Thursday, September 20, 2012

Issues for the SCC in Olanzapine Decision?

Eli Lilly Canada Inc v Novopharm Ltd / olanzapine (No 2) 2012 FCA 232 Nadon JA: Sharlow, Trudel JJA aff’g 2011 FC 1288 O'Reilly J
2,041,113 – olanzapine – ZYPREXA

In Eli Lilly Canada Inc. v. Novopharm Ltd. / olanzapine (No 1) 2009 FC 1018 O’Reilly J held Lilly’s olanzapine patent, 2,041,113, to be an invalid selection patent over the genus patent 1,075,687. On the appeal, the FCA held that invalid selection is not an independent basis upon which to attack the validity of a patent and that O’Reilly J’s finding of invalidity was fatally tainted by this error: 2010 FCA 197. The FCA held that the patent was neither anticipated nor obvious, nor was it invalid for double patenting, but it remanded the case to O’Reilly J on the issues of utility and sufficiency. On remand in Lilly v Novopharm / olanzapine (No 2) 2011 FC 1288, O'Reilly J held that the disclosure was sufficient, but the patent was invalid for lack of utility. In a brief decision from the bench the FCA has affirmed this decision: “we have not been persuaded that the judgment under appeal is based on any error of law or principle or any palpable and overriding error of fact” [1].

This brevity of this FCA decision is both unfortunate and understandable. It is unfortunate because O’Reilly J’s decision directly raises two important issues of pharmaceutical patent law. It is understandable because the legal issues are relatively settled at the FCA level.

The first issue relates to the promise of the patent doctrine, which holds that “where the specification sets out an explicit ‘promise’, utility will be measured against that promise” Lilly v Novopharm / olanzapine (No 1) 2010 FCA 197 [76]. If the promised utility is greater than that which is necessary to support a patent, utility will be measured against that promise, with the result that a patent for an invention which has sufficient utility to support a patent may nonetheless be invalid for lack of utility. This appears to be exactly the what happened in this case, as explained in this post on O’Reilly J’s decision. Nonetheless, this doctrine is now firmly established in the Federal Court jurisprudence: in Lilly v Novopharm / olanzapine (No 1) the FCA went so far as to say that “[t]he promise of the patent is fundamental to the utility analysis” 2010 FCA 197 [93]. The real battleground now is how exactly to construe the promise of the patent in a given case. In Lilly v Novopharm / olanzapine (No 1) the FCA gave a very strong hint to O’Reilly J as to how it thought that the promise should be construed and on remand he took the hint and construed the patent as suggested by the FCA. It is therefore not surprising that the FCA should be unwilling to review either the doctrine or the construction of the promise in this case.

From this it seems clear that the promise of the patent doctrine is here to stay, at least until it gets taken to the SCC. In my view, the doctrine is fundamentally unsound, and the SCC should grant leave sooner rather than later. After often being critical of the doctrine in this blog, I decided to explore the issue in a full article, which I am just finalizing. In that article I show that the doctrine was originally premised on the fact that the grant of a patent was a discretionary exercise of the Crown prerogative, so the mere fact that an invention had sufficient utility to support a patent did not guarantee that the Crown would actually choose to grant a patent. In measuring utility by the promise of the patent, the courts were refusing to second guess the Crown as to whether the patent should have been granted. Now that the grant of a patent has shifted from a matter of discretion to a statutory right, the basis for the doctrine no longer exists. Indeed the doctrine is inconsistent with the fac that the Commissioner of Patents has “nodiscretion to refuse a patent . . . if the statutory criteria are met” Harvard Mouse 2002 SCC 76 [11] (Binnie J), dissenting), [119] accord (Bastarache J). I will be on a panel “Current Issues in Construction of a Patent,” at the upcoming IPIC AGM which will discuss this doctrine, and I expect to have a draft of my article available before then.

O’Relly J’s decision in Lilly v Novopharm / olanzapine (No 2) also raises a second important issue related to selection patents. The IG Farbenindustrie rules for selection patents which were adopted by the SCC in Sanofi 2008 SCC 61 as being “well accepted” [11] have since been repudiated by the EWCA as being unsound in principle. In Dr Reddy’s Laboratories v Eli Lilly / olanzapine [2009] EWCA Civ 1362, [2010] RPC 9 [39] Jacob LJ noted that

If one thinks about [the IG rules] it is difficult to see how, realistically, they could be complied with unless the patentee carried out an enormous range of experiments. How can you show your class (or compound) has a “substantial advantage” over the prior class without experimenting with at least quite a lot of the class – enough to make a sound prediction at the very least? Or how can you show that the quality which makes your selected class is peculiar to that class? If you put in your thumb and pull out a plum, how are you to say that there are no other plums in the pudding?

As I noted in a previous post on the FC decision, O’Reilly J invalidated the olanzapine patent exactly for failure to conduct enough experiments to show that olanzapine had a substantial advantage over the prior class. That is, his decision turned on precisely an application of the test which caused the EWCA to reject the IG Farbenindustrie rules as unsound. Nonetheless, in light of the four-year old decision inSanofi approving those rules, it is understandable that the FCA would not choose to revisit them. Again, it seems that if the doctrine is to be addressed, it will have to be done by the SCC.

1 comment:

  1. From a very practical perspective, one has to feel sorry for all those PCT applications percolating through the system which were - gasp! - not drafted with an eye to the quirks of Canadian patent law. Someone should remind the FCA that we are not always a top-tier jurisdiction, and decisions like these don't strengthen the case for doing business here.

    On another note, I often wonder how best to balance satisfying the problem/solution approach to obviousness in Europe with these "promise" issues in Canada.

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