occurred over time.

Consequently, prejudgment interest was to be calculated on the monthly profit only as it arose [20].

While this is entirely correct as a matter of principle, the point that prejudgment interest is compensatory cuts both ways. While the plaintiff should not get a windfall, it should be fully compensated. In this case, Zinn J awarded only simple interest. Presumably this is all that was asked for, as Zinn J did not address the question of compound interest directly. (The award of simple interest is not explicit, but is evident from the calculations.) In Clarica Trust, the SCC noted that simple interest is not fully compensatory:

[24] Simple interest makes an artificial distinction between money owed as principal and money owed as interest. Compound interest treats a dollar as a dollar and is therefore a more precise measure of the value of possessing money for a period of time. Compound interest is the norm in the banking and financial systems in Canada and the western world and is the standard practice of both the appellant and respondent.

[38] Although not historically available, compound interest is well suited to compensate a plaintiff for the interval between when damages initially arise and when they are finally paid.

The Court therefore held that compound interest is therefore available at common law [44]. (And see discussion here).

The Court did go on to hold that "[a]n award of compound pre- and post-judgment interest will generally be limited to breach of contract cases where there is evidence that the parties agreed, knew, or should have known, that the money which is the subject of the dispute would bear compound interest as damages" [55]. This is curious, because there is nothing in the Court’s prior logic which leads to this conclusion, the point of which was that the successful plaintiff is entitled to be fully compensated, and simple interest does not achieve this goal. I don’t see why a victim of a wrong should be entitled to full compensation only if the wrong-doer had actually contract to that effect. In any event, the Court did go on to say that “It may be awarded as consequential damages in other cases but there would be the usual requirement of proving that damage component” [55].

In summary, the SCC decision in Clarica Trust apparently implies that compound interest may be awarded in patent cases, at least so long as it is properly pleaded and proven as a loss. While the result in Venlafaxine Quantum was a lower award of interest than the successful plaintiff had asked for, Zinn J’s emphasis on the compensatory nature of prejudgment interest opens the door to compound interest in the appropriate case.

Wednesday, July 9, 2014

Enhanced Disclosure Requirement Only in New Use Cases

AstraZeneca Canada Inc v Apotex Inc 2014 FC 638 Rennie J
            2,139,653 – esomeprazole – NEXIUM

As noted in yesterday’s post, in Apotex / esomeprazole Rennie J held that the effect of the SCC’s obiter remarks in Teva / sildenafil 2012 SCC 60 is to overturn previous FCA decisions holding that the factual basis for utility must be disclosed in the patent itself in all cases of sound prediction [142]. On Rennie J's view, the disclosure requirement is now “limited to the context of ‘new use’ patents, assuming such a utility disclosure requirement exists at all” [141]. This holding was expressly obiter [139], because he held that “none of the studies, disclosed or otherwise, demonstrate or soundly predict” the promised utility [140]. Nonetheless, it was a clear holding arrived at after thorough consideration.

To begin, Rennie J noted that “it is not in dispute that disclosure is not required for the demonstration of utility” [130]. In context, “disclosure” refers to disclosure in the patent of evidence demonstrating utility. The holding that such disclosure is not required is established law (see eg 2010 FCA 197 [74]; 2010 FCA 242 [80]; 2008 FCA 108, [56-64]).

He then noted that Wellcome / AZT 2002 SCC 77 [70] requires “proper disclosure” as the third component of the test for sound prediction [138], and he acknowledged that the FCA has interpreted this as requiring proper disclosure in all cases of sound prediction [142]. Rennie J began his analysis of why this is no longer good law with the Patent Act. He pointed out that utility and disclosure are treated separately, and that “there is no statutory basis for a requirement to disclose either the factual basis or the sound line of reasoning required to support a sound prediction of utility” [144].

Rennie J then provided a very careful analysis of the crucial paragraph [70] of Wellcome / AZT . That paragraph begins by saying “The doctrine of sound prediction has three components,” which is no doubt why the courts have previously understood “property disclosure,” the third component, to apply to all cases of sound prediction. But Rennie J notes [146] that in discussing proper disclosure, the SCC begins by noting that elevated disclosure is not normally required:

Thirdly, there must be proper disclosure. Normally, it is sufficient if the specification provides a full, clear and exact description of the nature of the invention and the manner in which it can be practised. It is generally not necessary for an inventor to provide a theory of why the invention works. Practical readers merely want to know that it does work and how to work it.

