Bell Helicopter Textron Canada Limitée v. Eurocopter 2013 FCA 261 Mainville JA: Noël,
Trudel JJA refusing a motion for reconsideration of 2013 FCA 219
In previous litigation in this action, Eurocopter’s claims to helicopter landing gear with a forward
offset front cross-piece had been held to be valid and infringed, but Claim 16, to landing gear
with a backward offset front cross-piece, had been held invalid for lack of utility. In this motion
under Rule 397, which permits reconsideration when “(a) the order does not accord with any
reasons given for it; or (b) a matter that should have been dealt with has been overlooked or
accidentally omitted,” Eurocopter has asked the FCA to modify two paragraphs of its reasons
([157]-[158]), in a way that Eurocopter apparently hoped would have the effect of reversing the
judgment with respect to Claim 16, rendering that claim valid [4]. The FCA rejected this motion
on the basis that (1), Rule 397 cannot be used to re-argue an issue [15]; (2) the paragraphs in
question were not inadvertent and indeed were not incorrect [16]-[17]; and (3) the motion was
pointless as even if the paragraphs in question were “corrected,” Claim 16 would still be invalid.
This last point is of some general interest. As I discussed in a post on the original FCA decision,
the FCA held that the line of reasoning supporting sound prediction must be disclosed in the
patent. If the decision has been amended as sought by Eurocopter, it would have held that the line
of reasoning was indeed disclosed in the patent [4]. But the FCA noted that this would not have saved the claim,
because Bell had brought evidence that the backward offset embodiment lacked utility, and “It
would therefore have still been incumbent on Eurocopter to rebut that evidence through its own
evidence of testing or through calculations supporting a sound line of reasoning for that
embodiment at the time the `787 Patent was applied for. Eurocopter failed to do so. As a result,
its cross-appeal would still fail” [18]. In other words, the FCA has recognized that its holding
that the line of reasoning must be disclosed in the patent was obiter, because the more
fundamental problem is that Eurocopter had not supplied any evidence of utility, whether in the
patent or not. This is significant, as there is some suggestion of a disagreement at the FCA as to
whether the heightened disclosure requirement in respect of sound prediction is sound, and to the
extent that the holding in Eurocopter affirming this doctrine is obiter, it has less weight than if it
were determinative. That is, it would be possible for a subsequent decision of the FCA to
distinguish Eurocopter on this point as being obiter. With that said, there obiter, and there is
obiter; while the Eurocopter panel of the FCA has acknowledged that its holding on this point
was strictly obiter, it was clearly thoroughly considered, and so will not be lightly distinguished
or ignored.
Wednesday, November 27, 2013
Friday, November 22, 2013
Draft Trans-Pacific Partnership Treaty – Data Protection
Unsurprisingly, data protection is being negotiated in the leaked draft TPP treaty. And also
unsurprisingly, the main debate is between the US, which proposes a fairly strong mandatory data
protection regime (Art E.16), a group of seven countries, including Canada, which propose
a weaker regime (“the majority proposal”) (Art E.XX.4), and the rest, who apparently would prefer
no data protection requirement at all. The notes indicate
that both Canada and Japan are considering the US proposal, which is not strictly inconsistent
with the majority proposal, as it sets a higher standard.
The gist of the US proposal is that when data is submitted for pharmaceutical marketing authorization for a new product, a third party cannot piggy back on that data for at least five years: E.16(a). If the chemical entity has previously been approved as part of another product, the period is reduced to three years: E.16(c). The majority proposal simply requires that such data be protected against “unfair commercial use.” No minimum period of data exclusivity is specified. Furthermore, under the majority proposal, the protection may be limited to new chemical entities – that is, no protection at all would be permitted if the chemical entity has been previously approved as part of another product, even if new data is required – and it may also be limited so that data protection is not available for new uses, or dosage forms, again, even if new data is required. There are also some other potential limitations on the data exclusivity. (Both proposals safeguard any measures necessary to implement the Doha Declaration on the TRIPS Agreement and Public Health.)
I am generally inclined to think that data protection is sound as a matter of policy. The argument for data protection is the same as the argument for intellectual property generally; the data is difficult and expensive to create (both proposals are limited to data “the origination of which involves a considerable effort”), and it is easy to copy, and without some form of protection no one will have an incentive to originate the data in the first place. Unlike patent protection, data protection does not have any requirement of an inventive step, but on the other hand, it does not provide a true monopoly either. In my view the inventive step requirement in patent law is designed to ensure that a monopoly is not granted over inventions that would have been independently developed in any event: Graham v John Deere Co, 383 US 1 at 11 (1966). Since data protection does not prevent applications for marketing authorization based on independently created data, this problem does not arise. On this logic, the potential exclusions for new uses of known entities, drugs that have not been approved in other formulations, or new dosages, are difficult to justify. If the data required significant effort to originate, and it is susceptible of piggy-backing, then it should be protected.
Of course, the bigger debate between the two positions is as to whether there should be a minimum period of data protection. If we accept the basic justification for data protection, which the majority proposal apparently does, then a minimum period of protection seems necessary in practice to make that protection effective.
The positions are set out below for convenience:
The gist of the US proposal is that when data is submitted for pharmaceutical marketing authorization for a new product, a third party cannot piggy back on that data for at least five years: E.16(a). If the chemical entity has previously been approved as part of another product, the period is reduced to three years: E.16(c). The majority proposal simply requires that such data be protected against “unfair commercial use.” No minimum period of data exclusivity is specified. Furthermore, under the majority proposal, the protection may be limited to new chemical entities – that is, no protection at all would be permitted if the chemical entity has been previously approved as part of another product, even if new data is required – and it may also be limited so that data protection is not available for new uses, or dosage forms, again, even if new data is required. There are also some other potential limitations on the data exclusivity. (Both proposals safeguard any measures necessary to implement the Doha Declaration on the TRIPS Agreement and Public Health.)
I am generally inclined to think that data protection is sound as a matter of policy. The argument for data protection is the same as the argument for intellectual property generally; the data is difficult and expensive to create (both proposals are limited to data “the origination of which involves a considerable effort”), and it is easy to copy, and without some form of protection no one will have an incentive to originate the data in the first place. Unlike patent protection, data protection does not have any requirement of an inventive step, but on the other hand, it does not provide a true monopoly either. In my view the inventive step requirement in patent law is designed to ensure that a monopoly is not granted over inventions that would have been independently developed in any event: Graham v John Deere Co, 383 US 1 at 11 (1966). Since data protection does not prevent applications for marketing authorization based on independently created data, this problem does not arise. On this logic, the potential exclusions for new uses of known entities, drugs that have not been approved in other formulations, or new dosages, are difficult to justify. If the data required significant effort to originate, and it is susceptible of piggy-backing, then it should be protected.
Of course, the bigger debate between the two positions is as to whether there should be a minimum period of data protection. If we accept the basic justification for data protection, which the majority proposal apparently does, then a minimum period of protection seems necessary in practice to make that protection effective.
The positions are set out below for convenience:
Thursday, November 21, 2013
Draft Trans-Pacific Partnership Treaty – Regulatory Review Exception
The leaked TPP treaty contemplates a regulatory review exception in Art E.13, but there is some
controversy over the scope. There is considerable debate over the precise wording (which makes the
annotated draft difficult to read), but main debate is over whether the exception should be
confined to getting marketing authorization for pharmaceuticals, or whether it should extend to any kind of
regulatory approval. The US proposal is representative of the more restrictive position, and
the Canadian proposal is representative of the broader position. I have parsed out their positions below, with
my underlining to highlight the differences. (No other countries support either of these positions
exactly, but several support each of them with some deviations.)
Draft Trans-Pacific Partnership Treaty – Written Description and Overbreadth
Two very different versions of Article E.9 are proposed in the leaked draft TPP treaty. The proposal of the US and Peru provides for a US-style written description requirement:
US version:
Australia proposes a very substantially different version:
All others except Japan oppose this provision. Japan is considering.
While this provision raises complex issues – this is a familiar refrain by now – in my view the Australian proposal is sound and desirable, while the US proposal verges on the absurd.
US version:
Article QQ.E.9
Each Party shall provide that a claimed invention is sufficiently supported by its
disclosure if the disclosure reasonably conveys to a person skilled in the art that the
applicant was in possession of the claimed invention as of the filing date.
Australia proposes a very substantially different version:
Article QQ.E.9
Each Party shall provide that a claimed invention shall be sufficiently supported by its
disclosure.
All others except Japan oppose this provision. Japan is considering.
While this provision raises complex issues – this is a familiar refrain by now – in my view the Australian proposal is sound and desirable, while the US proposal verges on the absurd.
Wednesday, November 20, 2013
Draft Trans-Pacific Partnership Treaty – Disclosure
Article E.8 of the leaked draft TPP treaty relates to the disclosure requirement. It is proposed by the
US, Australia and two others, and opposed by all others except Japan, which is still considering:
This provision essentially codifies the core disclosure requirement of Canadian law. This precise formulation is not commonly used by the Federal Courts. A more typical statement is that a specification is sufficient if a skilled worker can practice the invention, even if “routine trials and experiments not amounting to invention might be necessary to arrive at the desired result” (see eg 2010 FC 1265, [532]). But it is doubtful that there is any real difference between this and the “undue experimentation” formulation, which is often used by the PAB (see eg CD 1315).
While E.8 captures the core Canadian disclosure requirement, if, as appears on its face, this provision is intended to be an exhaustive definition of the disclosure requirement, then Canadian law would require amendment. For example, s 27(3)(c) has a best mode requirement, applicable at least to machines, and Professor Vaver is of the view that there is a more general best mode requirement in Canadian law: Vaver, Intellectual Property Law (2nd ed) at 343-44. Indeed, it is surprisingly difficult to define the Canadian disclosure requirement precisely. As the SCC noted in Supreme Court noted in Consolboard [1981] 1 SCR 504, 518, “[i]t cannot be said that [the disclosure section] of the Act is happily phrased. It gives the impression of a mélange of ideas gathered at random rather than an attempt to enunciate, clearly and concisely, a governing principle or principles.” This is illustrated by the recent confusing – dare I say confused? – decision of the SCC in Sildenafil 2012 SCC 60, in which the invalidity of the Viagra patent turned on the failure to disclose “the invention”: see my recent article “The Duty to Disclose ‘The Invention’: The Wrong Tool for the Job, (2013) 25 IPJ 269. It may be that Canada opposes E.8 to avoid having to amend and clarify the disclosure provision of our Act. In my view clarification of our disclosure provision is undoubtedly desirable. It might even turn out that paring down the requirement to something like E.8 would be the best solution; but a number of important substantive questions, such as whether a best mode requirement is desirable, would have to be addressed before we could arrive at that conclusion. If indeed E.8 is intended as an exhaustive disclosure requirement, I am not surprised at Canada’s opposition. Again, the problem is not that this particular issue is impossibly difficult to settle. Legislative reform never seems to happen without some kind of external pressure, and a trade negotiation is perhaps as good an occasion as any. The difficulty is that the TPP negotiations are raising a number of difficult issues, and I don’t see how they can all be satisfactorily addressed, especially without a more public consultation process.
According to FN 100 to Art E.8, Mexico and Singapore “are willing to accept the article provided that the sentence ‘without undue experimentation’ is deleted.” The effect of deleting these words depends on how the resultant provision is interpreted. It might be interpreted as implying the very stringent requirement found in some old English cases, that “the terms of a specification should express the invention in the clearest and most explicit manner; so that a man of science may be able to produce the thing intended without the necessity of trying experiments” Turner v Winter (1787) 99 ER 1274, 1277. Experience soon proved that this requirement was much too stringent, and a provision that required such disclosure would be unacceptable. The alternative, and more reasonable interpretation, is that there would still be room for some trials, and it is only the precise “undue experimentation” formulation that Mexico and Singapore find objectionable.
