Friday, July 24, 2015

Blogging Break

I am taking a two week summer vacation. I’ll resume blogging sometime in the week of August 10, starting with the cases that came out this week that I didn’t have time to blog before leaving, namely: Eli Lilly Canada Inc. v. Canada (Attorney General) - 2015 FCA 166; Eli Lilly Canada Inc. v. Apotex Inc., 2015 FC 875; and E Mishan & Sons, Inc v Supertek Canada Inc 215 FCA 163.

Monday, July 13, 2015

Non-Infringing Alternative "Defence" Rejected Once Again

ADIR v Apotex 2015 FC 721 Gagné J
            1,341,196 / perindopril / COVERSYL

As noted in my last post, this case is the accounting of profits portion of a bifurcated trial. In the liability decision, Laboratoires Servier v Apotex Inc, 2008 FC 825 aff’d 2009 FCA 222, Snider J held that the defendants had infringed the plaintiff’s ‘196 patent and she allowed the plaintiffs to elect an accounting of profits [1]. This post deals with the treatment of non-infringing alternatives in the accounting.

A substantial amount of the infringing material manufactured by Apotex in Canada was destined for export to markets such as the UK and Australia. Apotex argued that it could have manufactured perindopril API and finished dosage in other non-infringing jurisdictions for export to those same markets at exactly the same price, and if it had done so, it would have made exactly the same profits (or even more!) than it made by manufacturing in Canada [79]-[80]. In Schmeiser 2004 SCC 34, where the SCC held that the preferred means of calculating an accounting is the differential profit approach, in which “A comparison is to be made between the defendant's profit attributable to the invention and his profit had he used the best non-infringing option” [102]. On this authority, Apotex argued that since it would have made just as much money using the non-infringing offshore manufacturing, the profits attributable to its Canadian infringement were zero. This is referred in the decision to as the “non-infringing alternative” or “NIA” “defence”. (As I have argued, this argument is not a defence, in the sense that it does not normally result in a complete bar to liability.)

Gagné J rejected the NIA argument as a matter of law [106], though she went on to hold that in any event it was not made out on the facts [142]. In my view, Gagné J’s reasons for rejecting the NIA analysis as a matter of law is not persuasive, but her analysis of its application on the facts is.

Friday, July 10, 2015

“Insurance” Provision in Transfer Pricing Agreement

ADIR v Apotex 2015 FC 721 Gagné J
            1,341,196 / perindopril / COVERSYL

This case is the accounting of profits portion of a bifurcated trial. In the liability decision, Laboratoires Servier v Apotex Inc, 2008 FC 825 aff’d 2009 FCA 222, Snider J held that the defendants had infringed the plaintiff’s ‘196 patent, and she allowed the plaintiffs to elect an accounting of profits [1]. This decision is primarily of interest for two points: the treatment of payments made on account of what was argued to be liability insurance provided by Apotex to its foreign purchaser to protect against infringement of a foreign patent, which is dealt with in this post, and the treatment of non-infringing alternatives, which I will consider in my next post.

Thursday, July 9, 2015

Inventive Concept and the Promise of Utility Are Not Necessarily Coextensive

AstraZeneca Canada Inc v Apotex Inc / esomeprazole 2015 FCA 158 Dawson JA; Ryer, Webb JJA aff’g 2014 FC 638 Rennie J
            2,139,653 / esomeprazole / NEXIUM

The FCA’s brief Esomeprazole decision affirms a couple of important points that were raised in yesterday’s post (which I wrote before having read the FCA decision).

An initial, basic point is that the FCA affirmed Rennie J’s holding that the patent was invalid for failing to satisfy the promise of the patent, which was higher than the mere scintilla necessary to support a patent. As I remarked in my post on Rennie J’s decision, this shows that “the promise doctrine is alive and well post-Plavix FCA 2013 FCA 186.” This is not entirely surprising, as Plavix formally reaffirmed the promise doctrine, holding only that the promise must be explicit, but with the FCA’s affirmance in this case any thought that Plavix was the first step towards abandoning the doctrine entirely must now be laid to rest.

The FCA also stated that “[i]t is also now settled law that some promises can be construed to impose utility requirements across each of a patent’s claims, while other promises may touch only a subset of the claims,” citing Celecoxib 2014 FCA 250 (blogged here). While Rennie J in this case did not construe the promise on a claim-by-claim basis, the FCA held this was not an error in light of the evidence and submissions before him [6]. As noted in yesterday’s post, the distinction between overarching and claim-specific promises was applied by O'Reilly J in his Deferasirox decision.

AstraZeneca also argued that “the Federal Court erred by construing the utility of the claims in issue in a manner inconsistent with their inventive concept. AstraZeneca argues that because it is a fundamental rule of claim construction that a claim receives one interpretation for all purposes, there must be a unitary, harmonious understanding of the essential elements of the claim, inventive concept and utility” [10]. The FCA rejected this proposition as being unsupported by any jurisprudence. In my view, this holding is entirely correct. To elaborate on an example given in yesterday’s post, suppose a racemic compound is known to treat cancer though with side effects, and it is obvious to a skilled person that one of the enantiomers is therapeutically effective while the other is responsible for the side effects, but it is unusually difficult to resolve the enantiomers. If a patentee succeeds in resolving the enantiomers through inventive ingenuity and claims the therapeutically effective enantiomer, the claimed invention is surely patentable. But if the inventive concept and the promise of utility are coextensive, it would be held invalid; the enantiomer is useful, because it treats cancer (without side effects), but that was obvious to anyone. The reason the claim is valid is that the inventive concept, namely the method of separating the enantiomers, is distinct from the utility.

Wednesday, July 8, 2015

Application of Distinction Between Overarching Promise and Claim-Specific Promise

Novartis Pharmaceuticals Canada Inc v Teva Canada Ltd 2015 FC 770 O'Reilly J
            2,255,951 / deferasirox / EXJADE

As discussed in Monday’s post, the ‘951 patent relates to iron chelators, which are used to treat disorders caused by excess iron in the body [7]. As usual, the utility attack turned on the promise of the patent. O'Reilly J’s Deferasirox decision illustrates once again that under the promise doctrine the validity of the patent will turn on a meticulous reading of the disclosure. It is also interesting as applying the recently developed distinction between an “overarching” promise, which will affect all claims, and a promise that is directed at one claim only. One point I would quibble with is that there seems to have been an implicit assumption that the stated utility is the same as the inventive concept. Consequently, while O’Reilly J explicitly stated that (for the compound claims) he applied the low standard for utility that applies in the absence of an explicit promise, the standard he actually applied was higher than a mere scintilla.

