Monday, November 24, 2014

“The reasonable person thinks in terms of economics, not principle"

Apotex Inc v Canada 2014 FC 1087 Hughes J

This decision emerged from a test case in which Apotex and Health Canada battled over the question of whether a generic could apply for an NOC on the basis of a foreign reference product. The case settled on terms favourable to Apotex, but HPB did not live up to the settlement agreement. In this decision Hughes J held Canada liable for breaching that agreement (though because of quirks in the pleadings, the formal ground of liability was in tort rather than contract). In an interesting part of the decision, Hughes J held that Apotex was subject to a duty to mitigate, which would essentially have required it to abandon its test case and leave the question of legal principle unanswered. Hughes J held that the duty to mitigate was nonetheless applicable, because “the reasonable person thinks in terms of economics, not principle” [159].

In the late 1980s, the attitude of what was then the Health Protection Branch (HPB) of Health Canada towards the use of a foreign drug product as the reference product in a generic’s application for an NOC was uncertain. It was the usual practice to use a product approved in Canada as a reference product, but occasionally an NOC would be granted on the basis of a foreign reference product. Apotex wanted a test case to establish whether it was entitled to use a foreign reference product [105]. It picked trazodone, and in January 1988 Apotex filed a New Drug Submission comparing its Apo-Trazad product to the innovator’s US product. On the particular facts, the use of a foreign reference product was scientifically sound, but HPB was concerned that allowing the use of a foreign reference product might set a precedent for circumstances in which the comparison was not appropriate [39]. Consequently, HPB “insisted on a Canadian standard, unless the United States reference product could be ‘conclusively proven to be identical’ to the Canadian product” [44]. The requirement of identicality made it effectively impossible to use a foreign reference product [44]. In other words, both Apotex and HPB were treating this as a test case. In light of this impasse, in 1990 Apotex sought judicial review of the Minister’s position. That litigation was settled on terms favourable to Apotex by a Settlement Agreement in November of 1990 in which HPB agreed to assess the application on the basis of “equivalency” rather than identicality [51].

Friday, November 14, 2014

No New Cases for the Week of 10 November

No new patent / NOC / data protection cases were released for the week of 10 November 2014.

Tuesday, November 4, 2014

It Is Not Necessarily an Abuse of Process for an Innovator to Switch Positions Across NOC Proceedings

Apotex Inc v Pfizer Canada Inc and G.D. Searle & Co / celecoxib (NOC) 2014 FCA 250 Noël CJ: Trudel, Boivin JJA aff’g ) 2014 FC 38 and NOC) 2014 FC 314 Harrington J
            2,177,576 / celecoxib / CELEBREX

The decisions under appeal, Mylan / celecoxib (NOC) 2014 FC 38 and Apotex / celecoxib (NOC) 2014 FC 314 (blogged here and here, respectively), turned primarily on the construction of the promised utility of the ‘576 patent. In both cases Harrington J interpreted the promise of the patent modestly and granted an order of prohibition to Pfizer. In a decision which is primarily an application of Plavix FCA 2013 FCA 186 (blogged here), the FCA has now affirmed both of Harrington J’s decisions. (While Harrington J’s decisions were separate, the reasoning was common, and the appeals were heard together [3].) While the FCA decision elaborates on some points relating to the promise of the patent, it is perhaps more noteworthy in its treatment of abuse of process, particularly the holding that it is not necessarily an abuse of process for an innovator to switch positions across NOC proceedings.

Monday, November 3, 2014

Ex Turpi Causa Not Relevant to Patent Litigation

Les Laboratoires Servier & Anor v Apotex Inc & Ors [2014] UKSC 55 aff’g [2012] EWCA Civ 593 (IPKat) rev’g [2011] EWHC 730 (Pat) (here and IPKat)
            perindopril; Ex turpi causa

Patent protection is national, but trade and innovation incentives are international. This case begins to address that tension. The UKSC held that ex turpi causa is not applicable in the patent context, and so will not affect litigation where goods sold in one country were infringing in another country. Instead of using the blunt hammer of ex turpi causa, the tension should be resolved with the finer sword of damages. The result is to make Canadian damages law more relevant to foreign disputes; the damages portion of the bifurcated Canadian Perindopril, 2008 FC 825 aff’d 2009 FCA 222 litigation, in particular, has taken on added significance.

