Authors: Emir Crowne (Associate Professor, University of Windsor, Faculty of Law; Barrister and Solicitor, Law Society of Upper Canada) and Mohamed R. Hashim
Teva Canada Ltd v Pfizer Canada Inc, 2012 SCC 60, Supreme Court of Canada, 8 November 2012
Journal of Intellectual Property Law & Practice (2013) doi: 10.1093/jiplp/jps225, first published online: February 7, 2013
The Supreme Court of Canada unanimously ruled that Pfizer's patent for Viagra was void for insufficient disclosure.
Legal context
Subsection 6(1) of Canada's Patented Medicines (Notice of Compliance) Regulations, SOR 93-133 states that:
A first person may, within 45 days after being served with a notice of allegation under paragraph 5(3)(a), apply to a court for an order prohibiting the Minister from issuing a notice of compliance until after the expiration of a patent that is the subject of the notice of allegation.
Section 2 of the Canadian Patent Act, RSC 1985 c P-4 defines an ‘invention’ as:
any new and useful art, process, machine, manufacture or composition of matter, or any new and useful improvement in any art, process, machine, manufacture or composition of matter.
Subsection 27(3) adds the statutory requirements governing sufficiency:
The specification of an invention must
(a) correctly and fully describe the invention and its operation or use as contemplated by the inventor;
(b) set out clearly the various steps in a process, or the method of constructing, making, compounding or using a machine, manufacture or composition of matter, in such full, clear, concise and exact terms as to enable any person skilled in the art or science to which it pertains, or with which it is most closely connected, to make, construct, compound or use it;
(c) in the case of a machine, explain the principle of the machine and the best mode in which the inventor has contemplated the application of that principle; and
(d) in the case of a process, explain the necessary sequence, if any, of the various steps, so as to distinguish the invention from other inventions.
Facts
 |
| sildenafil |
In proceedings brought under the Patented Medicines (Notice of Compliance) Regulations, Pfizer sought an Order prohibiting the Minister of Health from issuing a Notice of Compliance to Novopharm (now, Teva) for its generic erectile dysfunction pill until the expiry of Pfizer's Viagra patent (Canadian patent no 2163446) in 2014. In the Notice of Allegation, Novopharm challenged the validity of Pfizer's patent on the grounds of obviousness, inutility and insufficient disclosure. In such proceedings the legal burden of proof is on the applicant (the patent holder) to establish, on a balance of probabilities, that the respondent's allegations of obviousness, inutility and insufficiency are not justified. In turn, the respondent's evidentiary burden is met by presenting a sufficient factual and legal basis to give those allegations an ‘air of reality’.
At the Federal Court, Justice Kelen allowed Pfizer's application, finding the allegations raised by Novopharm were not justified (2009 FC 638). As a result, the Minister of Health was prohibited from issuing the Notice of Compliance until the expiry of the patent (2009 FC 638, para 149).
At the Federal Court of Appeal, a unanimous court agreed with the trial judge and dismissed the appeal (2010 FCA 242). Writing for the court, Justice Nadon, found that the ‘invention’ at issue was found at claim 7 and properly disclosed in the specification. Further, since the utility of the invention was demonstrated (as opposed to being a sound prediction) there was no requirement for that basis to be disclosed in the specification (2010 FC 242, paras 82, 88, 90).
Analysis
Throughout the proceedings, Novopharm (now, Teva) maintained that the patent disclosed at least two different inventions, in contravention of the Patent Act which states that ‘[a] patent shall be granted for one invention only …’ (s 36 (1)). The first claim of the patent is said to cover 260 quintillion compounds (2009 FC 638, para 135), with either claim 6 or claim 7 specifically covering Viagra (sildenafil).
It was this ambiguity that led to the patent's downfall. Justice LeBel, writing for a unanimous court, held that:
The disclosure in the specification would not have enabled the public “to make the same successful use of the invention as the inventor could at the time of his application”, because even if a skilled reader could have narrowed the effective compound down to the ones in Claim 6 and Claim 7, further testing would have been required to determine which of those two compounds was actually effective in treating ED [erectile dysfunction] (2012 SCC 60, para 74).
