Tuesday, July 11, 2017

Promise Doctrine Abolished

AstraZeneca Canada Inc. v. Apotex Inc. 2017 SCC 36 rev’g 2015 FCA 158 Dawson JA; Ryer, Webb JJA rev’g 2014 FC 638 Rennie J
            2,139,653 / esomeprazole / NEXIUM

In a unanimous decision, delivered by Rowe J, the SCC has abolished the Promise Doctrine in the Canadian law of utility [2], [24], [36], [37], [51]. I might almost leave it at that. Under law developed in the Federal Courts, Canadian utility doctrine had two branches: the long-established and uncontroversial “scintilla” branch, and the more recent and controversial Promise Doctrine. Because the scintilla branch was never in dispute, and the Promise Doctrine never served any purpose that wasn’t already better served by some other provision of the Act, the Court was able to simply abolish the Promise Doctrine. The result is surgical. The Promise Doctrine was a tumour, but one which had not metastasized. AstraZeneca has cut out the tumour, while leaving the body of utility law unchanged.

The Court’s decision was not based on a narrow technical analysis of the details of the Act or precedent. Rather, it was decided on the basis of fundamental principles. Rowe J called the Promise Doctrine “excessively onerous” [37] and “punitive” [51], and called it “incongruent with both the words and the scheme of the Patent Act” [36], and “antagonistic to the bargain on which patent law is based,” as well as noting that it “undermines a key part of the scheme of the Act” [51].

What is the Promise Doctrine?

Under the law developed by the Federal Courts, the utility requirement had two branches, as summarized in Lilly v Novopharm / Olanzapine (No 1) 2010 FCA 197, [76] (quoted by the SCC at [29], emphasis added by SCC):

Where the specification does not promise a specific result, no particular level of utility is required; a “mere scintilla” of utility will suffice. However, where the specification sets out an explicit “promise”, utility will be measured against that promise:

The first branch represents the traditional utility requirement, which is now generally described as requiring a “scintilla” of utility. The second branch, emphasized by the SCC, is the Promise Doctrine.

A key feature of the Promise Doctrine is that the promise can be found anywhere in the specification [30]. This means that the promise of the patent may be, and in practice normally is, found in the disclosure, as opposed to the claims. Further, if there are multiple “promises” found in the disclosure, the invention must satisfy all of them, or the entire patent will be held invalid [31].

The Promise Doctrine can serve to elevate the requisite utility, often very substantially, above the standard that is required by the Act, as the FCA explained in Plavix 2013 FCA 186, [54]:

An inventor whose invention is described in a patent which would otherwise be valid can nonetheless promise more for his invention than required by the Act so as to render his patent invalid.

In this case, for example, the ‘653 patent claimed esomeprazole, which was a proton pump inhibitor (“PPI”) used for treating gastric disorders [3]. It was uncontested that esomeprazole was indeed useful as a PPI [9], and that use as a PPI was sufficient utility to support a patent [62]. The patent was nonetheless held invalid in the decisions on appeal, on the basis that the disclosure also promised that esomeprazole would be a better drug than existing drugs, and would work better for a wider range of patients [9]. That is more utility than is required for patentability, as it is well established that a new invention need not be better than existing product, if it “affords the public a useful choice”: Consolboard [1981] 1 SCR 504, 525. The only reason to hold the ‘653 patent to this higher standard was a putative “promise” found in the disclosure [63].

Promise Doctrine conflates disclosure and definition

The fundamental problem with the Promise Doctrine is that it conflates disclosure of the invention and definition of the invention [38]. These functions are distinct, and governed by different sections of the Act. The requirement that the patentee disclose the invention to the public is set out in s 27(3), while the requirement that the subject-matter of the invention “be useful” is set out in s 2 [40]. The specification consists of two parts. The first is a narrative portion normally called the “disclosure” (though it is now defined as the “description,”), that, as the name suggests, is primarily responsible for disclosing the invention. The specification ends with “a claim or claims defining distinctly and in explicit terms the subject-matter of the invention for which an exclusive privilege or property is claimed” (s 27(4)). Because the claims define the scope of the monopoly, it follows that validity must also be assessed against the claims: Whirlpool 2000 SCC 67 [49(b)]. Thus the description discloses the invention, the claims define the invention, and it is the invention as claimed, not whatever might have been disclosed, that must satisfy the requirements for receiving the protection of a patent, including the requirement for utility set out in s 2 [40]. Because the Promise Doctrine requires that an invention must satisfy the standard for utility set out in the disclosure, not just the requirement set out in s 2, the Promise Doctrine “effectively imports s. 27(3) into s. 2,” [44] thereby conflating those provisions [38].