Article QQ.E.8
Each Party shall provide that a disclosure of a claimed invention shall be considered to be
sufficiently clear and complete if it provides information that allows the invention to be
made and used by a person skilled in the art, without undue experimentation, as of the
filing date.
This provision essentially codifies the core disclosure requirement of Canadian law. This precise formulation is not commonly used by the Federal Courts. A more typical statement is that a specification is sufficient if a skilled worker can practice the invention, even if “routine trials and experiments not amounting to invention might be necessary to arrive at the desired result” (see eg 2010 FC 1265, [532]). But it is doubtful that there is any real difference between this and the “undue experimentation” formulation, which is often used by the PAB (see eg CD 1315).
While E.8 captures the core Canadian disclosure requirement, if, as appears on its face, this provision is intended to be an exhaustive definition of the disclosure requirement, then Canadian law would require amendment. For example, s 27(3)(c) has a best mode requirement, applicable at least to machines, and Professor Vaver is of the view that there is a more general best mode requirement in Canadian law: Vaver, Intellectual Property Law (2nd ed) at 343-44. Indeed, it is surprisingly difficult to define the Canadian disclosure requirement precisely. As the SCC noted in Supreme Court noted in Consolboard [1981] 1 SCR 504, 518, “[i]t cannot be said that [the disclosure section] of the Act is happily phrased. It gives the impression of a mélange of ideas gathered at random rather than an attempt to enunciate, clearly and concisely, a governing principle or principles.” This is illustrated by the recent confusing – dare I say confused? – decision of the SCC in Sildenafil 2012 SCC 60, in which the invalidity of the Viagra patent turned on the failure to disclose “the invention”: see my recent article “The Duty to Disclose ‘The Invention’: The Wrong Tool for the Job, (2013) 25 IPJ 269. It may be that Canada opposes E.8 to avoid having to amend and clarify the disclosure provision of our Act. In my view clarification of our disclosure provision is undoubtedly desirable. It might even turn out that paring down the requirement to something like E.8 would be the best solution; but a number of important substantive questions, such as whether a best mode requirement is desirable, would have to be addressed before we could arrive at that conclusion. If indeed E.8 is intended as an exhaustive disclosure requirement, I am not surprised at Canada’s opposition. Again, the problem is not that this particular issue is impossibly difficult to settle. Legislative reform never seems to happen without some kind of external pressure, and a trade negotiation is perhaps as good an occasion as any. The difficulty is that the TPP negotiations are raising a number of difficult issues, and I don’t see how they can all be satisfactorily addressed, especially without a more public consultation process.
According to FN 100 to Art E.8, Mexico and Singapore “are willing to accept the article provided that the sentence ‘without undue experimentation’ is deleted.” The effect of deleting these words depends on how the resultant provision is interpreted. It might be interpreted as implying the very stringent requirement found in some old English cases, that “the terms of a specification should express the invention in the clearest and most explicit manner; so that a man of science may be able to produce the thing intended without the necessity of trying experiments” Turner v Winter (1787) 99 ER 1274, 1277. Experience soon proved that this requirement was much too stringent, and a provision that required such disclosure would be unacceptable. The alternative, and more reasonable interpretation, is that there would still be room for some trials, and it is only the precise “undue experimentation” formulation that Mexico and Singapore find objectionable.
Draft Trans-Pacific Partnership Treaty – Patentability of Methods of Medical Treatment
The leaked draft TPP treaty has a number of provisions concerning medically related claims. My last
posts dealt with second medical use claims, and a prohibition on any requirement of enhanced
efficacy for pharmaceuticals. This post deals with methods of medical treatment, addressed in
Art E.1(3)(b). I find the notation in this provision to be a bit confusing, but as I understand it, the
position of the parties is as follows:
US proposes that:
Others (including Canada, but excluding Japan) propose:
The majority position reflects in TRIPS Art 27(3)(a); and see also EPO Art 53(c). The basic question is whether this potential exclusion of methods of medical treatment should be maintained, or eliminated.
Japan opposes any provision, one way or the other, on this issue.
US proposes that:
3. Each Party shall make patents available for inventions for (b) diagnostic, therapeutic,
and surgical methods for the treatment of humans or animals if they cover a method of
using a machine, manufacture, or composition of matter
Others (including Canada, but excluding Japan) propose:
3. Each Party may exclude from patentability (b) diagnostic, therapeutic, and surgical
methods for the treatment of humans or animals.
The majority position reflects in TRIPS Art 27(3)(a); and see also EPO Art 53(c). The basic question is whether this potential exclusion of methods of medical treatment should be maintained, or eliminated.
Japan opposes any provision, one way or the other, on this issue.
Tuesday, November 19, 2013
Draft Trans-Pacific Partnership Treaty – Prohibition on Requiring Enhanced Efficacy of Pharmaceuticals
The leaked TPP treaty has a number of provisions concerning medically related claims. My last
post dealt with second medical use claims.This post deals with a proposed prohibition on any
requirement of enhanced efficacy for pharmaceuticals, which is addressed in Art E.1(1)(b). The
following provision is proposed by the US and Australia, and opposed by all others, except
Japan, which is still considering:
I don’t have a specific context for this, but on its face this provision is aimed at precluding national legislation which would require enhanced efficiency as an additional condition of patentability for pharmaceuticals, presumably in an attempt to deal with pharmaceutical patent “evergreening.”
Article QQ.E.1: {Patents / Patentable Subject matter}
1. The Parties confirm that:
(b) a Party may not deny a patent solely on the basis that the product did not result
in enhanced efficacy of the known product when the applicant has set forth
distinguishing features establishing that the invention is new, involves an
inventive step, and is capable of industrial application.
I don’t have a specific context for this, but on its face this provision is aimed at precluding national legislation which would require enhanced efficiency as an additional condition of patentability for pharmaceuticals, presumably in an attempt to deal with pharmaceutical patent “evergreening.”
Draft Trans-Pacific Partnership Treaty – Patentability of Second Medical Use Claims
The leaked TPP treaty has a number of provisions concerning medically related claims, in
particular second medical use claims, a prohibition on any requirement of enhanced efficacy for
pharmaceuticals, and claims related to methods of medical treatment. I will deal with these in
separate posts, beginning with second medical use claims, which are addressed in Art E.1(1)(a):
The US and Australia support this, Japan is considering, and all others, including Canada, oppose this provision. This most prominent impact of this provision would be to ensure that second medical use claims are patentable, though it would apply more broadly, to any second use of a known product.
It is not clear to me why Canada opposes this provision, as it would do no more than affirm existing law. That patents are available for new inventive uses of a known product is the central holding of Shell Oil [1982] 2 SCR 536. In Wellcome / AZT [2001] 1 FC 495 (FCA), Rothstein J, [72-75] applied Shell Oil to hold a second medical use claim (to the use of AZT for the treatment of HIV/AIDS) to be valid, and this was affirmed by 2002 SCC 77 [49-50].
With that said, there is a real controversy over second medical use claims in particular. The advantage of Swiss form claims, to the use of a known compound for the manufacture of a pharmaceutical composition for the new therapeutic application, is that it can encompass a new use for a known product, but only the manufacturer could be liable for infringement, and not a physician prescribing or administering the drug. Thus prohibiting patenting of a second medical use, while allowing Swiss form claims, allows physicians to treat their patients according to their best medical judgment, without fear of an infringement actions. An alternative approach to achieve the same end is to allow second medical use claims but provide a defence for physicians; this is the approach used is the US under 35 USC § 287(c)(1).
It is conceivable that this concern is driving the Canadian opposition to E.1(a), but this seems unlikely. Since E.1(a) reflects existing Canadian law, even if E.1(a) is not adopted, Canada would still have to amend the Patent Act if it wants to protect physicians by abolishing second medical use claims. If we are going to amend the Act for this purpose, surely the simpler approach would be to amend it to provide for a US-style defence, which addresses the root problem directly. Further, it is not clear that TPP members would be required to allow Swiss form claims in the absence of E.1(a), since it could be said that functionally, Swiss form claims do provide patents for new uses of a known product, even though there is an important substantive difference between Swiss form claims and second medical use claims as such. And in any event, this argument respecting second medical use claims does not apply to second use claims more generally; for example, the invention at issue in Shell Oil was for a use as a plant growth regulator. This obviously does not raise concerns about physician’s freedom to treat their patients. It may be that Canada’s opposition to this provision is driven by its broader negotiating strategy, rather than opposition to this provision in particular.
Article QQ.E.1: {Patents / Patentable Subject matter}
1. The Parties confirm that:
(a) patents shall be available for any new uses or methods of using a known
product,
The US and Australia support this, Japan is considering, and all others, including Canada, oppose this provision. This most prominent impact of this provision would be to ensure that second medical use claims are patentable, though it would apply more broadly, to any second use of a known product.
It is not clear to me why Canada opposes this provision, as it would do no more than affirm existing law. That patents are available for new inventive uses of a known product is the central holding of Shell Oil [1982] 2 SCR 536. In Wellcome / AZT [2001] 1 FC 495 (FCA), Rothstein J, [72-75] applied Shell Oil to hold a second medical use claim (to the use of AZT for the treatment of HIV/AIDS) to be valid, and this was affirmed by 2002 SCC 77 [49-50].
With that said, there is a real controversy over second medical use claims in particular. The advantage of Swiss form claims, to the use of a known compound for the manufacture of a pharmaceutical composition for the new therapeutic application, is that it can encompass a new use for a known product, but only the manufacturer could be liable for infringement, and not a physician prescribing or administering the drug. Thus prohibiting patenting of a second medical use, while allowing Swiss form claims, allows physicians to treat their patients according to their best medical judgment, without fear of an infringement actions. An alternative approach to achieve the same end is to allow second medical use claims but provide a defence for physicians; this is the approach used is the US under 35 USC § 287(c)(1).
It is conceivable that this concern is driving the Canadian opposition to E.1(a), but this seems unlikely. Since E.1(a) reflects existing Canadian law, even if E.1(a) is not adopted, Canada would still have to amend the Patent Act if it wants to protect physicians by abolishing second medical use claims. If we are going to amend the Act for this purpose, surely the simpler approach would be to amend it to provide for a US-style defence, which addresses the root problem directly. Further, it is not clear that TPP members would be required to allow Swiss form claims in the absence of E.1(a), since it could be said that functionally, Swiss form claims do provide patents for new uses of a known product, even though there is an important substantive difference between Swiss form claims and second medical use claims as such. And in any event, this argument respecting second medical use claims does not apply to second use claims more generally; for example, the invention at issue in Shell Oil was for a use as a plant growth regulator. This obviously does not raise concerns about physician’s freedom to treat their patients. It may be that Canada’s opposition to this provision is driven by its broader negotiating strategy, rather than opposition to this provision in particular.
Monday, November 18, 2013
Draft Trans-Pacific Partnership Treaty – Patentability of Biological Subject Matter
This post deals with Article E.1(3)(a),(c) of the leaked TPP treaty. The issue being negotiated is
whether the potential exclusions from patentability set out in TRIPS Art 27(3)(b) should be
maintained, removed, or altered. The TRIPS article is as follows:
The draft TPP splits this into separate paragraphs dealing with (a) plants and animals, and (c) essentially biological processes for the production of plants and animals.
I find the notation to this provision a bit confusing, but as I understand it, the US proposes that both potential exclusions would be eliminated:
Ten countries, including Canada (Japan’s position is not noted), propose that (the “majority proposal”):
In the alternative, five countries, including Canada, propose that the TRIPS potential exclusions be maintained as is (the “alternative proposal”):
The difference between the majority proposal and the alternative is that the majority proposal would not explicitly require that parties provide an effective alternative to patent protection for plant varieties. However, since all of the TPP countries are WTO members, they would be bound be the TRIPS provision in any event, unless they qualify for the LDC transitional extension. So, it may be that the effect of the alternative would be to require LDCs to provide for an effective system of plant protection under TPP even if not required to do so under TRIPS. However, this may be parsing the draft too finely; the leaked draft simply provides notes, and the negotiators would understand more clearly the implications of the alternatives.