SCC Viagra Decision Does Not Create a Duty to Disclose All Test Results

Novartis Pharmaceuticals Canada Inc v Teva Canada Ltd 2015 FC 770 O'Reilly J
            2,255,951 / deferasirox / EXJADE

The background to this decision is given in yesterday’s post. Today’s post deals with Teva’s insufficiency attack. While the SCC’s Viagra 2012 SCC 60 decision was not cited, that decision, and not classic insufficiency, was the basis for the attack. In particular, Teva argued that “the real invention [deferasirox] was buried in claim 32," [56], and that “the patent does not specifically identify the compounds that had been tested in vivo, so a skilled reader would not know which of them would work” [59]. This echos Viagra, in which the SCC held the Pfizer’s Viagra patent invalid for failing to disclose the true invention, essentially on the basis that the patentee had not disclosed that the sildenafil was the only compound which had been tested in humans. The reference to the invention being buried in the claims reflects Viagra because the SCC indicated that if sildenafil had been the only individually claimed compound, that might have constituted sufficient disclosure that it was the true invention. 

The facts in Deferasirox were similar to those in Viagra in that the disclosure did not specifically which compounds had been tested in vivo [59] and numerous compounds were individually claimed. O’Reilly J nonetheless dismissed Teva’s arguments, saying “all of the thirty claimed novel compounds had been demonstrated or soundly predicted to have the stated utility set out in the patent. A skilled person would have had no difficulty making and using any one or more of those compounds based on the information in the patent” [60]. In so holding, O’Reilly J joins prior decisions by Harrington J (here) and Snider J (here) to the effect that Viagra does not impose a general obligation to disclose which compounds were tested. This interpretation of Viagra now seems well-established, at least at the FC level. This is a welcome development. The SCC in Viagra sought to do what it saw as justice, but with a shaky grasp of the facts, which led to a decision which was confusing, and, in my view, doctrinally confused: see “The Duty to Disclose ‘The Invention’: The Wrong Tool for the Job, (2013) 25 IPJ 269. The FC has wisely chosen to interpret Viagra conservatively, rather than as creating a new ground of invalidity.

Tuesday, July 7, 2015

State of the Law for an Obviousness Attack Includes Only Art Discoverable in a Reasonably Diligent Search

Novartis Pharmaceuticals Canada Inc v Teva Canada Ltd 2015 FC 770 O'Reilly J
            2,255,951 / deferasirox / EXJADE

O’Reilly J’s decision in Novartis v Teva / deferasirox does not break wholly new legal ground, but it does develop several interesting points regarding the state of the art in obviousness, Viagra-style insufficiency, and the promise of the patent. I will deal with these issues in separate posts.

The ‘951 patent relates to iron chelators, which are used to treat disorders caused by excess iron in the body [7]. Iron chelators were known in the prior art, but the most effective could not be administered orally, and others were toxic or insufficiently effective [9]. The problem facing the inventors was therefore to find an effective iron chelator that could be orally administered. Two classes of compounds are disclosed in the patent: Formula I compounds were previously known, and the relevant claims were to their use for treatment of diseases involving excess iron in humans, while Formula II compounds were novel, and they were claimed both as compounds and for the use in treatment of iron excess diseases [14]. Deferasirox, the active ingredient in EXJADE, is a Formula II compound and so is covered by both use and compound claims.

The obviousness attack turned primarily on the facts, but a pure question of law was raised as to what constitutes the prior art for the purposes of an obviousness attack. O’Reilly J held that there was considerable doubt as to whether some of the sources formed part of the relevant prior art for the purposes of an obviousness attack because they would not have been located by a skilled person conducting a reasonably diligent search. But section 28.3 of the Act provides that an invention must not be obvious having regard to information that “became available to the public” in Canada or elsewhere before the relevant date. This is exactly the same language as used in the novelty provision, s 28.2. Citing Barrigar’s, Canadian Patent Act Annotated, at PA-341, Teva argued that this means that the old requirement that only reasonably discoverable information can be used in an obviousness attack is no longer the law, and the prior art for obviousness and novelty purposes should be the same [53]. 

Teva has a good argument based on the text of the Act, but I have argued that “contextual and purposive considerations imply that s. 28.3 was not intended to change the law, and the state of the art remains limited to information that is reasonably discoverable”: What is the State of the Art for the Purpose of an Obviousness Attack?, (2012) 27 CIPR 385 at 394. I went on to note that “the argument based on the text of the provision is sufficiently strong that case law directly addressing the question will be needed before the point can be considered settled.” In this case, O’Reilly J stated that “there is case law applying the usual ‘reasonably diligent search’ criterion even after the enactment of s 28.3. I see no reason to take a different approach here” [53]. While O’Reilly J is right to say that there was prior case law using the traditional criterion, the question of whether s 28.3 had modified the law was not raised in those decisions. O’Reilly J’s considered holding is therefore a significant development on this point of law. Strictly, however, his holding was obiter, since he held that the invention was not obvious even if Teva’s interpretation was correct [54]. With that said, I believe that O’Reilly J's decision is the first to directly address this point, and it certainly reinforces the view that properly interpreted, s 28.3 did not change the law.

Monday, June 29, 2015

No New Cases for the Week of 22 June

No new patent / NOC / data protection cases were released for the week of 22 June 2015. Keep in mind that I do not normally blog on procedural cases. To keep up with all IP cases, I recommend Alan Macek's IPPractice Daily IP News service.

Tuesday, June 16, 2015

Canada / UK Contrast in the Test for Inducement Liability

Bayer Inc v Pharmaceutical Partners of Canada Inc / moxifloxacin (NOC) 2015 FC 388 Lafrenière J
            2,378,424 / moxifloxacin / AVELOX

Warner-Lambert Company, LLC v Actavis Group Ptc & Ors [2015] EWCA Civ 556 (28 May 2015)) rev’g [2015] EWHC 249 (Pat) (indirect infringement)
            EP 0 934 061 / pregabalin / LYRICA

Liability for inducing infringement raises the question of how the patentee’s rights should be protected when the defendant sells a product which is capable of non-infringing uses, but is likely to be put to an infringing use. This question often arises in the context of second medical use patents. The ‘424 patent at issue in Bayer v PPC / moxifloxacin is a formulation patent and PPC’s product can be used post-sale to make the formulation, so this case raises essentially the same question as second medical use patents. Lafrenière J struck the portions of Bayer’s application for an order of prohibition alleging that PPC would induce infringement of the ‘424 patent on the basis that Bayer had no reasonable chance of establishing inducement by PPC. The recent decision of the EWCA in Warner-Lambert v Actavis provides a helpful European perspective on the issue, albeit in the context of Swiss form claims. (An excellent summary is provided by the IPKat.) The comments in this post are tentative, as this issue deserves an article rather than a blog post.

