Lexpert Magazine

28 LEXPERT MAGAZINE | APRIL/MAY 2017 BIG SUITS ASTRAZENECA CANADA V. MYLAN PHARMACEUTICALS DECISION DATE: FEBRUARY 7, 2017 Mylan Pharmaceuticals ULC has invalidated the Canadian formulation patent relating to the drug VIMOVO®. In its decision in Astra- Zeneca Canada Inc. v. Mylan Pharmaceuti- cals ULC, 2017 FC 142, the Federal Court of Canada found the claims of Canadian Pat- ent No. 2,449,098 (the "098 Patent") invalid for obviousness. is decision paves the way for a generic version of the drug in Canada. VIMOVO® is a drug currently sold in Canada by AstraZeneca, under a licence to the 098 Patent from Pozen (collectively, "Astra"). e drug contains naproxen (a popular non-steroidal anti-inflammatory drug, or NSAID) and esomeprazole (a pro- ton pump inhibitor, or PPI, which protects the stomach). In VIMOVO®, the esomepra- zole is formulated to release in the body before the naproxen. e 098 Patent is di- rected to this sequential-release formula- tion architecture. Mylan alleged that the 098 Patent was obvious, for it merely applied a well-known formulation architecture to a well-known NSAID-PPI combination, using routine means, to achieve the well-known advan- tage of reducing gastrointestinal side effects in patients receiving NSAID co-therapy. Astra argued that the prior art taught away from formulating a PPI in this manner, without an enteric coat, rendering the in- vention non-obvious. e court's decision, issued by Justice Alan Diner, evaluated whether the 098 Patent was obvious. e Court agreed with Mylan that the supposed "teaching away" art had been superseded by subsequent art, including that from AstraZeneca, that taught how to make and use a non-enteric-coated PPI. In evaluat- ing whether a skilled person would be moti- vated to try a sequential-release formulation, the Court provided a thoughtful discussion and concluded that the distinction between "specific" and "general" motivation may be a false dichotomy; that the truth behind this requisite motivation may lie somewhere in the gray — between the black of general mo- tivation, and the white of specific motivation. e court noted a similar formulation had been used for an earlier product, AR- THROTEC, which served a similar purpose in protecting against NSAID side effects. Whether or not it had the same mecha- nism of action, the court found it would have been self-evident to successfully ap- ply an ARTHROTEC-type architecture to an NSAID-PPI formulation that sought to achieve the same effect. J. Bradley White, Nathaniel Lipkus, Carina de Pellegrin and Rebecca Stiles of Osler, Hoskin & Harcourt LLP acted for Mylan Pharmaceuticals. Yoon Kang, Andrew Mandlsohn and Paul Jorgensen of Smart & Biggar/Fetherston- haugh represented AstraZeneca Canada. ATOS V. SAPIENT CANADA DECISION DATE: DECEMBER 7, 2016 In 2006, Enbridge Gas decided to amal- gamate its numerous data into a single Systems, Applications and Products (SAP) system. e prime contractor for the proj- ect was the defendant, Sapient Canada Inc., which in turn subcontracted both the application management support services and the document conversion parts of the implementation of the soware to Siemens Canada Limited. e plaintiffs, Atos IT So- lutions and Services GMBH and Atos Inc., are successor entities to Siemens Austria and Siemens Canada respectively. Siemens Canada was initially subcon- tracted to provide only application support services ("AS Services") for the SAP system's new users once the system was in place, but was later agreed to do data conversion work on the project in addition to the AS services work. e data conversion agreement was less lucrative than the AS services agreement, and the project involved extensive planning and implementation. e installation of the soware began in 2007 and was completed in 2009, five months behind schedule. Siemens faced challenges in meeting its deadlines for the data conversion, and by May 2009 Sapient insisted on taking over man- agement of the data conversion track, follow- ing which progress generally improved. Nevertheless, on June 29, 2009, Sapient delivered a letter to Siemens terminating the subcontract on the basis that Siemens had materially breached its obligations to perform data conversion work, and that the 30-day cure period of the contract did not apply because the breach could not be cured. Sapient terminated not only the data conversion contract but the AS Services contract as well, despite no breach of that contract being alleged. In 2015 the case proceeded to a five-week trial before the Ontario Superior Court of Justice, where Siemens was eventually suc- cessful in recovering approximately $5.5 mil- lion in damages. e court was tasked with deciding whether Sapient had breached the subcontract through its termination of both the data conversion and AS Services agree- ments in June 2009, and had to determine whether Siemens' alleged breach was "mate- rial" such that termination was warranted under the subcontract. In his reasons, Justice Laurence Pattillo ad- opted a contextual approach to interpreting the subcontract termination clause explain- ing that the term "material breach" under the terms of the subcontract meant "a non- trivial breach that affects or may affect Sapi- ent's ability to perform its obligations under the Prime Contract in a material respect and which can either be cured within 30 days of notice or is incapable of being cured." Justice Pattillo concluded that Siemens was not in material breach of the subcontract in May 2009 or aerwards. In such circumstances, by terminating Siemens on the basis of a ma- terial breach that never existed, Sapient was in breach of the subcontract. Siemens argued that even if it had materi- ally breached the subcontract, based on the doctrine of election Sapient could not rely on the breach or breaches to terminate the A LOOK AT THE INVALIDATION BY MYLAN PHARMACEUTICALS OF ASTRAZENECA'S CANADIAN FORMULATION PATENT OF A NON- STEROIDAL ANTI-INFLAMMATORY DRUG, PAVING THE WAY FOR A GENERIC VERSION; AS WELL AS THE ONTARIO SUPERIOR COURT OF JUSTICE'S DECISION IN ATOS V. SAPIENT CANADA, WHICH AWARDED DAMAGES TO THE FORMER FOR BREACH OF CONTRACT

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