Nova v Dow: Will Nova v Dow Create a Chilling Effect?

Nova v Dow: Will Nova v Dow Create a Chilling Effect?

Nova Chemicals Corp v Dow Chemical Co 2022 SCC 43 Rowe J: Wagner CJ, Moldaver, Karakatsanis, Brown, Martin, Kasirer and Jamal JJ concurring; Côté J dissenting affg Nova Chemicals Corporation v Dow Chemical Company 2020 FCA 141 Stratas JA: Near, Woods JJA affg Dow Chemical Co v Nova Chemicals Corp 2017 FC 350, 2017 FC 637 Fothergill J

2,160,705 / film-grade polymers / ELITE SURPASS

The Intuition / The Legal Background / Causation as a Matter of Fact / The Concession / What Role for “But For” Causation in Identifying the NIO? / Summary of the Summary / Causation Concept in the Absence of an NIO / What is the NIO? / The Value of the Invention / Rivett on the Facts / Three Policy Arguments / The Source of the Chilling Effect / Miscellaneous Policy Issues / Doctrinal Implications

In previous posts summarizing my forthcoming IPJ article, I have argued that an accounting based on “but for” causation avoids the risk of a chilling effect in which parties avoid engaging in legitimate competition and investment in innovative sectors; conversely, an accounting which results in a greater disgorgement on average than a “but for” accounting will have a chilling effect on innovation and competition. Whether Nova v. Dow will have a chilling effect on innovation therefore turns on whether it will on average result in a greater disgorgement than a “but for” accounting. The chilling effect is always prospective—the problem is that the prospective infringer does not take a socially desirable course of action out of fear of litigation—so the question is which way this balance tips in expectation, which is to say on average.

There are some cases, such as Schmeiser, where the appropriate NIO corresponds to what the infringer would in fact have done, in which case the result will be the same under either a “but for” accounting or the Nova v Dow approach. There are other cases, such as Nova v Dow itself, in which the infringer would in fact have made substantial profits but for the infringement, but there is no appropriate NIO, so that a Nova v Dow accounting will result in a greater disgorgement than a “but for” accounting. Finally, in cases in which an NIO exists that was not in fact available to the infringer and which would have been more profitable than the non-infringing option actually available to the infringer, a Nova v Dow accounting will result in a smaller disgorgement than a “but for” accounting. Whether the Nova v Dow approach will result in a chilling effect turns on whether, on average, the excessive disgorgement in the second category of cases more than outweighs the reduced disgorgement in the third category of cases.

In Part II of my forthcoming IPJ article, I argue that the expected accounting under Nova v. Dow will be excessive for two reasons. First, cases in which the infringer will be able to establish a reduced disgorgement are likely to be rare. A reduced disgorgement arises when NIO was not actually available to the infringer and the NIO was more profitable than the alternative that was actually available to the infringer. This will be rare because the market will usually supply the infringer with the most profitable alternative. If the NIO is more profitable, it will normally be available; and if it is less profitable than the alternative that the infringer would in fact have used, then using the NIO will result in excessive disgorgement. Further, the burden is on the infringer to show the profits it would have made with the NIO. It will be difficult for the infringer to establish profits that it would have made with an alternative that was not actually available to it: how can the infringer establish the cost of an alternative that it could not have purchased at any price? Rivett 2009 FC 317 is the exception which proves the rule — the profitability of the non-available alternative was, unusually, established by evidence introduced by the patentee. Second, there is a selection bias: the patentee is entitled to damages as of right and so is less likely to seek an accounting when it expects the accounting to result in a reduced disgorgement.

The article goes through the implications of these points in detail, discussing issues such as how likely it is that there will be an NIO that existed but which was not in fact available to the infringer, which the infringer will nonetheless be able to use to establish its profits in the hypothetical world. I won’t review those details here, as the argument is a bit intricate, going through a variety of scenarios, and I don’t think that I can meaningfully compress it. Suffice it to say that I am very confident that the Nova v Dow approach will result in a chilling effect. I will leave it to the reader to review my arguments in detail when the article is published, and see if you agree.

An Action under the PM(NOC) Regs Has the Same Effect as an Action under the Act

Janssen Inc v Apotex Inc 2023 FCA 253 Locke JA: de Montigny CJ, Goyette JA revg 2023 FC 912 Manson J

2,655,335 / paliperidone regimens / INVEGA SUSTENNA / NOC

This decision addresses two issues of interest: abuse of process under the PM(NOC) Regs and the kinds of activities that may properly be enjoined. This post deals with each in turn.

Apotex sought to launch a generic version of Janssen’s INVEGA SUSTENNA. To that end, Apotex served an NOA alleging non-infringement. Janssen responded by bringing an action pursuant to s 6 of the PM(NOC) Regulations. Apotex lost: 2022 FC 107 discussed here. (An appeal has been heard and the FCA decision is pending [4]). After losing that action, Apotex served a second NOA in respect of the same product, this time alleging invalidity instead of non-infringement. Janssen again brought an action pursuant to s 6, which Apotex defended on the same invalidity basis as in its NOA. Janssen moved for summary judgment on the basis that this is an abuse of process by relitigation. Manson J held it was not, and dismissed Janssen’s motion for summary judgment. The FCA has now reversed.

The overarching point emerging from Locke JA’s decision is that “an action under section 6 of the Regulations is to proceed and have an effect much like a normal patent infringement action” [46]. In the absence of special circumstances, a defendant in a normal patent infringement action that defended itself on the basis of non-infringement, without challenging the validity of the patent, would not be allowed to commence a separate impeachment action concerning the same patent [47]. The same reasoning applies to actions under the Regulations [47]. That follows from the general principles of “judicial economy, consistency, finality and the integrity of the administration of justice” which underpin the law related to abuse of process by relitigation: [10]–[11], citing C.U.P.E. 2003 SCC 63 [37]. While Manson J’s decision relied on a rather technical reading of the Regulations (see here) to distinguish actions under the Regulations from actions under the Act, this distinction is not sound. There is no tension between general principles of abuse of process and the principles applicable under the Regulations. On the contrary, the RIAS to the 2017 amendments “makes it clear that a principal aim was to avoid multiple proceedings concerning patents on medicines, regardless of whether those proceedings are within or outside the Regulations” [44]; moreover, “the aim of avoiding multiple proceedings was front and centre” [45].

Under the old Regs, the second person was held strictly to its NOA, and this might have provided a reason for distinguishing NOC proceedings from a regular action. But Locke JA noted that under the new Regs, it is now established that it is permissible to amend the pleadings in an action under s 6 so as to introduce issues not raised in the underlying NOA: [46], citing Sunovion v Taro 2021 FCA 113 (see here).

Locke JA pointed out that the other arguments made by Apotex as to why there are good reasons to permit sequential NOAs can equally be made in the context of normal patent infringement actions, and are no more persausive in the NOA context [48]. Consequently:

[53] In my view, it was intended that the second person should raise all of its allegations in its NOA, and it should not to keep some in reserve in the event that it is not initially successful. Though this might lead to more complicated proceedings, it would meet the explicit goal of addressing all issues in a single action.

Locke JA therefore held that Manson J had erred in law by not recognizing that the same principle applies in the context of an action under the Regs as in an action under the Act [43]. Neither party asked that the matter be remitted, and Locke JA consequently considered Janssen’s motion anew [59] and declared that Apotex’s invalidity defence to be an abuse of process [60]. If Apotex wished to raise an invalidity argument, it should have done so in the first action [60]. Janssen was accordingly granted the relief it sought [71].

An entirely separate point of interest was raised regarding the remedy. Janssen requested an injunction prohibiting Apotex from making, selling or using the invention; these are the patentee’s express rights under s 42. This much was uncontroversial. But the injunction sought by Janssen also included prohibitions on “(i) offering for sale, (ii) marketing, (iii) having marketed, (iv) importing, (v) exporting, (vi) distributing, or (vii) having distributed” [64]. The exclusive right to engage in these activities is not explicitly granted by the Act. Apotex objected to the inclusion of these acts in the injunction on the basis that they fall outside the scope of the patentee’s rights.