In 2006 Servier commenced an action in the UK against Apotex for infringement of its European patent for a crystalline form of perindopril. Servier obtained an interlocutory injunction, subject to the usual undertaking in damages. Servier's action was ultimately dismissed, as the patent was declared invalid, and Apotex sought damages on the undertaking for the loss of UK sales. However, the perindopril which Apotex would have sold in the UK would have been manufactured by Apotex in Canada, and Servier also held a Canadian patent for the compound perindopril itself. In proceedings paralleling the UK litigation, Servier sued Apotex in Canada for infringement of the Canadian compound patent. An interlocutory injunction was denied, but Servier was ultimately successful. Thus it became clear that manufacture in Canada of the product which Apotex would have sold in the UK but for the interlocutory injunction, would have infringed the Canadian patent. In the UK proceedings on the undertaking, Apotex conceded that the award on the undertaking should be reduced by an amount equal to the liability that Apotex would (hypothetically) have faced under Canadian law for manufacturing the perindopril which it would (hypothetically) have sold in the UK had the interlocutory injunction not been in place [EWCA 22]. Servier, on the other hand, argued that Apotex should be entirely precluded from collecting on the undertaking because the Canadian infringement constituted sufficient "turpitude" to engage the doctrine of ex turpi causa. (This summarizes a somewhat complex procedural history, described in more detail at [2]-[8]; and see also my IPKat post on the EWCA decision.)

Friday, October 31, 2014

STELARA / Anti-IL-12 Antibody Decision Set Aside

Janssen Inc v AbbVie Corporation, 2014 FCA 242 Trudel, Webb, Boivin JJA (for the Court) rev’g 2013 FC 1148 Hughes J and setting aside 2014 FC 55 Hughes J

Janssen Inc v Abbvie Corporation 2014 FCA 241 Trudel, Webb, Boivin JJA (for the Court) setting aside 2014 FC 489 Hughes J
2,365,281 / IL-2 antibodies

In 2013 FC 1148 Hughes J dismissed Janssen’s motion to amend its Schedule A to its Defence and Counterclaim so as to remove some and add other prior art references. The decision of the FCA in 2014 FCA 242 reverses that decision of Hughes J. Consequently, because the amendments in question “go to the heart of one of the major invalidity issues” [15], the FCA also set aside Hughes J’s subsequent decision in the infringement action itself, 2014 FC 55 (blogged here and here). In light of the intimate relationship between the validity and infringement issues, the FCA declined to order a new trial solely on the issues most directly affected by the prior art in question; instead, it acceded to Janssen’s request for a new trial of all the issues [32]. The FCA also ordered that the trial would be before a new judge [32].

In 2014 FCA 241 the FCA set aside the injunction that had been granted by Hughes J in 2014 FC 489 (blogged here) in consequence of his liability decision. While the reasons were very brief, it is evident that the injunction was set aside purely in consequence of the setting aside of the liability decision, and not on its own merits.

In 2014 FC 863, Janssen was held to be prima facie in contempt of that injunction, as blogged here. Presumably the setting aside of the injunction would provide a defence to the prima facie contempt.

Thursday, October 30, 2014

Res Judicata in a Bifurcated Action

Merck & Co Inc v Apotex Inc 2014 FC 883 Lafrenière J
            1,275,350 – lisinopril – PRINIVIL

This motion to amend a Responding Statement of Issues raises a very interesting and difficult issue respecting the application of res judicata to a bifurcated action when the law has changed between the liability and damages portions, though at the end of the day I doubt the resolution of that question would make any difference to the outcome.

In the underlying Lisinopril Liability decision, 2006 FC 524 aff’d 2006 FCA 323, Apotex argued that the ‘350 patent was invalid because it was improperly divided from the parent ‘340 application, which disclosed only one invention. Hughes J rejected this on the basis that he was bound by prior case law, including Boehringer (1962), 39 CPR 201, to hold that each claim constitutes a different invention [116]. The FCA affirmed on this basis [39]. Subsequently, in its Viagra decision 2012 SCC 60 [57], the SCC held that Boehringer “does not stand for the proposition that every claim in a patent application is a separate invention.” In this motion Apotex argued that the law having changed – or at least, the Liability decision having been based on a misunderstanding of the law – it should be able to amend its defence in the damages portion of the action to argue that the Merck did not suffer any damages as a result of Apotex’ activities [28.12].

Essentially, the argument is that even though Apotex has been found liable for infringement, it should not be made to pay damages for infringement of an invalid patent. In support, Apotex relied on the UKSC decision in Virgin Atlantic [2013] UKSC 46. In Virgin Atlantic, the EWCA had held the patent at issue to be valid and infringed, and ordered an enquiry as to damages [11]. Subsequently, the EPO held the patent to be invalid [12]. The effect of the EPO decision is that the patent on which the liability decision was based is deemed never to have existed [27]. However, the EPO decision could not be raised by way of an appeal of the liability decision, as the order of the EWCA was final and not subject to appeal [16]. The question before the UKSC was whether the defendant should be able to raise the invalidity in the enquiry as to damage [16]. The UKSC held that the invalidity could be considered in the damages enquiry [37].