I will discuss in turn the paragraphs relating to higher life forms and essentially biological processes.
27(3). Members may also exclude from patentability: (b) plants and animals other than
micro-organisms, and essentially biological processes for the production of plants or
animals other than non-biological and microbiological processes. However, Members
shall provide for the protection of plant varieties either by patents or by an effective sui
generis system or by any combination thereof.
The draft TPP splits this into separate paragraphs dealing with (a) plants and animals, and (c) essentially biological processes for the production of plants and animals.
I find the notation to this provision a bit confusing, but as I understand it, the US proposes that both potential exclusions would be eliminated:
3. Each Party shall make patents available for inventions for
(a) plants and animals
(c) essentially biological processes for the production of plants or animals, other
than non-biological and microbiological processes for such production
Ten countries, including Canada (Japan’s position is not noted), propose that (the “majority proposal”):
3. Each Party may exclude from patentability
(a) plants and animals, other than microorganisms
(c) essentially biological processes for the production of plants or animals, other
than non-biological and microbiological processes for such production
In the alternative, five countries, including Canada, propose that the TRIPS potential exclusions be maintained as is (the “alternative proposal”):
3. Each Party may also exclude from patentability
(b) plants and animals other than microorganisms, and
essentially biological processes for the production of plants or animals other than
nonbiological and microbiological processes.
However, Parties shall provide for the protection of plant varieties either by patents or by
an effective sui generis system or by any combination thereof.
The difference between the majority proposal and the alternative is that the majority proposal would not explicitly require that parties provide an effective alternative to patent protection for plant varieties. However, since all of the TPP countries are WTO members, they would be bound be the TRIPS provision in any event, unless they qualify for the LDC transitional extension. So, it may be that the effect of the alternative would be to require LDCs to provide for an effective system of plant protection under TPP even if not required to do so under TRIPS. However, this may be parsing the draft too finely; the leaked draft simply provides notes, and the negotiators would understand more clearly the implications of the alternatives.
I will discuss in turn the paragraphs relating to higher life forms and essentially biological processes.
Thursday, November 14, 2013
TPP - Competition Issues
The recently leaked draft shows that Trans-Pacific Partnership treaty has the potential to have a major impact on
patent law, to a significantly greater extent than CETA or ACTA, as a number of issues that are
both fundamental and controversial are being negotiated. In this and subsequent posts I will
highlight some of these proposed provisions, with some suggestions as to their potential
implications. This post will deal with issues related to competition law. I should emphasize that all my comments are tentative, both because I may not be
interpreting the provision properly, and because I have not had time to fully assess the law to the
extent necessary to provide a thorough commentary. Nor are my comments a comprehensive
review of the draft treaty. I will deal with those provisions which strike me as particularly
interesting. There are a number of proposals which may be both controversial and of a significant
practical impact, which I will not discuss. In the extracts below I have edited the draft provisions
for clarity, sometimes omitting substantive material. Consequently, the excerpts and my
discussion may not fully reflect the proposal or the position of the parties. Please refer to the
original leaked draft before drawing your own conclusions.
Wednesday, November 6, 2013
Does Canada Really Follow the “English Rule” for Costs?
ABB Technology AG v Hyundai Heavy Industries Co, Ltd 2013 FC 1050 Barnes J
Cost-shifting has been big news lately in the US as a way of discouraging patent trolls, and in conversation I have heard it suggested that trolls are not a major problem in Canada because we follow the “English rule,” that costs follow the cause. There is a real debate as to whether the English rule actually deters trolls – my intuition is that it might deter trolls who are asserting weak patents for nuisance value settlement, but it is unlikely to deter trolls who are asserting strong and important patents that impact major markets. (And see this IPKat report of the debate being joined in Europe.)
But a more basic question from a Canadian perspective is raised by this costs award in ABB Tech v Hyundai: do we really follow the English rule? In ABB Tech v Hyundai 2013 FC 947 (blogged here), the defendant Hyundai was entirely successful: the plaintiff’s action was dismissed and both patents in issue were declared invalid. The defendant’s actual legal costs exclusive of disbursements, were $2,809,161 [2]. Costs calculated at the middle of Column III would have been $75,337 – less than 3% of actual costs [3]. Costs at the top of Column IV, which seems to be the norm in hard-fought patent cases, would have been $289,495, or just over 10% of actual costs. In the end, Barnes J felt that a premium even above Column IV was warranted [4], and he awarded $350,000 [8] – which is 12.5% of actual costs.
Readers in practice will know whether these numbers are representative of costs awards generally, but they are at least generally consistent with what I have seen in other costs decisions in which actual costs were disclosed. Barnes J confirmed this in his remark that “This case exemplifies the growing disparity between the Federal Court tariff and the actual costs of patent litigation” [4]. Barnes J continued to say, “but that [disparity] alone is not a basis for departing wholly from the tariff in assessing costs. If it were otherwise the tariff would rarely, if ever, be used in cases of this type.” I think this is right. Rule 400(1) does state that “The Court shall have full discretionary power over the amount and allocation of costs and the determination of by whom they are to be paid,” and the Court has already exercised that discretion in systematically departing from the prima facie rule of Col III that is set out in Rule 407, in favour of the top end of Column IV. But in order to maintain consistency and predictability, a complete departure from the tariff is a policy matter that should be implemented deliberately, rather than by the exercise of the discretion of individual judges.
Perhaps it is time for a deliberate reconsideration of the costs rules. It seems to me that now we don’t really follow the English rule in a functional sense. We have a hybrid in which costs awards are big enough to fight over (thus increasing costs), but not big enough to make any difference to litigation strategy. That may be the worst of both worlds.
Cost-shifting has been big news lately in the US as a way of discouraging patent trolls, and in conversation I have heard it suggested that trolls are not a major problem in Canada because we follow the “English rule,” that costs follow the cause. There is a real debate as to whether the English rule actually deters trolls – my intuition is that it might deter trolls who are asserting weak patents for nuisance value settlement, but it is unlikely to deter trolls who are asserting strong and important patents that impact major markets. (And see this IPKat report of the debate being joined in Europe.)
But a more basic question from a Canadian perspective is raised by this costs award in ABB Tech v Hyundai: do we really follow the English rule? In ABB Tech v Hyundai 2013 FC 947 (blogged here), the defendant Hyundai was entirely successful: the plaintiff’s action was dismissed and both patents in issue were declared invalid. The defendant’s actual legal costs exclusive of disbursements, were $2,809,161 [2]. Costs calculated at the middle of Column III would have been $75,337 – less than 3% of actual costs [3]. Costs at the top of Column IV, which seems to be the norm in hard-fought patent cases, would have been $289,495, or just over 10% of actual costs. In the end, Barnes J felt that a premium even above Column IV was warranted [4], and he awarded $350,000 [8] – which is 12.5% of actual costs.
Readers in practice will know whether these numbers are representative of costs awards generally, but they are at least generally consistent with what I have seen in other costs decisions in which actual costs were disclosed. Barnes J confirmed this in his remark that “This case exemplifies the growing disparity between the Federal Court tariff and the actual costs of patent litigation” [4]. Barnes J continued to say, “but that [disparity] alone is not a basis for departing wholly from the tariff in assessing costs. If it were otherwise the tariff would rarely, if ever, be used in cases of this type.” I think this is right. Rule 400(1) does state that “The Court shall have full discretionary power over the amount and allocation of costs and the determination of by whom they are to be paid,” and the Court has already exercised that discretion in systematically departing from the prima facie rule of Col III that is set out in Rule 407, in favour of the top end of Column IV. But in order to maintain consistency and predictability, a complete departure from the tariff is a policy matter that should be implemented deliberately, rather than by the exercise of the discretion of individual judges.
Perhaps it is time for a deliberate reconsideration of the costs rules. It seems to me that now we don’t really follow the English rule in a functional sense. We have a hybrid in which costs awards are big enough to fight over (thus increasing costs), but not big enough to make any difference to litigation strategy. That may be the worst of both worlds.
Monday, October 28, 2013
Is a Dosage Range Unpatentable as Being a Method of Medical Treatment?
Bayer Inc v Cobalt Pharmaceuticals Company / drospirenone (NOC) 2013 FC 1061 Hughes J
YAZ / drospirenone / 2,179,728
As noted in my overview post, the Drospirenone decision is notable primarily as a development in the law relating to the patentability of methods of medical treatment, as Hughes J held four of the five claims at issue to be invalid on this basis.
Claims 1, 2, 6,7 and 8 were at issue [124]. All but Claim 8 were held to be invalid [162]. Claim 1, which is representative of the invalid claims, was as follows:
Claim 2 restricted the estragen to ethinylestradiol, Claim 6 restricted the gestagen to one of the two listed in Claim 1, and Claim 7 was similar to Claim 1, but with somewhat more restricted dose ranges [158].
Claim 8, held to be valid, was as follows:
As noted by Hughes J, in contrast with the first four claims, “Claim 8 is restricted to a single dosage (not a range) of one of two estrogens; and a single dosage, not a range, of one of three gestagens” [159].
After referring to his Cobalt / zoledronate (NOC) 2013 FC 985 decision (blogged here) as summarizing the law, Hughes J held Claim 1, 2, 6 and 7 invalid for the following reasons (my emphasis):
Hughes J evidently wrote Cobalt / zoledronate with Drospirenone in mind, so the contrast between Claim 8 and the other four claims is directly reflected in the second pair of contrasting claims he identified at [91]-[92] of that decision:
From this, it follows directly that Claim 8 is patentable while the others are unpatentable. Drospirenone is helpful in explaining why Hughes J is of the view that claims to a dosage range are unpatentable, namely that “they provide for a choice to be made by those prescribing or providing contraceptive drugs to choose between a variety of components and a variety of dosage ranges” [162]. The implication is that by providing for a choice to be made, this implicates the professional skill of the prescribing doctor: (and see [161]).
I see two problems with this analysis. First, there is a distinction between a patent which requires the use of professional skill to practice the invention, and one in which professional skill may be exercised, but is not required, while practicing the invention. In Drospirenone, Hughes J held the claims to be useful, which implies that any combination with the specified range would work as an effective contraceptive. Professional skill might be exercised in practising the invention, to reduce side effects, for example, but in principle professional skill is not necessary to practice the invention effectively. Consider an analogy to a selection patent, in which the genus patent specifies that a broad range of compounds is effective for a particular purpose. It might well require professional skill, whether that of a doctor or engineer, depending on the patent, to get the most out of the invention; and if sufficient skill is required in choosing the best species, this might even be the basis for a valid selection patent. But the fact that professional skill is normally exercised in the practice of the genus patent, does not make the genus patent invalid. In this case, the patent does not “provide” for a choice to be made, in the sense of requiring a choice to practice the invention effectively, but rather it allows for a choice to be made. Put another way, elsewhere in this decision, Hughes J accepted that the word “about” is not vague and implies a range of about 10% around the specified value [103-06]. It would be possible to cover the entire range specified by Claim 1, by claims framed similarly to Claim 8, except to dosages “about” a single dosage. While this would require a very large number of claims, the difference between this multiplicity of specific dosage claims, and a single claim to a range of dosages, is purely formal. In summary, many patentable inventions allow for the exercise of professional skill in their implementation, and this alone does not make the claims invalid. While Claim 1 certainly allows for the exercise of professional skill, it does not seem to me to require it.
