hypertension and cardiac insufficiency. The
active ingredient in COVERSYL is perindopril, a compound covered by Canadian Patent
No. 1,341,196 (the '196 Patent), which patent is owned by one of the
Plaintiffs, ADIR. The other Plaintiffs – all corporate affiliates of ADIR – are
engaged in some aspect of the distribution, manufacture or sale of COVERSYL in
a number of countries throughout the world, including Canada.
[2]
Since
at least 2006, one of the Defendants, Apotex Pharmachem Inc. (Pharmachem), has
manufactured a generic version of perindopril erbumine tablets at its facility
in Brantford, Ontario, in 2 mg, 4 mg and 8 mg strengths, and tablets containing
a combination of perindopril erbumine and indapamide (a diuretic). The products
are sold to the other Defendant, Apotex Inc., which company, in turn, sells the
8 mg tablets in Canada and exports all dosages and the combination
product to affiliated companies and others abroad.
B. Basis of the Claim and Counterclaim
[3]
Servier
asserts, in this action, that Pharmachem and Apotex Inc. (jointly referred to
as Apotex) infringe its '196 Patent by the manufacture of all perindopril
products in Canada and by the sale of the 8 mg tablets in Canada. Further,
Servier claims that Apotex Inc. has induced others to infringe the '196 Patent.
[4]
In
its defence and counterclaim, Apotex asserts that all of the Plaintiffs with
the exception of Servier Canada Inc. (Servier Canada) and ADIR have no standing
to bring this action.
[5]
While
Apotex does not explicitly deny that its perindopril products fall within the
claims of the '196 Patent, it contends that the patent is invalid because:
·
the
invention disclosed by the '196 Patent is not inventive in light of prior
disclosures and the common general knowledge;
·
ADIR
was not the first inventor of the subject matter of the patent;
·
the
promised utility of the invention fails; and
·
most
of the claimed compounds had not been made and tested as of the application
date in Canada and there
was no sound basis to predict that they could be made and would have the
promised utility.
[6]
Apotex
further argues that the manner in which ADIR obtained the '196 Patent should
disentitle it to enforce that monopoly, even if otherwise valid. The '196 Patent
was ultimately obtained by ADIR only after conflict proceedings which were
ultimately resolved by a court-endorsed agreement among ADIR and two other
parties. As a result of the manner in which the patent was obtained, Apotex
claims damages pursuant to s. 36 of the Competition Act, R.S.C. 1985, c.
C-34 (the Competition
Act),
in respect of an alleged breach of s. 45 of the Competition Act.
[7]
Finally,
Apotex argues, even if claim 5 – as it stands today – of the '196 Patent is
otherwise valid, the proper scope of the monopoly granted thereby is not that
defined in the twice-corrected claim 5. Apotex argues that the twice-corrected
claim 5 is invalid because it is the result of the two certificates of
correction which were not obtained in accordance with s. 8 of the Patent Act,
R.S.C. 1985, c. P-4.
C. Overview of Conclusion
[8]
For
the reasons expressed in these Reasons for Judgment, and in very general terms,
my overall conclusions are that:
·
only
ADIR, as patentee, and Servier Canada, who claims under the patentee, have
standing to bring this action;
·
the
'196 Patent is valid and infringed by Apotex through the manufacture, in Canada, of the 2 mg,
4 mg and 8 mg strengths and the combination tablets and through the manufacture
and sale in Canada of the 8 mg
tablets;
·
Apotex
has not induced others to breach the '196 Patent; and
·
Apotex
fails in its claim for damages under the Competition Act.
D. Applicable Law
[9]
The
application leading to the patent in this proceeding was filed in Canada on October 1, 1981. According
to s. 78.1-78.2 of the present Patent Act, patent applications filed
before October 1, 1989, are to be dealt with under the provisions of the Patent
Act as they read immediately before that date. Accordingly, references in
these reasons to the Patent Act (referred to as the Patent Act or
the Act) will, unless specifically noted otherwise, be to the Act
as it stood immediately prior to October 1, 1989.
E. Table of Contents
[10]
For
assistance to the reader, I have set out a table of contents of these reasons
for judgment.
I.
Introduction
................................................................................... [1
] to [10]
A.
Overview ....................................................................................... [1]
B.
Basis of
the Claim and Counterclaim ............................................... [3]
C.
Overview
of Conclusions................................................................. [8]
D.
Applicable
Law............................................................................... [9]
E.
Table of
Contents ......................................................................... [10]
II.
Witnesses...................................................................................... [11]
to [38]
A.
Factual
Witnesses ........................................................................ [12]
B.
Expert
Witnesses.......................................................................... [21]
(1) Servier Expert Witnesses .................................................. [22]
(2) Apotex Expert Witnesses ................................................. [29]
(3) General
Comments on the Expert Witnesses...................... [35]
III.
Background................................................................................... [39]
to [66] .......................................................................................................................
A.
Background
to ACE Inhibitors, including Perindopril...................... [39]
(1) ACE Inhibitors Generally................................................... [39]
(2) History of ACE Inhibitors.................................................. [43]
(3) Schering’s Work on ACE
Inhibitors ................................. [50]
(4) ADIR’s Development of Perindopril.................................. [56]
(5) Conflict
Proceedings ........................................................ [63]
IV.
Standing ....................................................................................... [67]
to [95]
A.
Overview...................................................................................... [67]
B.
Statutory Provision
....................................................................... [69]
C.
Jurisprudence
and Principles ......................................................... [70]
D.
The Evidence
before the Court ..................................................... [78]
E.
Conclusion
................................................................................... [95]
V.
Claims
Construction .................................................................... [96]
to [133]
A.
The Law of
Claims Construction ................................................... [96]
B.
Application
of Principles to the Case at Bar ................................ [101]
(1) Person Skilled in the Art ................................................. [101]
(2) Construction of the Claims at
Issue ................................. [105]
(a) Description......................................................... [108]
(b) The Claims at
Issue............................................. [120]
(3) Apotex’s Argument that there
is but one “Invention” ........ [125]
VI.
Infringement
.............................................................................. [134]
to [173]
A.
Overview ................................................................................... [134]
B.
Direct
Infringement ..................................................................... [135]
C.
Inducement................................................................................. [139]
(1) The Test for Inducement.................................................. [141]
(2) Was the Act of Infringement
completed by the
Direct Infringer?
............................................................. [142]
D.
Exemptions
from Liability ........................................................... [161]
(1) Statutory Provisions ....................................................... [161]
(2) Experimental and Regulatory Use
................................... [162]
(3) Other Exemptions .......................................................... [169]
(4) Conclusion on Exemptions
.............................................. [172]
VII.
Claim 5
Corrections................................................................... [174]
to [222]
A.
Overview ................................................................................... [174]
B.
Background
to the Issue ............................................................. [177]
C.
Statutory
Authority of the Commissioner ..................................... [186]
D.
Must
Apotex Proceed by way of Judicial Review?....................... [187]
E.
Standard
of Review of a Commissioner’s Decision ...................... [199]
F.
Was either
of the Decisions of the Commissioner
Unreasonable? ........................................................................... [210]
G.
Conclusion
on this Issue.............................................................. [222]
VIII.
Obviousness
............................................................................ [223]
to [266]
A.
The Law..................................................................................... [223]
B.
The State
of the Art..................................................................... [229]
C.
Position
of the Parties ................................................................. [241]
D.