The law of inducement seeks to encourage cost-effective enforcement of its rights by the patentee, while at the same time ensuring that the public is not impeded in engaging in non-infringing activity. The “cost-effective” part of the rationale is central. Inducement is not necessary to allow the patentee to enforce its patent rights, as inducement (normally*) requires an act of direct infringement and the patentee could in principle enforce its rights by proceeding against the direct infringer. But that is not always practical. It is often more efficient to pursue a single intermediary which in some way facilitates infringing activity, as Napster illustrates in the copyright context. But once we move away from direct infringement, we must be careful not to impede the defendant who facilitates non-infringing activity as well.

Friday, June 12, 2015

Jurisdictional Variation as to Whether Direct Infringement by a Single Actor is Required for Inducing Infringement

Warner-Lambert Company, LLC v Actavis Group Ptc & Ors [2015] EWCA Civ 556 (28 May 2015) aff’g [2015] EWHC 72 (Pat) (interlocutory injunction) rev’g [2015] EWHC 249 (Pat) (indirect infringement)
            EP 0 934 061 / pregabalin / LYRICA

Limelight Networks Inc v Akamai Technologies Inc, (USSC, 2014) rev’g 692 F.3d 1301 (Fed Cir 2012)(en banc)

In Akamai v Limelight the US Federal Circuit held that a party may be liable for inducing infringement of a method claim even if there was no direct infringement by any single actor, so long as all of the steps that constitute the infringement method were practiced. Consequently, an inducer would be liable if it practiced some of the steps and induced another to practice the rest. The USSC reversed, holding that inducement liability can only arise if there is direct infringement, and, on the authority of the Fed Cir Muniauction 532 F. 3d 1318 (2008) decision, direct infringement of a method claim requires that all the steps are performed by a single actor. Consequently, the USSC held that inducement liability only arises if all the steps of a method claim are performed by a single actor.

In contrast, in Warner-Lambert v Actavis the EWCA undertook a thorough review of the European case law, and noted that the courts of two EPC members states (Holland and Germany [106]) have concluded that indirect infringement can arise even “the absence of a downstream event which, as a whole, can be regarded as putting the invention into effect” [135]-[136]. That is, indirect infringement does not necessarily require direct infringement. The EWCA did not give its own opinion on this matter, as the issue on appeal was only whether a claim for indirect infringement should be struck. But the EWCA did point to this view of the Dutch and German courts as reason for allowing the claim for indirect infringement to go to trial [136], [140].

Both US and European case law have to be treated with case. Both the US and European statutes define infringement (s 60 of the UK Act, s 271 of the US Act), while the Canadian Act has no explicit definition. The split between the US and European approaches is nonetheless instructive because the relevant European provisions derive ultimately (though loosely) from the US statute (see Grimme [2010] EWCA Civ 1110 ¶ 92), so the split is not just due to fundamentally different statutory provisions.

I have no opinion as to how this difficult question is best resolved, but the European developments do indicate that it would be wrong for Canadian courts to simply follow the recent USSC decision in Limelight v Akamai. That is particularly so because the US debate over the proper approach to inducing infringement is closely tied up with the Muniauction test for direct infringement. The USSC relied on Muniauction "[a]ssuming without deciding" that it is correct, and implied that any difficulties its holding might cause were attributable to Muniauction's strict approach to direct infringement. This might have been taken as an invitation to the Fed Cir to revisit that decision, but that invitation was declined in Akamai v. Limelight (Fed. Cir. 2015), on remand, which essentially reaffirmed Muniauction. Moreover, as explained here, it appears that in reversing the Fed Cir, the USSC didn’t fully understand the Fed Cir’s reasoning. It will be interesting to see how the issue of inducing infringement is treated in the UK now that Warner-Lambert v Actavis will proceed to trial on this issue.

Thursday, June 11, 2015

EWCA Criticizes Prohibition on Patenting Methods of Medical Treatment

Warner-Lambert Company, LLC v Actavis Group Ptc & Ors [2015] EWCA Civ 556 (28 May 2015) aff’g [2015] EWHC 72 (Pat) (interlocutory injunction) rev’g [2015] EWHC 249 (Pat) (indirect infringement)
            EP 0 934 061 / pregabalin/ LYRICA

The decision of the EWCA in Warner-Lambert v Actavis / pregabalin is an appeal from two decisions of Arnold J, refusing to grant an interlocutory injunction and striking a claim of indirect infringement. Despite the preliminary nature of the decisions on appeal, the EWCA is a must-read on methods of medical treatment, Swiss form claims, and direct and indirect infringement of second medical use patents. The IPKat has an excellent summary of the key holdings.

In this post I’d like to highlight the court’s remarks on methods of medical treatment. Methods of medical treatment are unpatentable under the EPC, as they are in Canada. The basis for the prohibition in the EPC is statutory (Art 53(c)), while in Canada it is a judge-made exception (see here). European law therefore cannot necessarily be assumed to reflect the same principles, but the basic rule is sufficiently similar that European jurisprudence may at least cast some light on the Canadian rule.

In Warner-Lambert v Actavis the EWCA ntoed that Swiss forms claims arose from the need to provide protection for second-medical use inventions in the face of the rule that “for reasons connected with protecting medical practitioners from claims for patent infringement, a patent cannot be granted for a method of treatment of humans with a therapy using the compound in question” [51]. We see here that the EWCA is of the view that the main reason for the rule against patenting methods of medical treatment is to ensure that physicians can treat their patients as is medically required, without being inhibited by fear of a patent infringement action.

The EWCA then pointed out that Swiss form claims are not necessarily effective in achieving this goal , because a Swiss form claim is a process claim, so “its direct product, the medicine, is an infringement, and all those who use or dispose of the product will infringe” [54]. Consequently,

[55] It would have been better if doctors had been provided with a defence, or the restriction on methods of treatment repealed altogether.

Or both, I might add, which is essentially the situation in the US; claims to methods of medical treatment are permitted, while physicians are provided with a defence under 35 USC § 287(c)(1). This makes perfect sense: if the underlying policy is to provide doctors with a defence, surely the best way to implement that policy is to provide doctors with a defence. Attempting the same thing indirectly, through a prohibition on methods of medical treatment, is both over- and under- inclusive; it does not adequately protect physicians, but at the same time makes it difficult to protect valuable second-medical use inventions.