Moreover, even the suggestion that a claim is invalid if it requires the exercise of medical skill, is very difficult to reconcile with Wellcome / AZT 2002 SCC 77 which upheld a Claim 22 to the use of “an effective amount” of AZT. Surely choosing an effective amount of AZT implicates the professional skill of a doctor or pharmacist just as much as choosing from a specified range. Indeed, more skill is required by the AZT claim, because, as just noted, in this case any selection within the range specified by the ‘728 patent would work, whereas in the AZT claim, professional skill must be exercised to select an effective amount. (See also my post on Cobalt / zoledronate, making a similar point.)
More broadly, what is wrong with a claim which requires the exercise of professional skill? Many claims are of this nature, and the question is normally treated as one of sufficiency. It is well established that a claim requiring the exercise of professional skill is not invalid for that reason, so long as undue experimentation is not required. As discussed in my previous post, there may be a sense that the exercise of professional skill is inherently nebulous, but if that is the real objection, it should be dealt with directly, by invalidating for insufficiency or ambiguity, claims where the professional skill required by the claim is of a nature that is not described or cannot be reliably replicated.
If the objection relates to the exercise of medical skill in particular, we must ask what distinguishes medical skill from other professional skills. One answer is that there is a policy argument to be made that a physician should not be prevented from treating her patient to the best of her ability by fear of a patent action. But if that is the real objection, the better response is to address it directly, by providing a defence for physicians, as in the US under 35 USC § 287(c)(1). That is surely a policy decision for the legislature; and in any event, this policy goal is not aided by Hughes J’s distinction between dosage ranges and a single dosage; to the extent that the compositions encompassed by any of the Claims are “used” by the prescribing physician, allowing claims to specific dosages exposes physicians to liability; Claim 8 would be infringed by a physician who determines that the dosage specified by that claim is appropriate for her patient.
Ultimately, it seems to me that the distinction between a dosage range and a specific dosage is a formalism which lacks a a clear policy rationale, and is inconsistent with Wellcome / AZT.
It is also very disappointing to see the apparent resurrection, both in this decision [162] and in Cobalt / zolendronate and the case-law discussed therein, of the long-discredited “vendible product” test for patentable subject matter. This test was created by Morton J in Re GEC's Application, (1942) 60 RPC 1 at 4, where he stated that “a method or process is a manner of manufacture if it (a) results in the production of some vendible product or (b) improves or restores to its former condition a vendible product or (c) has the effect of preserving from deterioration some vendible product to which it is applied.” The list is curiously specific, if it is an attempt to reconcile difficult cases on narrow factual grounds – though Morton J did not cite specific authority for this proposition, referring merely to “cases cited to me”. But it is more bluntly described as legal gerrymandering, aimed at reaching a particular result on the facts. There is no unifying principle, either stated or apparent. While the phrase “vendible product” is repeated, it is not truly a unifying concept, as not every invention that affects a vendible product is patentable; only certain effects are within the scope of the rule. In particular, on the facts of the case, Morton J held that using a known compound for extinguishing a fire did not fall within the rule as stated, apparently because preserving a vendible product from fire does not amount to “preserving from deterioration.” This invisibly fine distinction was evidently developed for the purpose of allowing Morton J to hold the invention unpatentable. The application at issue was for a patent on a method of extinguishing incendiary bombs by means of a concentrated aqueous solution of a known substance (zinc chloride). Legal realism provides the most obvious explanation for the rule: the case was decided in the middle of World War II, just after the Blitz, and Morton J did not want the inventor to be able to hold London to ransom. While this is no doubt a reasonable concern, it does not warrant re-writing the law of patentable subject matter. In Canada today, this concern could be addressed by s 19 of the Act.
Regardless of the explanation for Morton J’s decision in Re GEC's Application, it is no longer good law. Morton J held that the claims in question on the basis that they were “nothing more than claims for a new use of an old substance, such use not being, in my view, a manner of manufacture.” This holding, which was made immediately after his statement of the vendible production rule, and which is apparently his application of that rule on the facts, is directly inconsistent with Shell Oil, [1982] 2 SCR 536, the leading SCC decision on patentable subject matter, which upheld the patentability of a new use for an old compound. Even prior to that, the vendible product rule itself has been effectively expunged from the law by the penetrating analysis of the High Court of Australia in NRDC (1961) 102 CLR 252 (HCA). For more discussion of the vendible product rule, see my article, The Rule Against Abstract Claims: History and Principles, 26 CIPR 205 at 224-25 (draft version here).
YAZ / drospirenone / 2,179,728
As noted in my overview post, the Drospirenone decision is notable primarily as a development in the law relating to the patentability of methods of medical treatment, as Hughes J held four of the five claims at issue to be invalid on this basis.
Claims 1, 2, 6,7 and 8 were at issue [124]. All but Claim 8 were held to be invalid [162]. Claim 1, which is representative of the invalid claims, was as follows:
1. Use of an oral dosage form comprising an estrogen selected from
2.0 to 6.0 mg of 17-estradiol and
0.015 to 0.020 mg of ethinylestradiol;
and a gestagen selected from
0.05 to 0.075 mg of gestodene,
0.075 to 0.125 mg of levonorgestrel,
0.06 to 0.15 mg of desogestrel,
0.06 to 0.15 mg of 3-ketodesogestrel,
0.2 to 0.3 mg of norgestimate,
>0.35 to 0.75 mg of norethisterone,
0.1 mg of drospirenone to a drospirenone dose equivalent to 0.075 mg of
gestodene, and
0.1 mg of cyproterone acetate to a cyproterone acetate dose equivalent to 0.075
mg of gestodene;
for contraception for a female of reproductive age who has not yet reached
premenopause, by administration of the form of dosage for 23 or 24 days, beginning on
day one of the menstrual cycle, followed by 5 or 4 pill-free or placebo pill days, for a total
of 28 days in the administration cycle.
Claim 2 restricted the estragen to ethinylestradiol, Claim 6 restricted the gestagen to one of the two listed in Claim 1, and Claim 7 was similar to Claim 1, but with somewhat more restricted dose ranges [158].
Claim 8, held to be valid, was as follows:
8. Use according to claim 1, whereby the estrogen is present in a dose of 20 µg of
ethinylestradiol or an equivalent dose of 17-estradiol and the gestagen is present in a dose
of 75 µg of gestodene or an equivalent dose of levonorgestrel, cyproterone acetate or
drospirenone.
As noted by Hughes J, in contrast with the first four claims, “Claim 8 is restricted to a single dosage (not a range) of one of two estrogens; and a single dosage, not a range, of one of three gestagens” [159].
After referring to his Cobalt / zoledronate (NOC) 2013 FC 985 decision (blogged here) as summarizing the law, Hughes J held Claim 1, 2, 6 and 7 invalid for the following reasons (my emphasis):
[160 In the present case, all claims are clearly expressed in terms of use for a
contraceptive. All claims except claim 8 provide for a range of dosages for one or both of
the estrogen and gestagen components.
[162] The
point, however, is not whether a commercial product is provided with
fixed
dosages and regimens. The point is, what do the claims say? All claims
at issue are use
claims, not product claims. All but claim 8 claim the use as a
contraceptive of a two-component drug with each component to be selected
from a choice of components, and
with each component to be furnished at a dosage within a range of
dosages. Claims 1, 2, 6
and 7 are not proper subject matter for a Canadian patent, as they do
not claim a vendible
product; they provide for a choice to be made by those prescribing or providing
contraceptive drugs to choose between a variety of components and a variety of dosage
ranges. Only claim 8 survives, as it is directed to a single dosage of each of two
compounds.
Hughes J evidently wrote Cobalt / zoledronate with Drospirenone in mind, so the contrast between Claim 8 and the other four claims is directly reflected in the second pair of contrasting claims he identified at [91]-[92] of that decision:
• the substance X in the form of a 5 mg tablet for the treatment of Y [patenable]
• the use of substance X in a dosage range between A and B for the treatment of X
[unpatentable].
From this, it follows directly that Claim 8 is patentable while the others are unpatentable. Drospirenone is helpful in explaining why Hughes J is of the view that claims to a dosage range are unpatentable, namely that “they provide for a choice to be made by those prescribing or providing contraceptive drugs to choose between a variety of components and a variety of dosage ranges” [162]. The implication is that by providing for a choice to be made, this implicates the professional skill of the prescribing doctor: (and see [161]).
I see two problems with this analysis. First, there is a distinction between a patent which requires the use of professional skill to practice the invention, and one in which professional skill may be exercised, but is not required, while practicing the invention. In Drospirenone, Hughes J held the claims to be useful, which implies that any combination with the specified range would work as an effective contraceptive. Professional skill might be exercised in practising the invention, to reduce side effects, for example, but in principle professional skill is not necessary to practice the invention effectively. Consider an analogy to a selection patent, in which the genus patent specifies that a broad range of compounds is effective for a particular purpose. It might well require professional skill, whether that of a doctor or engineer, depending on the patent, to get the most out of the invention; and if sufficient skill is required in choosing the best species, this might even be the basis for a valid selection patent. But the fact that professional skill is normally exercised in the practice of the genus patent, does not make the genus patent invalid. In this case, the patent does not “provide” for a choice to be made, in the sense of requiring a choice to practice the invention effectively, but rather it allows for a choice to be made. Put another way, elsewhere in this decision, Hughes J accepted that the word “about” is not vague and implies a range of about 10% around the specified value [103-06]. It would be possible to cover the entire range specified by Claim 1, by claims framed similarly to Claim 8, except to dosages “about” a single dosage. While this would require a very large number of claims, the difference between this multiplicity of specific dosage claims, and a single claim to a range of dosages, is purely formal. In summary, many patentable inventions allow for the exercise of professional skill in their implementation, and this alone does not make the claims invalid. While Claim 1 certainly allows for the exercise of professional skill, it does not seem to me to require it.
Moreover, even the suggestion that a claim is invalid if it requires the exercise of medical skill, is very difficult to reconcile with Wellcome / AZT 2002 SCC 77 which upheld a Claim 22 to the use of “an effective amount” of AZT. Surely choosing an effective amount of AZT implicates the professional skill of a doctor or pharmacist just as much as choosing from a specified range. Indeed, more skill is required by the AZT claim, because, as just noted, in this case any selection within the range specified by the ‘728 patent would work, whereas in the AZT claim, professional skill must be exercised to select an effective amount. (See also my post on Cobalt / zoledronate, making a similar point.)
More broadly, what is wrong with a claim which requires the exercise of professional skill? Many claims are of this nature, and the question is normally treated as one of sufficiency. It is well established that a claim requiring the exercise of professional skill is not invalid for that reason, so long as undue experimentation is not required. As discussed in my previous post, there may be a sense that the exercise of professional skill is inherently nebulous, but if that is the real objection, it should be dealt with directly, by invalidating for insufficiency or ambiguity, claims where the professional skill required by the claim is of a nature that is not described or cannot be reliably replicated.
If the objection relates to the exercise of medical skill in particular, we must ask what distinguishes medical skill from other professional skills. One answer is that there is a policy argument to be made that a physician should not be prevented from treating her patient to the best of her ability by fear of a patent action. But if that is the real objection, the better response is to address it directly, by providing a defence for physicians, as in the US under 35 USC § 287(c)(1). That is surely a policy decision for the legislature; and in any event, this policy goal is not aided by Hughes J’s distinction between dosage ranges and a single dosage; to the extent that the compositions encompassed by any of the Claims are “used” by the prescribing physician, allowing claims to specific dosages exposes physicians to liability; Claim 8 would be infringed by a physician who determines that the dosage specified by that claim is appropriate for her patient.
Ultimately, it seems to me that the distinction between a dosage range and a specific dosage is a formalism which lacks a a clear policy rationale, and is inconsistent with Wellcome / AZT.
