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Sound Prediction Update – Federal Court Continues to Disagree on Fundamental Disclosure Aspect of Test

Utility is a basic requirement set out in the Patent Act, yet Canadian courts over the past year have continued to approach this concept from very different points of view. The “disclosure” requirement for sound prediction has been both wholly adopted and rejected by the Federal Court. The pro-disclosure side requires that the sound line of reasoning and factual basis be in the patent, whatever the nature of the invention.[1] The anti-disclosure side only requires any explanation in the patent where the invention is directed at a new use[2]. Otherwise the sound prediction may be satisfied with secret inhouse tests or publicly available material.

The Federal Court of Appeal has not squarely addressed the discrete disclosure issue since the SCC arguably “reinvigorated” the debate in Pfizer v Novopharm (“Viagra SCC”)[3], but may address the matter over the next year in Idenix’s pending appeal regarding the hepatitis drug sofosbuvir.[4] There appear to be some inconsistencies in recent FCA decisions. The Federal Court of Appeal’s finding that what is self-evident to a person skilled in the art need not be in the patent[5] (a somewhat common sense approach adopting earlier FCA jurisprudence in Eurocopter, 2013 FCA 261) signals tacit continuing approval of the disclosure requirement. Otherwise there would be no need to evaluate the necessary level of disclosure in a patent/whether to also consider the knowledge of the person skilled in the art. In contrast Madam Justice Gauthier, in concurring reasons has earlier criticized the disclosure requirement[6] and held it should be lower for non-use patents (which in turn was expressly accepted in the recent Federal Court anti-disclosure jurisprudence). Justice Gauthier focused on the fact that Sanofi’s patent was not filed based on mere speculation “The patentee had a solid track record based on an extensive research program and a reasonably sound line of reasoning”. As such whatever Promise was set – in humans or otherwise – it was met (at paras. 133-135).

Although rejecting any legal requirement that disclosure be in the patent, both of the recent Federal Court anti-disclosure decisions nonetheless found there was no sound prediction based on literature and/or inhouse tests/documents from the patentee. As such the disclosure requirement was not determinative in any event. In the sofosbuvir action before Justice Annis, he found there was “no utility disclosure requirement” following Justice Rennie’s lead in the esomprazole action. At the same time, Justice Annis found that it was still not possible to soundly predict therapeutic advantages of Idenix’s claimed compounds, even after considering both published literature and Idenix’s own inhouse tests (paras. 376-377). Justice Annis went further and confirmed insufficient disclosure in Idenix’s patent (as compensated by the common knowledge) given the issue is “contentious”.[7] In evaluating the common knowledge in this context, mere publication was insufficient (at para. 408). Similarly, Rennie found Astra could in fact rely on internal tests for sound prediction at para. 141 but in his analysis considered both disclosed and undisclosed tests (at paras. 161, 176, 190). Astra’s esomeprazole patent was found invalid for inutility in any event because certain promises were not made out even with confidential inhouse tests (paras. 214, 215, 367).[8]

In the NOC case before Mr. Justice Barnes, the court specifically acknowledged that “the issue of what the patentee must disclose to the public where utility is predicted remains somewhat controversial.” Despite “sympathy” for the contrary view, “it would take something more than …[the] apparent reservations expressed in …[Viagra SCC]…to displace the requirement for disclosure described by Justice Binnie in Apotex Inc v Wellcome Foundation Ltd,”.[9] At the same time, unlike the anti-disclosure actions, the court in Lilly v Hospira does not indicate whether the disclosure requirement would in fact have made a difference (ie whether there was significant public literature and/or inhouse tests that could have rendered the utility of Lilly’s 1000s of compounds soundly predictable). It appears that, on a reading of the decision, once the Promise was set at a certain level[10], it would not have been made out in any event even with the extra assistance of public literature and/or inhouse tests. The court only noted in passing that Lilly and its main expert sought to rely on apparent “in-house test data” that does not appear to have been in the public realm at the time of filing (para. 51).

It is interesting that a somewhat basic question is subject to so much disagreement. Perhaps this is an area ripe for “doctrinal” type decisions – ie. focusing on underlying rationales as distinct from particular facts or following prior jurisprudence – a concept recently discussed by Mr. Justice Stratus.[11] This area also provides an apt example of how stray phrases from the SCC can set off/invigorate an area of law, until it eventually (with the right case) percolates back to the SCC for public policy/legislative review and balancing/fine-tuning of the “bargain” central to patent law. There is a need for some explicit direction on the proper framework as to what needs to be in a patent and/or the public realm and/or inhouse tests in order to render a prediction of a certain promised utility sound.