Application
of the Law to Facts .................................................. [244]
(1) Obviousness of the 6,5
bicyclic ring................................. [244]
(a) The Invention ..................................................... [248]
(b) The Skilled Person
............................................. [251]
(c) Body of Knowledge ........................................... [252]
(d) Climate in the Field
............................................. [253]
(e) Motivation ......................................................... [257]
(f) Time and Effort .................................................. [260]
(g) Commercial Success........................................... [261]
(h) Meritorious
Awards............................................ [262]
(2) Obviousness
of linear alkyl side chain .............................. [264]
E. Conclusion
................................................................................. [266]
IX.
Utility ....................................................................................... [267]
to [343]
A.
Overview ................................................................................... [267]
B.
Promise of
the Patent ................................................................. [273]
(1) Position of Apotex ......................................................... [274]
(2) Position of Servier .......................................................... [278]
(3) Analysis ......................................................................... [281]
C. The
1992 Vincent Article ........................................................... [295]
(1) The
Context of the 1992 Vincent Article.......................... [296]
(2) Table
I in the 1992 Vincent Article.................................. [301]
(3) Dr. Laubie’s
Admission .................................................. [304]
(4) The
Purpose of the 1992 Vincent Article......................... [311]
(5) The
Underlying Data ...................................................... [314]
(6) Dr. Vincent’s
Testimony ................................................. [317]
(7) Conclusion
in Respect of the 1992 Vincent Paper ........... [319]
D. Dr. Gavras’s
Testing Report ....................................................... [320]
(1) Description
of the Testing ............................................... [321]
(2) Apotex’s
Argument ........................................................ [329]
(3) Apotex’s
Underlying Premise.......................................... [330]
(4) Problems
with the Testing Methodology .......................... [342]
(5) Conclusion
on the Gavras Report ................................... [343]
E. Conclusion
on Utility.................................................................. [343]]
X.
Sound
Prediction....................................................................... [344]
to [380]
A.
Overview.................................................................................... [344]
B.
Prediction
of Utility of the (R,R,R) Compounds ........................... [352]
C.
The “Trans”
Compounds ............................................................ [369]
D.
Conclusion
................................................................................. [380]
XI.
Inventorship............................................................................... [381]
to [456]
A.
Overview.................................................................................... [381]
B.
Relevant
Statutory Framework under the Patent Act .................. [385]
C.
Interpretation
of s. 61(1)(b) ........................................................ [393]
(1) General Comments and Position
of Parties ...................... [393]
(2) The Context of Conflict Proceedings
............................... [399]
(3) Intent of Parliament ........................................................ [404]
(4) The Object of the Patent
Act ......................................... [411]
(5) Relevant Jurisprudence ................................................... [417]
(6) Conclusion on this Issue ................................................. [426]
D. Was
there a Missed Conflict? ..................................................... [428]
E. Who
was the First Inventor of the '196 Patent? ........................... [440]
F. Summary
of Inventorship Issue ................................................... [456]
XII.
Competition
Act Claim............................................................. [457]
to [494]
A.
Overview ................................................................................... [457]
B.
Relevant
Statutory Provisions ..................................................... [460]
C.
The
Existence of the Patent as a Bar ........................................... [463]
D.
Limitation
Period ........................................................................ [479]
E.
Conclusion
................................................................................. [491]
XIII.
Remedies.................................................................................. [495]
to [517]
A.
Overview ................................................................................... [495]
B.
The
Bifurcation Order................................................................. [497]
C.
Permanent
Injunction .................................................................. [498]
D.
Damages or
Profits ..................................................................... [502]
E.
Interest....................................................................................... [512]
F.
Punitive
or Exemplary Damages................................................... [514]
G.
Conclusion
................................................................................ [516]
XIV.
Overall
Conclusion.................................................................................. [518]
II. Witnesses
[11]
During
30 days of testimony in this trial, a number of witnesses – both factual and
expert – were heard by the Court. In the following paragraphs, I will provide a
brief overview of the witnesses and the areas to which they testified. Further
particulars of the evidence will be provided as necessary throughout these
reasons.
A. Factual Witnesses
[12]
Servier
presented a number of employees of the Servier group of companies (referred to
as Groupe Servier) as fact witnesses:
·
Mr.
Michael Sumpter is the chief
executive officer of Servier Canada. He spoke to the operations of Servier
Canada and its relationship with the Groupe Servier entities. Mr. Sumpter also
appeared later in the proceedings to discuss marketing strategies of Servier
Canada.
·
Dr. Sylvie
Jaguelin, who now holds the title of « directeur des brevets » in Les
Laboratoires Servier (LLS), joined Groupe Servier in 1985. She spoke to her
role during the conflict proceedings, the settlement discussions and the
subsequent corrections to claim 5 of the '196 Patent.
·
Dr. Yves
Langourieux is currently the managing director of Servier International and is
in charge of Groupe Servier’s operations for a geographic sector covering North
America, Northern Europe, Central Europe and Eastern Europe. He has been with
Groupe Servier since 1977. In addition to being a trial witness, he was discovered
by Apotex during the pre-trial process. He spoke to the corporate structure of
Groupe Servier.
·
Dr.
Guillaume de Nanteuil is the director of the division of medicinal
chemistry for Groupe Servier. He presented, as business records, and explained
a number of the laboratory and working notes related to the development of
perindopril. Dr. de Nanteuil was also a discovery witness.
[13]
Servier
also produced Dr. Michel Vincent, who is one of the named inventors of the '196 Patent. Dr. Vincent is now
retired from Groupe Servier. He testified on his role in the invention,
including the laboratory work leading to the application of the patent and his
continuing laboratory work post-application.
[14]
Apotex
presented a number of witnesses who spoke to the development by Apotex of its perindopril
generic compounds, the formulation steps in making perindopril and the
experimental testing and use of perindopril. They were: Mr. Stephen Horne,
vice-president of research and development at Pharmachem; Mr. Donald John
Barber, formulation manager of Apotex Inc.; Mr. John Leslie Hems, director
of regulatory affairs for Apotex Inc.; and, Mr. Lance Lovelock, vice-president of
quality for Apotex Inc.
[15]
A number
of Apotex officers or employees testified on the subject of Apotex’s corporate
structure and operations:
·
Dr.
Bernard Sherman is the founder of Apotex. He spoke to a number of topics
including: Apotex’s product development process; the role of affiliated
international companies; Apotex’s production facilities in India; and, markets for perindopril and ACE
inhibitors.
·
Mr. Colin
Darroch is the managing director of Apotex U.K. Ltd. (Apotex UK). He described the contractual
arrangements in place with Apotex Inc. for the selling of perindopril in the United Kingdom.
·
Mr. Roger
Millichamp is the managing director of Apotex Pty Ltd (previously GenRx Pty
Ltd. and referred to as GenRx). He described the arrangements in place with
Apotex Inc. for the selling of perindopril in Australia, the regulatory process in Australia
(including the approvals necessary for the production of perindopril in Apotex’s
India facilities) and Australian
litigation involving GenRx and Servier.
·
Mr. Gordon
Fahner is the vice-president finance for Apotex Inc. He was a very helpful and
informative witness on the global operations of Apotex Inc. and its affiliates,
from a financial perspective. He also provided evidence on the shipping
transactions involved in international sales to affiliates.