I would add that another rationale is sometimes advanced for refusing to allow patents for methods of method treatment, and the exercise of professional skill more generally, in those cases where the inventive contribution cannot be precisely defined or reliably replicated. As I said in a previous post:

Professional skill often reflects a multitude of subtle practices that have accumulated over years of experience. These skills can be capable of general definition, yet precisely because the general strategy is instantiated by a variety of specific practices, it may be difficult to define how to practice the skill. For example, a lawyer who is skilled in cross-examination may say "I like to establish a rapport with the witness" or "I like to intimidate the witness," but how exactly this is done is difficult to define. A few tricks might be described, but the skill must ultimately be learned by experience and practice - which is why it is referred to as a skill rather than a rule. It seems evident that such skills should not be patentable, and I suggest that this may underpin the intuition that professional skills are unpatentable. But this rationale only applies to certain types of professional skill, namely those which cannot be precisely defined. Any claim to such a skill would be unpatentable in any event, as being vague or insufficiently disclosed. This objection does not apply to skills that can be sufficiently precisely defined to be susceptible of effective use on the disclosure in a patent.

This rationale is compelling, but it does not require that methods of medical treatment or the exercise of professional skill be unpatentable, because such claims would be invalid for ambiguity in any event. If this problem of replicability is the real issue, excluding claims to the exercise of professional skill is both under-inclusive, because it only catches a subset of claims in which replicability is a problem,  and over-inclusive, because replicability is not a problem in all exercises of professional skill.

Tuesday, June 9, 2015

FCA Affirms Validity of LUMIGAN RC Patent on the Facts

Apotex Inc v Allergan Inc 2015 FCA 137 Dawson JA: Webb, Boivin JA aff’g 2014 FC 567 O'Reilly J
            2,585,691 / bimatoprost / LUMIGAN RC

O’Reilly J’s holding that the ‘691 patent turned largely on the facts, and, unsurprisingly, the FCA has affirmed on the basis that O’Reilly J made no legal error and there was no palpable and overriding error in his factual findings.

O’Reilly J held, on the authority of Sanofi, 2008 SCC 61, [77], that it is sometimes necessary to look to the disclosure to determine the inventive concept of the claims. In my post on that aspect of his decision, I remarked that “O’Reilly J is clearly right on this point,” and the FCA has now affirmed that principle, on the same authority [7.1]

On appeal Apotex also argued that the utility of the invention was not soundly predicted “because the line of reasoning from which the desired result can be inferred was not explicitly disclosed in the patent” [8]. The FCA held that “[t]hose elements of the doctrine of sound prediction that would be self-evident to the skilled person need not be explicitly disclosed in the patent” [9]. This strikes me as no more than an explicit statement of what is implicit in the principle that the patent is addressed to a skilled person, and it does not represent any change in the practice in this respect. (See here for my discussion of the FC holding on this point.)

The FCA also affirmed at [10] that a genus patent does not anticipate a selection if the special advantages of the selection are not disclosed in the genus. As the FCA pointed out, this point was established in Sanofi [32].

Thursday, May 21, 2015

Disgorgement of Patentee’s Profits Fails Second Branch of Unjust Enrichment Test

Apotex Inc v Eli Lilly & Co, 2015 ONCA 305 Feldman JA: Doherty, Blair JJA aff’g 2013 ONSC 5937 Grace J: Law, Sachs JJ

When a patentee brings an application for an order of prohibition pursuant to the NOC Regulations a statutory stay is automatically triggered keeping the generic off the market for 24 months or until the application is resolved in the generic's favour. If the generic prevails, it is entitled, under s 8, to damages equal to the profits it lost from having been kept off the market by the statutory stay. Since the patentee's price is normally higher than the generic's, the profits made by the patentee from sales that would have been made by the generic but for the stay are normally greater than the generic’s damages. Apotex has now failed, once again, to obtain not just its damages, but a disgorgement of the profits made by the patentee.

In its decision on this motion to strike Apotex' claim for unjust enrichment, the ONCA has provided a helpful review of the prior attempts by Apotex, both in the Federal Courts and Ontario courts, to obtain a disgorgement [22]-[31]. Apotex was previously unsuccessful on the basis that s 8 is a complete code which contemplates damages as the sole remedy [35] (and see here, discussing the previous ONCA decision, and here discussing the leading FCA decision).

In this case Apotex argued that these precedents do not govern when the patent holder obtains and lists its patent through misrepresentation: that is, it argued that even if mere invocation of the NOC Regulations cannot trigger disgorgement, knowingly triggering the Regulations by misrepretation may trigger such a remedy. This invited a debate as to the limits of the "complete code" argument, which was the basis on which Apotex' claim was struck by the Divisional Court. But the ONCA, of its own initiative [40], took a different tack. Instead of holding that the unjust enrichment claim was barred because allowing it would be inconsistent with the statutory regime, the ONCA held that Apotex' claim could not stand purely as a matter of the law of unjust enrichment [39], [41] (my emphasis):

there is a fundamental flaw in Apotex’s claim for unjust enrichment that makes this doctrine unavailable to Apotex, irrespective of the nature of Lilly’s conduct that may be proved at a trial. The flaw is in the second requirement for a claim of unjust enrichment: a corresponding deprivation.

Put simply, Apotex was never deprived of the portion of Lilly’s revenues represented by its monopolistic profits because Apotex would never have earned those profits.

It is true that the patentee, Lilly in this case, benefitted at Apotex’ expense to some degree – the profits lost by Apotex were gained by Lilly – but Apotex is already entitled to recover that loss under s 8. In the unjust enrichment claim Apotex is seeking Lilly’s excess profits above the damages which are already payable to Apotex, and “the portion of the windfall that is not compensable under s. 8 of the PMNOC regulations, the monopolistic profit, was not in any way transferred from Apotex or lost by Apotex” [53].

This brings us to Apotex’ policy argument, which is that [16]:

In the absence of a disgorgement of [the patentee’s profits], every patentee would have an incentive to use the PMNOC Regulations in all cases to unjustly delay entry of every generic product at the expense of the Generic, in the knowledge that the revenues made by it would exceed the damages for which it will be liable for the delay caused to the Generic.

There are two answers to this. One is the “complete code” argument. The appropriate incentive is a complex matter which has been addressed by the legislature in the NOC Regulations as a whole. There are a number of difficult policy decisions related to the incentives to use the regulations. For example, in under the US Hatch-Waxman, the first generic to successfully challenge the patent gets a 180 day exclusivity over other generics as an added incentive to file applications. This incentive feature is missing from Canadian law. Whether this is right or wrong, it is a decision that has been made by the legislature, and so should be changed, if necessary, by the same body.

