Lexpert Magazine

Jan/Feb 2018

Lexpert magazine features articles and columns on developments in legal practice management, deals and lawsuits of interest in Canada, the law and business issues of interest to legal professionals and businesses that purchase legal services.

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LEXPERT MAGAZINE | JANUARY/FEBRUARY 2018 29 with that of our international trading part- ners and is in particular a significant win for pharmaceutical innovation in Canada. Background of dispute e Supreme Court's decision was in the context of a dispute regarding the validity of a patent for esomeprazole, a proton-pump inhibitor (PPI) used in the reduction of gas- tric acid, reflux esophagitis, and related mal- adies. AstraZeneca markets esomeprazole in Canada as NEXIUM ® ; esomeprazole is claimed in Canadian Patent No. 2,139,653 (the 653 Patent). In the lower Federal Court judgments on the validity of the 653 Patent, the entire pat- ent was declared invalid for failure to demon- strate or soundly predict utility alleged by the generic company Apotex to be promised in the disclosure portion of the patent. e main issue before the courts was whether statements of usefulness in the dis- closure amounted to a promise of utility by which standard the validity of the patent should be measured. Following the dismissal by the Federal Court's Hughes J. (as he then was) of a pro- hibition application by AstraZeneca under the Patented Medicines (Notice of Compli- ance) Regulations in 2010, Apotex launched a competing esomeprazole product in Canada. is launch led to an action in which Astra- Zeneca sued Apotex for infringement of the 653 Patent. Apotex defended the action in part by counterclaiming for a declaration of invalid- ity. In 2014, Rennie J. (as he then was) found the 653 Patent invalid and dismissed Astra- Zeneca's action for infringement. Although Rennie J. agreed with AstraZeneca that the subject matter of the claims of the 653 Pat- ent in suit was novel and inventive (non-ob- vious), he found the entire patent invalid for failure to demonstrate or soundly predict the utility promised in the patent. AstraZeneca's appeal to the Federal Court of appeal was dismissed by a unani- mous panel in 2015. Dawson J.A. concluded that Rennie J. had correctly applied the law in his construction of the promised utility of the patent. On the appeal, the SCC heard oral ar- gument from the AstraZeneca and Apotex parties, as well as the following interven- ers: Innovative Medicines Canada and BIOTECanada (jointly); the Centre for Intellectual Property Policy; and the Fé- dération internationale des conseils en propriété intellectuelle. e court also received written submis- sions from the Canadian Generic Pharma- ceutical Association, the Intellectual Proper- ty Owners Association, and the Intellectual Property Institute of Canada. Promise Doctrine is an error of law In unanimous reasons, the Supreme Court of Canada allowed AstraZeneca's appeal and struck down the promise doctrine as an error of law. Writing for the court, Rowe J. emphasised the connection between utility and the sub- ject-matter of the invention as identified by claims construction: For the subject matter to function as an inventive solution to a practical problem, the invention must be capable of an actual rel- evant use and not be devoid of utility. With this in mind, Rowe J. held that util- ity must instead be assessed using the follow- ing two-step test: First, courts must identify the subject- matter of the invention as claimed in the patent. Second, courts must ask whether that subject-matter is useful — is it capable of a practical purpose (i.e. an actual result)? is test is driven by the claims of the pat- ent, rather than the disclosure portion. Rowe J. also confirmed that there is a single, low bar for proof of utility, restor- ing the "scintilla" standard as the focus of the analysis. e Act does not prescribe the degree or quantum of usefulness required, or that every potential use be realized — a scintilla of utility will do. A single use related to the nature of the subject-matter is sufficient, and the utility must be established by either dem- onstration or sound prediction as of the filing date […]. In reaching this conclusion, the court rec- ognised that the promise doctrine was ex- cessively onerous and inconsistent with the scheme of the Patent Act. By wrongly conflat- ing the utility requirement in section 2 with the disclosure requirement in subsection 27(3), the promise doctrine had the potential to punish patentees for attempting to fulfill their part of the patent bargain by fully de- scribing the invention and its use. Declaration of invalidity reversed Applying the correct test for utility, the SCC held that the 653 Patent was valid and re- versed the courts below. In the Federal Court, Rennie J. had held that the subject matter of the main 653 Pat- ent claims in issue was "optically pure salts of the enantiomer of omeprazole". He had also held that one of the uses he identified un- der the promise doctrine — that these salts would be useful as PPIs to reduce gastric acid secretion — had been soundly predicted by the relevant date. ese holdings were sufficient to support the utility of the 653 Patent claims in suit: the other uses found by the lower courts to have been promised were irrelevant to the utility analysis. Gunars Gaikis, Yoon Kang and Y. Lynn Ing of Smart & Biggar acted for the appel- lants, AstraZeneca Canada Inc., AstraZene- ca Aktiebolag and AstraZeneca UK Limited. Harry B. Radomski, Andrew R. Brod- kin, Richard Naiberg and Sandon Shogilev of Goodmans LLP were counsel for the respondents, Apotex Inc. and Apotex Phar- machem Inc. Patrick E. Kierans, Kristin Wall and Jillian Hyslop of Norton Rose Fulbright Canada LLP represented the interveners Innovative Medicines Canada and BIOTECanada. Jeremy de Beer of the University of Ot- tawa and E. Richard Gold of McGill Univer- sity represented the intervener the Centre for Intellectual Property Policy. Jonathan Stainsby and Scott A. Beeser of Aitken K lee LLP acted for the inter- vener the Canadian Generic Pharmaceu- tical Association. Julie Desrosiers and Kang Lee of Fasken Martineau DuMoulin LLP and Alain M. Leclerc of Goudreau Gage Dubuc acted for the intervener Fédération internationale des conseils en propriété intellectuelle. Andrew Bernstein and Yael Bienen- stock of Tor ys LLP were counsel for the intervener the Intellectual Property Own- ers Association. Jason Markwell of Belmore Neidrauer LLP acted for the intervener the Intellectual Property Institute of Canada. | RECENT LITIGATION OF IMPORTANCE |

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