[16]
Under
subpoena, Mr. J. Nelson Landry appeared as an Apotex fact witness. Mr. Landry,
now of counsel to Ogilvy Renault, was the lawyer of record and patent agent for
Servier during the conflict proceedings. He spoke to two related issues: (a) the
translation of claim 5 from English to French for purposes of the '196 Patent; and (b) the two
corrections made to claim 5 in the '196 Patent. The subpoena for Mr. Landry was
the subject of a motion to this Court; that motion was dealt with in Laboratoires
Servier v. Apotex Inc., 2008 FC 321.
[17]
Dr.
Elizabeth Smith was a fact witness who appeared in Newark, New Jersey, under Commission of this Court, made
upon application by Apotex. Dr. Smith, who was and is an employee of Schering
Corporation (Schering), is one of the named inventors of Canadian Patent No. 1,341,206
(the '206 Patent). The '206 Patent was issued to Schering as a result of the
conflict proceedings and a consent order of Justice Nadon (discussed later in
these reasons). Her testimony dealt with her involvement with the development
of the Schering claims that became part of the conflict proceedings and her
role in those proceedings.
[18]
Under
subpoena, Mr. Joel Patrick Roche appeared as an Apotex fact witness. He was
counsel to the plaintiff, Sheila Wilson, in a class action commenced before the
Ontario Superior Court of Justice in Court File No. 98-CV-158832. The named
defendants in that action included a number of entities who are part of Groupe
Servier.
[19]
For
completeness, I refer to two Apotex fact witnesses whose testimony was not
referred to during final argument. Dr. Edward Lee-Ruff, a professor at York University, and Dr. Gabriella Mladenova,
a post-doctoral student at York
University,
conducted certain experiments, at the request of counsel for Apotex. The
experiments were intended to recreate the results of the '196 Patent.
[20]
Another
Apotex witness whose testimony was not explicitly referenced in final argument
was Ms. Nadia Corelli-Rennie, the supervisor of special projects at Pharmachem.
She produced the samples of compounds that were sent to Dr. Gavras, an Apotex
expert, for testing.
B. Expert Witnesses
[21]
This being
a patent infringement action with counterclaims of invalidity and Competition
Act offences, experts produced by both Apotex and Servier were very helpful
to the Court. For purposes of this introductory section of the reasons, I will
provide a very brief description of the witnesses’ education and experience and
the areas for which this Court found them to be qualified.
(1) Servier Expert
Witnesses
[22]
Dr. Paul
Bartlett is a professor emeritus of chemistry at the University of California, Berkeley. Dr. Bartlett was qualified by the Court
as an expert in synthetic chemistry and as a medicinal chemist. Of particular
relevance to the issues remaining at the end of the trial, he provided evidence
on the issues of claims construction, infringement, utility, sound prediction,
obviousness and inventorship.
[23]
Dr. Barry
Trost is a professor of chemistry at Stanford
University. He was accepted by the Court
as an expert in synthetic organic chemistry, including processes for making
compounds having medicinal use. Of particular relevance, Dr. Trost provided
evidence on the issues of obviousness and sound prediction.
[24]
Dr.
Christopher Cimarusti, retired from Bristol-Myers Squibb (Squibb) in 2006 after
having worked 37 years in the pharmaceutical industry, has been a consultant to
the pharmaceutical and biotech industry since 2006. He was accepted as an
expert in synthetic organic chemistry with particular knowledge and experience
in medicinal chemistry. Of note, Dr. Cimarusti worked with Drs. Ondetti and
Cushman at Squibb at the time when the Squibb scientists invented captopril,
the first ACE inhibitor. His opinions and testimony were particularly helpful
on the issues of claims construction, utility, obviousness, sound prediction and
inventorship.
[25]
Dr. Morris
Karmazyn was qualified as an expert in the area of cardiovascular pharmacology,
including the role of the renin-angiotensin system in cardiac function and the in
vivo and in vitro experimental techniques used to assess biological
activity of compounds. The main thrust of his expert evidence was directed to
the experiments performed by Dr. Gavras (see below). Thus, his testimony is
most relevant to the question of utility.
[26]
Dr. Zola
Horovitz was qualified as an expert in pharmacology with particular experience
in the areas of hypertension and ACE inhibition. Since 1994, when he retired
after 35 years at Squibb, Dr. Horovitz has been consulting, mostly to the
pharmaceutical industry. In 1967, he started up Squibb’s research program that
led to the development of captopril. He worked with Drs. Ondetti and Cushman.
In addition to commenting on the experiments performed by Dr. Gavras, and thus
the question of utility, Dr. Horovitz addressed the issues of obviousness and
sound prediction.
[27]
Dr. Aslam
Anis is a professor of health and economics at the University of British Columbia, within the faculty of
medicine. He was qualified as an expert in the field of health economics, with
particular expertise in regard to pharmaceutical markets and competition in
such markets. He assisted the Court on the issue of the alleged breach of the Competition
Act.
[28]
Dr. Iain
Cockburn was a second economist retained by Servier to address the issue of the
alleged breach of the Competition Act. He was qualified as an expert in
the field of health economics, with particular expertise in regard to
econometrics, pricing, and demand modeling in pharmaceutical markets.
(2) Apotex Expert
Witnesses
[29]
Dr.
Garland Marshall is a professor of biochemistry and molecular biophysics at Washington University. He was accepted as qualified to give
expert evidence as a medicinal chemist with expertise in the areas of
renin-angiotensin systems, cardiovascular pharmacology and hypertension and,
within those areas, particularly with respect to ACE, angiotensin I,
angiotensin II, ACE inhibitors and molecular recognition. His main areas of
testimony related to the issues in this trial of utility, sound prediction,
obviousness and inventorship.
[30]
Dr. Eugene
Thorsett is an organic synthetic chemist. In 1975, he joined Merck & Co., Inc.
(Merck) in their research laboratories in Rahway, New Jersey. Dr. Thorsett was at Merck in 1980 when
Merck first disclosed enalapril. He was accepted by the Court as qualified to
give expert testimony in respect of organic chemistry, especially organic
chemical synthesis and physical organic chemistry as it relates to drug
discovery, enzyme inhibitor design, especially proteolytic enzymes of the
zinc-metalloprotease class such as ACE. He was also accepted as an expert in
pre-clinical drug development. His main areas of testimony were on the issues
of utility, sound prediction and obviousness.
[31]
Dr. Robert
McClelland holds a Ph.D. in chemistry from the University of Toronto, where he was a tenured professor in the
chemistry department from 1980 to 2005. He was found to be qualified to provide
evidence as an expert in the area of physical organic chemistry, especially
reactive intermediates generated in nucleophilic substitution and addition
reactions, and in the area of biological and medicinal chemistry, especially
the properties of heterocyclic drugs and the syntheses of new analogs. While I
accept Dr. McClelland’s qualifications, I note that he has far less experience
working within the ACE inhibition field than the other chemistry experts. He
spoke to the issues of obviousness, utility, sound prediction and inventorship.
[32]
Dr.
Haralambos Gavras, a practising physician, is a professor of medicine at the
Boston University School of Medicine. He has been intimately involved in the treatment
of cardiovascular disease since at least 1972. Dr. Gavras was accepted by the
Court as an expert in the treatment of cardiovascular conditions including
hypertension and chronic heart failure and the use in pharmacology of ACE inhibitors.
He provided the Court with very useful background information on the
development of ACE inhibitors and the various treatments of hypertension.
However, the main purpose of his testimony was to address the question of
utility and to report on his experiments with some of the compounds included in
claim 3 of the '196
Patent.