The structure of this paragraph implies that normally, even in cases of sound prediction (the topic of the paragraph as a whole), the requirement of proper disclosure is satisfied by the standard disclosure requirement. Rennie J points out [147, his emphasis] that any elevated disclosure is an exception to this rule:

In this sort of case, however, the sound prediction is to some extent the quid pro quo the applicant offers in exchange for the patent monopoly.

The structure of this sentence implies that “this sort of case” is not all sound prediction cases, but only some sound prediction cases. As Rennie J says

[151] [I]t is clear from Justice Binnie’s reasoning that “this sort of case” is a subset of sound prediction cases and not a reference to all sound prediction cases. As he writes, “[i]n this sort of case, the sound prediction is to some extent the quid pro quo the applicant offers in exchange for the patent monopoly” (at para 70). By implication, there are other “sort[s] of case[s]” where the sound prediction is not the quid pro quo offered by the applicant.

This seems to be to be right, as a matter of logic and grammar. I must admit that I had always read the three sentences of paragraph [70] beginning with “Normally,” as simply describing the normal disclosure requirement that applied in cases other than sound prediction cases. I had therefore taken the key issue to be what constitutes “proper disclosure” in sound prediction cases generally. (Presumably the FCA read the paragraph the same way.) But on reflection I think that Rennie J’s reading of paragraph [70], in which “normally” describes the normal requirement for sound prediction cases, with an exception for “this sort of case,” is a better textual interpretation – though the paragraph is certainly not free of ambiguity. (And of course, on Wellcome / AZT alone, the question of what constitutes proper disclosure even in this “this sort of case,” is left open.)

On Rennie J’s reading, the key question is what the SCC meant by “this sort of case.” He held that “this sort of case” means new use cases. AZT was indeed a new use case, which supports that interpretation. Rennie J advanced a purposive analysis in addition to his textual analysis (his emphasis):

[152] Second, and even more critically, limiting “this sort of case” to new use cases, rather than sound prediction cases generally, is consistent with the rationale provided by Justice Binnie. In a new use case (which AZT was), there may be an enhanced disclosure requirement because utility is the only thing being offered in exchange for the patent monopoly since the compound itself was previously disclosed.

Rennie J also appealed to the passage from Teva / sildenafil in which the SCC made some obiter remarks regarding sound prediction, including the following:

[38] As the courts below noted, all that is required to meet the utility requirement in s. 2 is that the invention described in the patent do what the patent says it will do, that is, that the promise of the invention be fulfilled

After quoting a passage from Wellcome / AZT [56] in which demonstrated utility and sound prediction are discussed together, the SCC went on to say:

[40] Nothing in this passage suggests that utility is a disclosure requirement; all it says is that "the utility required for patentability (s. 2) must, as of the priority date, either be demonstrated or be a sound prediction". Utility can be demonstrated by, for example, conducting tests, but this does not mean that there is a separate requirement for the disclosure of utility.

Rennie J interpreted this as saying that there is no heightened utility requirement for sound prediction generally, so overruling FCA decisions to the contrary. While that is a reasonable interpretation of the quoted passages, I’m not sure it was so broadly intended. The SCC began this discussion by saying “ I am of the view that this is not a case about sound prediction and that Teva's argument [that Claim 7 is invalid for insufficient disclosure of sound prediction] on this point must fail” [36]. What follows can be taken as an explanation of why Teva’s claim must fail, given that it is not a sound prediction case, in which case the remarks are directed at demonstrated utility, not sound prediction generally. This is consistent with the SCC’s concluding statement that “Since sound prediction is not an issue, the question whether there is an "enhanced" or "heightened" disclosure requirement with respect to sound predictions does not arise in this case and need not be addressed” [43]. However, as with para [70] from Wellcome / AZT this passage is ambiguous, and Rennie J may well be right.

Whether or not Teva / sildenafil overruled prior FCA authority, Rennie J has made a strong argument based on Wellcome / AZT that any enhanced disclosure requirement should apply only in new use cases, not all cases of sound prediction. (And of course, the SCC did not hold that there was any enhanced requirement in any kind of case, only that there was the possibility of some kind of enhanced disclosure in “this sort of case”.) But the question remains as to what that enhanced disclosure might be. Rennie J stated that disclosure of evidence of utility should be required in new use cases because

[152] Theoretically, without such an enhanced disclosure requirement in new use cases, a new use patent could consist of a single sentence alleging a new use and a reference to a prior patent disclosing the compound to which the use attaches. None of the research or studies supporting that new use would have to be disclosed. While new uses can be of tremendous importance (see AZT), such seemingly sparse patents would fairly raise concerns for the court when evaluating the bargain between innovators and the public.