Locke JA dismissed Apotex’ objection. He noted that injunctions in such terms had been granted in other cases [65]–[66] — though I don’t think much weight can be put on that unless the terms were contested. More significantly, he noted that “[w]hile section 42 of the Patent Act refers specifically to the patentee having ‘the exclusive right, privilege and liberty of making, constructing and using the invention and selling it to others to be used’, it is well understood that this does not constitute a definition of infringement” [67]. The SCC in Monsanto v Schmeiser 2004 SCC 34 [34] defined infringement as being “any act that interferes with the full enjoyment of the monopoly granted to the patentee.” As Locke JA noted [68], the SCC in Schmeiser [58] also held that “[i]f there is a commercial benefit to be derived from the invention, it belongs to the patent holder.” Consequently, Locke JA held that

[69] I am satisfied that the wording proposed by Janssen for the injunctive relief is appropriate. All of the activities that Apotex objects to including in the injunction are commercial in nature, and would presumably be done for a commercial benefit. The activities of distributing and having distributed are essentially sales and are thus clearly infringing. The other activities involve commercial use of the patented invention as contemplated in Schmeiser, and would therefore presumably also be infringing. The principle goal of the injunction is to prevent future infringement of the exclusive rights granted by the 335 Patent. In my view, the proposed injunction achieves this, and in clear terms.

Locke JA is of course quite right to say that the rights of the patentee are not limited to the rights enumerated in s 42, per Schmeiser. But there remains a question as which specific non-enumerated rights are exclusive to the patentee. Locke JA’s discussion might well be taken as holding that the activities listed in the injunction and objected to by Apotex — (i) offering for sale, (ii) marketing, (iii) having marketed, (iv) importing, (v) exporting, (vi) distributing, or (vii) having distributed — are per se infringement, at least when done for commercial purposes. While there is caselaw that comes close to saying that activities such as importing and exporting are infringing, I don’t think the point is quite settled. While it would certainly be consistent with Schmeiser to hold that these activities are infringing, it does not flow inexorably from Schmeiser, and there are some issues with so holding that were not addressed in this brief paragraph.

So, Locke JA stated that “distributing and having distributed,” are “clearly infringing” because they are “essentially sales.” This strikes me as potentially problematic, depending on what is meant by “distributing.” Does this mean that the common carrier which transports infringing goods from the manufacturer’s warehouse to a retailer is an infringer? Is a logistics company which organizes distribution of infringing goods on behalf of the manufacturer an infringer which can be named as a defendant in an infringement action? These activities do not seem to me to be “essentially sales.” Perhaps these activities should be considered infringing, but this is a different question from whether Apotex, which has been found to infringe on the enumerated grounds, should be prohibited from engaging in distribution.

Locke JA also said that the other activities are “presumably” also infringing. There is some difficulty with “offering for sale” in particular. In Domco Industries v Mannington Mills (1990) 29 CPR(3d) 481 (FCA) 492, the FCA held that a sale was not established even though “[t]here is no doubt that [the defendant] offered infringing goods in Canada” (491). It might be argued that Domco, which predates Canada’s accession to TRIPS, is no longer good law in light of TRIPS Art 28, which requires that a patent shall confer on its owner the exclusive right of “offering for sale.” On the other hand, a treaty such as TRIPS has to be implemented in legislation, and the statutory language defining the patentee’s exclusive rights has not changed since Domco. It might also be argued that Domco is no longer good law because it is inconsistent with Schmeiser. Or Domco might be distinguished because of the cross-border nature of the activity in that case. But it is difficult to accept that Locke JA intended to hold definitively that “offering for sale” is infringing in a decision that didn’t even mention Domco. I don’t mean to comment on the scope or continued vitality of Domco, one way or the other, but I don’t think Locke JA meant to either.

Consequently, I think it is probably better to read Locke JA’s decision more conservatively, as holding only that an injunction is properly granted to prohibit these activities, even if they are not infringing per se, essentially on a quia timet basis. That does not imply any change in the law. Even under Domco it is clear that once infringement has been established, the infringer may be enjoined from offering to sell: see eg AlliedSignal (1995) 61 CPR(3d) 417 (FCA) 446. And in appropriate circumstances offering to sell or marketing may form the basis for a quia timet injunction: see eg No-Fume (1935) 52 RPC 231 (CA) 251–52. This interpretation implies that an infringer, like Apotex, which has been found to infringe on the basis of the enumerated grounds, might properly be enjoined from “distributing and having distributed,” while leaving open the question of whether a logistics company or common carrier engaged in distribution would itself be an infringer.

The Public Interest Factor in Norwich Orders

Seismotech IP Holdings Inc v Apple Canada Inc 2023 FC 1649 Grammond J

Seismotech owns patents related to intelligent thermostats and it wishes to sue consumers who bought and used such devices in their homes [1]. In a previous motion in the same litigation, 2023 FC 1335, Seismotech resisted adding the manufacturer of the allegedly infringing product to the action it brought against the consumers. As discussed in my post on that motion, Seismotech appears to be a patent assertion entity (PAE), which is focusing on consumers as they will be soft targets who will prefer to enter into nuisance value settlements rather than defending the patent vigorously.

This decision relates to a Norwich order sought by Seismotech which would have required Apple to disclose the names and addresses of consumers who downloaded the apps controlling such intelligent thermostats from the App Store [1]. The factors usually taken into consideration for granting a Norwich were recently summarized in Voltage Pictures 2018 SCC 38 [18], quoted at [12]. Grammond J refused to grant the order, on the basis that Seismotech failed to show that it has a bona fide claim (the first factor), and because the public interest does not favour the granting of a Norwich order (the fifth factor) [2]. Grammond J’s analysis on both points is of interest, but I will start with the public interest analysis as it bears on Seismotech’s litigation strategy and will be relevant to PAE litigation more broadly.

The thrust of the decision is that the courts will not exercise their discretion to facilitate a litigation strategy that is designed to extract settlements from consumers who are not in a position to effectively defend the claims made against them and so will settle simply to avoid getting embroiled in litigation. I entirely agree with his analysis, and I can’t do any better than to reproduce the key paragraphs.

Grammond J noted that while the public interest prong typically focuses on privacy concerns, that is not the only relevant consideration [40]. More broadly, “a Norwich order facilitates the search for the truth” [41].

[42] This, however, works both ways. Access to justice is important not only for plaintiffs, but also for defendants. Civil litigation is an adversarial process. Truth is expected to emerge from the process because assertions made by one party are subject to challenge by the other. For this to happen, both parties must have a genuine opportunity to put their cases forward. There is a serious risk that a matter will not be correctly adjudicated if the defendant is deprived of access to justice or is ill equipped to assert available defences.

[44] Special considerations arise when a party proposes bringing an action in patent infringement against a large number of individual consumers, each having a relatively modest amount at stake. Patent infringement cases are inherently complex. Patents are intended to be read by a person of skill in the art, not by persons who lack technical skills, such as judges and lawyers and, a fortiori, individual consumers. For this reason, prosecuting or defending an action in patent infringement almost always requires the presence of expert witnesses. In a large proportion of such cases, the validity of the patent is challenged on a number of grounds, which reinforces the need for expert evidence. The quantification of damages also often raises complex issues. For all these reasons, patent litigation is costly. Costs awards made by this Court provide a glimpse of the magnitude of the financial resources needed to defend such an action, which are often measured in millions of dollars. . .