[33]
Dr. Hans
Brunner, a medical doctor with extensive experience in cardiovascular
conditions, was called by Apotex, in reply, to respond to the criticism of Dr. Gavras’s
testing methodology. He was accepted as an expert in the treatment of
cardiovascular conditions, including hypertension and chronic heart failure,
and the use and pharmacology of ACE inhibitors.
[34]
Dr. Aidan
Hollis is an associate professor of economics at the University of Calgary. Although his Ph.D. thesis work was
unrelated to health economics, Dr. Hollis has consulted in and provided advice to
the pharmaceutical industry. He was accepted as qualified as an expert in
economics with particular expertise in industrial organization and regulatory
economics, particularly with reference to pharmaceutical markets and
competition therein. As did Drs. Anis and Cockburn, Dr. Hollis provided his
expert opinions and testimony on the question of the alleged violation of the Competition
Act. He returned after the appearances of Drs. Anis and Dr. Cockburn as
part of the reply case of Apotex.
(3) General Comments
on the Expert Witnesses
[35]
During the
course of the trial, comments were made by both sides about the strength of the
qualifications or testimony of witnesses for the other side. On the topic of
obviousness, for example, each of Apotex and Servier asserted that the other
parties’ experts were viewing the question from “hindsight”. The neutrality of
more than one witness was impugned. To the extent that I must deal with
individual criticisms as I address specific areas of the testimony, I will do
so. However, I wish to make a few overall comments.
[36]
Expert
witnesses are selected by the parties to litigation. It is obvious that a party
will not put forward an expert who disagrees with that party’s position in
litigation. It frequently happens that an expert who has appeared for a generic
company in a litigation matter will not appear as an expert for a
pharmaceutical company in the next litigation. The reverse is also true. From
this practice, however, it does not follow, in my view, that experts who
appear before the Court do so with any inherent bias. The experts that I had
the pleasure of seeing in this trial were all eminently qualified in their
fields and presented their opinions in a professional manner. That did not
prevent any of them from vigorously supporting their own opinions and providing
direct criticisms of the experts who came to contrary views.
[37]
I wish to
comment directly on the general criticisms directed to Dr. Bartlett, Dr.
Cimarusti and Dr. Trost. In final argument, counsel for Apotex asserted as
follows:
But I am going to submit to My Lady, that
if [you] consider my friends' three principal experts, Cimarusti, Bartlett and
Trost, you will find, in my submission, that they lacked objectiveness, that
they were advocates and that they constantly, constantly volunteered
information in defence of their advocated position.
Counsel then passed up a listing of transcript page references
for each of these three witnesses that, in his view, showed “Volunteering
advocacy, lack of objectiveness, as well as errors, as well as contradictions .
. .”.
[38]
I disagree
with counsel’s characterization of the evidence of these three experts. I will
acknowledge that Dr. Bartlett, in his written report, allowed himself to use
unprofessional terms in describing the evidence of experts who disagreed with
him. He did not need to do that. Further, Dr. Trost appeared, at times, to be
evading certain questions during cross-examination; I eventually had to step in
to speak to him. For neither witness do I find the problems so significant that
I should discount their opinions. I also suspect that, if counsel for Servier
had conducted the same exercise of finding instances of advocacy, lack of
objectiveness, errors and contradictions for the Apotex experts, their lists
would have been just as long.
III. Background
A. Background to ACE Inhibitors
including Perindopril
(1) ACE
Inhibitors Generally
[39]
The
experts did not disagree on the organic chemistry and biochemistry applicable
to these proceedings. What follows is a very brief outline of that evidence.
[40]
Amino
acids are the basic building blocks from which living matter is constructed. By
combining various numbers and groups of these acids in various configurations,
larger structures known as peptides are formed. The bonds between these acids
are known as peptide bonds. Still larger groups known as proteins may be formed
from such acids.
[41]
Enzymes
are organisms present in the body that facilitate the conversion of materials
such as proteins and peptides into other material. The enzyme that is of
interest in this case is the angiotensisn-converting enzyme (ACE). ACE can bind
with a compound known as angiotensin I to produce angiotensin II. This
conversion increases blood pressure by constricting blood vessels.
[42]
The
drugs discussed in this case, including perindopril, enalapril, captopril,
lisinopril and quinapril are all “ACE inhibitors”. ACE inhibitors, such as
perindopril, bind with ACE to prevent the conversion of angiotensin I to
angiotensin II; the result is lower blood pressure.
(2) History
of ACE Inhibitors
[43]
A
number of the experts in this trial were present at various critical times
during the history of ACE inhibitors and provided very useful evidence. A
number of the articles produced in evidence were helpful. I summarize this
evidence in the following paragraphs.
[44]
Dr. Horovitz,
who worked at Squibb from 1967, provided an excellent summary in his report of
the early history of ACE inhibitors. The story begins in the late 1960s, when
scientists began studying the venom of the Bothrops jararaca, an
indigenous Brazilian snake, because it was known to reduce blood pressure.
Scientists at Squibb isolated the active compound and synthesized a compound
known as teprotide, a peptide. Teprotide was first tested on humans in 1973 and
proved to be an effective anti-hypertensive agent in humans. However, teprotide
was only effective through intravenous administration.
[45]
The
transformation of teprotide into an orally-effective ACE inhibitor occurred as
a result of work done by a team of scientists working for Squibb, including Drs. Miguel
Ondetti and David Cushman. Although the precise structure of ACE was not known
at the time, the Squibb scientists were able to make some educated assumptions
about a working model in the human body for ACE, relying upon what was known
about another enzyme known as carboxypeptidase A. According to Dr. Horovitz,
one of the first steps taken by the Squibb scientists was to include a carboxyl
group (HO2C) at the terminal of the teprotide molecule based on
prior art in relation to carboxypeptidase A. They then added a CH2
to the backbone. Next, the scientists introduced a sulfhydryl (SH) group in the terminal position instead of
the carboxyl group. This was captopril, the first small molecule, orally-effective,
ACE inhibitor. As stated by Dr. Horovitz, “After almost ten years of work
at Squibb, and the testing of thousands of compounds, Squibb finally had a drug
that could be used for the treatment of hypertension and was orally active”.
The structure of captopril is set out below:
Captopril
[46]
While
captopril was a tremendous innovation, the presence of the sulphur atom was
responsible for serious side effects in some people. One of the experts, Dr. Thorsett,
was at Merck from 1975 through the next exciting years and provided his story
of what happened next.
[47]
In
response to the problem of the side effects, Merck scientists (including Dr. Patchett)
focussed on removing the sulfhydryl (SH) group (also referred to as a thiol
group or thiol moiety). The result was enalapril. According to Dr. Marshall,
who provided expert testimony on this point, enalapril “retained the Ala-Pro
C-terminal unit while replacing the sufhydryl methylene group (HSCH2-)
in captopril with an N-carboxyalkyl moiety”. While enalapril lacked the sulphur
moiety present in captopril, what remained consistent from captopril to
enalapril was the presence of the proline unit or five-membered ring structure
on the right side of the compound. This new ACE inhibitor had three
stereocentres, all of which were in the (S) configuration. As of 1980, when the
results of the scientists’ work was confirmed, the mood at Merck was described
by Dr. Thorsett as “electric”. The structure of enalapril is set out
below:
Enalapril
[48]
On
June 18, 1980, at a medicinal chemistry conference in Troy, New York (the Troy
conference), Dr. Patchett presented Merck’s new ACE inhibitor. The disclosure
made by Merck at the Troy conference was widely anticipated by the ACE inhibitor
community. Scientists at a number of pharmaceutical companies had been carrying
out extensive research to develop new ACE inhibitor drugs. Dr. Vincent of
Servier and Dr. Smith of Schering were two such scientists. Both of them
had carried out some preliminary work that, they hoped, could build on or
incorporate the Merck disclosure.
