2,163,446 / VIAGRA
In this decision in an impeachment action brought by Apotex, Zinn J granted a motion for summary judgment that the ‘446 patent is invalid, on the basis that the SCC had declared the ‘446 patent to be invalid with in rem effect in its Pfizer / sildenafil 2012 SCC 60 decision. (This decision was released in late November and posted by Alan Macek on IP Practice. I missed it as I was away on vacation at the time. It is still not posted on the FC website.) It seems to have been accepted by Pfizer that the SCC did hold the ‘446 patent invalid with in rem effect when it held at [91] that “Patent 2,163,446 is void.” So in this motion, Pfizer argued that the SCC exceeded its jurisdiction, and has filed a motion seeking amendment of the judgment, or for a rehearing on the issue of remedy [10]. Pfizer also argued that “as a consequence of the Judgment of the Supreme Court declaring the ‘446 Patent void,” the impeachment action is moot [15]. Pfzier also argued that the questions at issue were questions of mixed fact and law, and so were not binding [32]. All of these arguments take it for granted that the SCC held that patent void with in rem effect. I do not agree. The question is, what did the SCC mean when it said the patent is “void”? Did it mean “void in rem,” or “void inter partes”? In my view, it is very clear that the SCC intended the latter.
Judicial decisions must be interpreted with the same modern approach that is used for interpreting statutes, patents, a contract or any “communication for a practical purpose.” In all these cases, the interpretive task is to discern the intent of the author: see Lord Hoffmann Kirin-Amgen [2004] UKHL 46 at [30]. The modern approach to interpretation, to paraphrase Canada Trustco Mortgage Co. v. Canada, 2005 SCC 54 [10] is:
The interpretation of a [judicial decision] must be made according to a textual, contextual and purposive analysis to find a meaning that is harmonious with the [decision] as a whole. When the words of a [decision] are precise and unequivocal, the ordinary meaning of the words play a dominant role in the interpretive process. On the other hand, where the words can support more than one reasonable meaning, the ordinary meaning of the words plays a lesser role. The relative effects of ordinary meaning, context and purpose on the interpretive process may vary, but in all cases the court must seek to read the [decision] as a harmonious whole.
To begin, is the word “void” “precise and unequivocal”? Can it support more than one reasonable meaning? Section 59 of the Act states (emphasis added):
The defendant, in any action for infringement of a patent may plead as matter of defence any fact or default which by this Act or by law renders the patent void, and the court shall take cognizance of that pleading and of the relevant facts and decide accordingly.
This uses the word “void,” and yet “[s]trictly speaking, under section 59 of the Patent Act, the defendant is not entitled to a declaration in rem that the patent is invalid. A dismissal of a patent infringement action on the basis of section 59 of the Patent Act constitutes a judgment inter partes and not a judgment in rem on the invalidity of the patent” Johnson & Johnson v Boston Scientific 2004 FC 1672 [49]. Thus, in the Act itself, “void” does not necessarily mean “void with in rem effect.” On the other hand, “in reliance upon section 60 of the Patent Act, the defendant may obtain a declaration in rem that the patent is invalid or void” ibid. Thus, it is perfectly clear that under the Act “void” may mean either “void with in rem effect,” as in s 60, or “void with inter partes effect,” as in s 59.
Furthermore, “void” is essentially a synonym for “invalidity.” If there is any difference between the two, it is the “void” refers to the entire patent, while “invalid” may refer to an individual claim. But there is no distinction with respect to in rem or inter partes effect. In particular, s 60, which provides that “[a] patent or any claim in a patent may be declared invalid or void” has in rem effect. Thus “invalid” clearly may mean “with in rem” effect. But it is also very commonly used to mean “invalid with inter partes effect.” So, in the decision appealed from in the SCC Viagra case, the FCA said “the Judge nevertheless declined to invalidate the '446 Patent,” noting “the 13-year delay in initiating invalidity proceedings” [32]. Indeed, in the phrase “allegation of invalidity” which appears throughout any NOC proceeding, including in the Viagra litigation, no one ever considers it necessary to say “allegation of invalidity with inter partes effect,” even though strictly, that is what is meant. This is because it is implicit from the context of the NOC proceeding that “invalid” means “invalid with inter partes effect.” So, not only is the term “invalid” capable of meaning either with in rem effect, or with inter partes effect, in the context of an NOC proceeding, it is invariably used as meaning “with inter partes effect,” unless it is stated expressly that in rem effect is meant, as in the decisions clarifying that an NOC proceeding does not have in rem effect.
