In the past five years, the Canadian Federal Court has invalidated several patents based on an arguably “technical” deficiency – the “Promise/utility” requirement.
The most recent trend however suggests an increasing reluctance to both find an “elevated Promise”, and require a patentee to meet such a Promise. Instead the Federal Court of Appeal in late 2014 reinforced a “pro-patentee” approach by applying the “rule in favour of saving an invention rather than invalidating it” and is now consistently holding that Promises must be “explicit” ie. supported by clear and unambiguous language in the patent.
Eli Lilly’s pending NAFTA challenge (following a finding of inutility of two its patents for an antipsychotic selection and an improved ADHD drug) is another background factor which may be having an influence on recent jurisprudence.
However, the “Promise/utility” requirement in Canada is clearly not yet a “dead issue”. In limited circumstances, it remains a legitimate validity challenge. The patents considered in “elevated Promise” cases arguably have fairly clear technical deficiencies – for example, claiming a group of compounds where admittedly many of the compounds did not even have minimal activity; asserting a new compound is an effective, less irritating eye drug, when admittedly eye drugs must have chronic safety tests and no tests had been done; asserting a compound has clinical safety/efficacy, when in fact only preliminary tests had been conducted. Overall, even though recent decisions may adopt a “pro-patentee approach”, the Canadian Federal Court is not summarily disposing of utility attacks. Utility analysis continues to consist of a lengthy and detailed review of the entire patent and law on utility.
I. Federal Court of Canada – Promise/Utility
The most recent pronouncements from both the Federal Court (2015) and Federal Court of Appeal (2014) continue a trend over the past few years of trying to uphold a patent and find that it has the required utility.
In 2013 the Federal Court of Appeal arguably reversed its course in earlier cases where high Promises had been found. In Sanofi v Apotex 2013 FCA 186 (Plavix/clopidogrel), the appellate court defined “The Promise” as “the standard against which the utility of the invention described in the patent is measured”. Notably the court found the source of the concept to be a 1981 Supreme Court of Canada decision (it is not a “new” concept as Eli Lilly argues in its NAFTA factum). Significantly the Federal Court of Appeal emphasized: (1) only if an inventor makes “an explicit promise of a specific result, then utility will be assessed by reference to the terms of the explicit promise”; (2) as there is no obligation to disclose utility in a patent, one cannot assume every patent has an explicit promise; and (3) where there is no explicit promise, a “mere scintilla” of utility will suffice. The Court construed Sanofi’s selection patent and found there was no “promise for use in humans”. It was incorrect to simply rely on inferences from the patent. There was no “language [promising effectiveness in humans] at least as clear and unambiguous as that used to establish the advantages of the selection over the compounds of the genus patent”.
The requirement for a “clear and unambiguous” promise has been repeated in the most recent cases from the Federal Court and Federal Court of Appeal. In Eli Lilly Canada Inc. v. Mylan Pharmaceuticals ULC, 2015 FC 17 [tadalafil Notice of Compliance case (“NOC”)], Justice de Montigny accepted that Eli Lilly’s patent for the new use of a drug to treat erectile dysfunction (“ED”) only promised ED treatment. The Promise did NOT include absence of severe side effects, or oral treatment (this was only “one aspect” of the invention).
It was not enough that the patent refer to the advantage of oral therapy:
“ The specification goes on to describe the compounds of the invention … and states that these compounds, “unexpectedly”, have been found to be useful in the treatment of ED. “Furthermore the compounds may be administered orally, thereby obviating the disadvantages associated with i.c. administration” (pp 3-4 of the Patent).”
There was “absolutely no reference to toxicity” in the patent. It was not enough that the patent refer to avoiding “disadvantages” with oral administration as opposed to existing therapies:
“Indeed, the ‘784 Patent is clearly drafted in terms of advantages as opposed to promise, to the extent that oral administration is described as avoiding the disadvantages associated with i.c. administration…. This is undoubtedly insufficient to infer that a clear and unambiguous promise has been made;…”not all statements of advantage in a patent rise to the level of a promise. A goal is not necessarily a promise”. The case at bar is plainly one where the Patent shall be construed in favour of the patentee as it can be read by the skilled person as excluding the promise of reduced side effects.”
The Court then made a pro-patentee finding that the Promise of ED was soundly predicted. “Tadalafil’s ability to treat ED was not a mere “lucky guess”, and the invention claimed in the ‘784 Patent is not based on mere speculation.” The Court went so far as to find that, even if the Promise included oral administration, it was still soundly predicted based on the patent and the “state of the art”.
At the same time, in a second NOC decision heard at the same time by the same judge, another tadalafil patent (directed at a selected lower dosage range) was held to be invalid based on inutility (Eli Lilly v Mylan 2015 FC 125). This time Justice de Montigny focussed on what he called “ambitious and explicit statements throughout the Patent” directed at more than marginal side effect improvements over sildenafil. The Court was critical of Eli Lilly’s attempt to “read down” the promise. The patent stated “Most unexpectedly, the product also can be administered with clinically insignificant side effects”. The statement “”[t]hus, the contraindication once believed necessary for a product containing a PDE5 inhibitor is unnecessary…” was characterized as a clear promise of significant improvement. This was “the inescapable conclusion”. This case illustrates the continued susceptibility of patents that promise “clinical type” improvements. A single small clinical study with healthy males, using 1 dose, did not demonstrate utility (and significantly Lilly did not even try to argue sound prediction).