[49]
As
we will see in greater detail later in these reasons, both Dr. Vincent and
Dr. Smith carried out work that led to the molecules that resulted in
ramipril (Dr. Smith) and perindopril (Dr. Vincent).
(3) Schering’s
Work on ACE Inhibitors
[50]
Although
more will be said further on in this decision about the development work done
by Schering during the late 1970s and early 1980s, it is helpful at this point
to have an overview of the nature of the research work that was being done by
Schering leading up to the application for what would become the '206 Patent and the compound
ramipril. The evidence of Dr. Elizabeth Smith, both in oral testimony and
an affidavit, was helpful.
[51]
Prior
to the Merck announcement at the Troy conference in June of
1980, scientists at Schering, including Dr. Smith, were trying to develop
an anti-hypertensive compound that would be more effective than captopril.
While Merck’s work involved the removal of the thiol group, Schering’s work
focussed on a different aspect of the captopril molecule - that is, the proline
unit. By late 1979 or early 1980, Dr. Smith and her colleagues had found
that the replacement of the proline in captopril with certain fused ring or
spirocyclic moieties resulted in active compounds.
[52]
As
a result of the Merck disclosure at the Troy conference, the Schering
scientists decided to try to create compounds based, in part, upon the Merck
work on the thiol end of the molecule, but also using the fused ring moieties
that Schering had already been working on in relation to the proline end of the
molecule. That is, Schering’s scientists decided to try using various bicyclic
ring structures in place of the proline on an enalapril-type molecule. This
proposed work was documented in an invention disclosure report dated June 20,
1980. According to Dr. Smith, this report shows the conception of the
generalized structure of the compounds in what ultimately became the '206 Patent.
[53]
Over
the next few months, Dr. Smith and the other scientists at Schering made
several of these compounds using different bicyclic ring structures. Initial
testing of these compounds indicated that they demonstrated ACE inhibition
activity.
[54]
Throughout
this time, Dr. Smith and her colleagues continued to create and test
additional compounds using the bicyclic ring structure coupled with Merck’s
enalapril-type “backbone”. One of the compounds created during this period, SCH
31335, contained molecules having a perhydroindole ring structure at the proline end.
Preliminary pharmacological testing revealed that SCH 31335 was active in
vitro and in vivo.
[55]
On
October
20, 1981,
Schering applied for patent protection in Canada for its work
in this area. The Canadian application ultimately resulted in the issuance of
the '206 patent in
March of 2001. The '206 Patent
covers the molecule known as ramipril, a very successful commercialized
compound. The structure of ramipril is set out below:
(4) ADIR’s
Development of Perindopril
[56]
Dr.
Vincent provided the Court with the history of how perindopril was developed
within Groupe Servier. He described how Servier’s work in ACE inhibitors began
in 1977 after captopril was invented. Dr. Vincent’s work with ACE inhibitors
began in 1978. He focused on the proline portion of captopril, hypothesizing
that proline could be replaced by a larger substituent.
[57]
Servier
kept a record of the synthesis and analysis of compounds it created during this
time in documents known as “S-sheets”; S-sheets are themselves classified by
series. These were placed into evidence through another witness, Dr. de
Nanteuil.
[58]
Dr.
Vincent’s first attempt at a better captopril-like molecule began with the
V-812 series. His work with the V-812 series continued through the winter of
1979/1980. By February 27, 1980, the scientists had synthesized S-8935, the
first compound that contained the perhydroindole carboxylic acid in place of proline.
The perhydroindole ring structure has, as its foundation, a 6,5 bicyclic ring
with three chiral centres – two on the bridgehead (positions 3a and 7a) and one
at the C2 position, where a carboxylic
acid moiety is attached (-COOH). Testing results showed the compound to be very
active. S-8935-1 was a turning point in Dr. Vincent’s research. It drove home
to Dr. Vincent the «grande
importance» of
chirality to the compound he was synthesizing and focused his future efforts on
perhydroindole.
[59]
Meanwhile,
scientific progress outside of Servier marched steadily forward. Merck’s
disclosure of enalapril, at the Troy conference, had an immediate impact upon
Dr. Vincent who returned to his laboratory and began a program to take into
account the results disclosed at the conference; the V-827 series was born.
[60]
Beginning
in August 1980 Dr. Vincent synthesized and had tested a number of compounds as
part of this series. Two of those compounds, S-9178-1 and S-9179-1, synthesized
on August 26, 1980, combined a bicyclic proline substitution with the
Merck backbone and a side chain ending with a methyl.
[61]
After a
number of other compounds were synthesized, with varying results, compound S‑9332-1
was synthesized and sent for testing on December 4, 1980. Containing a
variation of the Merck backbone with a « dicyclopropylméthyle » side chain,
testing results of this compound were average. Shortly thereafter, S-9352-1 was
synthesized and sent for testing on December 22, 1980. For Dr. Vincent,
S-9352-1, « un Ether éthylique », opened the door for him to use a side chain
between methyl and phenethyl.
[62]
The first
significant compound produced in 1981, S-9490-1, dated, April 6, 1981, combined
perhydroindole with the Merck backbone but used a propyl on the side chain.
When tested in vivo the results were excellent - better than captopril
and enalapril. Reacting to this breakthrough, Dr. Vincent told Dr. Laubie,
another of the named inventors of the '196 Patent, « Voilà un produit que ça
vaudrait le coup de le commercialiser ». Work on the compound, which was not
believed to be a pure stereoisomer, did not end there. In the weeks that
followed S-9490-1 was sent for analysis to be studied more closely. On May 22,
1981, chromotogram analysis showed the compound was in fact an all-S isomer. On
September 1, 1981, a maleate form of the compound (S-9490-2) was sent for
testing, without great success; the compound was simply not stable enough to be
commercialisable. However, that same day S-9490-3, an all-S
salt version, was tested. Perindopril had been successfully synthesized and
tested.
(5) Conflict
Proceedings
[63]
The
process to patent Servier’s work began, in Canada, on October 1, 1981, when ADIR filed
Application 387,093 (the '093 Application). In separate applications, other
claimants also applied for the issuance of patents covering certain compounds. Of
specific interest, Schering filed Patent Application 388,336 (the '336
Application) and Hoechst Aktiengesellschaft (predecessor to Sanofi-Aventis Deutschland
GmbH and referred to as Hoechst) filed Patent Application 384,787 (the '787
Application). As provided for in the Patent Act, certain of the claims
in the '093 Application were placed into conflict with claims in the other
applications. In table form, the specifics of the applications and the claims
in conflict are as follows:
Applicant
|
Application
No.
|
Date
of Application
|
Claims
in Conflict
|
ADIR
|
the
'093 Application
|
October
1, 1981
|
C19,
C25 to C28, C33 and C34, C39 and C40
|
Schering
|
the
'336 Application
|
October
20, 1981
|
C19,
C39 and C40
|
Hoechst
|
the
'787 Application
|
August
28, 1981
|
C19,
C25 to C28
|
Hoechst
|
418,453
(the '453 Application)
|
December
23, 1982
|
C33
and C34
|
[64]
In four
decisions dated August
8, 1996, the
Commissioner of Patents (the Commissioner) made determinations related to inventorship,
pursuant to s. 43(7) of the Patent Act. In table form, the conclusions
of the Commissioner were as follows:
Claim
No.