[45] The nature of the technology at stake in this case compounds the difficulty of defending the claim. Very broadly, Seismotech’s patents involve the use of information technology to provide sophisticated manners of controlling devices such as heaters, gas fireplaces and the like. End-users of intelligent thermostats cannot be expected to read the patents at issue and to construe their claims. Moreover, they do not have access to the inner workings of the device they own or the app they downloaded. Without the assistance of the manufacturer, it would require considerable effort and expertise to disassemble the device and its code to ascertain whether it infringes the claims of Seismotech’s patents. This is unlike simpler mechanical inventions that a layperson may more easily understand. . . .

[46] It is obvious that meaningfully defending Seismotech’s action is entirely out of reach for the individual consumer. Even accepting Seismotech’s theory that it is entitled to recover each consumer’s utility bill savings, the amount at stake for each defendant is unlikely to exceed a few thousand dollars. The Court is not aware of any realistic manner of providing individual consumers with adequate legal representation in the defence of such an action that would be proportionate to their own potential liability. Seismotech explicitly declined to attempt to certify this action as a reverse class action. Seismotech’s suggestion that defendants could pool their resources to defend the action appears out of touch with reality, given the number of individual consumers involved and the amount at stake for each of them.

[47] Given the practical impossibility of defending the action, it is foreseeable that many defendants will feel compelled to accept an offer to settle regardless of the merits of the case.

With all that said, in some circumstances the end-users are appropriately named as defendants.

[48] The complexity of mounting a defence sets this case apart from copyright infringement cases in which a Norwich order was issued to identify a large number of individual defendants. In those cases, there is rarely any debate about the plaintiff’s copyright over the musical or cinematographic work that was copied or downloaded by the defendants. It appears that the defence is usually that the owner of the IP address is not the person who illegally copied the work. It stands to reason that the factual and legal complexity of such a defence bears no relationship to a patent infringement action.

While I agree that complexity is a distinguishing factor, there is another difference that I would suggest is relevant to the public interest analysis. The consumer in most patent cases — certainly in this one — is an innocent infringer, who purchases the goods from a mainstream outlet in the reasonable belief that any intellectual property issues have been dealt with. In copyright cases, the individual defendants typically know full well that the uploading or downloading is illegal, even if they might express ‘information likes to be free’ style arguments as to why the law is wrong. (I recall the horror on the face of one of my students after we discussed the reverse class action copyright cases.) Another distinguishing feature is that the copyright owners in such cases have made very considerable efforts to go after larger entities, such as ISPs, and they have been led to pursue individual defendants because their strategies aimed at ISPs have not proven entirely satisfactory.

Another example where end-users are appropriately pursed is where the end-user is a large entity, with the resources and interest to defend the case on the merits:

[49] Seismotech also relied upon Wobben Properties GmbH v Siemens Public Ltd Co, [2014] EWHC 3173 (Pat), to argue that a Norwich order can properly be used to reveal the identity of the end-users of patented technology. It is obvious, however, that the proposed defendants in that case were large businesses that, one can assume, had the resources to defend a patent infringement action involving complex technology. If anything, this case shows that the character of the parties and the manner in which the proposed litigation is likely to unfold are relevant factors for deciding whether a Norwich order should be issued.

In some cases, where a small entity inventor supplies a crucial patented component to a large entity end-user, the end-user may even be better placed to defend the action.

When I say that in some cases it is appropriate to pursue the end-user while in others it is not, I am of course not saying that the plaintiff does not have a legal right to pursue the end-user in the latter category. The question is whether it is appropriate in the sense of being in the public interest, so as to properly come into play in a discretionary order such as a Norwich order. The difficulty of drawing any bright line between cases in which it is, or is not, appropriate shows the wisdom of making this one factor in a holistic consideration.

On the first point, the requirement of a bona fide case, Seismotech sought to have the motion granted on the basis of a bare assertion of belief that the defendants infringed, without any supporting evidence [23]; Seismotech’s owner refused to even explain the basis for his belief [25]. Seismotech argued that evidence that a wrongful act has been committed is not necessary to obtain a Norwich order and that all that is required is to show that the plaintiffs really do intend to bring an action [15]. Grammond J rejected this argument, holding that while a plaintiff need not show that the claim is likely to succeed [14], “the mere assertion of a cause of action, without any factual foundation, is insufficient” [16]. I won’t go through Grammond J’s analysis of the cases except to say I agree with it, but I will highlight one comment:

[29] A useful way of looking at the matter is to ask whether the statement of claim, together with [Seismotech’s owner’s] evidence, would withstand a motion to strike. The test for striking out a claim does not have the exact same purpose as the requirement for a bona fide claim in the test for a Norwich order. Nevertheless, it is difficult to contemplate the issuance of a Norwich order where the statement of claim is so deficient that it is liable to be struck.

This does strike me as a very useful test, at least for the minimum evidentiary threshold. If a statement of claim would be struck when asserted against a defendant, how can it be the basis for an order against a third party?

On the facts, Grammond J found the claim to be “purely speculative” and hence it was not bona fide [35]. He also helpful distinguished this case from the typical copyright infringement cases:

[36] Typically, the plaintiff provides a forensic investigation report showing that a person using a certain IP address downloaded a file containing music or a movie, in which the plaintiff holds the copyright. In such a case, the report provides a plausible basis for assuming that there was a copyright infringement, as the very act of unlawfully downloading the copyrighted work is the infringing act. The investigator is able to report that the work downloaded by the user and the copyrighted work are the same. In contrast, the mere fact that consumers downloaded the apps in this case does not give any indication that the apps, the devices or their use by the consumers infringe Seismotech’s patents.

The Limits of Sufficiency

Allergan Inc. v. Juno Pharmaceuticals Corp 2023 FC 1686 Pentney J

2,585,691 / bimatoprost formulation / LUMIGAN RC / NOC

Glaucoma and ocular hypertension are serious medical conditions that can lead to blindness. It can be controlled by medications which lower the pressure inside the eye, referred to as intraocular pressure (“IOP”) [4]. “[T]aking glaucoma medication is boring, because it requires a daily dose of one or more medications, often for the rest of a person’s life. And the patient will usually not notice any improvement in their vision, because the medication is actually only stopping further decline” [48]. For this reason, patient compliance is very important. (I must say that I enjoyed Pentney J’s lucid discussion of the physiology of the eye and drug transport through it [29]–[49]. One of the reasons I specialize in patent law is that the science is interesting and Pentney J’s discussion was particularly clear and informative.)

Allergan’s old LUMIGAN product was used to treat IOP. It contained 300 ppm bimatoprost, the active ingredient, and 50 ppm BAK, a preservative. It was successful in lowering IOP but had unwanted side effects, which impacted compliance. “Allergan therefore sought to develop a formulation that was similarly effective in lowering IOP but did not cause the unwanted side effects” [17]. The result was the claimed invention, embodied in LUMIGAN RC, which contained 100 ppm bimatoprost and 200 ppm BAK—that is, it had less of the active ingredient and more preservative.

The main question was whether this formulation was obvious. Pentney J helds on the facts that it was not. While reducing the concentration of bimatoprost might be expected to reduce side effects, the skilled person would also expect it to reduce efficacy [203]. While BAK is generally safe at the levels in both the old and new formulations, there was nonetheless a trend to decreasing BAK levels, to minimize its potentially inflammatory and cytotoxic effects [241], [243]. The key to the formulation is that BAK also worked as a “penetration enhancer” which meant that the lower amount of bimatoprost in the claimed formulation achieved equal or better IOP reduction than old formulation [245]. This effect was not obvious. It was known that BAK could be a penetration enhancer for some molecules, in particular hydrophilic molecules, but it was not expected to be a penetration enhancer for lipophilic substances such as bimatoprost [302]–[305]; and see [319]. Consequently, Pentney J found the claimed formulation was not obvious after an obvious-to-try analysis [380]–[382].