In Apotex v Pfizer Canada, 2014 FCA 250 [celecoxib NOC case], The Court of Appeal was focussed on interpreting the Promise in favour of Pfizer. Again relying on the 1981 Consolboard case, Justice Noel clearly enunciated the approach to be taken:
“Where the validity of a patent is challenged on the basis of an alleged unfulfilled promise, the patent will be construed in favour of the patentee where it can reasonably be read by the skilled person as excluding this promise.”
As part of the analysis, the Court started with the “principle that statements outside of the claim should not be presumed to be promises”. Again statements as to benefits were found to be mere advantages. Pfizer’s patent as a whole “stated that the compounds are useful as anti-inflammatory agents with the additional benefit of having significantly less harmful side effects”. The patent also added that the selectivity of the compounds “may” indicate an ability to reduce the incidence of common anti-inflammatory side effects.
This pro-patentee approach to the Promise was evident in subsequent Federal Court decisions from mid/late 2014. The focus is again on claim language in order to find the Promise, rather than any stray phrases in the disclosure. For example:
(a) In Dow Chemical Co. v. NOVA Chemicals Corp 2014 FC 844 Justice O’Keefe found there was no explicit Promise for a specific result, such that a “mere scintilla” of utility was sufficient for Dows’ polymer patent. The patent was to be taken as a whole, with a focus on the fact that “The claims simply speak of the compositions… having improved properties but not any particular level of improvement.” A statement at page 1 of the patent was not determinative: “Surprisingly, we have now discovered compositions useful in films and molded parts having synergistically enhanced physical properties.” At the same time, the court permitted the patentee to rely on its desired characteristics in finding the patent was not obvious.
(b) In Alcon Canada Inc. v. Apotex Inc. 2014 FC 699 Justice Kane again focussed on Alcon’s patent claims which referred only to “Use of a therapeutically effective amount of a compound … for the treatment of glaucoma and ocular hypertension.” The Promise was only that the compound will be “therapeutically effective in the treatment of glaucoma and ocular hypertension”. Although the court accepted “there appears to be a promise in the summary of the invention … that the IOP reduction will be significantly greater and the side effects similar or reduced over the compounds of the ‘417[genus]”, “there is no reference to reduced side effects or advantages over the genus in the claims”.
II. Utility/Sound Prediction – Requirement for Disclosure in Patent
After the first step of determining the Promise, the Court evaluates (1) whether a patentee in fact established that Promise with its own internal tests at the time of filing (utility in fact), or (2) whether the patentee had a sound prediction of such a Promise. Evaluation of actual utility and sound prediction are areas that may be expected to further develop in decisions over the next decade.
As to actual utility, the Federal Court recently stressed an arguably strict approach against patentees, by requiring that their studies relied on for actual utility be referred to in the patent. Following an earlier Federal Court of Appeal decision, Justice Roy reasoned that “without any reference to studies that will show, once they have to be produced, the existence of the promised utility, how is the public to know that utility is demonstrated.” (Laboratoires Servier v Apotex 2015 FC 108 [controlled release gliclazide NOC]). Servier’s one test example was severely criticized by the court, who was “left with the general impression that [what] was played [was] a game of hide-and-seek”. In Eli Lilly v Mylan 2015 FC 125, it was particularly damaging that “Lilly had no evidence by April 2000 [nor as of today] that a contraindication was unnecessary”, after the court had construed the Promise to include precisely this effect.
On the pro-patentee side, however, the Supreme Court of Canada (who in 2002 adopted the “sound prediction” approach), recently appeared to question, in obiter, the idea that there must be disclosure of such sound prediction in the patent (Teva Canada v Pfizer Canada 2012 SCC 60) [Viagra NOC case]. The Federal Court of Appeal subsequently released two apparently conflicting decisions. In one case, one of the concurring judges agreed that “the level of disclosure required by law should be lower”. A few months later, the Federal Court of Appeal acknowledged the SCC’s obiter comments, however stressed that context must be considered – “where the factual basis is reliant on data which does not form part of the common general knowledge, then disclosure in the specification may indeed be required to support a sound prediction.”
In cases of arguably technically deficient patents, the Federal Court continues to hold patentees to their Promises and require some disclosure. In Eli Lilly v Mylan 2015 FC 125 after finding a Promise of improved side effects as compared to another compound, the Court was very critical that there were no tests in the patent showing any comparison. “This failure is clearly unacceptable in a Patent that promises not only efficacy in treating ED, but also a better side effect profile as against sildenafil, and a patentee should not be able to benefit from a partial, if not misleading, disclosure.”
III. Eli Lilly NAFTA challenge
The nine day hearing of Eli Lilly’s NAFTA challenge is scheduled for May 30, 2016. There is a January 22, 2016 deadline for applications for amicus curiae briefs.