|
First
Invention Date
|
Claim
Awarded To
|
Claims
Refused To
|
C19
|
August
8, 1980
|
Schering
('336 App’n)
|
ADIR
('093 App’n), Hoechst ('787 App’n)
|
C25,
C27
|
May
8, 1981
|
Hoechst
('787 App’n)
|
ADIR
('093 App’n)
|
C26,
C28
|
October
2, 1980
|
ADIR
('093 App’n)
|
Hoechst
('787 App’n)
|
C33
|
October
8, 1981
|
Hoechst
('453 App’n)
|
ADIR
('093 App’n)
|
C34
|
December
29, 1981
|
Hoechst
('453 App’n)
|
ADIR
('093 App’n)
|
C39,
C40
|
August
8, 1980
|
Schering
('336 App’n)
|
ADIR
('093 App’n)
|
[65]
In
accordance with s. 43(8) of the Patent Act, six proceedings were then
commenced by way of actions in the Federal Court for the determination of the
parties’ respective rights in relation to the subject matter of the conflict
claims. All of the proceedings were consolidated into Court File No. T-228-97
pursuant to the Order of Justice Joyal dated May 27, 1997 (the Joyal Order).
This Order provided that each of the parties were entitled to contest any
aspect of any decision of the Commissioner regarding the award of any claim
declared to be in conflict between and amongst the parties irrespective of
whether the party was directly involved in conflict proceedings in the Patent
Office with respect to that particular claim.
[66]
Subsequent
to completion of discoveries, ADIR, Hoechst and Schering signed Minutes of
Settlement wherein they agreed to settle the consolidated action. Shortly
thereafter, on December 12, 2000, an Order on consent was issued by
Justice Nadon (the Nadon Order) which provided for an allocation of the claims
among the three parties. More specifically, it provided that, based on the '093
Application, ADIR was entitled to the issuance of a patent restricted to the
claims in Appendix A of the Minutes of Settlement. Ultimately, the result of
the claims awarded to ADIR was the '196 Patent.
IV. Standing
A. Overview
[67]
Apotex
challenges the standing of all but two of the Plaintiffs, ADIR and Servier
Canada, to bring this action. ADIR is the named owner of the '196 Patent and
Servier Canada exploits the patent rights in Canada. All of the
other Plaintiffs, namely LLS, Oril Industries (Oril), Servier Laboratories
(Australia) Pty. Ltd. (Servier Australia) and Servier Laboratories Limited
(Servier UK) (collectively, the non-ADIR Foreign Plaintiffs) do not, in Apotex’s
submission, “work” the '196 Patent in Canada. Apotex submits that the non-ADIR
Foreign Plaintiffs have been joined in this action in an attempt to recover for
marketing activities in foreign jurisdictions where corresponding patents to
the '196 Patent have expired.
[68]
In
turn, Servier asserts that each of the non-ADIR Foreign Plaintiffs holds an
implied licence permitting each of them to “work” the '196 Patent and,
therefore, meets the requirements for standing to bring this action, as
described in s. 55(1) of the Patent Act.
B. Statutory Provision
[69]
The
source of the ability of the non-ADIR Foreign Plaintiffs to claim damages is
found in s. 55(1) of the Patent Act. That provision of the Patent
Act provides as follows:
55.(1)
Any person who infringes a patent is liable to the patentee and to all
persons claiming under him for all damages sustained by the patentee or
by any person, by reason of the infringement. [Emphasis added.]
|
55.(1)
Quiconque viole un brevet responsable, envers le breveté et envers toute
personne se réclamant du breveté, des tous dommages-intérêts que cette
violation a fait subir au breveté ou à cette autre personne. [Non souligné
dans l'original.]
|
C. Jurisprudence and Principles
[70]
The
test for who qualifies as a person claiming under a patentee is not simply
whether the patentee has consented to the person being joined as a plaintiff in
an action; nor is it enough to demonstrate that two parties are related. In
each case, the facts must demonstrate a credible and legally sufficient basis
for claiming under a patentee (Jay-Lor International Inc. v. Penta Farm
Systems Ltd. (2007), 59 C.P.R. (4th) 228 at paras. 31, 36 (F.C.) [Jay-Lor]).
[71]
In
Signalisation de Montréal Inc. v. Services de Béton Universels Ltée (1992),
46 C.P.R. (3d) 199 at 210-211 (F.C.A.), the Federal Court of Appeal held that:
… a person “claiming under” the patentee
is a person who derives his rights to use the patented intention, at whatever
degree, from the patentee. The right to use an invention is one the monopoly to
which is conferred by a patent. When a breach of that right is asserted by a
person who can trace his title in a direct line back to the patentee that
person is “claiming under” the patentee. It matters not by what technical means
the acquisition of the right to use may have taken place. It may be a
straightforward assignment or a licence. It may, as I have indicated, be a sale
of an article embodying the intention. It may also be a lease thereof. What
matters is that the claimant asserts a right in the monopoly and that the
source of that right may be traced back to the patentee.
[72]
More
recently, in Apotex Inc. v. Wellcome Foundation Ltd. (1998), 79 C.P.R.
(3d) 193 (F.C.T.D.), rev’d on other grounds (2000), 10 C.P.R. (4th)
65 (F.C.A.), rev’d on other grounds, [2002] 4 S.C.R. 153 [Wellcome (T.D.)],
the court considered the relationship between two related companies who alleged
infringement of a patent and provided some helpful analysis on the issue of the
right to assert rights under s. 55(1) of the Patent Act. In that case,
the patentee was Wellcome Foundation Ltd. (Wellcome). Glaxo Wellcome Inc. (GWI)
manufactured, distributed and sold the patented product in Canada and claimed
that it was entitled to bring an action for infringement because it held an
implied exclusive licence from Wellcome to import, manufacture, use and sell
the invention described in the patent. Although no written licence was produced
to establish GWI as a licensee, GWI maintained that the licence was implied.
[73]
The
plaintiffs in Wellcome (T.D.) asserted that GWI failed to meet its onus
to establish that it had an entitlement to sue under s. 55(1) of the Patent
Act. Justice Wetston examined the evidence on the operational practices of
GWI and Wellcome, both of whom were under the ownership, common care and
control of Glaxo Wellcome plc.:
Mr. Jenkins testified that, as part of
the general corporate policy regarding licensing, the AZT patent was licensed
by the Wellcome Foundation Ltd. to what was then Burroughs Wellcome Inc. He
stated that within the corporation licenses were rarely written and were
generally implied, except where the subsidiary was not wholly owned. He stated
that generally the policy was that a subsidiary was given an exclusive license
by implication. He further testified that this is the situation as it remains
today.
Mr. Jenkins also testified that there are
no corporate documents which confirm this corporate policy of granting
licenses. Furthermore, he stated that no discussions preceeded the grant of an
implied license nor were any steps taken before the license was to become
effective. Indeed it was argued that before the merger, both corporate groups
had the same practice with respect to using implied licenses, and if there had
been any concerns about GWI not being a subsidiary, the license would have been
reduced to writing (Wellcome (T.D.), above at paras. 365-366).