There was a fairly extended discussion of the inventive concept and whether it should be determined from the claims alone or by considering the disclosure as well. Pentney J rejected an approach based on the claims alone, noting that Shire 2021 FCA 52 [72] held that it is necessary to turn to the specification, at least in the case of a claim to a chemical compound [158]. Pentney J noted that Shire was particularly pertinent to the case at hand [153], because a chemical formulation is no different from a chemical compound in that respect. Consequently, Pentney J embarked of a fairly lengthy examination of the disclosure in light of the expert evidence in order to identify the inventive concept.

I won’t go through his discussion in detail, but I will point out that looking at the claims and looking at the specification are not the only two possible choices. The problem with looking at the claims is that a claim to a compound does not tell us what the inventive step was: the compound might be easy to synthesis, but with no previously known use, in which case identifying the use might be inventive. Or a compound might be known to be useful, but difficult to synthesize (eg early biologics), in which case the method of synthesis might be the inventive step. We cannot tell which by looking at the claims alone.

The problem with looking at the disclosure to determine the inventive concept is that the inventor does not always know what they have invented, because the inventor does not normally know all the prior art, and may well not know the entire state of the art (which now includes all the prior art). So, the inventors who discovered that sildenafil could be orally administered to treat ED because it was a PDE V inhibitor, thought their real discovery was that PDE V inhibitors can be orally administered to treat ED, but in fact at least one was already known (epimedium aka ‘horny goat weed’ aka ‘yin yang huo’). Consequently, all they really discovered was that sildenafil can be orally administered to treat ED. If the inventors do not know what they have discovered, they might not identify the true inventive concept in the disclosure.

In my view, elaborated at more length in my post on Shire, the focus should be on the solution to the objective problem facing the inventors. In this case, the objective problem, identified in Pentney J’s discussion of the facts, was “to develop a formulation that was similarly effective [to the old Lumigan] in lowering IOP but did not cause the unwanted side effects” [17]. The question should be whether the claimed invention was an obvious solution to that problem. This didn’t make any difference on the facts, because in this case the inventors were essentially correct about what they had invented, and so the inventive concept derived from the specification was more or less the same as the objective inventive concept — similar enough to make no difference in the obviousness analysis [181]. But that will not always be true.

Pentney J also dismissed four insufficiency attacks in brief reasons. It was clear that the specification disclosed sufficient information to allow the skilled person to make and use the invention [390] and all four attacks were premised on the incorrect idea that sufficiency somehow requires more than that.

First, Juno argued that the patent failed to disclose information which would allow the skilled person to conclude it was safe for human use [386]. Pentney J pointed out the claim doesn’t say anything about the safety profile, so failure to disclose any such information is irrelevant [391]. Further, “It is well-established in the jurisprudence that the standard required to obtain a patent cannot be equated to that needed to obtain regulatory approval” [391] quoting Novo Nordisk v Cobalt 2010 FC 746 [352].

Second, Juno argued that the patent “fails to fully describe the advantage of the 0.01% dose formulations to enable the POSITA to understand its benefits over old LUMIGAN” [386]. Pentney J dismissed this by saying “I find that the specification in the 691 Patent, and in particular the data shown in the examples, is sufficient to establish that the formulation in Claim 16 would deliver comparable or better IOP reduction as compared to old LUMIGAN, and that is all that is required” [393]. I’m sure that even that much is required. The claim is simply to a formulation. The claim says nothing about its benefits, namely increased efficacy with reduced side effects. I don’t see why the specification has to establish comparable efficacy; it’s enough that the specification discloses how to make and use the invention so as to achieve whatever benefits it might have.

Third, Juno argued that the disclosure was insufficient because it did not disclose that the 200 ppm BAK served as a penetration enhancer [395]. Pentney J dismissed this on the basis that “a patent does not have to explain how the invention works as long as it explains how to work the invention” [395]. That is a straightforward application of Consolboard [1981] 1 SCR 504, which Pentney J cited.

Finally, Juno argued that “since Allergan has asserted that data based on rabbit studies cannot be directly extrapolated to the effects on humans, the Patent’s disclosures regarding permeability are not sufficient” [386]. This strikes me as another version of the third argument, arguing that the patent must disclose why the invention works. Pentney J dismissed it for similar reasons.

What Is the Evidentiary Threshold for Denying a Permanent Injunction on Public Interest Grounds?

AbbVie Corporation v JAMP Pharma Corporation 2023 FC 1520 McVeigh J

2,504,868 / 2,801,917 / 2,904,458 / adalimumab / HUMIRA / SIMLANDI

As discussed in a previous post, in this decision McVeigh J denied a permanent injunction to AbbVie even though she found that its 458 patent was valid and infringed. This is very unusual. While it is clear that an injunction is a discretionary remedy, it is also well-established that a permanent injunction will only be refused in “very rare circumstances” (Valence v Phostech 2011 FC 174 [240]), as McVeigh J acknowledged [642]. Indeed, I believe this is the only decision apart from Unilever (1993) 47 CPR(3d) 479 (FCTD) to entirely refuse a permanent injunction to a successful patentee. In Jay-Lor 2007 FC 358 [263], Snider J declined to grant a permanent injunction on the basis that it was unnecessary, as the defendant had not manufactured an infringing product for over two years; and in Janssen v Abbvie 2014 FC 489 Hughes J granted a partial injunction, for reasons I will return to. There have also been a few cases in which the permanent injunction was tailored with a short run-off period in which infringing sales or delivery was allowed: Janssen-Ortho v Novopharm 2006 FC 1234 and Weatherford 2010 FC 667; in the UK see similarly Virgin Atlantic v Premier Aircraft [2009] EWCA Civ 1513.

As a matter of law, property rights of all kinds are normally protected by injunctive relief. Why? That question was famously answered by Calabresi & Melamed in one of the most cited law review articles of all time: “Property Rules, Liability Rules, and Inalienability: One View of the Cathedral” (1972) 85 Harv L Rev 1089. Calabresi & Melamed argued that when a right is protected by injunctive relief the owner of the right can set the price at which the right is purchased in a voluntary negotiation, whereas when a right is protected only by damages it is the court that determines the value of the right. The advantage of property rights is that the parties will always know the true value of the right better than the court; the advantage of liability rules is that transaction costs and related problems, such as holdout, may mean that a voluntary negotiation does not reflect the true value of the property.

With that in mind, we can divide cases in which an injunction is properly refused into two broad categories. One is where the grant of an injunction would allow the patentee to extract substantial sunk costs. The classic article is Lemley & Shapiro, “Patent Holdup and Royalty Stacking” (2007) 85 Tex L Rev 1991. This is well-recognized as the main issue in the FRAND context, as well as with patent assertion entities (PAEs) aka ‘patent trolls.’ As a result, injunctions are regularly refused to PAEs in the US. Tailoring of injunctions to allow a runoff period or to allow for redesign, such as in Janssen-Ortho v Novopharm and Weatherford, may be an appropriate partial solution to this problem: see generally Contreras & Husovec (eds), Injunctions in Patent Law: Trans-Atlantic Dialogue on Flexibility and Tailoring (Cambridge University Press, 2022) (and see my Canada chapter in that volume for a discussion of Unilever).

The second is a more amorphous category of cases turning on traditional equitable principles, such as clean hands, laches etc. Jay-Lor is an example of the application of the maxim that ‘equity does not act in vain.’ Sometimes these cases can be explained in sunk cost terms: for example, undue delay in bringing an action may give time for an innocent infringer to invest substantial sunk costs in the infringing goods; while the injunction might be refused on the basis of laches, the result would be the same on a sunk cost analysis. This case, in which the injunction was refused on public interest grounds, falls into the second category. While JAMP no doubt has incurred some sunk costs in developing its biosimilar, costs of that nature are regularly incurred by infringing pharmaceutical companies and are never in themselves grounds for refusing an injunction.