Promise Doctrine wrongly invalidates patents which satisfy the requirements of the Act

This is not a technical point. Under the Promise Doctrine, an inventor can be denied a patent, or have a granted patent held invalid, even though the patent satisfies all of the statutory criteria. This happened regularly under the Promise Doctrine; this case is but one example. (See my article, The False Doctrine of False Promise, (2013), 29 CIPR 3, 33 (available here in good draft form) for a summary of the cases up to 2012.) This result is “incongruent with . . . the scheme of the Patent Act” [36], because in Canadian law, a patent is a statutory right; an inventor is entitled to a patent if the invention satisfies the statutory requirements for patentability: Harvard Mouse 2002 SCC 76, [11], [119]; Monsanto [1979] 2 SCR 1108, 119-20. The judge-made Promise Doctrine was contrary to the scheme of the Act because it could result in the inventor being denied a patent to which it was entitled by statute.

Promise Doctrine discourages full disclosure

Thus the Promise Doctrine was inconsistent with the fundamental nature of the patent right under the Patent Act, with the result that inventors were denied patents to which they were entitled by statute. This is bad enough, but the Promise Doctrine also has more insidious effects, extending to patents which are not actually invalidated by the doctrine.

The description and the claims are not just separate parts of the specification, they are functionally separate: the claims define the scope of the monopoly, while the description tells the public how to use the invention. The requirement to both define and describe the invention had long been a part of patent law, but at one time, both functions were served by a single narrative. The difficulty, as was explained over a century ago by Fletcher Moulton LJ, is that “These two things—the delimitation of the invention, and full practical directions how to use it—are in their nature almost antagonistic” (British United Shoe Machinery (1908), 25 RPC 631, 650 (CA), cited at [51]). The patent bargain requires “fulsome disclosure” of how to make and use the invention [51], but defining the invention requires narrow precision, to avoid encompassing subject matter which does not meet the statutory requirements for an invention. This tension was resolved by adding distinct claims to the end of the specification, which serve to define the invention. While now required by statute (s 27(4)), claims were originally implemented by patentees, for their own benefit, so that the requisite fulsome disclosure could be made without any risk that the disclosure would be taken to define the invention, with invalidity as a result. (For a more detailed discussion of the evolution of separate claims and their function, see False Doctrine of False Promise, 43-46.) Hence the rule that “what is not claimed, is disclaimed” (Monsanto 2004 SCC 34, [123]; Whirlpool 2000 SCC 67 [42]). This rule benefits the public, who thereby know the scope of the exclusive rights, but it also benefits the patentee, by excluding statements made in the disclosure alone from the definition of the invention. Under the Promise Doctrine, statements in the disclosure that are intended to describe the invention may be taken to define it, re-creating the very problem that gave rise to claims in the first place: “Thus, the Promise Doctrine undermines a key part of the scheme of the Act” [51].

By undermining the key distinction between disclosure and definition, the Promise Doctrine undermines the disclosure function: “To invalidate a patent solely on the basis of an unintentional overstatement of even a single use will discourage a patentee from disclosing fully, whereas such disclosure is to the advantage of the public” [51]. This chilling effect primarily affects those patents in which the disclosure is limited to avoid the risk of falling afoul of the Promise Doctrine. The abolition of the Promise Doctrine means that patent applicants can make full disclosure without worrying that statements in the disclosure will raise the bar on utility. And, as a practical matter, it means that patent applicants who have drafted their application primarily with the requirements of European or US law in mind will not be taken by surprise on this point when their patent is litigated in Canada.

The Court also held that the Promise Doctrine runs counter to the Act “by requiring that where multiple promised uses are expressed, they all must be satisfied for the patent to meet the utility requirement” [47]; and see also [37]. I see this as largely a corollary of the first point. So, the Court noted that this is potentially unfair because is risks invalidity if all of the multiple promises are not satisfied [50]. But given that a patent must have a scintilla of utility under the first branch to be patentable, even a single elevated promise effectively holds the invention to multiple utilities, namely the “scintilla” which is always required, and the elevated promise. Multiple promises are an exaggerated form of the same problem.