[74]
Based
upon his review of the facts of the case, Justice Wetston concluded, at paragraph 367,
that “GWI is indeed able to trace an interest under the patent to the patentee
in virtue of the corporate practices with respect to implied licensing within
the group of companies under the care and control of Glaxo Wellcome plc”.
[75]
On
appeal, this particular conclusion of Justice Wetston was upheld. In his
judgment, Justice Rothstein commented as follows:
It is perhaps not uncalled for to observe
that this is not a case in which the alleged licensee is alone in advancing its
claim for patent infringement. Here, the patentee is also before the Court as a
co‑plaintiff supporting the claim of GWI. It is difficult to conceive of
what more is necessary to prove the existence of a licence than to have the
licensor and licensee both attesting to the validity of the licence. Where both
the patentee and the person claiming under the patentee are before the Court,
are affiliated as being owned by the same parent and have an identity of
interest in the litigation -- with the patentee supporting the person claiming
under the patentee -- it is, to say the least, surprising that technical
questions of status to sue would be advanced as a defence to infringement (Apotex
Inc. v. Wellcome Foundation Ltd. (2000), 10 C.P.R. (4th) 65
(F.C.A.) aff’d [2002] 4 S.C.R. 153 at para. 99 [Wellcome (C.A.)]).
[76]
In
Jay-Lor, above, this Court found that there was an implied licence
between Jay-Lor International Inc., the owner of the patent in issue and
Jay-Lor Fabricating Inc., the company who manufactured and sold the patented
machinery in Canada and the United
States.
The key facts supporting that conclusion were that: (a) both companies were
under the same control of one individual; (b) no other licence had been granted
either explicitly or by implication to any third party; and (c) the two
companies had structured their affairs in a manner consistent with a
licensee-licensor relationship (Jay-Lor, above at para. 37).
[77]
In
sum, the Canadian jurisprudence has provided a broad interpretation of “persons
claiming under” the patentee. The ability of a party to claim under a patentee
does not necessarily require the existence of an express licence. Where no
express licence exists, each case will be determined on its facts to determine
whether an implied licence or other right exists that gives rise to a claim “under
the patentee”.
D. The Evidence before the Court
[78]
In
light of these principles, I turn to the evidence before the Court.
[79]
I
begin by reviewing the evidence about the relationship between the patentee and
each of the non-ADIR Foreign Plaintiffs. Mr. Yves Langourieux, who is the
managing director of Servier International, testified on the relevant corporate
relationships. Mr. Langourieux’s various positions with the Servier group of
companies are indicative of the close corporate relationships; in addition to
being the managing director of Servier International, he is the president of
Servier Canada, on the board of directors of Servier U.K. and Servier
Australia. Servier International is owned 100% by LLS. Mr. Langourieux reports
to Dr. John Phillip Seta, the vice-president of operations for the Servier
group of companies. Dr. Seta reports directly to Dr. Jacques-Paul
Servier, the founder, president and sole owner of what is referred to as Groupe
Servier. Mr. Langourieux produced into evidence an organizational chart of
Groupe Servier. The chart supports Mr. Langourieux’s oral testimony of the
inter-corporate relationships and demonstrates that each of the Plaintiffs
(including ADIR, Servier Canada and the non-ADIR Foreign Plaintiffs) can trace
100% of their ownership back to Dr. Servier himself. I am satisfied that
each of the Plaintiffs – including the non-ADIR Foreign Plaintiffs – is part of
a closely-held family-owned group of companies. Further, based on the testimony
of Mr. Langourieux, I accept that the general policies and directions for the
Groupe Servier are set by Dr. Servier.
[80]
In
spite of the closely-held structure, I would not go so far as to refer to Groupe
Servier as a single entity, as it was described by Mr. Langourieux. The very
existence of distinct corporations within the family is direct evidence of more
than one entity. Dr. Servier has, for reasons of his own, decided that
numerous separate corporations should be created that fulfil various separate
functions. Servier Canada, for example, operates in Canada. In Mr.
Langourieux’s words:
The role of Servier Canada is to market,
to promote, market sales and distribute the Servier products on the Canadian
market. . . . For Servier Canada only.
[81]
Mr.
Langourieux confirmed that none of the non-ADIR Foreign Plaintiffs manufacture,
offer for sale or import any of the compounds claimed in the '196 Patent into Canada. He also
agreed that each local affiliate in a particular country has the focus of
promoting, marketing, and registering the product in its specific jurisdiction.
For example, Servier UK promotes, markets, sells and distributes
the medicines of Groupe Servier in the U.K. market only.
I have seen no evidence that Servier Canada sells perindopril in the United
Kingdom.
For that purpose, Servier UK exists. Servier Australia promotes,
markets, sells and distributes the Servier products in the Australian and New Zealand markets.
Manufacturing of the active ingredient (the API) in COVERSYL is done by Oril
Industries in France. Thus the
evidence shows that the affiliated companies within Groupe Servier do not
operate as a single entity; each has its own sphere of operation and its own
responsibilities within Groupe Servier. Nevertheless, the non‑ADIR
Foreign Plaintiffs may still be able to satisfy s. 55(1) of the Patent Act,
through a licence or other such arrangement.
[82]
As
noted above, the mere existence of a corporate affiliation is not conclusive
evidence of a right under s. 55(1) of the Patent Act. There must be something
more. That something more has consistently been described in the jurisprudence
as a “licence” or some other arrangement (for example, a lease, an assignment,
or a sale) that would give the affiliate the right to use the patent.
[83]
In
this case, there is no express licence by which any one of Servier Canada or
the non‑ADIR Foreign Plaintiffs is given the explicit right to use the '196
Patent. Servier contends, however, that all Groupe Servier companies hold an
implied licence to use the '196 Patent. On this basis, Servier argues that
Servier Canada and the non-ADIR Foreign Plaintiffs fall within the types of
relationships that have been held to satisfy s. 55(1) of the Patent Act
(such as in Wellcome (T.D.) and Jay-Lor, above). I turn to an
examination of the evidence to see if that assertion is supported by the
evidence.
[84]
In
my view, the facts presented to me are persuasive evidence with respect to the
existence of an implied licence to Servier Canada. As in Jay-Lor, both
ADIR and Servier Canada are under the same control. The relationship is similar
to that in Wellcome (T.D.) where the party claiming under the patentee
operates the patent in Canada. Apotex does not dispute the standing of
Servier Canada in this action.
[85]
The
situation with the non-ADIR Foreign Plaintiffs is more difficult.
[86]
In
his testimony, Mr. Langourieux described a “group policy”, whereby implicit,
unwritten licences are given “to all our operations for the purpose of running
their activities”:
Q. Okay. I would like to, for you to
explain to the Court how it is that Servier Canada has the right to use the
196, to exploit the 196 patent.
A. In fact it’s linked to the general
policy of the Servier Group, and that policy is dictated by Dr. Servier.
Servier views itself as a single world-wide enterprise that -- in which each
subsidiary, and again this is the will of Dr. Servier -- each subsidiary
has the right to use any patent of the Servier Group for commercial purposes
for its own use.
Q. And so that, for lack of a better word,
is we can call it a patent policy, if you want?
A. It is the position of Dr. Servier
regarding patent. It is a patent policy, yes.
Q. Okay. And is this patent policy
written down?
A. No, this is not written down.
Again, it’s the concept of a one single group world-wide with subsidiaries
having the rights to use, to benefit from the patent of the Servier companies
world-wide. We are a private organization, a private group that belongs to one
man, Dr. Servier. All decisions and policies come up to the top. He
makes the decision and the policies, and the subsidiaries then implement these
policies.