I don’t see this as a particular cause for concern. The evidence supporting the new use would not have to be disclosed in the patent, but it will have to exist. It is clear on existing law that a claim to an entirely new compound could confine itself to a statement of its use, without supporting evidence of that use in the patent itself, though such evidence would have to exist, and I don’t see a principled distinction between those situations. Indeed, I am not sure that Rennie J himself was entirely persuaded by his own argument on this point, as he did not elaborate on the “concerns” that might be raised. It may be that he simply felt bound by prior FCA decisions to hold that there must be an elevated disclosure requirement in “this sort of case”. That suspicion is reinforced by his opening statement that the disclosure requirement is limited to the context of new use patents, “assuming such a utility disclosure requirement exists at all” [141].

With that said, Rennie J’s focus on new use patents is persuasive and thought-provoking. If we accept that enhanced disclosure arises in new use cases, and not sound prediction case generally, perhaps the requirement is simply to disclose the use, but not the supporting evidence. After all, from Consolboard, as affirmed in Teva / sildenafil, it is not generally necessary to make any disclosure of utility at all, so a requirement to disclose the use is enhanced relative to that standard.

In any event, Rennie J’s very careful analysis of the law related to proper disclosure is a welcome re-assessment of this difficult area, which he clearly sees as being problematic. I am very gratified that he quoted at [158] a concluding passage from my article, “Must the Factual Basis for Sound Prediction be Disclosed in the Patent?” (2012) 28CIPR 39, and he stated that “I generally agree with [Professor Siebrasse's] observations.” It will be interesting to see what, if anything, the FCA chooses to do with this issue on appeal. Rennie J has certainly given them a great deal to think about:

[160] In conclusion, I am of the view that there is no enhanced disclosure requirement in all sound prediction cases. Utility and disclosure are treated separately under the Patent Act, and consequently, should be treated separately in the jurisprudence as well.

Tuesday, July 8, 2014

Promise of the Patent is Alive and Well Post-Plavix FCA

AstraZeneca Canada Inc v Apotex Inc 2014 FC 638 Rennie J
            2,139,653 – esomeprazole – NEXIUM

Rennie J’s decision holding AstraZeneca’s esomeprazole patent invalid is interesting in several respects. Most importantly, Rennie J held that the effect of the SCC’s obiter remarks in Teva / sildenafil 2012 SCC 60 is to overturn previous FCA decisions holding that the factual basis for utility must be disclosed in the patent itself in all cases of sound prediction [142]. On Rennie J's view, the disclosure requirement is now “limited to the context of ‘new use’ patents, assuming such a utility disclosure requirement exists at all” [141]. On the other hand, his decision also shows that the promise doctrine is alive and well post-Plavix FCA 2013 FCA 186. This is not surprising, as the FCA affirmed the doctrine, and held only that the promise must be explicit. Rennie J’s decision makes no new law in this respect, though it gives some guidance as to what will be considered an “explicit” promise. On a third point, Rennie J also has an interesting analysis of what is meant by the “inventive concept” in the obviousness analysis. Ultimately, Rennie J held the ‘653 patent invalid solely for failure to meet the promise of the patent. This post will provide background and deal with the promise issue. Subsequent posts will deal with disclosure and obviousness.

The claims at issue, primarily claims 7 and 8 of the ‘653 patent [79], are compound claims to six specified salts of esomeprazole of high optical purity. “Esomeprazole,” is synonymous the (-) enantiomer of omeprazole [61]. As of the priority date, the skilled person would have known that omeprazole is a racemate, containing equal amounts of (-) and (+)-omeprazole; that omeprazole is a proton pump inhibitor (PPI) and is useful as an inhibitor of gastric acid secretion and for the treatment of gastric acid-related diseases; and that omeprazole is a very safe and effective drug [64].

In current Canadian law, a patentee will be held to every “promise” made in the specification, though failure to meet a goal, or “a hoped-for advantage of the invention,” will not invalidate the patent. Rennie summarized the difference between a promise and a goal as follows [117, his emphasis]:

In sum, promises are explicit and define guaranteed or anticipated results from the patent (depending on whether the promise is demonstrated or soundly predicted), whereas goals merely relate to potential uses for the patent.