The other response is made by the ONCA in this case:

Effectively, Apotex is asking the court to designate it as the de facto beneficiary of the wrongfully-obtained monopolistic profits despite recognizing in its pleadings that it was the public that suffered actual deprivation as a result of the monopolistic pricing. Unlike the plaintiffs in the “profiting from wrong” cases discussed above, Apotex is not positioned as the sole party with a legitimate right to “enforce” or “deter” the underlying wrong. The pecuniary interests of consumers, and potentially other generic companies, are also implicated.

That is, even if it is desirable to require the patentee to disgorge its profits to avoid abuse of the patent-linkage system, it does not follow that the profits should be disgorged to the generic. There is a prima facie argument that the parties actually harmed by the excessive prices, namely the consumers, should be those entitled to the disgorgement.

This argument is entirely distinct from the complete code argument. As the ONCA pointed out, in Low v Pfizer Canada Inc, 2014 BCSC 1469, Smith J allowed an allegation of unjust enrichment to stand in a class action claim on behalf of consumers [33]. Smith J’s holding required a rejection of the “complete code” argument [34], but it is consistent with the ONCA’s holding in this case. Even if it sound policy to require a patentee to disgorge is profits, Low v Pfizer illustrates that it is not necessary, either in theory or in practice, to require those profits to be disgorged to the generic that triggered the s 8 challenge.

Wednesday, May 20, 2015

OMNARIS Patents Invalid for Obviousness

Takeda Canada Inc v Apotex Inc 2015 FC 570 O'Reilly J
            2,388,322 / 2,388,325 / 2,538,419 / ciclesonide / OMNARIS

Takeda had a compound patent to ciclesonide (2,050,812) which expired in 2011 [3]. The patents at issue in this case were two formulation patents and a second use patent. O’Reilly J held all three patents to be obvious. None of the other grounds were addressed [5]. O’Reilly J’s holding turned entirely on the facts. One point of interest is that he did prefer evidence that was given before the expert knew what was claimed in the patent in dispute, following Rasagiline (blogged here) and Esomeprazole 2014 FC 638 [29], [43], [60]. However, this did not appear to be a determinative reason in his overall weighing of the evidence; for example, another factor that was at least as important was the fact that Takeda’s expert did not fully canvass the prior art [34], [45].

Tuesday, May 19, 2015

Should Claim Construction be a Matter of Law?

Cobalt Pharmaceuticals Co v Bayer Inc / drospirenone (NOC) 2015 FCA 116 Stratas JA: Pelletier, Webb JJA aff’g 2013 FC 1061 Hughes J (blogged here and here)
            2,382,426 / drospirenone / YAZ

In Cobalt / Drospirenone the FCA held that “[t]he Federal Court’s construction of the patent is to be reviewed on the basis of correctness” [12]. However, Stratas and Webb JA went on to argue at some length, in obiter comments, that it would make more sense to apply a deferential standard [16]-[24]. (Pelletier JA did not join in this potion of the decision; he did not disagree with the comments, but rather expressed no opinion on the basis that it was not necessary to do so for the disposition of the appeal [105]).

Stratas JA pointed out that “a court nearly always reads a patent through goggles supplied by the experts whom the judge considers to be credible and accurate,” and “[o]ften the experts’ testimony stretches beyond opinion evidence and goes into factual matters within their knowledge that are relevant to the construction exercise” [17], [18]. As is well-recognized, if an inquiry is heavily fact dependent, this militates in favour of a deferential standard of review [18], [20].

These are compelling arguments against reviewing claims construction on a correctness standard. I also agree with Stratas JA’s observation that “doctrine of comity among judges will ensure there is sufficient consistency and certainty in the meaning of patents” [21]. But I don’t think these points, valid though they are, lead to the conclusion that a generally deferential standard of review should apply. In principle at least, the problem of claim construction is a mixed question of fact and law. Ideally, the trial judge would use the testimony of the experts to educate herself as to the meaning of all the technical terms, and then, armed with that knowledge, would construe the claim herself. The first aspect of the inquiry is factual, while the second is legal. It would follow that in principle the mixed standard – deferential review except for extricable legal questions, which are reviewed for correctness – should be applied. This is the standard which applies in obviousness and utility for example, as Stratas JA notes [48], [55]. Stratas JA appealed to Sattva Capital 2014 SCC 53, for the proposition that “even legal documents may be subject to review on a deferential standard” [24]. Indeed, Sattva Capital does illustrate that legal documents are not necessarily reviewed on a correctness standard, but to be precise, the SCC held that a mixed standard of review was applicable to the contract in question [53].

I don’t think I am disagreeing with Stratas JA in suggesting that the appropriate standard is mixed standard. While he repeatedly referred to “a deferential approach” [20] or “a deferential standard” [24], or “according deference” [22], his comments were mainly directed at showing why a pure correctness standard was problematic, and in referring to “a” deferential standard, he appears to have intended to capture any standard more deferential than correctness. This is directly implied by his reference to both Sattva Capital and the USSC decision in Teva v Sandoz as endorsing a deferential standard, as both of those cases endorse a mixed standard.

In any event, even if a mixed standard is applicable in principle, can it really be applied in practice? Stratas JA made this point by asking rhetorically, “How are appellate judges supposed to cleave off those aspects of claim construction that flow from the trial judge’s appreciation of expert evidence from the words of the claim per se?” [20]. It seems to me that the answer is yes, sometimes they can. This is illustrated by Stratas JA’s own decision in Cobalt / Drospirenone. While he argued that a deferential standard would be preferable, he recognized that review for correctness is settled law, and correctness is the standard he actually applied [25].