When should an injunction be refused on public interest grounds? The premise of the patent system is that the return to the patentee is beneficial to society by inducing innovation. So, on the one hand, the return to the patentee must be protected. Harm to the public interest may be taken into account on the other side of the balance. This does not include harm in the form of higher prices, which is inherent in the patent exclusivity: the premise of the patent system is that the harm from higher prices for a limited term is more than outweighed by the concomitant incentive to innovate. The harm to the public that might warrant refusing an injunction is typically more idiosyncratic, turning on the facts of the case. In the US, harm to medical patients for whom the patentee’s product is not an adequate substitute for the infringer’s product is one of the more common reasons for refusing a permanent injunction, particularly in the context of medical devices: see Seaman “Permanent Injunctions in Patent Litigation After eBay: An Empirical Study,” (2016) 101 Iowa Law Review 1949, 1991.

In Canada, the point is illustrated by Hughes J’s decision in Janssen v Abbvie 2014 FC 489 (discussed here), which also related to HUMIRA. Janssen’s infringing product was STELARA, a biologic used to treat psoriasis, which, in its severe form, can be disabling [17]. While HUMIRA is used to treat psoriasis, and has significant market share, it is not a perfect substitute for STELARA: STELARA operates by inhibiting IL-12, while HUMIRA targets TNF-α [21]. There were also two other TNF-α drugs on the market. A common treatment scenario was for the physician to switch the patient among the TNF-α drugs before going to the sole IL-12 drug (STELARA) [23]. A permanent injunction would therefore have allowed AbbVie to prevent the sale of a drug which AbbVie itself does not supply, and which for some patients is the only effective treatment for a disabling condition. On these unusual facts, AbbVie did not even seek a complete permanent injunction. Instead, AbbVie sought a tailored injunction with an exception for existing patients and restrictions on new patients. The basic idea was to ensure that any patient who could effectively be treated by HUMIRA would be, and STELARA could only be used for patients who responded better to it. This is a classic example of the kind of case in which a permanent injunction might properly be denied for public interest reasons.

In this case, there were two key reasons why McVeigh J refused the permanent injunction. First, AbbVie has licensing agreements with seven other pharmaceutical companies in Canada that offer adalimumab biosimilars [632], [638]; second, JAMP’s SIMLANDI is the only product available as a low-citrate high-concentration (80 mg/0.8 mL) formulation [633]–[636].

The first point goes to the need to preserve the incentive to innovate. In lieu of an injunction, McVeigh J granted a AbbVie a reasonable, running royalty on future sales of SIMLANDI, saying “[t]his rate should easily be determined given the licensing agreements it has with seven other biosimilar pharmaceutical companies” [643].

With respect, the matter is not quite so simple.

There are broadly two reasons that AbbVie might have licensed. First, it might not have wished to enter the Canadian market directly. It is very common for innovative patentees to exploit their inventions by licensing, especially in secondary markets. Royalty rates paid by a voluntary licensee in such a situation are not directly comparable to the reasonable royalty assessed by a court. A voluntary licensee normally performs some kind of value-added services for the patentee, such as product development, reverse tech transfer, clinical trials, marketing, manufacturing or distribution, and may also receive additional value from the licensor, such as supporting IP such as trademarks or trade secrets relevant to the patented technology, or ongoing technical support. The royalty paid by the licensee reflects the value of those services in both directions, as well as the value of the patented technology itself. A compulsory licensee under a running royalty will not generally perform all the same services, though it may perform some. This means the royalty paid by the voluntary licensee cannot simply be applied to the compulsory licensee. Instead, the royalty should be adjusted to account for differences in the services provided by the infringer as compared with those provided by the voluntary licensee. See generally my article with Professor Cotter, A New Framework for Determining Reasonable Royalties in Patent Litigation, (2016) 68 Florida Law Review 929, esp 954ff and Ch 1 Reasonable Royalties § 1.3.6 Comparable Licenses in Biddle, Contreras, Love & Siebrasse (eds), Patent Remedies and Complex Products: Towards a Global Consensus (Cambridge University Press, 2019).

Another complication is that the value of a license will generally depend on the degree of exclusivity. The per unit rate the licensor charges to a single licensee will be higher than the rate it can ask if it licenses to two licensees who compete with each other in the same market. If the licensor does license to multiple licensees, it will typically provide some kind of territorial or product exclusivity to each. One way or the other, unless the market is already perfectly competitive, the entry of a new unrestricted competitor into the market will affect the rate that can be charged to voluntary licensees. So, even if the AbbVie now demands a royalty of $1/mg from its current licensees (to pick an arbitrary number), the entry of JAMP may reduce the value of the licence to those licensees, so future renewals may be at a lower rate due to the reduction in market power. This is a loss to AbbVie that must be compensated in the reasonable royalty paid by JAMP to AbbVie if the incentive to innovate is to be preserved. Further, it is not obvious that the current licenses will reflect some simple rate, such as $1/mg. The licenses may reflect individual bargaining power, or idiosyncratic advantages of the licensees, so that even if the voluntary licensees provide the same services, their royalties may be different.

Another possibility is that the current licenses were negotiated under the threat of litigation. In that case, the royalty rate would be discounted by the parties’ estimate that the patentee would prevail against the potential infringer / licensee in an infringement action. But after litigation, such as in this case, we know with certainty that the patent is valid and infringed, and the reasonable royalty must therefore be higher than the negotiated royalty to avoid the problem of double discounting. As we explained in Ch 1 of Patent Remedies and Complex Products at 22-23:

it is well established in U.S. law that the parties to the hypothetical negotiation are assumed to have known that the patent was valid and infringed, even though actual parties would not. This rule is required to achieve just compensation, because the opposite view – that the parties should be assumed to discount the royalty to allow for the probabilistic nature of the patent (as would presumably be done by parties to an actual negotiation) – would result in so-called double discounting; not only would the court-approved royalty derived from the hypothetical negotiation include a discount for the risk of nonliability, but then pre-litigation negotiations in which royalties were based on the expectation of such a court award occurring with a less than 100 percent probability would include a further discount for risk of non-liability.

Further, the rates in the various licenses might be quite idiosyncratic — there is no particular reason that each ‘generic’ would arrive independently at the same estimate of its probability of prevailing. And these royalties would also reflect the pricing issues with truly voluntary licenses, discussed above. It is also entirely possible that the current licensing situation is a combination, where AbbVie has entered into some licenses on a truly voluntary basis and others in contemplation of litigation.

There are some cases in which it is indeed easy to calculate an accurate reasonable royalty, such as when the patentee offers a licence to all comers on demand at a standard rate. This is clearly not such a case. With that said, it is possible that it will be easy to calculate an accurate reasonable royalty; not all of the difficulties described above will arise in every cases. But the mere fact that there are seven other licensees of similar products certainly does not give any guarantee that the reasonable royalty calculation will be easy.

The other side of the coin is the effect on patients of an injunction. McVeigh J relied on two points.

One is the potential that “non-medical switching” could negatively impact patients, through the “nocebo effect” which could result in a perception of increased injection site pain. It seems to me that if we give the nocebo effect any weight at all, a permanent injunction would never be granted against any infringing pharmaceutical that has actually been launched, as the effect, by definition, does not turn on any real difference in the product, but on the mere knowledge that the product is different [636].

The other point is that JAMP’s formulation is the only high-concentration / low volume, citrate-free product on the market. (It’s not clear to me whether YUFLYMA is on the market, but I’ll assume it’s not.) It is possible that the greater volume and / or the citrate could cause increased injection site pain for some patients, and “[t]hough the evidence is scant for those few patents, it could be very harmful” [635].