It is also very disappointing to see the apparent resurrection, both in this decision [162] and in Cobalt / zolendronate and the case-law discussed therein, of the long-discredited “vendible product” test for patentable subject matter. This test was created by Morton J in Re GEC's Application, (1942) 60 RPC 1 at 4, where he stated that “a method or process is a manner of manufacture if it (a) results in the production of some vendible product or (b) improves or restores to its former condition a vendible product or (c) has the effect of preserving from deterioration some vendible product to which it is applied.” The list is curiously specific, if it is an attempt to reconcile difficult cases on narrow factual grounds – though Morton J did not cite specific authority for this proposition, referring merely to “cases cited to me”. But it is more bluntly described as legal gerrymandering, aimed at reaching a particular result on the facts. There is no unifying principle, either stated or apparent. While the phrase “vendible product” is repeated, it is not truly a unifying concept, as not every invention that affects a vendible product is patentable; only certain effects are within the scope of the rule. In particular, on the facts of the case, Morton J held that using a known compound for extinguishing a fire did not fall within the rule as stated, apparently because preserving a vendible product from fire does not amount to “preserving from deterioration.” This invisibly fine distinction was evidently developed for the purpose of allowing Morton J to hold the invention unpatentable. The application at issue was for a patent on a method of extinguishing incendiary bombs by means of a concentrated aqueous solution of a known substance (zinc chloride). Legal realism provides the most obvious explanation for the rule: the case was decided in the middle of World War II, just after the Blitz, and Morton J did not want the inventor to be able to hold London to ransom. While this is no doubt a reasonable concern, it does not warrant re-writing the law of patentable subject matter. In Canada today, this concern could be addressed by s 19 of the Act.
Regardless of the explanation for Morton J’s decision in Re GEC's Application, it is no longer good law. Morton J held that the claims in question on the basis that they were “nothing more than claims for a new use of an old substance, such use not being, in my view, a manner of manufacture.” This holding, which was made immediately after his statement of the vendible production rule, and which is apparently his application of that rule on the facts, is directly inconsistent with Shell Oil, [1982] 2 SCR 536, the leading SCC decision on patentable subject matter, which upheld the patentability of a new use for an old compound. Even prior to that, the vendible product rule itself has been effectively expunged from the law by the penetrating analysis of the High Court of Australia in NRDC (1961) 102 CLR 252 (HCA). For more discussion of the vendible product rule, see my article, The Rule Against Abstract Claims: History and Principles, 26 CIPR 205 at 224-25 (draft version here).
Friday, October 25, 2013
YAZ Overview
Bayer Inc v Cobalt Pharmaceuticals Company / drospirenone (NOC) 2013 FC 1061 Hughes J
YAZ / drospirenone / 2,179,728 – 2,382,426
Cobalt sought an order of compliance allowing it to market a drospirenone + ethinylestradiol combination birth control product. Two patents were listed on the register. Hughes J granted the order of prohibition based on the ‘426 patent (which doesn’t expire until 2020), but dismissed it in respect of the earlier expiring ‘728 patent on the basis that the claims which were arguably infringed were unpatentable methods of medical treatment, as well as non-infringement. This decision is significant primarily as a development in the law relating to patentability of methods of medical treatment. Another point worth noting is that the promise of the patent respecting utility was modestly construed for both patents. The decision also raised an evidentiary point of interest. Other issues turned on the facts. This post discusses the evidentiary point and the promise of the patent.
Evidentiary point
Claim 31 of Bayer’s ‘426 patent was to a composition of drospirenone with a specified dissolution profile and the question of fact was whether Cobalt’s product fell within the specified parameters. The problem for Bayer was that Cobalt refused to provide samples to Bayer for testing: “Bayer complains that, despite a motion that it brought to compel Cobalt to produce samples, Cobalt refused to do so; and the Court would not compel it to do so” [33] (and see [66]). Despite this lack of direct evidence, Hughes J held in Bayer’s favour on the infringement issue:
In the absence of evidence, the answer must turn on the burden of proof. Hughes J summarized the rule as being that “with respect to the second person’s [generic’s] allegations of non-infringement, the first person [innovator] bears the burden of proving that such allegations are not justified” [32], which would seem to imply that Cobalt should prevail. But more precisely, the generic must present “sufficient evidence to give the allegations in its NOA an air of reality”: see eg 2013 FC 573 [37]. Similarly, in 2011 FCA 215 [15], quoted by Hughes J, the FCA affirmed that “The determination must turn on whether there are allegations by the second person sufficiently substantiated to support a conclusion for administrative purposes (the issuance of a NOC) that an applicant's patent would not be infringed if the second person's product is put on the market” (FCA emphasis). So, Hughes J’s holding on this point illustrates that a mere statement that its product will not infringe does not amount to sufficient substantiation of the allegation of non-infringement to give the allegation an air of reality. However, it appears that if the generic does supply the product for testing, this is sufficient to substantiate the allegation of non-infringement, even if the innovator does not actually test it: see 2005 FC 1205 rev'd on related but distinct grounds 2007 FCA 209.
Promise of the Patent
While the obviousness issue in this case turned on the facts, a brief review is necessary to understand the utility issue. Drospirenone is acid-labile and would degrade (isomerize) in the presence of stomach acid, and micronization could be expected to exacerbate this problem. Consistently with this, degradation of micronized drospirenone was a serious problem in in vitro tests, and consequently Bayer initially worked on an enteric coated tablet. It turned out that micronized drospirenone nonetheless had good bioavailability in vivo. Hughes J held on the facts that the good bioavailability was non-obvious [87].
The ‘426 patent contained the following statement:
That is, the patent speculated that the reason for the good bioavailability was that fine particles of drospirenone were absorbed more quickly than they degraded. Hughes J indicated that Cobalt argued that this passage should be construed as a promise, so that the patent would lack utility unless this theory could be shown to be the correct explanation for the observed bioavailability [97]. (I must say that the passage from Cobalt’s NOA set out at [89] seems to me to be making the more modest argument that the studies relied on were not sufficient to show that a composition with the claim dissolution profile would be an effective contraceptive, but of course I do not have the advantage of the full record.)
Hughes J declined to read this statement as a promise. He quoted at length from the FCA’s recent Clopidogrel decision 2013 FCA 186 (blogged here), emphasizing that the promise must be explicit [94] and that “Courts should not strive to defeat otherwise valid patents” [93]. He concluded that the quoted passage from the patent was not a promise, but rather an effort to explain the mechanism of action [98].
Hughes J’s emphasis on the need to avoid being overly aggressive in construing the promise is, in my view, welcome, but his holding with respect to the ‘426 patent is not especially significant, as it seems to me that the passage in question would probably not have been construed as a promise even prior to Clopidogrel.
The promise analysis of the ‘728 patent is more interesting. The ‘728 patent claimed a low-dose contraceptive composition, with a 23-day dosage cycle. In effect, a lower dose is achieved by using a longer period of administration. The specification contained the statement that “The advantages of a combination preparation for oral contraception [with the claimed characteristics] can be characterized as follows” with four specific advantages listed [120]. The passage concludes by noting that “In summary, an intake [of the claimed composition] can produce the above-mentioned advantages. . .” [120]. This is very much the kind of statement that might be taken as a promise of utility. Hughes J did not construe this as a promise, finding that it was included in the patent to support non-obviousness, rather than as a promise of utility [120]:
Because the statement in the ‘728 patent might easily have been construed as a promise, Hughes J’s holding on this point is significant in indicating that Clopidogrel may mark a real shift in approach. Of course, it shouldn’t be surprising that an FCA decision would influence the Federal Court, but there is still a great deal of subjectivity involved in assessing the promise of the patent, so the enthusiasm with which the FC embraces Clopidogrel will strongly influence its real impact. With that said, one decision does not make a trend. Moreover, the significance of the decision on this point is diminished because it was not determinative. While Hughes J rejected the utility attack, he held the key claims invalid for lack of patentable subject matter. A more stringent test of the impact of Clopidogrel will come when validity turns on the construction of the promise.
YAZ / drospirenone / 2,179,728 – 2,382,426
Cobalt sought an order of compliance allowing it to market a drospirenone + ethinylestradiol combination birth control product. Two patents were listed on the register. Hughes J granted the order of prohibition based on the ‘426 patent (which doesn’t expire until 2020), but dismissed it in respect of the earlier expiring ‘728 patent on the basis that the claims which were arguably infringed were unpatentable methods of medical treatment, as well as non-infringement. This decision is significant primarily as a development in the law relating to patentability of methods of medical treatment. Another point worth noting is that the promise of the patent respecting utility was modestly construed for both patents. The decision also raised an evidentiary point of interest. Other issues turned on the facts. This post discusses the evidentiary point and the promise of the patent.
Evidentiary point
Claim 31 of Bayer’s ‘426 patent was to a composition of drospirenone with a specified dissolution profile and the question of fact was whether Cobalt’s product fell within the specified parameters. The problem for Bayer was that Cobalt refused to provide samples to Bayer for testing: “Bayer complains that, despite a motion that it brought to compel Cobalt to produce samples, Cobalt refused to do so; and the Court would not compel it to do so” [33] (and see [66]). Despite this lack of direct evidence, Hughes J held in Bayer’s favour on the infringement issue:
[68] Given that Cobalt is obliged in its Notice of Allegation to provide sufficient
information so that Bayer can come to grips with the allegations made; and, given that
Cobalt has supplied no sample tablets nor any evidence as to the dissolution parameters
of its tablets, I must conclude that Cobalt’s allegations as to non-infringement of claim
31, and dependent claims, of the '426 patent are not justified.
In the absence of evidence, the answer must turn on the burden of proof. Hughes J summarized the rule as being that “with respect to the second person’s [generic’s] allegations of non-infringement, the first person [innovator] bears the burden of proving that such allegations are not justified” [32], which would seem to imply that Cobalt should prevail. But more precisely, the generic must present “sufficient evidence to give the allegations in its NOA an air of reality”: see eg 2013 FC 573 [37]. Similarly, in 2011 FCA 215 [15], quoted by Hughes J, the FCA affirmed that “The determination must turn on whether there are allegations by the second person sufficiently substantiated to support a conclusion for administrative purposes (the issuance of a NOC) that an applicant's patent would not be infringed if the second person's product is put on the market” (FCA emphasis). So, Hughes J’s holding on this point illustrates that a mere statement that its product will not infringe does not amount to sufficient substantiation of the allegation of non-infringement to give the allegation an air of reality. However, it appears that if the generic does supply the product for testing, this is sufficient to substantiate the allegation of non-infringement, even if the innovator does not actually test it: see 2005 FC 1205 rev'd on related but distinct grounds 2007 FCA 209.
Promise of the Patent
While the obviousness issue in this case turned on the facts, a brief review is necessary to understand the utility issue. Drospirenone is acid-labile and would degrade (isomerize) in the presence of stomach acid, and micronization could be expected to exacerbate this problem. Consistently with this, degradation of micronized drospirenone was a serious problem in in vitro tests, and consequently Bayer initially worked on an enteric coated tablet. It turned out that micronized drospirenone nonetheless had good bioavailability in vivo. Hughes J held on the facts that the good bioavailability was non-obvious [87].
The ‘426 patent contained the following statement:
Without wishing to be limited to any particular theory, it appears that the in vitro
dissolution rate of drospirenone is connected to the dissolution rate in vivo resulting in
rapid absorption of drospirenone in vivo on oral administration of the compound. This is
an advantage because isomerization of the compound in the gastric environment and/or
hydrolysis in the intestine is substantially reduced, leading to a high bioavailability of the
compound.
That is, the patent speculated that the reason for the good bioavailability was that fine particles of drospirenone were absorbed more quickly than they degraded. Hughes J indicated that Cobalt argued that this passage should be construed as a promise, so that the patent would lack utility unless this theory could be shown to be the correct explanation for the observed bioavailability [97]. (I must say that the passage from Cobalt’s NOA set out at [89] seems to me to be making the more modest argument that the studies relied on were not sufficient to show that a composition with the claim dissolution profile would be an effective contraceptive, but of course I do not have the advantage of the full record.)