The claim of the ‘426 patent in question, Claim 31, was to “drospirenone particles” [27] and the question was whether this should be construed as being limited to micronized particles [28]. In making the argument that it should be so limited, Cobalt pointed to references to micronized form in several points in the specification. In rejecting Cobalt’s argument, Stratas J noted that “Patents are not to be construed in a tendentious way. Rather, we must examine the patent as a whole construing the language of the claims with due regard to the inventor’s purpose through the eyes of the skilled reader: Whirlpool, [2000 SCC 67]” [31]. This, it seems to me, is a point of law, as is indicated by the fact that Stratas JA cited the authority of Whirlpool as support. He also noted that while some of the claims did explicitly claim “micronized drospirenone particles,” others, including the claim at issue, were not so limited [37]. Had the inventors intended to limit Claim 31 to micronized particles, they would have done so explicitly, as they did in other claims. This is not a question of what “micronized” means, or anything else which is informed by technical expertise, but is rather a matter of general grammar and interpretative principles, which are more squarely within the expertise of a judge than a technical expert. Similarly, Stratas JA pointed to a passage in the specification stating that “Instead of providing the drospirenone in micronized form, it is possible to [use other techniques to promote rapid dissolution]” [35]. To explicitly give micronized form as but one alternative in the specification supports the view that not all of the claims are restricted to micronized form. One can come to this conclusion without knowing what “micronized” means. Without getting into the niceties of whether these are all strictly extricable questions of law, at least they are questions which are squarely within the expertise of a judge, rather than a technical expert.

This distinction is important because the law / fact question goes not only to the standard of appellate review, but also to the role of the trial judge in the construction of the patent. Indeed, the statement by the SCC that is cited as authority for the correctness standard – “claims construction is a matter of law for the judge” – goes to the latter point (Whirlpool [61], cited at [12]). The full passage is as follows:

The appellants object that the "vane" controversy ought to have been foreclosed by the Agreed Statement of Facts where the parties agreed that the appellants' flex vane machine infringed the '803 patent subject to the removable sleeve issue. However, claims construction is a matter of law for the judge, and he was quite entitled to adopt a construction of the claims that differed from that put forward by the parties.

In the question of whether Claim 31 was restricted to micronized particles, it would no doubt be possible for a trial judge to decide this matter purely as a question of fact by considering the evidence of expert witnesses. But this would require the expert witness to testify eg that a skilled person would in fact construe the claims by looking to the patent as a whole with due regard to the inventor’s purpose, and that a skilled person would note that some claims did use this language, and would therefore infer that the claims that were not so restricted were broader, and so on. And another expert would no doubt testify to the contrary. The trial judge would likely then decide that the evidence of the expert who advanced grammatically peculiar interpretations was to be discounted. But if the trial judge could and should discount the evidence of an expert who testifies to an ungrammatical reading for the reason that the reading is ungrammatical, it is more straightforward for the trial judge to simply say directly she can consider matters of grammatical reading herself, without evidence from technology experts. That, it seems to me, is the gist of the SCC statement in Whirlpool.

In summary, Stratas JA has given strong reasons not to review claim construction on a pure correctness standard, but there is a stronger argument for a mixed standard than for a wholly deferential standard. Stratas JA’s comments were directly primarily to the problems with the correctness standard, and I do not see his remarks as ruling out the mixed standard.

Friday, May 15, 2015

Time for En Banc Review at the FCA?

Cobalt Pharmaceuticals Co v Bayer Inc / drospirenone (NOC) 2015 FCA 116 Stratas JA: Pelletier, Webb JJA aff’g 2013 FC 1061 Hughes J (blogged here and here)
            2,179,728 / 2,382,426 / drospirenone / YAZ

No new law was applied by the FCA in Cobalt / Drospirenone and the result itself is not surprising, but the decision is nonetheless very interesting. Stratas JA explicitly called for the SCC to provide advice in two different areas, namely the standard of review for claim construction [16] and whether methods of medical treatment should be considered patentable subject matter [101]. Stratas JA also provided an in-depth discussion, albeit in obiter, of whether construction of the claims should be considered a matter of law or fact [16]-[24].

That the FCA called for SCC clarification in two contentious areas of law raises the broader question of what institutional mechanisms should be used to clarify and advance the law. I suggest it is time to seriously consider instituting an en banc mechanism similar to that which is used in both the US appellate system, including the Federal Circuit, and in the EPO with the Enlarged Board of Appeal. In this mechanism, a court which normally sits in panels, will sit with a large number of judges (though not necessarily the full court) to review its own decision in appeals raising important points of law. As the EPO explains, the Enlarged Board of Appeal “clarifies and interprets important points of law . . . and ensures uniform application of the law.” The issues raised in this case illustrate the usefulness of a mechanism for clarification and interpretation of important points of law. An en banc procedure could also usefully address apparent divergences between different panels of the FCA. En banc review would have advantages over the options which are currently institutionally available, namely legislative amendment, review by the SCC, or allowing panels to overrule prior decisions of other panels.

The problem with legislative amendment is obvious: the legislature has a lot on its plate and even very important issues of patent law may not be important enough to warrant legislative action. This is so obvious that in his call for reform Stratas JA addressed himself only to the SCC: he did not bother to say “in the interests of the sound development of the law, I would like to offer certain observations for the legislature to consider.” But much the same can be said about the SCC. The SCC has a limited caseload and it grants leave only in cases which it considers to be “of public importance” (Supreme Court Act s 40; and see here for a general discussion of the factors considered in leave decisions.) As I noted in an earlier post, “The SCC only hears about 60 cases a year, including many as of right criminal appeals, and it has an understandable focus on constitutional and criminal law cases. With what remains it has to deal with every other area of private law. The SCC simply does not have the ability to deal with every confused technical area of law, no matter how important that area might be to some parties.” It is true that the SCC is more accessible than the legislature and it is certainly more likely to act on technical matters of law such as the nature of appellate review, but the fact remains that the SCC cannot deal with every area of patent law that requires clarification or reform.

The problem of accessibility does not arise if we look to individual panels of the FCA, but individual panels simply lack the requisite institutional authority. This is quite apart from any argument that a panel should not be permitted to change or depart from settled law in order to preserve the expectations of the parties. Even if we were to say that it is permissible for an individual panel to depart from settled law, doing so would be more likely to further confuse difficult areas of law. The views of any panel, even the most recent to opine on a particular issue, carry no more weight than the panels that went before it. If one panel purported to change or clarify the law, the next panel to hear the same issue would be perfectly justified in saying that the opinion of the panel that had changed the law deserved no more weight than any of the panels that went before it, and so the supposed change was ineffective. Certainly, a well reasoned opinion of one panel may be so persuasive that subsequent panels will follow it for that reason; and more broadly, mechanisms of comity can cause the law to evolve and become clearer through the decisions of multiple panels. Such a process often does work effectively to resolve difficult new issues of law. But sometimes even new issues prove intractable; and the mechanism of incremental change through the decisions of individual panels is much less effective to address the problem which arises when law which is taken to be settled in principle proves to be problematic in practice.