This raises two points of law. One is the threshold for the harm to the public interest. Though the point is not normally made explicitly, it is clear enough that we are willing to tolerate some degree of harm to the public beyond the increase in prices. For example, in Valence v Phostech 2011 FC 174, Gauthier JA refused to even tailor a permanent injunction by allowing a two year grace period for the completion of a new factory designed to use a non-infringing process. Presumably, requiring the infringing factory to shut down immediately would entail significant disruption to the workers, such as temporary or even permanent unemployment. (Moreover, in that case a strong argument can be made that tailoring would have been appropriate on substantive grounds, as the infringement appears to not have been intentional and the infringer had incurred very substantial sunk costs.) The question then is how much non-price harm to the public we are willing to allow.

It is not clear what McVeigh J meant by “very” harmful and “few” patients, but this seems to be a far cry from Janssen v AbbVie in which it was uncontested that there were a significant number of patients whose potentially debilitating psoriasis could only be effectively treated by the infringing product. In this case, as I understand it, it is not disputed that the non-infringing alternatives will treat the disorder just as effectively as SIMLANDI, and the harm is increased injection site pain. (Since there are several citrate-free alternatives [638], it seems that the main issue is the increased volume.) In principle, the issue is not the pain from the alternative as such that is important, but the incremental pain of the alternative over SIMLANDI. So, SIMLANDI is available in a 40 mg/0.4 mL pre-filled syringe where most of the alternatives are a 40 mg/0.8 mL — so, double the volume for a 40mg dose. As I understand the evidence (as well as from people I know), many people do not find the 0.8 mL dose to be at all painful or even uncomfortable, so presumably those who do are unusually sensitive to dose volume and might find a 0.4 mL dose to be painful as well, though presumably less so. The harm if the injunction is granted is not the pain to those patients from the 0.8 mL dose, but the additional pain as compared with the 0.4 mL dose. It is not clear to me from McVeigh J’s reasons whether the “very harmful” pain refers to the pain of the larger dose, or the incremental pain. (Perhaps the main harm is to those who are particularly sensitive to both citrate and injection volume, which would imply a smaller subset of affected patients.) Now, perhaps the harm is more significant than intuition suggests. It may be that there are some patients for whom the additional pain is so substantial that they would skip injections and impair their treatment rather than endure the injections with HUMIRA or one of the licensed alternatives. That would align this case more closely with Janssen.

Of course, the degree of harm is a matter for evidence. My point here is that it seems reasonable that there should be some substantive threshold for the nature of the harm suffered in order to warrant denying an injunction on public interest grounds. If evidence established that 10 patients in Canada would suffer arm soreness for two minutes after an injection rather than for one minute, I would suggest that should not be a sufficient harm to warrant refusing a permanent injunction on public interest grounds. From McVeigh J’s brief description, the harm in this case appears to be substantially less, both in its nature and its extent, than the harm at issue in Janssen v AbbVie.

As noted, the extent of the harm is not clear from McVeigh J’s reasons. This raises the second point: what is the proper evidentiary threshold for refusing injunctive relief on public interest grounds? In this case, we do not know how many patients would be affected and how serious the harm is, because the evidence is “scant” and “limited” [635]. All we know is that it “could” be very harmful. When evidence is scant, any degree of harm is possible. Suppose an expert witness was asked whether the injection site pain might dissuade some of patients from following the correct dosage schedule, and the answer was “Anything’s possible.” Would that be enough to warrant refusing the permanent injunction on public interest grounds? More generally, can a permanent injunction be denied on the basis of a speculative harm? Surely the presumption in favour of granting injunctive relief to a successful patentee is strong enough that more than mere speculation should be required to overcome it. The more difficult question is whether the standard should be something like the balance of probabilities, or a lower threshold, such as evidence which is clear and not speculative.

The substantive threshold and the evidentiary threshold are distinct issues. It might be uncontested that 1% of the patients would suffer soreness for two minutes instead of one minute; or one expert might provide unsupported opinion evidence that large numbers of patients would fail to comply to their injection schedule dosage. Given McVeigh J’s explicit acknowledgment of the limited nature of the evidence, it might be easier for the FCA to address evidentiary threshold. It will be difficult to address the question of whether the substantive threshold has been met when the extent of the harm is not actually established in the evidence.

On the whole, the reasons given by McVeigh J strike me as very tenuous grounds for denying a permanent injunction. Further, even if some kind of significant harm to some patients could be established on a non-speculative basis, this does not strike me as a good case for denying a permanent injunction entirely. A tailored injunction, along the lines of that granted in Janssen v AbbVie, which would allow the use of SIMLANDI by the specific patients who cannot tolerate HUMIRA or one of the other licensed biosimilars, would seems to me to strike a better balance.

When can a range anticipate a point?

AbbVie Corporation v JAMP Pharma Corporation 2023 FC 1520 McVeigh J

2,504,868 / 2,801,917 / 2,904,458 / adalimumab / HUMIRA / SIMLANDI

The most important aspect of this case was McVeigh J’s refusal to grant a permanent injunction to the successful patentee. I will discuss that in a separate post. McVeigh J also had a brief discussion of double patenting, which I discussed in a previous post that focused on NCS v Kobold 2023 FC 1486. This post provides an overview and addresses some miscellaneous issues, including McVeigh J’s brief but helpful discussion of as to when prior art that discloses a range can anticipate a point within a range.

This case involved three patents related to adalimumab, which is well known under the brand name HUMIRA for treatment of rheumatoid arthritis, inflammatory bowel disease (IBD) and psoriasis. The 868 patent relates to a dosing regimen for a known use (the treatment of IBD). McVeigh held the 868 patent to be invalid as being obvious to try [303], though an attack based on patentable subject matter failed [339]. The 917 patent relates to a second medical use — the treatment of hidradenitis suppurativa (HS) — and a dosing regimen. It seems that the use of adalimumab to treat HS was known [400], so the key issue, as with the 868 patent, was whether the dosing regimen was obvious. McVeigh J held on the facts that it was [402]. An attack based on patentable subject matter failed [413]–[415]. There was also an unusual attack based on “Claim term not described” which I will come back to. The 458 patent related to an adalimumab formulation, which McVeigh J found on the facts to be not anticipated [559] and not obvious [591]. Attacks based on overbreadth [592]–[603] and double patenting [604]–[620], also failed.

Identical Witness Statements

As discussed here, in dTechs 2023 FCA 115 [32], [34], the FCA addressed the role of counsel in the preparation of expert reports. Gauthier JA noted that while it is not unusual for expert reports to be prepared “in close collaboration with counsel,” this is not normally a significant problem, so long as the Court is ultimately “presented with the substantive and objective opinion of the expert.” Gauther JA also noted that “While counsel may make mistakes and overstep the bounds of what is permissible involvement, this will normally be revealed on cross-examination at trial, and will be considered by trial courts in assessing the evidence” [34]. Something along those lines happened here, albeit with a fact witness:

[210] Dr. Noertersheuser suffered significant credibility issues. It became apparent during his cross-examination that much of his statement was nearly identical, or word-for-word the same, as a witness statement made by Dr. George Richard Granneman on December 18, 2017 in US litigation. While this is not, in and of itself, hugely problematic, his responses on cross-examination reduced his credibility. He attempted to explain that perhaps he and Dr. Granneman had written identical statements because of how closely they had worked together in the past. He said they worked side by side and discussed things back then, and that must have been the reason they wrote identical statements. He was asked several times and confirmed that he independently came up with the exact same words but that he never copied. This is clearly inaccurate, and he would have better served the Court by admitting the statements were copied, instead of trying to claim that it was sheer coincidence.

[212] Unlike in Rovi, Dr. Noertersheuser was not an expert witness. Nonetheless, the word-for-word copying of Dr. Granneman’s report raised significant concerns about Dr. Noertersheuser’s impartiality. His inability to accept or acknowledge the paragraphs were word-for-word the same greatly impugned his credibility and reliability.