Monday, October 27, 2014

No New Cases for the Week of 20 October

No new patent / NOC / data protection cases were released for the week of 20 October 2014.

Keep in mind that I generally only blog on substantive patent / pharma cases. If you want to keep abreast of all new Canadian decisions, including procedural decisions and cases outside that core substantive area, I recommend subscribing to the Daily Intellectual Property News service from Alan Macek's IPPractice.

Tuesday, October 14, 2014

More on the Perfect Match Requirement of Listing on the Patent Register

ViiV Healthcare ULC v Teva Canada Ltd 2014 FC 893 Hughes J aff’g 2014 FC 328
Milczynski J (here)
            abacavir & lamivudine. / KIVEXA & TRIZIVIR / 2,289,753

Hughes J applied the “perfect match” requirement for listing of a patent on the Patent Register, as set out by the FCA in the leading case of Gilead / COMPLEREA 2012 FCA 254 (blogged here), to uphold Milczynski J decision (blogged here) that the ‘753 patent cannot be listed on the Patent Register against KIVEXA or TRIZIVIR. There is not really any new law in this decision, though Hughes J does provide a thorough review of the case law at [47], and a list of principles emerging from those cases at [48]. The main point of interest is that in this litigation, the Minister of Health had argued that while a perfect match is required to list a patent claiming a formulation under 4(2)(b) of the NOC Regulation, a perfect match is not required to list of a patent claiming a medicinal ingredient, which is governed by 4(2)(a). However, as Milczynski J held, in Gilead the FCA clearly held that the perfect match is required under 4(2)(a), and Hughes J has now affirmed. In other posts on the listing requirement I have argued that the perfect match requirement is rigid formalism, because eligibility for listing turns on how the claims are drafted rather than on the substantive scope of the claims. I can understand how the “relevant” standard developed by the courts under the old Regulations was too liberal, but requiring a perfect literal match strikes me as too strict; it seems to me that a “would necessarily infringe” standard would strike a better balance. But the point is settled law now.

Here is the summary of the law provided by Hughes J:

[48] I draw the following principles respecting the interpretation of the various subsections of 4(2) of the NOC Regulations having regard particularly to the Federal Court of Appeal decisions and the Reasons of Justice Russell in Bayer, as affirmed by the Federal Court of Appeal:
• There is no sound reason to adopt different legislative requirements of product specificity for the various subparagraphs of subsection 4(2) of the NOC Regulations (Gilead, paragraph 39);
• absent precise and specific matching between what the patent claims and the product/use/dosage forms for which the NOC has been granted to the first person, the Minister cannot properly list the patent (Purdue, paragraphs 43; Abbott, paragraph 49; Gilead, paragraphs 37-38);
• a claim for a formulation means a claim that includes both medicinal and non-medicinal ingredients. A claim directed to medicinal ingredients, without claiming also non-medicinal ingredients, does not qualify for listing as a formulation under subsection 4(2)(b) of the NOC Regulations (Gilead, paragraphs 27 to 32, 49; Bayer, paragraphs 67 to 69).
• where a patent claims only one medicinal ingredient, it cannot be listed as against an NOC obtained for two (or more) medicinal ingredients; at least where, to use the words of Russell J, at paragraph 69 of Bayer, where “…a drug with one medicinal ingredient will have a different effect from a drug where two medicinal ingredients are combined “to achieve the desired effect [emphasis added].” This same distinction appears in Gilead, where Trudel JA wrote at paragraphs 31 and 32:
31 Finally, the overall inventive step of the '475 Patent, as found by the Judge, is the combination of chemically stable medicinal ingredients. The '475 Patent emphasizes the beneficial effects of combining chemically stable combinations of medicinal ingredients.
32 Thus, I conclude that the '475 Patent falls under paragraph 4(2)(a), as the relevant claims consist of chemically stable combinations of medicinal ingredients.

As the last bullet point indicates, Hughes J considered whether the prior case law left open the possibility that a patent claiming one medicinal ingredient might be listable against a drug with two medicinal ingredients if there was no synergy between drugs. However, he ultimately held that

[89] In my view, it is not productive when considering the listing requirements of subsection 4(2) of the NOC Regulations to consider synergy or not. The decision of the Federal Court of Appeal in Gilead is sufficiently clear. A patent claim for only one medicinal ingredient cannot support a listing under the NOC Regulations where the underlying NOC is for a combination (synergistic or otherwise) of two or more medicinal ingredients.

For a discussion of the facts related to KIVEXA, see my post on Milczynski J’s decision, here. This appeal also consolidated a closely related proceeding in which Apoex also challenged the listing of the ‘753 patent against KIVEXA [9], as well as a third proceeding in which Apotex challenged the listing of the ‘753 patent against TRIZIVIR. The legal issues were substantially the same in all the proceedings.

