Friday, November 11, 2016

What Did Whirlpool Decide?

Apotex Inc v Eli Lilly Canada Inc 2016 FCA 267 Pelletier JA: Boivin, Rennie JJA aff’g 2015 FC 875 Gleason J
            2,226,784 / tadalafil / CIALIS / NOC

This brief decision of FCA dealing with obviousness-type double patenting is important for its discussion of the FCA's view of precedent, both at the SCC level and its own. The decision first addresses the question of when the SCC should be taken to have settled a question of law. This topic is important not just for the issue at hand, but more broadly as the Federal Courts interprets and applies new Supreme Court precedent. The FCA also suggested that counsel might want to be more creative in thinking about how to approach obviousness-type double patenting. On both points, the FCA’s attitude bodes well for the future development of the law.

The 784 patent was attacked as being invalid for double patenting over patent 2,181,377 in two separate NOC proceedings, one involving Mylan and the other involving Apotex. The key issue in all the proceedings was the appropriate date for assessing obviousness-type double patenting: is it the claim date of the earlier patent, the claim date of the later patent, or the publication date of the later patent?

Mylan FC 2015 FC 17 was decided in Lilly’s favour in January 2015 (see here). The decision under appeal in this case, Apotex FC 2015 FC 875 was decided, also in Lilly’s favour, in July 2015 (see here). Mylan FC was affirmed by Mylan FCA 2016 FCA 119, which was issued in April of 2016. As discussed here, in Mylan FCA, the FCA rejected the latest date, namely the publication date of the later patent, and held that it did not need to decide between the two other possible dates, because the FC had held that on the facts, the 784 patent was not obvious over the 377 patent on either of the claim dates. Only a few days after Mylan FCA was issued, the appeal from Apotex FC was heard [8]. Pelletier JA remarked that “In the normal course, given that the double patenting issue is identical in both cases, this Court would have simply followed Mylan FCA and rejected Apotex’s double patenting argument on the basis that it had already decided this issue” [8]. But Apotex argued that Mylan FCA should not be followed because it was inconsistent with the SCC decision in Whirlpool 2000 SCC 67. The question therefore, was “What did Whirlpool Decide?” [28ff].

I won’t rehash the details of the Whirlpool decision, which was summarized by the FCA at [28]-[33]. Suffice it to say that Apotex made a plausible argument that the SCC in Whirlpool would have assessed double patenting as of the publication date of the later patent, if the issue had been before it [36-[37]. However, Whirlpool didn’t explicitly decide, or even address, the question of the appropriate date. The issue is whether the appropriate date should be considered settled by implication through exegesis of the SCC’s statements, or whether the question should be considered to have been left open.

Despite the appeal of Apotex’s argument, Pelletier JA rejected it (my emphasis):

[37] It is, in my view, improbable that Binnie J. would settle a significant point in the law of double patenting by implication and without addressing it directly. The care taken to justify the publication date of a patent as the date at which it is to be construed suggests that if Binnie J. intended to decide the issue of the comparison date of the claims of the patents in an obviousness double patenting suit, he would do so explicitly.

[38] Furthermore, the issue of the comparison date in double patenting cases had not arisen previously in the Supreme Court jurisprudence, nor in the works of the text book writers. It would be surprising, to say the least, if Binnie J. purported to deal with a novel question by implication. This is all the more so when one considers that the issue was there to be addressed if the Court chose to do so.

He therefore held that the question of the appropriate date remained open after Whirlpool [39].

In my view, Pelletier JA’s reasoning is both sound as a matter of policy and strongly supported by the SCC’s discussion in R v Henry 2005 SCC 76 [57]. In Henry the SCC reconsidered a number of its prior decisions, overruling some of them. The issue of the binding effect of SCC statements arose because R v Noël, 2002 SCC 67 was affirmed on its facts (Henry [49]) and the Attorney General of Ontario worried that some of the obiter would be seen as binding on trial courts. Binnie J, for the Court, that “ I do not think this ‘concern’ is plausible. The comment was neither part of the legal analysis nor a direction to trial courts. It was simply an observation by an experienced judge” [52]. Binnie J reviewed the law relating to the binding effect of its decisions, and summarized as follows (my emphasis):