Although the SCC has recently granted leave in Astra’s esomeprazole action[12], both parties have acknowledged in their leave materials that the disclosure requirement is not determinative in this case (as the lower court held there was no sound prediction of the promised utility relying on material in the patent as well as Astra’s internal tests). Instead the SCC case is expected to focus on the applicability of the Promise in patent validity in the first place, the framework for setting the Promise, and the interplay (if any) between claims construction, inventive concept and the Promise. At the same time, if the SCC decides to “adjust/lower” the Promise of Astra’s patent, the disclosure issue may become a “live” issue and be directly addressed by the SCC, as opposed to obiter observations.

From a point of first principles, the difference of opinion reflects some fundamental differences in opinion as to the meaning of utility – and in particular what level of education the patentee is required to provide the reader (if any) to satisfy the sound prediction aspect of utility.

à Is it only a substantive requirement when the invention is a new use, meaning one cannot obtain the invention unless one obtains the new use? Otherwise the person skilled in the art is permitted to rely on external public literature/documents at the time of filing that may not be self-evident to evaluate whether a prediction is sound (ie beyond the common general knowledge type of searches that a person skilled in the art is readily able to do for evaluating obviousness)? This would include confidential internal testing done by the inventors, which provides the court with a basis to test the inventors’ sound prediction.

à Is it a substantive requirement irrespective of the invention, to hold the inventor in check/compel compliance with the statutory requirement of “useful”. Even if in the end an untested compound is useful (as is generally the case where there is an infringer), it is still important for an inventor to disclose not just how to make it but the reasoning/facts underlying the sound expectation that it works as promised. Underlying this viewpoint is that the public should be able to vet the veracity of a sound prediction of utility by reading the patent, and not scouring extra sources and/or awaiting confidential disclosure by the inventors that is not in their patent.

Absent more definitive consistent instruction from the Federal Court of Appeal, or direct SCC pronouncement on the proper approach, patent drafters are still advised to keep their promises to a minimum to avoid disclosure challenges regarding sound prediction.

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[1] Eli Lilly v Hospira 2016 FC 47 (Barnes)

[2] Gilead v Idenix 2015 FC 1156 at para 381 (Annis), under appeal A-483-15, adopting earlier reasoning of Astra v Apotex 2014 FC 638 (Rennie), aff’d 2015 FCA 158, under appeal to SCC (36654) [leave granted March 10/16].

[3] Pfizer v Novopharm, 2012 SCC 60 at paras 37-38, 40

[4] Gilead v Idenix 2015 FC 1156 at para 381 (Annis), under appeal A-483-15

[5] Apotex v Allergen 2015 FCA 137 at paras. 8, 9

[6] Sanofi-Aventis v Apotex, 2013 FCA 186 at para. 134-135 (the majority referred to tests “clearly disclosed” in the patent in finding there was a sound prediction of enantiomer clopidogrel’s advantages at paras. 53, 71)

[7] Gilead v Idenix 2015 FC 1156 (Annis) at paras 259-260; 380-382, 401, 412 (under appeal A-483-15). The decision also focused on insufficient disclosure because the disclosure was directed at related compounds – not the compounds claimed.

[8] Astra v Apotex 2014 FC 638 (Rennie), aff’d 2015 FCA 158, under appeal to SCC (36654) [leave granted March 10/16]. The appellate court did not discuss the disclosure issue.

[9] Eli Lilly v Hospira 2016 FC 47 (Barnes) at para. 48

[10] The Promise was articulated by the court as the use of the compounds as antitumor agents., in vivo activity in relation to abnormal tissue or by evidence of in vitro activity from which an extrapolation of in vivo activity could be drawn. (paras 36-37)

[11] At May 12, 2016 CBA IP Day in Ottawa

[12] Astra v Apotex SCC 36654 (leave granted March 10, 2016) http://www.scc-csc.ca/case-dossier/info/result-resultat-eng.aspx?cas=36654&par=00&n=&jur=&prov=&submit=Search

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