Patentable Subject Matter: We Have Company in the Chaos

I have criticized the FCA for its inconclusive decision in Amazon.com, which failed entirely to resolve the central question of whether business methods are patentable. But at least we are in good company. As I discuss in my guest post on IPKat, the US Federal Circuit en banc decision in CLS Bank v Alice Corp (Fed Cir 2013) is equally inconclusive. In the UK, the statute itself is confused, but the UK courts are starting to develop a coherent approach, as I discuss in a second IPKat guest post on HTC Europe Co Ltd v Apple Inc [2013] EWCA Civ 451.

Golden Bonus Doctrine in US COMBIGAN Decision

Allergan, Inc v Sandoz Inc / COMBIGAN (Fed Cir 2013) rev’g 818 F.Supp.2d 974

The recent Fed Cir decision in Allergan v Sandoz / COMBIGAN provides an interesting perspective on the parallel Canadian litigation. The invention at issue is a combination of brimonidine and timolol, used for the treatment of glaucoma. Both active ingredients had previously been used for that purpose, and the primary issue in both the US and Canadian litigation was whether the combination was obvious.

In the litigation over the Canadian patent 2,440,764, Allergan v Sandoz / COMBIGAN(NOC) 2011 FC 1316 (blogged here), Crampton J held it non-obvious, largely on the basis that the improved safety profile and absence of an afternoon trough in efficacy as compared to the individual drugs were part of the inventive concept [58], and these were not obvious. Subsequently, in Allergen Inc v Apotex Inc / COMBIGAN (NOC) 2012 FC 767 (blogged here), Hughes J held that the absence of an afternoon trough in efficacy was not part of the inventive concept [147]. His view was that the inventive concept was that the specified combination would achieve the promised results [145]. Consequently, Hughes J would have held the claims obvious [189], but for a concern regarding comity with Crampton J’s prior decision. The disagreement between Crampton J and Hughes J over the nature of the inventive concept turned on a disagreement as to whether the specification as a whole should be considered in construing the inventive concept. On appeal of Hughes J’s decision, the FCA was resolved that debate in favour of considering the entire specification, as Crampton J had done: Apotex Inc v Allergan Inc / COMBIGAN (NOC) 2012 FCA 308 (blogged here). Consequently, the FCA concluded that the improved safety profile was part of the inventive concept [74], and that improved safety profile was not obvious [93]. An order of prohibition was therefore granted.

In the US litigation the district court held that the increased efficacy (absence of an afternoon trough) and reduction in side-effects (improved safety profile) were unexpected results that weighed in favour of non-obviousness (Fed Cir slip op 12, Dist Ct 998-99). In respect of the majority of claims at issue (Claim 1 of 7,323,463 was exemplary) the Fed Cir held that this did not establish non-obviousness:

While the unexpected benefits of twice a day dosing of the combination formula are relevant to Sandoz’s attack on the validity of the method claims, we do not find it similarly meaningful to our evidence in the prior art showing the concomitant administration of brimonidine and timolol multiple times per day, that the combination had benefits over the administration of either alone, and that there was a motivation to combine the two to achieve better patient compliance. KSR, 550 U.S. at 426. Whether or not that combination also solved problems associated with the afternoon trough, we find the motivation to make the combination was real. [My emphasis] Accordingly, we conclude that the claims of the ’463 patent are invalid as obvious.

In other words, if the invention was obvious for other reasons, a patent cannot be supported by the discovery of a non-obvious advantage. This is the classic “golden bonus” principle as described in Hallen v Brabantia [1991] RPC 195 at 216 (CA). This principle is perhaps not as well recognized in Canadian law as it is in English law (compare 2007 FC 455 [309-10] with 2007 FCA 217 [26]), but it is certainly a point which deserves more attention that it received in the Canadian litigation. I am still of the view that the main holding of the FCA in COMBIGAN, that it is necessary to have reference to the entire specification in order to construe the inventive concept, is correct, but the golden bonus argument may provide a different route leading to a different conclusion on the obviousness question.

The Federal Circuit decision was also interesting for a split on Claim 4 of the 7,030,149 patent. (There was no equivalent claim in the Canadian ‘764 patent.)

4. A method of reducing the number of daily topical ophthalmic doses of brimondine administered topically to an eye of a person in need thereof for the treatment of glaucoma or ocular hypertension from 3 to 2 times a day without loss of efficacy [by treatment with COMBIGAN]

In effect, the unexpected advantages were made part of the claim itself. Judge Dyk, dissenting on this point, held that this claim was also invalid, on the basis that a golden bonus cannot render an invention patentable, whether or not that bonus is made part of the claim:

Avoiding a ‘loss of efficacy’ is not a separate step, but rather a result of the claimed method. We should recognize in this case, as we did in Bristol-Myers Squibb, that ‘[n]ewly discovered results of known processes directed to the same purpose are not patentable.’