The patent was therefore void for insufficient disclosure (ibid, para 87).
Practical significance
Patents are a bargain between the inventor and the State. Justice LeBel expressly noted that ‘patentees cannot be allowed to “game” the system’ (ibid, para 80). The inventor, through the specification, tells the State how the invention works. The State in turn grants a monopoly for such disclosure. That quid pro quo is at the heart of the modern patent system. As the Supreme Court noted in the decision:
… the logical consequence of a failure to properly disclose the invention and how it works would be to deem the patent in question invalid. This flows from the quid pro quo principle underpinning the Act. If there is no quid—proper disclosure—then there can be no quo—exclusive monopoly rights. (ibid, para 84) (see also Consolboard Inc v MacMillan Bloedel (Sask) Ltd (1981) 56 CPR (2d) 145)
Aside from re-affirming fundamental patent theory, the decision undoubtedly impacts claim drafting, cascading claims in particular. For instance, at para 72, the court held Pfizer accountable for not specifically disclosing sildenafil:
Recall that in this case Pfizer had conducted tests that demonstrated that sildenafil was effective in treating ED. None of the other compounds in Patent '446 had been shown to be effective in doing so. Therefore, the invention was the use of sildenafil for the treatment of ED. This had to be disclosed in order to meet the requirements set out in s. 27(3) of the Act.
The court then appears to signal that the error was committed by the addition of two specified compounds.
I would not make too much of the fact that Claim 1 included over 260 quintillion compounds. The practice of cascading claims—although it may, as in this case, result in claims that are overly broad—is a common one that does not necessarily interfere in every case with the public's right to disclosure. The skilled reader knows that, when a patent contains cascading claims, the useful claim will usually be the one at the end concerning an individual compound. The compounds that do not work are simply deemed invalid. In accordance with s. 58, any valid claim—in this case, Claim 7—survives despite the existence of invalid claims. However, the public's right to proper disclosure was denied in this case, since the claims ended with two individually claimed compounds, thereby obscuring the true invention. (ibid, para 80).
A ‘strict’ interpretation of this jurisprudence might suggest a tightening of cascading claims. Instead of claiming several formulations of a compound, a single patent may need to be broken into multiple patents to avoid a sufficiency attack. Alternatively, on a ‘liberal’ reading, disclosures may increase in size with inventors disclosing ‘the kitchen sink’ in order to avoid an allegation of insufficient disclosure.
The decision will also likely give rise to one of the largest damages awards in Canadian patent history. This appeal arose from proceedings under the Patented Medicines (Notice of Compliance) Regulations, to which we must turn to assess the damages. The applicable sub-section states:
8. (1) If an application made under subsection 6(1) is withdrawn or discontinued by the first person or is dismissed by the court hearing the application or if an order preventing the Minister from issuing a notice of compliance, made pursuant to that subsection, is reversed on appeal, the first person is liable to the second person for any loss suffered during the period.
Because the court found that the allegations of were justified, this subsection of the Regulations is triggered. Indeed, in proceedings under the Regulations, the validity of a patent is not finally determined, but only the allegations. Applied to the case at bar, Pfizer (ie the ‘first person’), having lost to Novopharm (ie the ‘second person’), would be liable for damages in the amount that would financially restore Novopharm to the position it would have been in, had the proceedings not taken place. In other words, Pfizer will have to compensate Novopharm for lost sales that occurred ‘but for’ the proceedings.
While s 8 jurisprudence is still in its infancy, the recent CAD $ 215 million award in Apotex Inc v Sanofi-Aventis, T-1357-09 (released on 2 November 2012), for the four years that the drug ramipril (a blood pressure drug) was kept off the market, signals that the stakes are likely higher for a drug like sildenafil, which was denied entry into the market for about five years.
The Supreme Court of Canada has re-armed the arsenal of patent litigators. The traditional weapons of anticipation, obviousness, and inutility remain, but sufficiency of disclosure—a favourite concept of the patent doctrinalist—has again assumed prominence.
The editorial assistance of Niousha Ghomashchi is gratefully acknowledged, as is the funding provided by the Law Foundation of Ontario.