The Arbitral Tribunal is a Belgian Lawyer/Professor and 2 UK lawyers.
The main issue in the NAFTA challenge is: What are the minimum basic IP principles, in particular regarding utility, which NAFTA countries must adhere to? As part of this, the Tribunal will need to consider the extent to which countries may have a wide range to apply these principles according to their statutes and common law.
Eli Lilly does not appear to focus its arguments on the nature of its two patents. The olanzapine patent is a selection; the atomoxetine patent was directed at improved side effects after long term dosing. Arguably, both of these are technically deficient patents – drafted with explicit elevated Promises. At the same time, the Government of Canada is unclear as to whether Canada does indeed have a different utility law than the US; and, if so, whether such differences are NAFTA compliant.
Eli Lilly Position
- NAFTA mandates only minimal utility requirements – “capacity to be put to a specific industrial use”; this was also the test in Canada in the 1990s; US law also requires a low threshold
- since 2005 Canada has redefined utility by creating “impermissible Hurdles to Patentability” with its unique (1) “Promise Utility Doctrine” that is arbitrary and involves the court “subjectively scour[ing] the patent”; and (2) additional disclosure requirements for sound prediction
- the Promise Utility doctrine discriminates against pharmaceutical patents; no pharmaceutical patents were invalidated for inutility until 2004; since then 23 pharmaceutical patents have been invalidated based on the doctrine
- there has been an expropriation of Eli Lilly’s investments for its commercially approved drugs, contrary to what Eli Lilly legitimately expected when it filed its patents in the 1990s
Government of Canada Position
- Eli Lilly is trying to re-litigate 2 lengthy infringement trials resulting in “two reasoned and procedurally just decisions” that it disagrees with; Lilly’s own “scattershot” filing practices explain the rationale for Canada’s approach: after filing over 24 patent applications on its 2 drugs for various uses and then abandoning most of them, “Close study of these patent applications suggests that they were filed when Claimant had little or no basis to claim the alleged new uses”
- Eli Lilly’s “Promise Utility Doctrine” is in fact several established Canadian patent rules that have “deep roots in Canadian law”; patents are granted “on the basis of invention, not on the basis of speculation”
- only 3 – not 23 – pharmaceutical patents have been invalidated in Canada solely because of utility; two of these are the patents Eli Lilly has based its NAFTA challenge on; the percentage of invalid patents has not changed since 2005; inutility has “typically been unsuccessful “
- Canada’s law (like the US) has “evolved”; Canada’s utility doctrine is “similar” to US Enablement and Written Description doctrines; in any event Canadian courts cannot be expected to apply US patent law
- Mexico has a different “industrial applicability” requirement
- no international IP obligations are engaged; “nuanced aspects of the patent law” are not within NAFTA’s “high level framework”
- there is no jurisdiction under NAFTA for the relief requested; there are no NAFTA provisions engaged; Chapter 17 provides only general guidelines on IP and there are no egregious, discriminatory violations establishing a denial of justice contrary to Chapter 11there can be no expropriation of an invalid patent; Lilly’s expectations following the Canadian Patent Office’s grant of their patents were “unfounded” given courts regularly correct granted patents
 Sanofi-Aventis v Apotex 2009 FC 676, aff’d 2011 FCA 300 [ramipril]
 Apotex v Pfizer 2011 FCA 236 [latanoprost NOC]
 Eli Lilly v Novopharm 2011 FCA 220 [atomoxetine]
 In its NAFTA complaint Lilly argues that 23 pharmaceutical patents have been invalidated in Canada based on utility since 2005. As clarified by the Government of Canada in its reply factum, in fact three Canadian patents have been invalidated solely on the basis of utility since 2005 – two of which are Eli Lilly’s patents that are the subject of its NAFTA challenge. (The misconception arises because patents are not “invalidated” in our Notice of Compliance cases.)
 Although Apotex appealed this decision to the Supreme Court of Canada (who granted leave for the appeal, which it does not do as of course for IP matters), the parties settled a day before the November 4, 2014 hearing date (SCC Court File No. 35562).
 Consolboard Inc. v. MacMillan Bloedel (Saskatchewan) Ltd.,  1 S.C.R. 504, (“Consolboard”). Consolboard is often cited as a leading authority on utility and disclosure.
 Under appeal by Mylan A-47-15.
 The patent was also found anticipated and obvious. Under Appeal by Eli Lilly A-120-15.
 Justice Rennie of the Federal Court has adopted this approach and held there is “new law” that now ““proper disclosure” of utility applies only to new use patents” – otherwise no disclosure is required in the patent for a sound prediction. (AstraZeneca v Apotex 2014 FC 638; under appeal by Astra A-420-14) [esomprazole enantiomer action].
 Sanofi v Apotex 2013 FCA 186 (clopidogrel) at para. 135 per Justice Gauthier (concurring)
 Eurocopter v Bell Helicopter 2013 FCA 219 at paras. 153, 154
 Refer to http://italaw.com/cases/1625.
 The different numbers arise from the fact that the 20 other cases relate to increased NOC proceedings which do not invalidate a patent but make only preliminary findings of validity and infringement.