The majority held that it was not clear from the record whether the increased efficacy was an inherent property of the composition (fn 1). This disagreement raises an interesting point: is it possible to avoid the golden bonus doctrine (if that doctrine exists in Canada), by making the unexpected advantage part of the claim?

No New Cases for the Week of 5 May

No new patent / NOC / data protection cases were posted on the Federal Courts' websites for the week of 5 May 2013.

PMPRB “subverting the will of Parliament”

Teva v Canada (AG) 2013 FC 448 Zinn J (Copaxone II) quashing In re Copaxone PMPRB-2010-D3-Copaxone additional reasons at 2013 FC 500

            PMPRB / Copaxone Syringe

This is the second trip by Teva to the FC appealing a decision of the Patented Medicine Prices Review Board that Teva has sold its Copaxone Syringe at an “excessive” price. In the first decision, 2009 FC 1155 (Copaxone I), Hughes J quashed the decision of the Board for having failed to consider the statutorily mandated factors. Hughes J returned the question to the Board for redetermination. A differently constituted panel of the Board heard the matter, and once again determined that the price was excessive. Zinn J has now held that the decision of the second Board was defective, in exactly the same way as the decision of the first Board, and once again sent the matter back for reconsideration.

Section 85(1) of the Patent Act provides that “the Board shall take into consideration the following factors, to the extent that information on the factors is available to the Board:”

(a) the prices at which the medicine has been sold in the relevant market;

(b) the prices at which other medicines in the same therapeutic class have been sold in the relevant market;

(c) the prices at which the medicine and other medicines in the same therapeutic class have been sold in countries other than Canada;

(d) changes in the Consumer Price Index; and

(e) such other factors as may be specified in any regulations made for the purposes of this subsection.

Copaxone Syringe was introduced by Teva in 2003 at $36 per daily dose. Teva subsequently increased its price to $43.20, a 20% increase, which was in excess of the CPI for the relevant period.* However, during the entire period, Copaxone Syringe was the lowest priced drug in its class domestically, and it was also consistently sold at a lower price in Canada than in any of the other comparator nations specified by regulation [8]. In Copaxone I, Hughes J found that in finding the price increase excessive, “the Board focused only on the [Consumer Price Index] essentially to the exclusion of the other factors set out in section 85(1). Lip service only was given to these other factors” [49]. He therefore quashed the decision and sent it back for redetermination, “preferably by a different panel” [76].

A different panel was duly constituted, and the Board again concluded that Copaxone Syringe was excessively priced. On appeal, Zinn J, like Hughes J, held that “the Board’s decision must be set aside because it again paid no more than lip service to the factors favouring the conclusion that the medicine was not excessively priced, namely paragraphs 85(1)(b) and (c), and again treated paragraph 85(1)(d), CPI, as a conclusive factor” [38]. The second panel’s attempts to explain why the low domestic and international price should not be given any weight were not persuasive enough to constitute a reasoned decision. For example, with respect to the international comparison, the Board argued that “the comparator drugs’ prices are not from Canada and as such might be affected by exogenous factors such as a different regulatory regime, different income levels, and different health and other socio-economic factors.” But as Zinn J pointed out, “Having enacted this provision, Parliament is presumed to be aware of the difficulties in comparing the price of medicines across borders; despite this, it saw fit to include ‘the prices at which the medicine and other medicines in the same therapeutic class have been sold in countries other than Canada’ as a factor to be considered when determining whether a drug is being sold at an ‘excessive’ price in Canada. What the Board appears to be saying is that this factor is inherently unreliable and should be given little if not no weight. The Board appears therefore to be subverting the will of Parliament, which clearly saw this as a relevant factor to be accorded weight” [41].

Its difficulties with the Board are no doubt frustrating for Teva, but the bigger question is why the Board appears to be not just “subverting the will of Parliament,” but doing so systematically. The problem is not just that the Board decided unreasonably; one erroneous decision, or even an unreasonable decision, is readily explained as an aberration. But we now have two different Federal Court judges independently concluding that two differently constituted panels have ignored their statutory obligation. This points to a deeper problem.