[215] The similarity between Dr. Noertersheuser (fact witness) and Dr. Granneman’s expert report went well beyond the appropriate limits. I will assess Dr. Noertersheuser’s evidence with some caution when it is in disagreement with other witnesses.

Treating his evidence with “some caution” is a very measured response.

Blinding the Witness

Over the past decade there have been various attempts to enhance the credibility of an expert on issues such as claim construction or obviousness by not informing the expert of the party’s position when they write their report. While some earlier decisions supported this practice, the trend more recently has been to be skeptical, generally on the view that the substance of the report is more important than whether the witness was blinded. Another concern is that it may impossible to truly blind a person who is an expert keeping abreast of developments in a particular field: see eg Hospira 2018 FC 259 [203]. That problem arose in a particularly acute form in this case, when one of the experts who had been ‘blinded’, forgot that she had previously provided expert evidence in another matter involving the 868 patent [247]–[249], [252]. McVeigh J expressed skepticism of the worth of the blinding process, saying “I rely on Dr. Baughman’s evidence, not for the fact that it was blinded but for the reasoning it provides” [250]. McVeigh J did not fault Dr. Baughman, whom McVeigh J found to have sincerely failed to recall her prior involvement”; nonetheless, while she did accept the evidence as credible and reliable, she only assigned a moderate weight to it [252].

When can a range anticipate a point?

The parties disagreed “as to whether prior art that discloses a range can anticipate a point within a range or embodiment. For example, has disclosure occurred if the range is 0.2-400 mg in the prior art, and the subsequent patent claims about 10 mg or a narrower range such as 0.10-100 mg” [157]. JAMP relied on several recent cases in which “the Federal Court held a range or a broad disclosure can anticipate a point within a range or an embodiment” [158]. After reviewing those cases, and discussing several blog posts in which I have argued that these decisions were clearly wrong, McVeigh J concluded as follows:

[173] I find that the law has developed that, where the evidence presented at trial shows that the range is narrow enough, such that a flag can be planted based on the context and examples given, then it is anticipated. If the evidence shows a very broad range that the Judge, with the experts’ assistance (if needed), does not see it as a precise enough to plant the flag before proceeding to the enablement stage, then it fails at the disclosure stage.

This statement of the law strikes me as sound and helpful (though I’m not sure it actually explains the prior cases or whether McVeigh J intended it as doing so). It is consistent with the EPC Examination Guidelines G.VI.8, which also strike me as sound:

A sub-range selected from a broader numerical range of the prior art is considered novel if both of the following two criteria are satisfied (see T 261/15):

(a) the selected sub-range is narrow compared to the known range;

(b) the selected sub-range is sufficiently far removed from any specific examples disclosed in the prior art.

The meaning of "narrow" and "sufficiently far removed" has to be decided on a case by case basis.

McVeigh J also applied her analysis to the facts in two instances, both holding that there was no anticipation.

JAMP argued that the asserted claims of the 917 Patent were anticipated by the 868 application [383]. Recall that the 917 patent relates to the use of adalimumab, a TNFα inhibitor, to treat HS according to a specified dosing regimen. The 868 application disclosed the use of TNFα inhibitors as a means of treating 16 broad categories of disorders, including HS, and presenting a large class of dosing elements with numerous choices for the specific TNFα inhibitor, the number of loading doses, the amount for each loading dose, the interval between loading doses, the interval between loading and maintenance dose (one hour, one day, one week, two weeks) and the amount of maintenance dose [387]. So, “a skilled person reading the 868 Application would have a range of dose amounts, dosing intervals, and durations of treatment to choose from when creating a multiple variable dosing regimen to treat an inflammatory-related disorder” [388]. In contrast, the 917 Patent claimed a much more specific dosing regime [389]. McVeigh J invoked her para 173 analysis [385] and concluded:

[390] Given the number of dosing elements disclosed in the 868 Application, it is not clear that a POSITA would know to select adalimumab and to administer it using the specific dosing regimen claimed in the 917 Patent. If the POSITA reading the prior art reference must adopt a specific way forward in order to infringe, yet there are numerous other ways to perform the prior art without necessarily infringing, then there is no disclosure: Shire [2021 FCA 52] at para 50.

This strikes me as straightforwardly correct, and consistent both binding jurisprudence, such as Shire and with McVeigh J’s summary statement at [173].

JAMP also argued that the asserted claims of the 458 Patent, claiming a formulation of adalimumab, were anticipated by the 181 Application, titled “Self-Buffering Protein Formulations” [539]. The 181 Application listed adalimumab among the proteins:

[545] The most preferred protein concentration range in the 181 Application is 20-150 mg/mL. This is a very large range. For the four proteins tested whose test results appeared in the 181 Application, there were concentrations of 90 mg/mL and 110 mg/mL which proved to be self-buffering within pH ranges which included 5.2. But there were other ranges tested too, and none of these proteins were adalimumab. Moreover, in the claims section of the 181 Application, these proteins are not introduced in the same claim as adalimumab and there is no indication of dependency between the claims that introduce these proteins and the claim which refers to adalimumab.

[546] As mentioned above, a range does not always anticipate a point, but it could if dependant on the facts of the particular patent. This is even truer where the range is very large or broad. Accordingly, I do not see how a range of protein concentration from 20-150 mg/mL can plant a flag at the specific concentration of 100 mg/mL, especially where specific examples of formulations given do not include the relevant protein.

Accordingly, she held the 181 application did not anticipate. Again, this strikes me as straightforwardly correct, and consistent both the binding jurisprudence and with McViegh J’s summary statement at [173].

Methods of medical treatment

It is still black letter law that methods of medical treatment are not patentable subject matter, though the jurisprudential basis for that proposition is shaky: see Hospira 2020 FCA 30 [48]–[49] (discussed here). However, no one really knows what a “method of medical treatment” is. That’s because there is no clear principle underpinning the rule. The rule was originally set out by the SCC in Tennessee Eastman [1974] SCR 111, primarily on the very logical basis that allowing patentability of methods of medical treatment would allow an end-run around what was then s 41, which restricted patents for medicine to product-by-process claims. Section 41 has since been repealed, but Tennessee Eastman had a tantalizing dictum — “I do not think so” — suggesting there might be more to it than that. Subsequent decisions of the SCC suggested that the bar might turn on the “essentially non-economic” nature of the methods of medical treatment: see Hospira 2020 FCA 30 [49], discussing Shell Oil [1982] 2 SCR 536, 554 and Wellcome / AZT 2002 SCC 77 [49]. But no one really knows what it means to say that professional skills are essentially non-economic. (Try telling that to a lawyer.)

In any event, the best current theory is that a claim that encompasses the skill of a medical professional is unpatentable. To say it’s the best theory is not to say it’s a correct theory, or even a good theory — see Hospira [51]–[52] — but that’s more or less where we are now. The problem is that no one really knows what it means for a claim to encompass the skill of a medical professional. As a result, we are all flailing in trying to give some kind of content to the putative rule that methods of medical treatment are unpatentable.

In this case, JAMP argued that the claims of the 868 and 917 patents, both directed to dosage regimens, were invalid as being directed to a method of medical treatment that requires the exercise of professional skill or judgment [332] saying that:

[333] where there is evidence that the dose would be changed over time in response to a patient’s needs, then that regimen is vulnerable to an attack on the basis that is an unpatentable method of medical treatment. In JAMP’s view, the dosing regimen must be appropriate for all.

McVeigh J rejected this argument, quoting the decision of Manson J in Janssen 2022 FC 1218 [171] (discussed here) to the effect that if a physician departs from the claimed dosage regimen “they would no longer be practicing the claimed invention” [338]. She followed this reasoning, concluding that “to the extent a minority of physicians wish to deviate from the claimed regimens at some point, this does not render the claims unpatentable; rather, it takes their conduct outside the scope of the patents like in Janssen” [339]. See similarly [413]–[415] respecting the 917 patent.