The SCC uses the term “invalid” throughout its decision, and given the context of it being an appeal, it is clear that the SCC is using the term “invalid” is exactly the same sense as it was being used in the courts below, namely to mean “invalid with inter partes effect.” It is also clear that the SCC was using “void” in the final sentence as a synonym for “invalid.” Otherwise its conclusion that the patent was “void” would have come as a bolt out of the blue, unsupported by the Court’s previous reasoning. If the word “allegation” is thought to have some particular effect in signalling inter partes effect, the SCC used that as well, several times, particularly in reviewing the decision of Kelen J. Thus, if it needs to be stated, the SCC clearly understood the context of the appeal.
Turning to purpose, the purpose of the SCC Viagra decision was to decide the appeal. The in rem validity of the patent was not in issue in the courts below, and the appellant did not request an in rem declaration at the SCC level: all that was asked in the factum was that "this appeal be allowed" with costs. It would be contrary to the purpose of the decision to understand it as having had in rem effect.
It is also a rule that interpretations giving rise to absurd results are to be avoided. If we interpret “void” as meaning “void with in rem effect,” then either (a) the SCC implicitly intended to overrule the well-established FCA jurisprudence that a holding of invalidity in an NOC proceedings does not have in rem effect, notwithstanding that this issue was not raised at any level of court, notwithstanding that it would wreak a major change in the balance under the NOC Regulations, and notwithstanding that the SCC did not explicitly say that it was overruling this line of jurisprudence; or (b) the SCC intended to preserve the existing rule in most cases, but it intended to hold the Viagra patent void with in rem effect without regard to the law. Both of these results are, in my view, absurd.
In summary, considering that “void” is reasonably capable to supporting more than one meaning, and considering the context of an NOC proceeding and the purpose of deciding an appeal, in my view the SCC very clearly intended to use the word “void” to mean “void with inter partes effect.” Indeed, I would say that this is sufficiently clear that it would be reasonable for the SCC to refuse Pfizer’s motion for amendment of the decision on the ground that the decision does not contain “an error” as required by s 81(1)(a), because it is clear as it stands.
Finally, I would turn to Zinn J’s reasoning. He held “the determination by the Supreme Court in its Reasons that the ‘446 Patent fails to meet the requirement of sufficient disclosure pursuant to subsection 27(3) of the Patent Act is a legal determination binding on this Court and is dispositive of Apotex’s claim” [80]. More specifically:
[33] The determinations made by the Supreme Court on those three questions of law are binding on this Court. Its finding that Pfizer, in failing to disclose which of the many compounds named in the ‘446 Patent was effective in treating erectile dysfunction, had not properly or sufficiently disclosed its invention, is a finding that this Court must respect and follow. As a consequence, when, as here, the action seeks a declaration of the invalidity of the ‘446 Patent for insufficient disclosure, there can be no genuine issue for trial because no result is possible other than a finding that the ‘446 Patent is invalid. Accordingly, Apotex is entitled to summary judgment.
With respect, this logic cannot be right. If it is, then the same would be equally true of a holding of the FCA; while the SCC is a higher court than the FCA, the decisions of both are equally binding on the FC. But the FCA has made it abundantly clear that its holdings in an NOC proceeding are not binding on the FC in a subsequent infringement action:
One important aspect of the NOC Regulations is that a prohibition application cannot result in a final determination of the validity or infringement of a patent. The NOC Regulations operate in addition to the patent enforcement regime in the Patent Act. Regardless of the outcome of a prohibition application, the innovator has the right to sue a generic drug manufacturer for infringement, and a generic drug manufacturer has the right to impeach the patent.
Wyeth v Ratiopharm 2007 FCA 264 [21]
It is possible that on the facts all of the prior decisions of the FCA turned on mixed questions of fact and law, rather than pure questions of law; I have not exhaustively examined the cases to see if this is so. This is because the FCA has made it very clear, as in the above statement, that it is the type of proceeding that matters, not the type of question. Functionally, the reason is that the NOC proceedings take place on a limited record. While NOC proceedings are certainly expensive by the standards of general civil litigation, they are much less exhaustive and expensive that the corresponding impeachment action. As the courts have often noted, they are similar to a motion for an interlocutory injunction, and a holding in an interlocutory motion that the patent is likely valid does not determine the final outcome. That is never forgotten in an interlocutory motion, as it is part of the action, but the principle is the same.
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