Hughes J declined to read this statement as a promise. He quoted at length from the FCA’s recent Clopidogrel decision 2013 FCA 186 (blogged here), emphasizing that the promise must be explicit [94] and that “Courts should not strive to defeat otherwise valid patents” [93]. He concluded that the quoted passage from the patent was not a promise, but rather an effort to explain the mechanism of action [98].
Hughes J’s emphasis on the need to avoid being overly aggressive in construing the promise is, in my view, welcome, but his holding with respect to the ‘426 patent is not especially significant, as it seems to me that the passage in question would probably not have been construed as a promise even prior to Clopidogrel.
The promise analysis of the ‘728 patent is more interesting. The ‘728 patent claimed a low-dose contraceptive composition, with a 23-day dosage cycle. In effect, a lower dose is achieved by using a longer period of administration. The specification contained the statement that “The advantages of a combination preparation for oral contraception [with the claimed characteristics] can be characterized as follows” with four specific advantages listed [120]. The passage concludes by noting that “In summary, an intake [of the claimed composition] can produce the above-mentioned advantages. . .” [120]. This is very much the kind of statement that might be taken as a promise of utility. Hughes J did not construe this as a promise, finding that it was included in the patent to support non-obviousness, rather than as a promise of utility [120]:
[152] That list should not be elevated to a “promise”; it is simply an observation as to
advantages expected to be achieved. As expressed by Pelletier JA in Sanofi-Aventis v
Apotex Inc, [Clopidogrel] 2013 FCA 186 at paragraph 67, in alluding to a possibility, an
inventor is not promising a result to be achieved; a goal is not necessarily a promise.
Because the statement in the ‘728 patent might easily have been construed as a promise, Hughes J’s holding on this point is significant in indicating that Clopidogrel may mark a real shift in approach. Of course, it shouldn’t be surprising that an FCA decision would influence the Federal Court, but there is still a great deal of subjectivity involved in assessing the promise of the patent, so the enthusiasm with which the FC embraces Clopidogrel will strongly influence its real impact. With that said, one decision does not make a trend. Moreover, the significance of the decision on this point is diminished because it was not determinative. While Hughes J rejected the utility attack, he held the key claims invalid for lack of patentable subject matter. A more stringent test of the impact of Clopidogrel will come when validity turns on the construction of the promise.
Wednesday, October 23, 2013
How (Not) to Cure an Inadvertent False Promise in a Granted Patent
F. Hoffmann-La Roche AG v. Commissioner of Patents 2013 FC 1001 Roy J
Capecitabine / XELODA / 2,103,324
As reaffirmed in the recent FCA decision in Sanofi-Aventis v Apotex / clopidogrel 2013 FCA 186, the promise of the patent doctrine is now firmly established in Canadian law. If a patent promises a particular utility, utility will be measured against that promise: ibid [47]. However, there is no requirement that a patent contain a promise, and if it does not, the invention need have a “mere scintilla” of utility: ibid [49]. In the future, applicants may be able to draft patents that will avoid making promises, but what can be done about patents that have already been granted, but not yet litigated? This was the question faced by Hoffmann-La Roche, the applicant in this motion. While Roy J refused the application, the decision suggests the possibility that s 53(2) of the Act might be available to rectify a false promise in litigation.
Tuesday, October 22, 2013
Non-Obviousness Affirmed on the Facts in Teva / Zoledronate
Teva Canada Ltd v Novartis Pharmaceuticals Canada Inc / zoledronate (NOC) 2013 FCA 244
Gauthier JA: Evans, Near JJA aff’g 2013 FC 283 Hughes J
ZOMETA ACLASTA / zoledronate / 1,338,937
In a brief decision from the bench, the FCA has affirmed Hughes J’s decision granting an order of prohibition in favour of Teva on the basis of deference in respect of his appreciation of the evidence.
This NOC proceeding initially concerned two patents, one to zoledronate (‘937) and a separate patent to a broad class of compounds including zoledronate (‘895). At first instance Hughes J held the ‘895 patent invalid for lack of utility, but the ‘937 patent was held to be valid and an order of prohibition was granted accordingly: see my post here. Teva appealed only the holding respecting the ‘937 patent, on the basis that Hughes J had erred in his obviousness analysis, arguing that Hughes J had misapplied the Windsurfing / Pozzoli test accepted by the SCC in Sanofi 2008 SCC 61 [3]. Teva argued that Hughes J set the bar for non-obviousness too high, based on his statement that “one cannot raise the bar too high in respect of obviousness. Research ought to be rewarded, not discouraged” [FC 161]. The FCA pointed out at [6] that this statement reflected a similar statement made by Rothstein J in Sanofi at [64]. The FCA then went on to emphasize the deferential standard of review for factual findings in respect of obviousness [11], and noted that “The Judge is presumed to have considered all the evidence before him” [12]. In the circumstances, the FCA concluded that there was no basis for interfering with Hughes J's conclusion.
ZOMETA ACLASTA / zoledronate / 1,338,937
In a brief decision from the bench, the FCA has affirmed Hughes J’s decision granting an order of prohibition in favour of Teva on the basis of deference in respect of his appreciation of the evidence.
This NOC proceeding initially concerned two patents, one to zoledronate (‘937) and a separate patent to a broad class of compounds including zoledronate (‘895). At first instance Hughes J held the ‘895 patent invalid for lack of utility, but the ‘937 patent was held to be valid and an order of prohibition was granted accordingly: see my post here. Teva appealed only the holding respecting the ‘937 patent, on the basis that Hughes J had erred in his obviousness analysis, arguing that Hughes J had misapplied the Windsurfing / Pozzoli test accepted by the SCC in Sanofi 2008 SCC 61 [3]. Teva argued that Hughes J set the bar for non-obviousness too high, based on his statement that “one cannot raise the bar too high in respect of obviousness. Research ought to be rewarded, not discouraged” [FC 161]. The FCA pointed out at [6] that this statement reflected a similar statement made by Rothstein J in Sanofi at [64]. The FCA then went on to emphasize the deferential standard of review for factual findings in respect of obviousness [11], and noted that “The Judge is presumed to have considered all the evidence before him” [12]. In the circumstances, the FCA concluded that there was no basis for interfering with Hughes J's conclusion.
Wednesday, October 9, 2013
Are Swiss Form Claims a Matter of Substance?
Novartis v Cobalt / zoledronate (NOC) 2013 FC 985
2,410,201 – ACLASTA
It is now well-established in the Federal Courts that methods of medical treatment are not patentable, but how to define such unpatentable methods is very much an open question. In Cobalt / Zoledronate Hughes J, has reviewed and summarized the Supreme Court and Federal Court jurisprudence on this point, before concluding that all the claims at issue were unpatentable. In my view, to the extent his conclusions of law are supported by the jurisprudence, they do not justify his conclusion on the facts that the Swiss form claims are to unpatentable subject matter.
Friday, October 4, 2013
Opening the Door to Punitive Damages in Patent Law?
Eurocopter v. Bell Helicopter Textron Canada Limitée 2013 FCA 219 Mainville JA: Noël,
Trudel JJA aff’g 2012 FC 113 Martineau J
2,207,787
Punitive damages are very rarely awarded in Canadian patent cases, yet in his trial decision in Eurocopter, Martineau J held that Eurocopter was entitled to punitive damages, essentially on the basis that Bell had intentionally copied helicopter landing gear which it knew to be patented [FC 431-33]. My post on this aspect of Martineau J’s decision argued that this holding is very problematic, as it is likely to having a chilling effect on desirable challenges to invalid patents. The FCA has now affirmed Eurocopter’s entitlement to punitive damages.
2,207,787
Punitive damages are very rarely awarded in Canadian patent cases, yet in his trial decision in Eurocopter, Martineau J held that Eurocopter was entitled to punitive damages, essentially on the basis that Bell had intentionally copied helicopter landing gear which it knew to be patented [FC 431-33]. My post on this aspect of Martineau J’s decision argued that this holding is very problematic, as it is likely to having a chilling effect on desirable challenges to invalid patents. The FCA has now affirmed Eurocopter’s entitlement to punitive damages.
Thursday, October 3, 2013
Line of Reasoning Supporting Sound Prediction Must Be Disclosed in the Patent
Eurocopter v. Bell Helicopter Textron Canada Limitée 2013 FCA 219 Mainville JA: Noël,
Trudel JJA aff’g 2012 FC 113 Martineau J
2,207,787
The doctrine of sound prediction of utility is routinely applied in the context of pharmaceutical and chemical inventions, but rarely – perhaps never, before Eurocopter – applied to a mechanical invention. Nonetheless, the FCA Eurocopter decision is a significant development in the law of sound prediction, which affirms and emphasizes what I consider to be the most problematic aspects of the doctrine.
Given the novelty of applying sound prediction in the mechanical context, Eurocopter argued that the doctrine doesn’t apply to mechanical inventions at all [144]. The FCA rejected this, on the ground that there is no reason in principle why the doctrine should not apply [146]. It may generally be easier to establish demonstrate utility in the context of mechanical inventions, but I cannot think of any reason why a mechanical patentee should be precluded from establishing utility on the basis of sound prediction if it cannot establish demonstrated utility. As Snider J noted in Imatinib 2013 FC 141 [164], sound prediction “is a way of showing that an invention is useful when the invention has not been directly demonstrated to work. Its introduction into Canadian law was not, as I understand it, to give a crushing hammer to those who challenge patents.” (See more here.)
Why then was Eurocopter arguing that the doctrine does not apply? The answer is that sound prediction has become a potent weapon for attacking patents, even though Snider J was right to say that it was not originally intended as such. The reason for this is the requirement that the factual basis for sound prediction must be disclosed in the patent if, and only if, utility is based on sound prediction. This point has previously been affirmed by the FCA in the Raloxifene 2009 FCA 97 [15] and Atomoxetine 2011 FCA 220 [46-47] decisions. The consequence is to draw a sharp distinction between demonstrated utility and sound prediction, with more stringent requirements for the latter. I have argued that this distinction is inconsistent with the Act, as there is no statutory basis for this distinction; there is only one utility requirement in the Act, not two requirements with two different criteria.. Again, as Snider J stated in Imatinib “Sound prediction is not a free-standing statutory requirement” [164].
2,207,787
The doctrine of sound prediction of utility is routinely applied in the context of pharmaceutical and chemical inventions, but rarely – perhaps never, before Eurocopter – applied to a mechanical invention. Nonetheless, the FCA Eurocopter decision is a significant development in the law of sound prediction, which affirms and emphasizes what I consider to be the most problematic aspects of the doctrine.
Given the novelty of applying sound prediction in the mechanical context, Eurocopter argued that the doctrine doesn’t apply to mechanical inventions at all [144]. The FCA rejected this, on the ground that there is no reason in principle why the doctrine should not apply [146]. It may generally be easier to establish demonstrate utility in the context of mechanical inventions, but I cannot think of any reason why a mechanical patentee should be precluded from establishing utility on the basis of sound prediction if it cannot establish demonstrated utility. As Snider J noted in Imatinib 2013 FC 141 [164], sound prediction “is a way of showing that an invention is useful when the invention has not been directly demonstrated to work. Its introduction into Canadian law was not, as I understand it, to give a crushing hammer to those who challenge patents.” (See more here.)