More broadly, this suggests that the incoherent state of the law has made the Federal Court wary of striking down patents on the basis that they claim unpatentable methods of medical treatment. This wariness strikes me as being entirely appropriate. This bar on patentability has no basis in the Act. While the courts can and do read text into a statute, this is normally done only after a careful purposive interpretation shows that adhering to the text would lead to an absurd or otherwise unacceptable result. The courts are right to be reluctant to use a judge-made doctrine to strike down a patent for an invention which is otherwise new, useful and non-obvious, without some clear principled basis for doing so.

Doses not subject to discretionary adjustment

The 917 patent claimed a dosage regimen “wherein said multiple doses are not subject to any discretionary adjustment by a physician or medical practitioner” [380]. This phrase was added by AbbVie during prosecution to overcome an examiner objection that the claim was to a method of medical treatment because it limits the professional skill or judgment of a physician [441]. The issue came up as part of an added matter attack, which I will return to below. For now, I’ll just point out McVeigh J’s remark that “AbbVie’s addition did not change claim 1, nor does it broaden the claim. Claim 1 would have had the same effect, with or without the additional statement” [443]. This is a relief. I don’t want to get too far into the weeds of how this phrase might be construed. (Surely any dosage regimen is subject to discretionary adjustment in some cases, eg if the patient has an unexpected life-threatening reaction to the first dose—would that mean all claims with that phrase would be invalid?) The larger point is that McVeigh J’s statement suggests that the issue of patentability of methods of medical treatment will be decided on substantive grounds, not by trying to make the issue disappear with drafting slight of hand. When the law is settled, but unworkably, it may be necessary to allow the use of drafting methods to get around the black letter law, as was done with Swiss form claims. But that is a second best solution. It is better to get the substantive law right in the first place, and the law on patentability of methods of medical treatment is currently sufficiently unsettled to allow us to try to do that.

Added matter

JAMP attacked the 917 patent for failure to comply with s 38.2(2): see [192]–[197], reviewing the law, and [416]–[444], further reviewing the law and applying it to the facts. This attack was referred to as a “Claim Term Not Described,” but I’ll call it an “added matter” attack, as is this the conventional term for the parallel issue in UK law. The issue arises regularly in UK law, because claim amendments are permitted in litigation, and the question is whether the amended claim impermissibly adds new matter. There is limited Canadian caselaw on this provision, with the main authority being Western Oilfield 2021 FCA 24 (discussed here).

38.2(2) provides as follows:

The specification and drawings contained in an application, other than a divisional application, may not be amended to add matter that cannot reasonably be inferred from the specification or drawings contained in the application on its filing date.

One issue that was raised was whether this provision can be the basis for an invalidity attack, or whether it is purely procedural.

After reviewing the authorities, including Western Oilfield, McVeigh J concluded that “the law currently stands, it is unclear whether a patent is invalid when a party adds a claim term that cannot be reasonably inferred from the specification or drawings” [197]. Western Oilfield is perhaps a bit ambiguous. The main issue was the nature of the test for whether the new matter could be inferred, and specifically whether the Canadian courts should follow the “strict” UK test. One reason for wariness given by the FCA was that “the U.K. provision provides explicitly for patent revocation. Section 38.2 does not” [143]. McVeigh J took this as a hint that perhaps invalidity is not a remedy for failure to comply with s 38.2(2), as I did I in my post on that aspect of Western Oilfield, where I said that Locke JA’s statement “raises the question of whether added matter contrary to s 38.2 is a basis for invalidating a claim in a granted patent, or whether it is only ground for refusing an amendment during prosecution.”

On re-reading, I don’t think that is what Locke JA was suggesting. As noted, the discussion was in the context of whether the strict UK test for inferability should be followed. The full paragraph was:

[143] The third reason to be wary of the strict U.K. test is that the U.K. provision provides explicitly for patent revocation. Section 38.2 does not. On the contrary, subsection 38.2(1) provides that, subject to certain limitations, a patent application may be amended. The provision of particular interest in the present appeal, subsection 38.2(2), provides for one of the contemplated limitations.

I think Locke JA’s point is that because an amendment is explicitly permitted, we should be wary of being too restrictive in permitting such amendments. That does not imply that invalidity is not the remedy when the amendment is not permitted, even under a more relaxed test. The FCA in Western Oilfield went on to hold that the amendment was reasonably inferable [147], so the Court did not explicitly address the remedy for failure to comply with this provision.

I’d also note that s 72 of the UK Act exhaustively states the grounds for invalidity of a patent, including that the invention is not patentable (72(1)(a)), which includes anticipation or obviousness, as well as added matter (72(1)(d)). The Canadian Act has no equivalent. Section 60 simply provides that patent may be declared invalid or void, but without listing the specific grounds, and s 59 is the same. And s 28.2, for example, dealing with novelty, only says that subject matter “must not” have been disclosed, but does not say explicitly that a claim may be invalidated on that basis. So, given that there is no provision in the Canadian Act expressly stating that a patent may be held invalid for anticipation, obviousness, inutility or insufficiency, the fact that there is no provision expressly providing that a patent may be held invalid on the basis of 38.2 does mean much. This is another reason for thinking that this comment by Locke JA was not intended to question whether invalidity was the appropriate remedy for failure to comply with 38.2(2).

In any event, while McVeigh J did not consider the matter settled by Western Oilfield, she went on to hold that when an amendment is made in violation of 38.2(2), a claim is indeed invalid [434]. This seems to me to be clearly correct. Suppose I invent the wheel and file an application fully disclosing and claiming the wheel. Then, after I filed, but before my patent is granted, someone else publicly discloses how to make and use mRNA vaccines. I then amend my application to disclose and claim how to make and use mRNA vaccines. My claim can’t possibly be valid, even if it somehow slips through the patent office. There isn’t any other provision that would clearly prohibit this kind of amendment, since the mRNA vaccine is new and non-obvious as of my filing date. Section 38.2(2) provides a straightforward basis for invalidating such a patent.

The issue arose on the facts because of the addition of the phrase “wherein said multiple doses are not subject to any discretionary adjustment by a physician or medical practitioner” to the 917 patent during prosecution, as discussed above. McVeigh J held that amendment did not result in invalidity:

[443] In my view, AbbVie’s addition did not change claim 1, nor does it broaden the claim. Claim 1 would have had the same effect, with or without the additional statement.

[444] However, that is not the issue. The issue is whether the added claim term was reasonably inferable from the 917 Patent disclosure. I find that though it does conflict with the disclosure, AbbVie has not gained anything more than it originally had.

It’s not clear to me what McVeigh J meant when she said the added term “does conflict with the disclosure” but the main point seems to be that since the amendment did not change the claim scope, nothing at all was added, so it follows that nothing that was not reasonably inferable was added.

Claim construction

The only real dispute between the parties was the definition of “treating” in Claim 1

[296] I agree and adopt JAMP’s experts’ construction, as, even given its ordinary meaning, treating does not always achieve a meaningful result. Treating means attaining some therapeutic results but does not demand a particular duration or result.

[297] Treating does not mean achieving a meaningful clinical response and I do not accept Dr. Marshall’s definition that there must be a “certain therapeutic effect” (Dr. Marshall Report at para 91). “Treating” means a physician administering or prescribing adalimumab to an IBD patient according to the dosing regimen of the patent.

This seems right to me, not just on the text.

The question goes to utility. Generally, clinical efficacy does not have to be established at the time of filing. If the research has proceeded to the point where there is sufficient information to support a valid patent, the patent agent will want to draft a valid claim. The drafter will never specify “clinical efficacy” in the claim unless it is crucial to validity, because doing so needlessly raises the bar for utility. It seems to be consistent with a purposive interpretation to construe the claims on the presumption that the drafter did not intend to draft the claim in a way that would undermine its validity.