Consolboard is not authority for the Promise Doctrine

If, as the Supreme Court explained, the Promise Doctrine is fundamentally incompatible with the scheme of the Patent Act, how did it emerge in Canadian law in the first place? The answer is that it found its “new home in the Federal Courts’ jurisprudence” [35] on the basis of a narrowly technical misinterpretation of the case law.

The primary Canadian case cited as authority for the promise doctrine is the following passage from the SCC decision in Consolboard [1981] 1 SCR 504, 525 (my emphasis):

. . . the Federal Court of Appeal erred also in holding that s. 36(1) [now s. 27(3) and (4)] requires distinct indication of the real utility of the invention in question. There is a helpful discussion in Halsbury’s Laws of England (3rd ed.), vol. 29, at p. 59, on the meaning of “not useful” in patent law. It means “that the invention will not work, either in the sense that it will not operate at all or, more broadly, that it will not do what the specification promises that it will do”. There is no suggestion here that the invention will not give the result promised. . . .
This passage, and the underlined phrase in particular, is the central authority for the proposition that the promise doctrine was part of the law of Canada: see e.g. Olanzapine (No 1) quoted at [29]. Consolboard is the only pre-2005 Canadian case ever cited by the Federal Courts as authority for the promise doctrine: see False Doctrine of False Promise at 23. (Of course, after 2005, the Federal Courts began citing their own post-2005 case law.)

The SCC in AstraZeneca firmly rejected the proposition that Consolboard is authority for the promise doctrine:

[43] While the above passage [from Consolboard] uses the word “promise” it does not refer to, nor does it embody, the Promise Doctrine.

The problem is that the courts citing Consolboard as authority for the Promise Doctrine seized on the word promise, while ignoring the context. As the Supreme Court emphasized in Consolboard itself, the central point of the decision was that “the Federal Court of Appeal has confused the requirement of s. 2 of the Patent Act defining an invention as new and ‘useful’, with the requirement of s. 36(1) [now s 27(3)] of the Patent Act that the specification disclose the ‘use’ to which the inventor conceived the invention could be put” (527). Indeed, the reason the Court in Consolboard quoted the passage in question was to emphasize this distinction (526). A case that stands for the distinct nature of the disclosure and definition requirements cannot possibly be good authority for a doctrine which runs them together. As Rowe J noted in AstraZeneca:

[38] [T]he Promise Doctrine runs counter to the scheme of the Act by conflating ss. 2 and 27(3) — the very confusion this Court sought to clarify in Consolboard.

The other pre-2005 authority cited by the Canadian courts was old English case law: see False Doctrine of False Promise at 23. However, that English case law is clearly not good authority for the doctrine in Canada, because the grant of a patent had a fundamentally different foundation than in Canadian law. When the English version of the Promise Doctrine developed, the grant of a patent was not a matter of right, but rather a discretionary exercise of the Crown prerogative, and the basis of the promise doctrine in English law was the “unwillingness of the courts to second-guess the Crown in the exercise of its discretion,” ([35], quoting False Promise of False Doctrine at 17.) As noted above, the grant of a patent is Canada is not discretionary, and it never has been: the Canadian Patent Act was originally based on the U.S. Patent Act, not on English law, and the non-discretionary nature of the grant of a patent in Canadian law follows the U.S. model. Thus the justification for the Promise Doctrine in English law is inapplicable in Canada. Indeed, citing the English case law as authority was especially misplaced because the Promise Doctrine is now “extinct” in English law [35]. It disappeared with the Patents Act, 1977, which formally made the grant of a patent a statutory right, as it always had been in Canada: see Siebrasse, Form and Function in the Law of Utility, (2015) 30 CIPR 109, 126-32 (available here in good draft form). So, Canadian courts were citing English cases as authority for a doctrine which no longer existed in English law. Moreover, the reason it no longer existed is that the scheme of the UK Act had changed to become more similar to that of the Canadian Act. In effect, it is backwards to cite the old English cases as authority for the Promise Doctrine in Canada; the real principle emerging from the English cases is that the Promise Doctrine is “incongruent” with a patent system, like the Canadian system and the modern English system, in which the grant of a patent is a statutory right.

Promise Doctrine serves no purpose not better served by other doctrines

The SCC noted that supporters of the Promise Doctrine assert that it is important to ensure patentees do not “overpromise” in their patent applications [45]. The Court rejected this argument in a brief paragraph. While overpromising is a “mischief” [45], this mischief is treated by the Act in multiple ways [46]. A patent that claims more than it discloses will be invalid for insufficiency under s 27(3), and if a statement in the specification is “willfully made for the purpose of misleading,” the patent will be void under s 53 [46].