* Copaxone I at [7], [33], [34], [35], based on the first Board decision, states that the price increase took place all at once on July 1, 2004, while Copaxone II at [7], [15], [18], [21], based on the decision of the second panel, states that the price increase took place over a period of several years, with substantial increases in 2004 and 2005, no increase in 2006-07, and smaller increases in 2008-08. I have no explanation for the discrepancy, but it is not crucial to the reasons of either panel, or to those of the Federal Court.

No New Cases for the Week of 21 April

No new patent / NOC / data protection cases were posted on the Federal Courts' websites for the week of 21 April 2013.

No New Cases for the Week of 14 April

No new patent / NOC / data protection cases were posted on the Federal Courts' websites for the week of 14 April 2013.

No New Cases for the Week of 7 April

No new patent / NOC / data protection cases were posted on the Federal Courts' websites for the week of 7 April 2013.

No New Cases for the Week of 31 March

No new patent / NOC / data protection cases were posted on the Federal Courts' websites for the week of 31 March 2013.

Delayed Release Esomeprazole Not Obvious on the Facts

Astrazeneca Canada Inc. v. Ranbaxy Pharmaceuticals Canada Inc / esomeprazole (NOC) 2013 FC 232 O’Keefe J
            NEXIUM / esomeprazole / 2,170,647

Obviousness was the only point in issue in this NOC proceeding related to a delayed release form of esomeprazole. O’Keefe J’s decision holding that the enteric coating formulation was not obvious, due to the difficulty of actually producing an effective coating, turned entirely on his assessment of the conflicting expert evidence.

The only point of more general interest is a brief review at [80]-[84] of the case law relating to the “motivation” aspect of the obvious to try test. O’Keefe J noted that in Allergan Inc. v Canada (Minister of Health), 2012 FC 767 a finding that there was a strong motivation to solve the problem at hand supported a finding of non-obviousness, on the logic that “If other parties were motivated to find the solution and yet were unable or unwilling to do so prior to the patent being obtained, this factor would point to a solution that was not ‘obvious to try’” [82]. On the other hand, in Janssen-Ortho Inc. v Novopharm Ltd. 2006 FC 1234, a finding that there was “no motivation exhibited by any outside persons to explore Ofloxacin enantiomers,” also supported a holding of non-obviousness, on the basis that absent Daiichi’s motivation, “there may well never have been levofloxacin” [84]. 

Note that in his recent decision in Apotex Inc. v. H. Lundbeck A/S / escitalopram 2013 FC 192 (not mentioned by O’Keefe J), Harrington J remarked that “I am troubled by the concept of motivation. Wishing does not make something come true. Wishing does not make something easier. A motive is defined as that which moves or tends to move a person to a particular course of action (Oxford Dictionary). On the other hand, there may not have been reason to do something at a particular point in time. For instance, there may have been little interest in increasing automobile fuel efficiency in the 1950s. Lack of interest would not give rise to a patent if what was eventually done was obvious” [99]. It seems that significance of motivation in the obvious to try test needs clarification.

O’Keefe J’s reasoning in this case did not ultimately turn on the question of motivation.

Sufficiency and Utility

Novartis Pharmaceuticals Canada Inc v Teva Canada Ltd / zoledronate (NOC) 2013 FC 283 Hughes J
            ZOMETA ACLASTA / zoledronate / 1,338,895

What is the relationship between sufficiency and utility? Recall that claim 14 of the ‘895 patent, which was to a broad class, was held to lack utility on the basis that the it was not possible to predict the potency of any individual compound without testing. Hughes J held the ‘895 patent to be insufficient for the following reason:

[177] For the same reasons as discussed with respect to utility, I find that the '895 patent, claim 14, is insufficient, even at the date that the patent was issued and granted. No further discussion is required in respect of that patent.

I have to admit this reasoning is not transparent to me. Hughes J made this statement at the very outset of his sufficiency analysis, so there is no context that might shed light on his reasoning. There was no suggestion in the discussion of utility (or anywhere in the decision) that the ‘895 patent did not adequately disclose how to make the compounds in question (“classic insufficiency”). I don't see an obvious link to Sildenafil insufficiency. Could this be a reflection of the US doctrine that an invention that lacks utility is necessarily insufficient, on the logic that “Obviously, if a claimed invention does not have utility, the specification cannot enable one to use it.” In re Brana, 51 F.3d 1560, 1565 (Fed. Cir. 1995)? But I had not understood that to be established in Canadian law; and in the UK it seems that this proposition has been rejected: see Tetra Molectric’s Application [1977] R.P.C. 290 (CA) at 297: “if much of Mr. Walton's argument on this branch of the case be right, every failure to achieve the promised result could, as my Lord pointed out during the argument, be attacked for insufficiency under section 14. For my part, I cannot think this is right."