There was considerable dispute over exactly how to characterize the putative promises, and of course over whether the statements in question were actually promises or merely goals, but in the end, Rennie J held that two promises were made respecting the claimed invention, namely

(1) that it was useful as use as a proton pump inhibitor (PPI); and
(2) that it had an improved therapeutic profile such as a lower degree of interindividual variation [214].

He held that the first promise was met [165], while the second was not [195], [214], and consequently the patent is invalid for lack of utility. (AstraZeneca argued that the second promise was, at most, of improved therapeutic profile, but that truncated promise would not have altered the outcome, as it was not met either [198].) Note that the promise (1), use as a PPI, is the same utility as omeprazole itself. Therefore it is clear that the claimed compound, high-purity esomeprazole, has sufficient utility to support a valid patent, and the patent was invalid solely because of the failure to meet the higher utility that was promised in the patent. Moreover, the elevated promise of improved therapeutic profile was found solely in the disclosure; the claims themselves were to the compound, with no mention of its properties or advantages. This case is therefore a clear example of the promise doctrine in action.

The second promise, which was determinative of invalidity, turned entirely on the interpretation of the following passage from the ‘653 patent [113, Rennie J’s emphasis]:

It is desirable to obtain compounds with improved pharmacokinetic and metabolic properties which will give an improved therapeutic profile such as a lower degree of interindividual variation. The present invention provides such compounds, which are novel salts of single enantiomers of omeprazole.

Ultimately, Rennie J’s conclusion that this passage promised an improved therapeutic profile turned on the word “will” [119-20]. By way of contrast with this imperative language, he noted that in another case he found that “an object a clause beginning with ‘it is a particular object of the present invention to,’ merely described a goal that the patent strived to achieve” [117]. As another example of language indicating a mere goal, “[h]ad the patent stated that such compounds 'may' or 'could' give an improved therapeutic profile, then the argument that such statements referred merely to a goal would be more compelling” [120].

If we accept the premise of the promise doctrine, that patentees intend to make promises of utility in the disclosure which will determine the validity of the patent, then Rennie J’s conclusion that the word “will” signifies a promise strikes me as sound as a matter of textual interpretation, and as being consistent with prior cases. As noted, while the FCA held that a promise must be explicit in its Plavix 2013 FCA 186, blogged here, it also clearly re-affirmed that if a promise is explicit, the patentee will be held to it. Since no patent ever says “I promise [heightened utility]," it is not surprising that affirmative language such as “will” is taken as a sufficiently explicit promise.

Of course, in my view it is wrong to suppose that a patentee ever intended to make promise in the disclosure, which is intended to disclose the invention, not define it: see my article “The False Doctrine of False Promise,” (2013) 29 CIPR 3 (draft version available here). But until the SCC addresses this doctrine, perhaps in the upcoming Plavix case, Apotex / esomeprazole illustrates a fairly straightforward application of the current state of the law relating to the promise of the patent.

To conclude, I should mention a couple of preliminary issues. One was the standing of AstraZeneca Canada, which Apotex challenged because there is no express license agreement between AstraZeneca Aktiebolag, the patentee, and AstraZeneca Canada, which distributed and sold NEXIUM in Canada [9-10]. Rennie J held that standing may be based on an implied licence [10], and that can probably be established solely by the fact that the patentee and the purported licensee are both joined before the court seeking recovery for infringement [11]. In any event, an implied licence may certainly be inferred from the conduct of the parties, and the facts in this case clearly allowed such an inference [23]. This holding strikes me as a straightforward application of Apotex Inc v Wellcome Foundation Ltd, [2001] 1 FC 495 (FCA), which had similar facts.

Rennie J also held that while an NOC proceeding is not res judicata in respect of a subsequent infringement action, which is well established, the doctrines of issue estoppel and abuse of process remain open [30]. However, on the facts he held that it was not an abuse of process for AstraZeneca to shift its argument relating to the promise of the patent between the NOC litigation and the infringement action [41]. Nor, while he found it “more problematic” [46], was AstraZeneca’s changed position regarding the moitivation of a skilled person to separate the enantiomers. On the whole, it seems that while issue estoppel and abuse of process remain open, they will not be lightly invoked to constrain a patentee from changing its litigation strategy between the NOC proceeding and the infringement action.

Finally, I’m a bit late with this post, as I had an enforced long weekend, after storm Arthur left me (and most of Fredericton, NB) without power for three days.