I have seen some suggestions that this somehow opens the door to a more aggressive use of the disclosure requirement. In my view, that suggestion is entirely without foundation. This is not a call to arms. The SCC called overpromising a “mischief” not a scourge, and it gave a few examples – “for instance” – of the way the law already “treats” that mischief [46]. The Court gave not the slightest suggestion that these existing treatments were inadequate. Nor, really, did it say the contrary. The Court’s explicit point is that the Promise Doctrine is not the appropriate mechanism for addressing this issue, and other mechanisms exist. To read anything more into the brief discussion would be an error indeed, the same type of error as was made in building the Promise Doctrine out of a single acontextual phrase from Consolboard.

Correct approach to utility

The SCC’s legal analysis concluded by setting out the correct approach to utility. There is nothing surprising in this discussion, given that the Promise Doctrine has been rejected.

The Court reaffirmed that a “scintilla” of utility is all that is required. While that term has been commonly used in the Federal Court for the last decade, I believe this is the first time the SCC has used the term “scintilla” to describe the standard for utility. It is nonetheless consistent with the older jurisprudence holding that “very little will do”: see e.g. Wandscheer [1948] SCR 1, 24. The Court also noted that “A single use related to the nature of the subject-matter is sufficient.”

The Court also affirmed the holding from Consolboard that “a patentee is not required to disclose the utility of the invention to fulfill the requirements of s. 2” [58]. However, in my view, when the utility would not be evident to a skilled person on the basis of their common general knowledge, or from the nature of the claimed invention itself, as may be the case for a new chemical compound, it may be necessary to disclosure the utility in the specification: see Siebrasse, Must the Factual Basis for Sound Prediction Be Disclosed in the Patent?, (2012) 28 CIPR 39, 56-59. Arguably this is required not as a matter of s 2, which requires only that the invention be useful, but rather to satisfy the disclosure requirement that the inventor describe the invention so that persons skilled in the art can “use the invention as successfully as the inventor could himself” (Consolboard, 526, quoting R. v. American Optical Company). In any event, what is more important for present purposes is that AstraZeneca does not change anything on this point, one way or the other. The question of whether utility has to be disclosed was not at issue in this case, and the Court is simply reaffirming the point already made in Consolboard.

The Court stated that “utility must be established by either demonstration or sound prediction as of the filing date,” citing AZT [55] (my emphasis). This is significant in affirming the filing date, not the priority date, as the appropriate date for assessing utility. AZT itself was ambiguous, or rather inconsistent on this point, referring to both the filing date and the priority date as being the appropriate date. (There was no debate between the parties in AZT on this point, which no doubt accounts for the confusion). Subsequent Federal Court decisions have settled on the filing date: Ramipril 2005 FC 1283, [91]-[96] aff’d 2006 FCA 64, [30]; Quinapril 2007 FCA 209, [153]. Here, the SCC is apparently accepting the filing date as the correct date. The point was not argued in this case – both parties accepted the filing date as the correct date for establishing utility – so the authority is somewhat weaker than if the point had been in dispute, but given the consistent FCA holdings and this statement by the SCC, the point seems settled.

The Court noted that the purpose of the utility requirement is to “avoid granting patents prematurely, and thereby limiting potentially useful research and development by others” [56]. This is a helpfully clear statement, which is consistent with prior caselaw: see e.g. AZT, [56], Wandscheer v Sicard Ltd, [1948] SCR 1, 5, 10. It is also consistent with the position in the US, Europe, and the UK: see Brenner v Manson, 383 US 519 (1966); T 0870/04, BDP1 Phosphatase / Max-Plank, [21]-[22]; T 0898/05 Hematopoietic cytokine receptor / Zymogenetics, [7]; HGS v Lilly, [2011] UKSC 51, [ 91], [102], [107]. This raises the question of how early is too early? The Court went on to say that the utility requirement “is to be interpreted in line with its purpose — to prevent the patenting of fanciful, speculative or inoperable inventions” [57]. This indicates that the line is drawn quite far upstream, as it is only “fanciful, speculative or inoperable inventions” which are excluded. This is consistent with the low “scintilla” standard for utility. But again, we should not read too much into this statement. The question at issue in AstraZeneca was the Promise Doctrine, not the question of how high the bar is for the scintilla standard. The Court’s general statement reaffirms the prior case law and provides helpful guidance in principle, but it does not address, nor does it purport to address, such details.