So, en banc review is more accessible than the legislature or the SCC and it is more authoritative and potentially quicker than the decisions of individual panels. With that said, I can think of a couple of objections to en banc review, though none which strike me as compelling. One is that the law once settled, should not be changed. But that is not an argument against en banc review; it is an argument against changing the law through any mechanism, including SCC review and legislative change. And if the issue is one of clarification or interpretation rather than change, then by definition there are no settled expectations to be disturbed.

The other objection is that en banc review will not be useful when the problematic law is SCC precedent. While it is true that not even an en banc panel of the FCA could overrule the SCC, that only limits the scope of en banc review in some cases. So, one of the areas addressed by the FCA was methods of medical treatment. As Stratas JA noted “The current law in this Court is that methods of medical treatment are not patentable. . . . The provenance of this is Tennessee Eastman Co. et al. v. Commissioner of Patents, [1974] S.C.R. 111, 33 D.L.R. (3d) 459, a decision based on former subsection 41(1) of the Patent Act, now repealed.” As Stratas JA points out, and as the SCC has affirmed, Tennessee Eastman itself was based on s 41. As discussed here, the notion that methods of medical treatment remain unpatentable despite the repeal of s 41 stems from the interpretation of Tennessee Eastman by the FCA itself in ICI (1986) 9 CPR(3d) 289, subsequently affirmed in other FCA decisions. While the law is settled, changing it would not require the FCA to overrule the SCC, but only to overrule its own prior decisions.

The question of the correct standard of appellate review of claim construction is different, because of the authority of the SCC in Whirlpool 2000 SCC 67 [61] holding that “claims construction is a matter of law for the judge.” I will discuss this in more detail in Monday’s post. For now I will just saw that I think the law could be considerably clarified and improved in this area without overruling Whirlpool. And even if I am wrong about that, if en banc review can authoritatively tackle even half the contentious patent issues that come to the FCA, that would be very helpful.

Thursday, May 7, 2015

Valid Industrial Design May Be Functional

Zero Spill Systems (Int’l) Inc v Heide 2015 FCA 115 Stratas JA: Dawson, Near JJA var’g 2013 FC 616 Barnes J

In its Zero Spill decision the FCA has largely set aside Barnes J’s decision and remitted it for redetermination. The only legal point of interest relates to the ‘793 Industrial Design.

Wednesday, May 6, 2015

Allegation of S 53 Invalidity Allowed to Stand

NOV Downhole Eurasia Limited v TLL Oil Field Consulting 2015 FCA 106 Nadon JA: Dawson, Boivin JJA aff’g 2014 FC 889 Mosley J
            2,255,065

In a brief decision from the bench the FCA has affirmed Mosley J’s refusal to strike a statement of defence asserting that the '065 patent was void pursuant to s 53(1) as a result of statements regarding claim scope made during prosecution. As discussed here, this case raises important issues regarding the relationship between s 53 and prosecution history estoppel, though of course these issues are not resolved by a motion to strike.

Monday, April 27, 2015

Blogging Break

I am taking an end of term vacation. I expect to resume blogging sometime on the week of May 11, starting with any decisions that came out while I was away.

Wednesday, April 22, 2015

SCC Affirms FCA on Calculation of Damages under NOC S 8

Sanofi-Aventis Canada Inc v Apotex Inc / ramipril (s 8) SCC 35886 aff’g 2014 FCA 68 Sharlow JA, Pelletier JA concurring, Mainville JA dissenting, var’g 2012 FC 553 Snider J

On Monday the SCC delivered judgment orally, dismissing the appeal in Ramipril s 8:

THE CHIEF JUSTICE — We are all of the view to dismiss the appeal substantially for the reasons of the majority of the Court of Appeal.
           The appeal is dismissed with costs.

My posts on the FCA decision are here, here and here; posts on the FC decision are here and here, as well as here in the related Teva action.

The companion Teva case, which was not appealed to the SCC, also dealt with assessment of damages under s 8: 2014 FCA 67 var’g 2012 FC 552, with an additional blog post here relating to an issue raised solely in Teva. See also the related litigation challenging the validity of s 8: 2014 FCA 69 blogged here, aff’g 2012 FC 551 here.

Friday, April 17, 2015

Should Experts Be “Blinded” as to the Infringing Device When Construing the Claim?

Teva Canada Innovation and Teva Pharmaceutical Industries Ltd v Apotex Inc (NOC) 2014 FC 1070 Gleason J
            2,232,310 / rasagiline / AZILECT

In this NOC decision, which turned entirely on claim construction, Apotex’ Apo-rasagiline product was found not to infringe Teva’s ‘310 patent. The main point of legal interest is Gleason J’s holding that if an expert is “blinded” as to the nature of the putatively infringing product when carrying out their claim construction, this is a reason to prefer that evidence over the evidence of an expert who is not so blinded.

The ‘310 claims a pharmaceutical composition comprising rasagiline and at least one alcohol selected from the group consisting of “pentahydric and hexahydric alcohols” [7]. It was undisputed that the term “pentahydric” refers to five hydroxyl, or “-OH” groups, and that the term “hexahydric” refers to six hydroxyl groups [20]. So, for example, mannitol is pentahydric:

Apotex’s product comprised rasagiline and an alcohol, and the sole question was whether that alcohol was pentahydric or hexahydric. While the exact alcohol used by Apotex was redacted (with the redaction to be removed once Apotex’ NOC is issued) [5], the problem can be understood if we suppose Apotex’ product contained maltitol:
Apotex’ experts opined that in naming an alcohol, all the -OH groups in the molecule should be counted, while Teva’s experts were of the view that only the groups on the alcohol moiety should be counted. So, on the former view maltitol would be a nonahydric alcohol, and on the latter view it would be pentahydric.

Gleason J accepted the view of Apotex’ experts, primarily - or at least "firstly" - as a matter of textual construction of the specification. In particular, the specification uses the term “alcohol” to refer to the entire molecule to be used in the composition, not just the alcohol moiety, and it uses the term “pentahydric or hexahydric” to modify the term “alcohol,” thus implying that all the -OH groups in the molecule must be counted, not just those on the alcohol moiety [89]-[93].

A second reason that Gleason J preferred the evidence of Apotex’ experts is of more general interest. Apotex’ experts had been provided with the ‘310 patent and asked to construe it, and only subsequently were they provided with Apotex’ ANDS and asked to opine as to whether Apo-rasagiline fell within the claims [43]-[46]. Teva’s experts, on the other hand, construed the ‘310 patent with the allegedly infringing substance in mind [34]-[42]. Gleason J held that the way in which they had been instructed was a reason to prefer the evidence of Apotex’ experts [94]. (Though she did not suggest it was a determinative reason.)