[57] The issue in each case, to return to the Halsbury question, is what did the case decide? Beyond the ratio decidendi which, as the Earl of Halsbury L.C. pointed out, is generally rooted in the facts, the legal point decided by this Court may be as narrow as the jury instruction at issue in Sellars or as broad as the Oakes test. All obiter do not have, and are not intended to have, the same weight. The weight decreases as one moves from the dispositive ratio decidendi to a wider circle of analysis which is obviously intended for guidance and which should be accepted as authoritative. Beyond that, there will be commentary, examples or exposition that are intended to be helpful and may be found to be persuasive, but are certainly not “binding” in the sense the Sellars principle in its most exaggerated form would have it. The objective of the exercise is to promote certainty in the law, not to stifle its growth and creativity. The notion that each phrase in a judgment of this Court should be treated as if enacted in a statute is not supported by the cases and is inconsistent with the basic fundamental principle that the common law develops by experience.

This statement emphasizes that even direct statements by the SCC expressing a view on a point of law are not necessarily binding; it follows that inferences as to what the Court might have been thinking can never be binding. 

In his discussion, Binnie J acknowledged that in the 1970s the Court’s mandate shifted from error correction to development of the jurisprudence, and consequently, the Court’s work became more oriented to “the development of a general analytical framework which necessarily went beyond what was essential for the disposition of the particular case” [53]. While Binnie J noted that this is particularly true in the Charter context, there is no doubt that we have seen a similar shift in patent law as well. Binnie J acknowledged that this shift meant that some statements that are strictly dicta should nonetheless be considered to be effectively binding: “It would be a foolhardy advocate who dismissed Dickson C.J.’s classic formulation of proportionality in Oakes as mere obiter” [53]. Nonetheless, it is still true that “the common law develops by experience,” and much of that experience is gained at the trial and appellate levels. Binnie J cautioned that the lower courts should not be too ready to overly broaden what the SCC had decided, because:

the effect would be to deprive the legal system of much creative thought on the part of counsel and judges in other courts in continuing to examine the operation of legal principles in different and perhaps novel contexts, and to inhibit or skew the growth of the common law. This would be a consequence totally unforeseen and unintended by the Court that decided Sellars.[56]

The Supreme Court of Canada is the highest court in our system, and we like to think that it has some of the best judges, but very able judges are found at every level of court, and the Supreme Court justices are not omniscient oracles. A judge in the Federal Court or the Federal Court of Appeal, will have more insight into the proper disposition of a legal question that is immediately raised on the facts before her and fully argued by counsel, than can be found in the inferred intent of a Supreme Court judge. Binnie J’s assertion that it is not “plausible” that obiter statements by the SCC could be seen as effectively binding on lower courts, is, with due respect, clearly wrong, as we know well in patent law, but the remainder of his discussion is entirely compelling.

In summary, not only was the FCA in this case right to hold that the remarks in Whirlpool were not binding authority on the issue of the correct date for assessing obviousness-type double patenting, to have held otherwise would have been inconsistent with the SCC’s own guidance in R v Henry on the binding effect of SCC decisions.

Finally, on a point of considerable practical importance, Pelletier JA concluded with the following observation:

[40] I might add that the analysis in the Earlier Cases, in Mylan FCA, and in this case was driven by the fact that the parties chose to frame the issue in terms of the date for comparison of the claims of the patents in issue. Having conducted the analysis on the basis chosen by the parties, we should not be taken as having decided that this framework for analysis is the correct one. The fact that this issue has not arisen in this form in the past may be an indication that there may be other ways to approach it. Perhaps, the Court, having construed the claims of each of the patents with the assistance of the persons skilled in the art, simply compares the claims and decides whether the later claims are patentably distinct from the earlier claims on the basis of the insights which it has gained in the course of the construction of the patents. This appears to be what was done in [Comm’r of Patents v Hoechst [1964] SCR 49], and more recently in [Sanofi 2008 SCC 61]. This is not to argue that this approach is any more correct than the comparison date approach but rather that, going forward, parties should not feel that they are locked into the framework chosen by the parties in these cases.

This observation is of a piece with Pelletier JA’s discussion of Whirlpool. Adherence to precedent is important to the predictability which allows parties to plan in reliance on the law, but sound precedent cannot grow in a straightjacket imposed by the idiosyncracies of how particular cases were argued: to repeat Binnie J’s words, “The objective of the exercise is to promote certainty in the law, not to stifle its growth and creativity."

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