Why then was Eurocopter arguing that the doctrine does not apply? The answer is that sound prediction has become a potent weapon for attacking patents, even though Snider J was right to say that it was not originally intended as such. The reason for this is the requirement that the factual basis for sound prediction must be disclosed in the patent if, and only if, utility is based on sound prediction. This point has previously been affirmed by the FCA in the Raloxifene 2009 FCA 97 [15] and Atomoxetine 2011 FCA 220 [46-47] decisions. The consequence is to draw a sharp distinction between demonstrated utility and sound prediction, with more stringent requirements for the latter. I have argued that this distinction is inconsistent with the Act, as there is no statutory basis for this distinction; there is only one utility requirement in the Act, not two requirements with two different criteria.. Again, as Snider J stated in Imatinib “Sound prediction is not a free-standing statutory requirement” [164].
Tuesday, October 1, 2013
No Sign of Changed Approach to the Promise Doctrine in First Post-Clopidogrel FCA Decision
Eurocopter v. Bell Helicopter Textron Canada Limitée 2013 FCA 219 Mainville JA: Noël,
Trudel JJA aff’g 2012 FC 113 Martineau J
2,207,787
While the promise of the patent doctrine and the requirement that the factual basis for sound prediction be disclosed in the patent are most closely associated with pharmaceutical patents, the FCA Eurocopter decision is significant on both issues, particularly when contrasted with the recent FCA Clopidogrel decision 2012 FCA 186. This post deals with the promise doctrine, while the next will deal with the factual basis issue. An overview of the facts in Eurocopter is provided in my last post.
In Clopidogrel decision, as discussed here, the FCA re-affirmed the promise doctrine, but it also adopted a relatively restrictive approach to construing the promise, emphasizing repeatedly that the promise must be “explicit,” and also noting that it should not be assumed that every patent has a promise. The question remains as to whether this change in tone will generate a real change in practice. Eurocopter is the first FCA decision since Clopidogrel to consider the issue. In Eurocopter the FCA affirmed, with little discussion, a fairly aggressive pre-Clopidogrel style of interpretation of the promise. Since Eurocopter was argued before Clopidogrel was released, this may simply reflect the fact that counsel would not have argued the Clopidogrel requirement for an express promise, and the FCA did not feel inclined to review the trial judge’s construction of the promise on its own initiative. But it is disquieting that the FCA simply accepted Martineau J’s construction, without even reference to the Clopidogrel approach.
2,207,787
While the promise of the patent doctrine and the requirement that the factual basis for sound prediction be disclosed in the patent are most closely associated with pharmaceutical patents, the FCA Eurocopter decision is significant on both issues, particularly when contrasted with the recent FCA Clopidogrel decision 2012 FCA 186. This post deals with the promise doctrine, while the next will deal with the factual basis issue. An overview of the facts in Eurocopter is provided in my last post.
In Clopidogrel decision, as discussed here, the FCA re-affirmed the promise doctrine, but it also adopted a relatively restrictive approach to construing the promise, emphasizing repeatedly that the promise must be “explicit,” and also noting that it should not be assumed that every patent has a promise. The question remains as to whether this change in tone will generate a real change in practice. Eurocopter is the first FCA decision since Clopidogrel to consider the issue. In Eurocopter the FCA affirmed, with little discussion, a fairly aggressive pre-Clopidogrel style of interpretation of the promise. Since Eurocopter was argued before Clopidogrel was released, this may simply reflect the fact that counsel would not have argued the Clopidogrel requirement for an express promise, and the FCA did not feel inclined to review the trial judge’s construction of the promise on its own initiative. But it is disquieting that the FCA simply accepted Martineau J’s construction, without even reference to the Clopidogrel approach.
Friday, September 27, 2013
FCA Affirms Eurocopter: Overview and Claim Construction
Eurocopter v. Bell Helicopter Textron Canada Limitée 2013 FCA 219 Mainville JA: Noël,
Trudel JJA aff’g 2012 FC 113 Martineau J
2,207,787 - new Act
The FCA decision in Eurocopter is most important for its discussion of punitive damages, and it is also significant for its discussion of two doctrines more closely associated with pharmaceutical patents, namely the promise of the patent doctrine and the requirement that the factual basis for sound prediction be disclosed in the patent. I will discuss both of these issues in subsequent posts. For now I will just say that any hopes raised by the FCA’s recent Clopidogrel decision that we might see some retrenchment in respect of the pharmaceutical doctrines (see here and here), must be significantly tempered by the FCA’s Eurocopter analysis.
This post provides background and discusses the claim construction issues. Anticipation and obviousness were also raised on appeal, but they were dismissed essentially on the basis that the points raised turned on matters of fact on which the trial judge had made no overriding error.
2,207,787 - new Act
The FCA decision in Eurocopter is most important for its discussion of punitive damages, and it is also significant for its discussion of two doctrines more closely associated with pharmaceutical patents, namely the promise of the patent doctrine and the requirement that the factual basis for sound prediction be disclosed in the patent. I will discuss both of these issues in subsequent posts. For now I will just say that any hopes raised by the FCA’s recent Clopidogrel decision that we might see some retrenchment in respect of the pharmaceutical doctrines (see here and here), must be significantly tempered by the FCA’s Eurocopter analysis.
This post provides background and discusses the claim construction issues. Anticipation and obviousness were also raised on appeal, but they were dismissed essentially on the basis that the points raised turned on matters of fact on which the trial judge had made no overriding error.
Thursday, September 26, 2013
What Is an “Oversight” in a Order?
Sanofi-Aventis v Apotex Inc 2013 FCA 209 amending Sanofi-Aventis v Apotex Inc / clopidogrel
2013 FCA 186 Pelletier JA: Noël, Gauthier JJA rev’g 2011 FC 1486 Boivin J
1,336,777 – PLAVIX
This decision of the FCA amends its clopidogrel decision with respect to the parties affected by the judgment. The full style of cause in the case included Apotex Inc, Apotex Pharmachem Inc and Signa SA de CV as defendants / respondents. (Apotex contracted for Pharmachem to develop the Apotex product and process of manufacture, and Pharmachem transferred the technology to Signa, which manufactured the product according to Pharmachemm’s specification, and sold it in bulk to Apotex [2013 FCA 186 [86]].) The action against Signa was discontinued (FC [10] fn 3), but the style of cause was not changed [7]. Boivin J at trial held that the patent was invalid. This holding was reversed on appeal, which required the FCA to deal with infringement. As originally written, the FCA reasons stated that “As the Trial Judge made no findings of infringement against Apotex Pharmachem Inc. and Signa SA de CV, I would dismiss Sanofi's claims against them” [2013 FCA 186, [121]]. The original FCA judgment declared that Apotex Inc infringed the patent, and that the claim against Apotex Pharmachem and Signa was dismissed [1]. Sanofi brought this motion under Rule 397 asking the FCA to amend the judgment by (1) removing the reference to Signa, which stated that the claim against it was dismissed; and (2) adding a reference stating that Apotex Pharmachem was also liable for infringement.
1,336,777 – PLAVIX
This decision of the FCA amends its clopidogrel decision with respect to the parties affected by the judgment. The full style of cause in the case included Apotex Inc, Apotex Pharmachem Inc and Signa SA de CV as defendants / respondents. (Apotex contracted for Pharmachem to develop the Apotex product and process of manufacture, and Pharmachem transferred the technology to Signa, which manufactured the product according to Pharmachemm’s specification, and sold it in bulk to Apotex [2013 FCA 186 [86]].) The action against Signa was discontinued (FC [10] fn 3), but the style of cause was not changed [7]. Boivin J at trial held that the patent was invalid. This holding was reversed on appeal, which required the FCA to deal with infringement. As originally written, the FCA reasons stated that “As the Trial Judge made no findings of infringement against Apotex Pharmachem Inc. and Signa SA de CV, I would dismiss Sanofi's claims against them” [2013 FCA 186, [121]]. The original FCA judgment declared that Apotex Inc infringed the patent, and that the claim against Apotex Pharmachem and Signa was dismissed [1]. Sanofi brought this motion under Rule 397 asking the FCA to amend the judgment by (1) removing the reference to Signa, which stated that the claim against it was dismissed; and (2) adding a reference stating that Apotex Pharmachem was also liable for infringement.
Friday, September 20, 2013
Ambiguity(?) in Scope of Settlement
Procter & Gamble Co v Brushpoint Innovations Inc 2013 ONSC 5747 Charbonneau J
The parties entered into a settlement agreement in which Brushpoint undertook to “not make, construct, use, or sell, or induce others to make, construct, use or sell the Products, in Canada, while any of the Patents are in force.” P&G submitted that Brushpoint or its agents, by acts in Canada, had induced parties in the US to make and sell the product in the US [13]. If, properly interpreted, the covenant restricted Brushpoint from carrying out acts in Canada which induced others to make or sell the Products anywhere, then there was a breach; on the other hand, if it only restricted Brushpoint from inducing (by acts anywhere?) others to make or sell the products in Canada, there was no breach.
Charbonneau J held that on the proper interpretation, there was no breach; the covenant restricted Brushpoint only from inducing others from infringing in Canada. He arrived at this conclusion primarily on the text of the covenant itself, which he found to be “clear and unambiguous” [11]. If he had found the clause ambiguous, he would have arrived at the same conclusion based on the context, as the settlement was presumably intended to prevent Brushpoint from infringing the Canadian patents [12].
John Golden has a very interesting article on the related issue of the scope of injunctions: Injunctions as More (or Less) than “Off Switches”: Patent Infringement Injunctions’ Scope , 90 Tex L Rev 1399 (SSRN here). Here is the abstract:
The parties entered into a settlement agreement in which Brushpoint undertook to “not make, construct, use, or sell, or induce others to make, construct, use or sell the Products, in Canada, while any of the Patents are in force.” P&G submitted that Brushpoint or its agents, by acts in Canada, had induced parties in the US to make and sell the product in the US [13]. If, properly interpreted, the covenant restricted Brushpoint from carrying out acts in Canada which induced others to make or sell the Products anywhere, then there was a breach; on the other hand, if it only restricted Brushpoint from inducing (by acts anywhere?) others to make or sell the products in Canada, there was no breach.
Charbonneau J held that on the proper interpretation, there was no breach; the covenant restricted Brushpoint only from inducing others from infringing in Canada. He arrived at this conclusion primarily on the text of the covenant itself, which he found to be “clear and unambiguous” [11]. If he had found the clause ambiguous, he would have arrived at the same conclusion based on the context, as the settlement was presumably intended to prevent Brushpoint from infringing the Canadian patents [12].
John Golden has a very interesting article on the related issue of the scope of injunctions: Injunctions as More (or Less) than “Off Switches”: Patent Infringement Injunctions’ Scope , 90 Tex L Rev 1399 (SSRN here). Here is the abstract:
Injunctions have often been viewed as mere "off switches" that prevent future violations
of rights protected by so-called property rules. But injunctions in fact come in a variety of
forms having different objects, scopes, and degrees of effectiveness. In practical
situations, an injunction might amount to little more than a threat of higher-than-normal
monetary sanctions delivered at substantially higher-than-normal speed.
This article builds on these insights by investigating the potential and actual scopes of
injunctions against patent infringement. An economic model for infringer incentives
shows how concerns of injunction scope are substantially analogous to widely examined
concerns of patent scope. A new taxonomy provides named classifications for different
forms of injunctions. A systematic study of patent-infringement injunctions issued by
U.S. district courts in 2010 indicates how often these different forms appear in practice.
Startlingly, this study suggests that the majority of such patent-infringement injunctions
take an "obey the law" form that violates the Federal Rules of Civil Procedure, at least as
the U.S. Court of Appeals for the Federal Circuit has traditionally understood those rules.
In another indication of patent law's technology specificity, only 12% of the injunctions
directed to biomedical-substance technology feature such apparent error. Meanwhile,
courts frequently issue specially tailored injunctions that protect patent rights more or less
than a conventional "do-not-infringe" order would. Prophylactic injunctions and other
specially tailored injunctions should be recognized as legitimate forms of relief that can
enable better balancing of concerns of notice, rights protection, rights limitation, and
administrability.