As Gleason J acknowledged [96], this raises the tension between the principle that “the construction exercise [should] be uninfluenced by concerns over infringement or invalidity,” and the competing principle that in construing claims "it is essential to see where the shoe pinches” Nokia v Interdigital [2007] EWHC 3077 (Pat) [25], quoted with approval in Qualcomm v Nokia [2008] EWHC 329 (Pat) [7], quoted with approval by Hughes J in Shire Biochem 2008 FC 538, [22] (and see 2009 FC 991 [88]; 2009 FC 676 [82]). Gleason J said that

However, the decision in Shire Biochem does not stand as authority for the proposition that it is proper to construe a patent with the infringing substance in mind, but, rather, only for the common sense notion that to be useful evidence and arguments in a case must be directed toward the issues that arise.

This is not quite right. What Floyd J said in Qualcomm, quoted with approval by Hughes J in Shire Biochem, is that

It is often said that a patent specification should be construed without reference to the infringement. Yet one cannot sensibly identify the point of construction without understanding what it is about the alleged infringement which is said to take it outside the claims.

So, when the claim calls for A, and the allegedly infringing device requires B, “the right question is . . . whether in its context in the specification the skilled man would appreciate that A in the claim encompassed B” (Qualcomm [25]). This necessarily requires focusing on the allegedly infringing device. Similarly, in Technip France SA's Patent (2004) RPC 46, quoted in Shire Biochem, Jacob LJ remarked that “in most sensible discussions of the meaning of language run on the general lines `does it mean this, or that, or the other?' rather than the open-ended `what does it mean'?” In Nokia, Pumfrey J prefaced the quoted remark with the statement that “it seems sensible to turn to the [allegedly infringing product] to identify the points of construction that arise” [25]. He specifically directed the parties to serve statements of the case identifying the relevant aspects of the allegedly infringing product for the experts to focus on in construing the claims, and he indicated that such statements are “essential” [26], at least in a complex case.

Two SCC decisions cited for the proposition that claim construction is independent of validity and infringement are Whirlpool 2000 SCC 67 and Sanofi 2008 SCC 61. In Whirlpool the Court said that “Claims construction is antecedent to consideration of both validity and infringement issues” [43]. This may be taken to say that construction should not be influenced by concerns over infringement or invalidity, but it does not say that claim construction should be undertaken without reference to the infringing product. In holding that the report of the experts who had been “blinded” should be preferred, Gleanson J cited Rennie J’s holding to the same effect in Omeprazole 3 2014 FC 638, [321]. Rennie J held that the “blinded” experts “had mandates that allowed them to opine on the state of the art, in the words of the Supreme Court of Canada, ‘viewed without any knowledge of the alleged invention as claimed’ (Sanofi-Synthelabo Plavix, at para 67).” But that statement in Sanofi was made in the fourth step of the Windsurfing / Pozzoli test for obviousness

(4) Viewed without any knowledge of the alleged invention as claimed, do those differences constitute steps which would have been obvious to the person skilled in the art or do they require any degree of invention?

What this is saying is that the obviousness inquiry must be undertaken without the benefit of hindsight. Claim construction is step (2) of the test, and Sanofi does not say that claim construction should be undertaken without reference to the infringing product.

Apart from these authorities, I see a danger in ignoring the infringing device. Suppose that almost all alcohols were simple linear chain molecules, so that there is normally no difference between counting -OH groups in the alcohol moiety and counting them in the molecule as a whole. If asked the general question of how to define a pentahydric alcohol, a skilled person might say “count the -OH groups in the molecule.” But if then presented with an unusual alcohol with two distinct parts, the skilled person might well say “Well, I never thought of that – of course I meant that when there are two parts to the molecule, you should count the -OH groups on the alcohol moiety.” Imagine trying to give legal advice to a client who insisted on asking “what are the requirements for a valid patent,” while refusing to disclose her invention, and who then insisted on holding you to your original definition after revealing the peculiarities of her own invention.

I take the point that claim construction should not be tendentious. But it seems to me that ignoring the infringing device in claim construction can also be misleading. Either course has its risks. Rather than preferring the evidence of experts who have been blinded, perhaps it would be better to recognize the problem of tendentious testimony on the one hand, and misdirected evidence on the other.

Finally, Gleason J remarked that

[96] Teva could easily have directed its experts’ attention to these issues by posing the question whether the terms “pentahydric or hexahydric alcohols” as used in the 310 Patent would connote a molecule or a moiety to the skilled person, without alerting the experts to the fact that the potentially infringing substance was [redacted].

I don’t find this persuasive. I agree that this would have properly directed the experts’ witness to where the shoe pinches, but I’m not sure this type of instruction is any better than revealing the allegedly infringing molecule itself. The experts knew that all the alcohols specifically mentioned in the specification were linear chain alcohols (mannitol, sorbitol and xylitol), and an expert instructed to consider whether the term connoted a molecule or a moiety could readily have inferred that the infringing substance had two distinct moieties, which would defeat the purpose of the blinding. More importantly, this approach demands an excessive degree of foresight from counsel; how can counsel, who are not normally themselves persons skilled in the art, know in advance which aspects of the allegedly infringing product are relevant to the claim construction? How would they known to present the molecule / moiety distinction before having an opinion from an expert that it was relevant? Perhaps in this case the particular point might have been obvious to a pharmaceutical litigators of ordinary skill, but as a general matter we cannot presume that litigators will know “where the shoe pinches” before they are told by experts.

Tuesday, April 14, 2015

Minister Cannot Issue NOC to Generic Licensee on Basis of Administrative Submission

Actelion Pharmaceuticals Canada Inc v Canada (Attorney General) 2014 FC 1249 Gleason J
            2,071,193 / bosentan / TRACLEER

This decision is a companion to Gleason J’s Exemestane 2014 FC 1243 decision, in which she held that when a first generic has received an NOC, a second generic which licenses from that first generic remains subject to s 5. Consequently, as discussed here, the second generic must serve an NOA on the patentee, and the Minister cannot issue an NOC to the second generic based on an administrative drug submission that cross-references the first generic’s submission.

The Bosentan case raised exactly the same question and Gleason J simply applied Exemestane and held that the patentee was entitled to a declaration that Health Canada had failed to comply with the PMNOC Regulations by failing to require the second generics to address the 193 Patent before issuing them NOCs for their bosentan products [9]. However, in this case the patent had expired by the time of judgment and Gleason J noted that an order quashing the NOC would potentially be moot. Since the mootness question had not been fully argued, she required the patentee to file additional submissions if it wished to pursue an order quashing the NOCs [10].