One general point made by Rowe J is that a use which is acceptable to satisfy the utility requirement must be related to the claimed subject-matter: “a proposed invention cannot be saved by an entirely unrelated use” [53]. That general statement is clarified by the example: “It is not sufficient for a patentee seeking a patent for a machine to assert it is useful as a paperweight” [53]. While I’m not sure I’ve seen that point made in quite this way before, the principle is entirely consistent with established Canadian law; no doubt the reason it has not arisen directly is that no patentee has had the temerity to argue, for example, that a new chemical compound with no known use should be considered useful as landfill. It corresponds to the requirement in US law for a “specific” utility – since any machine could be used as a paperweight, such a use would not be considered specific to the invention (unless, of course, its main purpose was as a paperweight): see Brenner v Manson, 383 US 519 (1966).

The Court also set out a two step analysis for approaching the utility requirement:

First, courts must identify the subject-matter of the invention as claimed in the patent. Second, courts must ask whether that subject-matter is useful — is it capable of a practical purpose (i.e. an actual result)?

The first point is that the utility inquiry is directed to the invention as claimed. In context, this is in contrast with assessing utility on the basis of the invention as disclosed in the specification. The second branch just repeats the utility requirement.

The result in this case

Rennie J at trial had accepted that esomeprazole was useful as PPI (on the basis of sound prediction) [62], and he had held the patent invalid solely on the basis of the failure to meet the elevated promise [62]. Consequently, with the Promise Doctrine disposed of, it was straightforward for the Court to hold the ‘653 patent valid [63], without any need for remand.


The most obvious consequence of AstraZeneca is that patents for good inventions will no longer be invalidated on the basis of a doctrine which “has no basis in the Act” [51]. Legal uncertainty will be substantially reduced, as the actual process of determining the promise of the patent was unpredictable and arbitrary, as I described in The False Doctrine of False Promise, at 35-40. It often happens that when a case reverses or clarifies a problematic doctrine, there is a subsequent period of uncertainty as the law settles into its new form. That should not be a concern in this instance. Because the Promise Doctrine was so idiosyncratic and out of step with the scheme of the Act, its excision leaves no gap to be filled. With the abolition of the Promise Doctrine, Canadian patent law is also brought more into line with our major trading partners. (For example, the Promise Doctrine is one reason the US put Canada on the Special 301 Report Watch List. The SCC decision entirely resolves that concern.)

This does not mean that all is well in Canadian utility law, or that no differences remain between our law and European or US law. Outside of Canada the phrase “promise doctrine” is sometimes used to refer to the entire constellation of quirks in Canadian utility law, but Promise Doctrine dealt with in AstraZeneca refers only to an elevated standard for utility imported from the disclosure. In particular, one point of considerable controversy is the enhanced disclosure requirement for utility based on sound prediction, which requires the factual basis and sound line of reasoning supporting the prediction to be set out in the patent itself (see generally my article, Must the Factual Basis for Sound Prediction Be Disclosed in the Patent?). That doctrine is unaffected by this decision. (The issue was raised at first instance, but only in obiter, and it was not addressed by the Supreme Court.) I have seen it suggested that AstraZeneca overturns that enhanced disclosure requirement, on the basis of the Court’s statement at [58], that a patentee is not required to disclosure utility. The argument, presumably, is that if the patent must disclose the factual basis for utility, the patent must necessarily disclose the utility, but since disclosure of utility is not required, it must follow that disclosure of the factual basis for utility is not required. While there is logic to this reasoning, in my view it is not plausible that the Court intended to eliminate a doctrine that is controversial yet well-established at the Federal Court level, purely by implication, without even referring to it directly. Perhaps there is an inconsistency between the enhanced disclosure requirement and the rule that the patentee is not required to disclose the utility of the invention, but if so, that inconsistency existed ever since the enhanced disclosure was developed, which was long after Consolboard. Put another way, if the enhanced disclosure is bad law, that is because it has always been bad law, and not because AstraZeneca has changed the relevant law. The Promise Doctrine arose as a result of an acontextual over-interpretation of a few words in Consolboard. That is a mistake which should not be repeated in interpreting AstraZeneca.

No comments:

Post a Comment