Friday, September 13, 2013
ONCA Affirms that Disgorgement of Profits in NOC S 8 Claim Not Available in Ontario
Apotex Inc v Abbott Laboratories Ltd 2013 ONCA 555 Goudge JA: Watt, Pepall JJA aff’g 2013
ONSC 356, 107 CPR(4th) 332 Quigley J
The FCA has held definitively that disgorgement of the patentee’s profits is not available as a remedy in a claim under s 8 of the NOC Regulations: 2011 FCA 358 blogged here. Hoping to circumvent this holding, Apotex turned to the Ontario courts, seeking a disgorgement of the profits made by Abbott while Apotex had been kept out of the market by operation of the NOC Regulations. In brief reasons, the ONCA has now affirmed Quigley J’s lengthy summary judgment decision (blogged here) that this claim must fail, primarily on the basis that the operation of the NOC Regulations constitutes a valid juristic reason for Abbott’s profits [6].
The FCA has held definitively that disgorgement of the patentee’s profits is not available as a remedy in a claim under s 8 of the NOC Regulations: 2011 FCA 358 blogged here. Hoping to circumvent this holding, Apotex turned to the Ontario courts, seeking a disgorgement of the profits made by Abbott while Apotex had been kept out of the market by operation of the NOC Regulations. In brief reasons, the ONCA has now affirmed Quigley J’s lengthy summary judgment decision (blogged here) that this claim must fail, primarily on the basis that the operation of the NOC Regulations constitutes a valid juristic reason for Abbott’s profits [6].
Purposive Construction When the Inventor Is Mistaken as to the Inventive Contribution
ABB Technology AG v Hyundai Heavy Industries Co Ltd 2013 FC 947 Barnes J
2,570,772 – 2,567,781
ABB Technology, in which both patents at issue were held to be invalid and not infringed, is a fairly straightforward case which turned largely on its facts. It does, however, illustrate an interesting point regarding purposive interpretation of the claims.
The Supreme Court has said that “where the language of the specification, upon a reasonable view of it, can be so read as to afford the inventor protection for that which he has actually in good faith invented, the court, as a rule, will endeavour to give effect to that construction” Western Electric Co [1934] SCR 570 at 574, quoted by the SCC inter alia in quoted by the SCC in Consolboard, supra note 58 at 521, in Whirlpool 2000 SCC 67 [49(g)[, and Free World, 2000 SCC 66 at [43]; and see Schmeiser, 2004 SCC 34, at [35] referring to this as “the guiding principle” of claim construction. In my article on “The Essential Elements Doctrine” (2011) 22 IPJ 223 (draft available here), I explained this as following from purposive construction. The disclosure is the quit pro quo for which the patent is granted, and the inventor will normally want to claim the full scope of the invention disclosed, in order to maximize the value of the patent, but not more, in order to avoid invalidity. So, as I argued in my article, a purposive analysis of the Patent Act implies that the presumed intention of the patentee should be to claim the full patentable extent of the invention disclosed. In my article I discussed problems which arise when the textual and purposive analyses conflict. ABB Technologies raises a common problem which I did not address: what happens when the inventor has misunderstood the nature of their contribution?
2,570,772 – 2,567,781
ABB Technology, in which both patents at issue were held to be invalid and not infringed, is a fairly straightforward case which turned largely on its facts. It does, however, illustrate an interesting point regarding purposive interpretation of the claims.
The Supreme Court has said that “where the language of the specification, upon a reasonable view of it, can be so read as to afford the inventor protection for that which he has actually in good faith invented, the court, as a rule, will endeavour to give effect to that construction” Western Electric Co [1934] SCR 570 at 574, quoted by the SCC inter alia in quoted by the SCC in Consolboard, supra note 58 at 521, in Whirlpool 2000 SCC 67 [49(g)[, and Free World, 2000 SCC 66 at [43]; and see Schmeiser, 2004 SCC 34, at [35] referring to this as “the guiding principle” of claim construction. In my article on “The Essential Elements Doctrine” (2011) 22 IPJ 223 (draft available here), I explained this as following from purposive construction. The disclosure is the quit pro quo for which the patent is granted, and the inventor will normally want to claim the full scope of the invention disclosed, in order to maximize the value of the patent, but not more, in order to avoid invalidity. So, as I argued in my article, a purposive analysis of the Patent Act implies that the presumed intention of the patentee should be to claim the full patentable extent of the invention disclosed. In my article I discussed problems which arise when the textual and purposive analyses conflict. ABB Technologies raises a common problem which I did not address: what happens when the inventor has misunderstood the nature of their contribution?
Monday, September 9, 2013
No New Cases for the Week of 1 September
No new patent / NOC / data protection cases were posted on the Federal Courts' websites for the week of 1 September 2013.
One costs decision was released: Fournier Pharma Inc. v. Canada (Health) 2013 FC 862
One costs decision was released: Fournier Pharma Inc. v. Canada (Health) 2013 FC 862
Wednesday, August 21, 2013
The Duty to Disclose “The Invention”: The Wrong Tool for the Job
Teva Canada Ltd v Pfizer Canada Inc 2012 SCC 60
My initial response to the SCC’s Sildenafil decision was quite positive about the general reasoning, though I was somewhat more critical of the doctrinal details of the decision. I have since completed a thorough analysis of the decision, which has caused me to substantially revise my opinion. In law, the doctrinal details matter, and in my article I argue that by using the wrong tool for the job, the SCC in Sildenafil did a poor job on the facts and damaged the tool of disclosure. My article, entitled “The Duty to Disclose ‘The Invention’: The Wrong Tool for the Job,” is forthcoming in the IPJ and is available in draft from SSRN. Here is the abstract:
My full analysis of the Sildenafil decision also confirms my initial view that Zinn J was wrong to grant summary judgment to Apotex in the subsequent impeachment action, Apotex v Pfizer / sildenafil 2012 FC 1339, in which he held the ‘446 patent to be of no force or effect, in part on the basis that “the determination by the Supreme Court in its Reasons that the '446 Patent fails to meet the requirement of sufficient disclosure pursuant to subsection 27(3) of the Patent Act is a legal determination binding on this Court and is dispositive of Apotex's claim in this action” [30]. While it is remarkably difficult to pin down precisely the core of the SCC’s legal reasoning in Sildenafil, the decision was clearly motivated by the belief that Pfizer had tried to “game” the system [Sildenafil 80; and see Imatinib 2013 FC 141, blogged here, in which Snider J at [387] emphasized this aspect of Sildenafil]. The SCC held this view because it apparently believed that Pfizer had tested the other compounds and knew them to lack utility. This is a factual question, and the SCC’s view appears to be wrong, in large part because the nature of the NOC proceedings did not allow the question to be fully explored. This illustrates the wisdom of the current rule that the results of NOC proceedings are not binding in a subsequent infringement or impeachment action. As the SCC said in Eli Lilly & Co v Novopharm Ltd [1998] 2 SCR 129, in affirming the rule developed in the Federal Courts (SCC’s emphasis):
Note that in Eli Lilly v Novopharm the question on which the SCC refused to provide a binding declaration was whether the supply agreement constituted a sublicence. As a question of contractual interpretation, this would be a question of law, and despite having answered the question, the SCC refused to make a binding declaration, saying “For this Court to make a binding declaration concerning the private rights and obligations of the parties to the agreement would go well beyond the limited scope of the proceeding. Accordingly, I would deny the declarator relief requested by Novopharm” [97]. The same reasoning must surely hold with respect to the question of invalidity in Sildenafil, and for the same reason; my article on Sildenafil illustrates the perils of making a binding declaration based on the basis of the summary NOC proceeding.
2,163,446 – Sildendafil – VIAGRA
My initial response to the SCC’s Sildenafil decision was quite positive about the general reasoning, though I was somewhat more critical of the doctrinal details of the decision. I have since completed a thorough analysis of the decision, which has caused me to substantially revise my opinion. In law, the doctrinal details matter, and in my article I argue that by using the wrong tool for the job, the SCC in Sildenafil did a poor job on the facts and damaged the tool of disclosure. My article, entitled “The Duty to Disclose ‘The Invention’: The Wrong Tool for the Job,” is forthcoming in the IPJ and is available in draft from SSRN. Here is the abstract:
In its Sildenafil decision, the Supreme Court of Canada held Pfizer’s Viagra patent to be
invalid for failure to disclose “the invention,” though it provided no explicit definition of
that term. I argue that on the best reading of the decision, “the invention” means the new,
useful, non-obvious contribution to knowledge which is disclosed in the patent. While
this is initially attractive, I argue that on this definition, a duty to disclose the invention is
unsound as a matter of law and policy, because it implies that if any important claim in a
patent is invalid, all the claims will be invalid. This eviscerates section 58 of the Patent
Act, which provides that claims stand or fall independently. I argue that the Court’s
reasoning was motivated by a mistaken belief that at the time of the application Pfizer had
tested the other claimed compounds and knew them to be ineffective in treating ED, and
that it claimed those compounds primarily to conceal the true invention. I argue that even
if the Court’s understanding of the facts was correct, a duty to disclose the invention is
not the appropriate tool to address the issue. The case properly raises questions relating to
the duty of good faith disclosure, not a duty to disclose the invention.
My full analysis of the Sildenafil decision also confirms my initial view that Zinn J was wrong to grant summary judgment to Apotex in the subsequent impeachment action, Apotex v Pfizer / sildenafil 2012 FC 1339, in which he held the ‘446 patent to be of no force or effect, in part on the basis that “the determination by the Supreme Court in its Reasons that the '446 Patent fails to meet the requirement of sufficient disclosure pursuant to subsection 27(3) of the Patent Act is a legal determination binding on this Court and is dispositive of Apotex's claim in this action” [30]. While it is remarkably difficult to pin down precisely the core of the SCC’s legal reasoning in Sildenafil, the decision was clearly motivated by the belief that Pfizer had tried to “game” the system [Sildenafil 80; and see Imatinib 2013 FC 141, blogged here, in which Snider J at [387] emphasized this aspect of Sildenafil]. The SCC held this view because it apparently believed that Pfizer had tested the other compounds and knew them to lack utility. This is a factual question, and the SCC’s view appears to be wrong, in large part because the nature of the NOC proceedings did not allow the question to be fully explored. This illustrates the wisdom of the current rule that the results of NOC proceedings are not binding in a subsequent infringement or impeachment action. As the SCC said in Eli Lilly & Co v Novopharm Ltd [1998] 2 SCR 129, in affirming the rule developed in the Federal Courts (SCC’s emphasis):
[95] [T]he summary judicial review that is to be conducted on an application for a
prohibition order under the Regulations is highly fact-specific and is generally considered
to be binding only on the parties in the specific litigation. This is only appropriate, given
the limited nature of the proceedings, the question that is to be answered, and the record
generated for this limited purpose. [my emphasis]
[96] This point was reinforced more recently by Strayer J.A. in David Bull Laboratories,
supra, at p. 600:
This Court is not prepared to accept that patentees and generic companies alike
have been forced to make their sole assertion of their private rights through the
summary procedure of a judicial review application. [SCC emphasis]
Note that in Eli Lilly v Novopharm the question on which the SCC refused to provide a binding declaration was whether the supply agreement constituted a sublicence. As a question of contractual interpretation, this would be a question of law, and despite having answered the question, the SCC refused to make a binding declaration, saying “For this Court to make a binding declaration concerning the private rights and obligations of the parties to the agreement would go well beyond the limited scope of the proceeding. Accordingly, I would deny the declarator relief requested by Novopharm” [97]. The same reasoning must surely hold with respect to the question of invalidity in Sildenafil, and for the same reason; my article on Sildenafil illustrates the perils of making a binding declaration based on the basis of the summary NOC proceeding.
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