Tuesday, September 30, 2014

Prosecution History Estoppel Meets Section 53

NOV Downhole Eurasia Limited v TLL Oil Field Consulting 2014 FC 889 Mosley J

The pigeons are coming home to roost from the SCC’s ill-advised holding in Free World 2000 SCC 66, [66], that prosecution history is not to be used in claim construction (for my critique of the SCC decision, see here).

The invention at issue in NOV Eurasia v TLL Consulting is a downhole oilwell tool which comprises a valve. The defendant alleged that during patent prosecution the applicant had amended the application to restrict the claims to embodiments which included a transverse valve, and they now sought to assert the patent against the defendants, even though the allegedly infringing tool does not have a transverse valve [9].

If we had a doctrine of prosecution history estoppel, this would be a straightforward matter. If indeed the applicant had given up the scope in question during prosecution, then the patentee would not be estopped from reclaiming that scope in litigation, and the patent would be construed accordingly. The claim, and the patent, would remain valid, but the defendant’s tool (assuming it did not in fact contain a transverse valve), would not infringe. This is an eminently fair and sensible result.

But because the SCC in Free World held that prosecution history cannot be considered as a matter of claim construction, the defendant in this case pleaded that the applicant’s statements were made “with the intention of misleading the Patent Office,” and so the entire patent is void pursuant to s 53(1) [9], which provides that:

A patent is void if any material allegation in the petition of the applicant in respect of the patent is untrue, or if the specification and drawings contain more or less than is necessary for obtaining the end for which they purport to be made, and the omission or addition is wilfully made for the purpose of misleading.

The patentee in this case brought a motion to have the paragraphs pleading s 53 struck. Prothonotary Milczynski granted the motion, but Mosley J reversed, holding, after a review of the case law, that “[i]t remains a live issue whether section 53 of the Patent Act may void an entire patent due to steps taken in the application process” [32]. I think Mosley J is right on this point, but given the low threshold for allowing the pleading to stand I will not review the case law in detail.

The broader point is that the SCC’s Free World holding has created an unpalatable dilemma for the lower courts. If s 53 cannot be used in this manner, then a patentee may be able to narrow the scope of its claim during prosecution to obtain the patent, and then try to reclaim that scope in subsequent litigation. On the other hand, if s 53 can be used, then what would have been a battle over claim construction, turns into an atomic bomb of patent invalidity. This will increase uncertainty, as opposed to the option of admitting prosecution history in claim construction, because the intent element of s 53 is inherently uncertain. Moreover, to the extent that there is any justification for excluding prosecution history, it is to simplify the claim construction exercise; but to introduce exactly the same evidence under s 53 means that while claim construction is simpler, the litigation as a whole is at least as complex. Indeed, it will be more complex, because the stakes have been raised from scope to validity, ensuring that all the more money will be put into this uncertain issue.

It is not unlikely that in this case the s 53 issue will ultimately become moot, even if it does go to trial. The claims themselves refer to “the valve member being transversely movable,” and the court may well construe the claims to exclude tools without a transverse valve even without the aid of the prosecution history. That will be all the more unfortunate, as parties in future litigation will have to engage the s 53 issue, instead of what could have been a much simpler matter of claim construction. The SCC in Free World feared opening the “Pandora’s box” [66] of file wrapper estoppel. By refusing to do so, it opened the far more dangerous box of s 53.

Friday, September 26, 2014

Form and Function in the Law of Utility

I have criticized the promise doctrine, both in this blog and in my article “The False Doctrine of False Promise” (2013) 29 CIPR 3. In their article published in the most recent issue of the CIPR, “The Promise of the Patent in Canada And Around the World” 30 CIPR 35, Richard Gold & Michael Shortt defend the promise of the patent. My reply article, “Form and Function in the Law of Utility: A Reply to Gold & Shortt,” has been accepted by the CIPR. A good draft, subject to copy-editing, is available from SSRN. Here is the abstract:

In a recent article, “The Promise of the Patent in Canada And Around the World,” Richard Gold and Michael Shortt argue that the law relating to the controversial “promise” branch of the Canadian law of utility is justifiable as a matter of policy, that it is long established in Canadian law, and that promises are enforced in a number of other jurisdictions. In this article I argue that Gold & Shortt fail to appreciate the functional distinction between the two branches of the utility requirement, which are consequently conflated throughout their article. The points they make in respect of the promise doctrine actually relate, for the most part, to the traditional “scintilla” branch of the law of utility, though they also conflate the promise of the patent with obviousness, sufficiency and overbreadth. This article uses Gold & Shortt’s article as a foil to explore the functional nature of the two branches of the law of utility and the differences between them. I will also contrast utility with sufficiency, obviousness and overbreadth.