Q. And so therefore, what this means is
that Servier U.K. Servier U.K., for example, has access to
the patents of all the other Servier entities. Would that be correct?
A. It does. It is correct.
Q. Same thing with Servier Australia?
A. The same thing with Servier
Australia.
Q. LLS?
A. LLS.
Q. Oril Industrie?
A. Oril Industrie, and all Servier
companies.
Q. This unwritten policy, as you have
explained it or identified it, is it something that -- is it communicated to
the heads of the local subsidiaries, like Servier Canada, Servier U.K., Servier
Australia?
A. Not necessarily. This policy is
known by the senior management of the company, but in the running of their
business the CEO’s, the managing directors of the operations do not need to
have the details of their policy. Their tasks, their responsibility is to grow
the business of the operations, that is to say to ensure that our medicines are
recognized and known for their benefits by the doctors, the doctors know how
use them, how to prescribe them, and the patients, the local patients in Canada
and in Australia benefit from the benefits of our drugs.
[87]
Notwithstanding
the description of the group policy by Mr. Langourieux, I do not accept that
the facts establish the existence of an implied licence that extends to the
breadth asserted by Servier.
[88]
As
shown by the evidence, none of the non-ADIR Foreign Plaintiffs operates in Canada. In final
argument, counsel for Servier tried to counter Apotex’s arguments on the use of
the patent by the non-ADIR Foreign Plaintiffs through the following
hypothetical:
It is wholly conceivable that if Servier
Australia ran out of perindopril and Servier Canada had too much of it, that Servier
Australia would purchase perindopril from Canada, or even in Canada.
My friends' position would either prevent
that situation from happening, because Servier Australia would not have a
licence in Canada, or would make everybody stop, negotiate a sublicence under
the '196 Patent, or bring in Adir to award Servier Australia a licence under
the Canadian patent.
That is nonsensical . . . when we view
the manner in which the Servier group of companies views itself and operates.
[89]
There
are two problems with this line of reasoning. First, this argument is not based
on any evidence that this has ever happened in the history of Groupe Servier;
it is totally speculative. Secondly, it is not at all “nonsensical” to require
affiliates to enter into some type of document to reflect legal rights.
[90]
Further,
none of these Plaintiffs has ever needed a licence in respect of the '196 Patent
because none of their foreign activities relating to the manufacture, use or sale
of perindopril can constitute an infringement of the '196 Patent.
[91]
Quite
clearly, the non-ADIR Foreign Plaintiffs do not use the '196 Patent in Canada or
elsewhere. They do not need a licence from ADIR in respect of that patent. It
is a stretch to say that the non-ADIR Foreign Plaintiffs are parties to an
implied licence for the '196 Patent when no such licence is required.
[92]
Additional
support for a conclusion that no implied licence exists comes from an earlier
Ontario Superior Court action to which some of the Groupe Servier companies
were named. Specifically, in the 1970s and 1980s, Servier, as it had done
worldwide, marketed in Canada diet drugs known as Ponderal (Fenfluramine)
and Redux (Dexfenfluramine). On the basis of alleged serious side effects,
Servier was exposed to product liability claims abroad and in Canada. Class
action proceedings were commenced in the Ontario Superior Court of Justice in
the name of Sheila Wilson (Court File No. 98-CV-158832; referred to as the Wilson action). The
defendants to the action were named as Servier Canada, LLS, Servier Amerique,
Institut de recherches internationals Servier, Science Union et cie, Oril S.A. and Biofarma
S.A. When asked,
during discovery, to “Produce all of the licensing agreements governing relationships
between Servier Canada, and any one or all of LLS, Science Union et Cie, Oril
or Biofarma from 1978 to September 1997 relating to Ponderal or Redux”, the
response was “No such agreements exist”.
[93]
In
a subsequently filed motion, the plaintiff sought to add other related
companies (for example, Servier Monde). Various foreign Servier entities,
including LLS, Oril and ADIR, resisted jurisdiction being taken over them by a
Canadian court, on the basis, among others, that they “do not carry on business
in Canada, and as such are not subject to the jurisdiction of this Court.”
[94]
These
responses are in direct conflict with the evidence before me in this action as
provided by Mr. Langourieux. I first note that most if not all of the named
defendents in the Wilson action have been included in the organizational
chart for the Servier Groupe. According to the evidence of Mr. Langourieux all
of these companies would have “the rights to use, to benefit from the patent” at
issue in the Wilson action; they
would have an implied licence. Yet, when sued, those foreign affiliates made
clear and unequivocal representations to the Court that they were not
licensees. It seems to me that, if the licence exists and applies to all
patents of the Groupe Servier, it would apply to the patents for Ponderal or
Redux. Additionally, the denial by certain affiliates of Servier that they
carry on business in Canada is at odds with the view of Mr. Langourieux
that all of the affiliates operate as a single entity.
E. Conclusion
[95]
In
sum, the Plaintiffs’ assertion of what is, in essence, an inter-corporate
world-wide open licence is not supported by the evidence before me. I am not
persuaded, on a balance of probabilities, that the non-ADIR Foreign Plaintiffs
hold a licence to use the '196 Patent or can otherwise claim under the
patentee, ADIR. I conclude that these companies have no standing to bring this
action.
V. Claims
Construction
A. The Law of Claims Construction
[96]
The
first step in a patent suit is to construe the claims. The principles to be
applied when construing the claims were stated by the Supreme Court in Whirlpool
Corp. v. Camco Inc., [2000] 2 S.C.R. 1067 [Whirlpool], and require
the Court to interpret the claims in dispute in a purposive way in order “to
achieve fairness and predictability and to define the limits of the monopoly” (Dimplex
North America Ltd. v. CFM Corp., 2006 FC 586 at para. 49, aff’d 2007
FCA 278 [Dimplex]). Furthermore, where necessary, the whole of the
patent, and not only the claims, should be interpreted (Eli Lilly Canada
Inc. v. Apotex Inc, 2008 FC 142 at para. 25; Eli Lilly Canada Inc.
v. Novopharm Ltd., 2007 FC 596 at para. 103).
[97]
Construction
of the claims is a matter for the Court to determine. The Court should construe
the claims in light of the description in the specification, assisted, where
necessary, by experts as to the meaning of technical terms if they cannot be
understood by the Court from reading the specification (Shire Biochem
Inc. v. Canada (Minister of Health), 2008 FC 538 at para. 23 [Shire];
Whirlpool, above at para. 45).
[98]
It
is also important to recognize that purposive construction should be directed
at the points at issue between the parties. To quote Justice Hughes in Shire,
above at para. 22:
The Court, however is not to construe a
claim without knowing where the disputes between the parties lie. To quote
Justice Floyd of the England and Wales High Court (Patent Court) in Qualcomm
Incorporated v Nokia Corporation [2008] EWHC 329 (Pat) at paragraphs 7 to
11, who in turn quoted the late Justice Pumfrey (as he then was) in Nokia v
Interdigital Technology Corporation [2007] EWHC 3077 (Pat), “it is
essential to see where the shoe pinches so that one can concentrate on the
important points.”
[99]
At
all times, purposive construction requires the Court to construe the claims
through the eyes of an ordinary person skilled in the art (Whirlpool, above
at paras. 45, 53). Moreover, where a patent is of a highly technical
nature, the person skilled in the art will be someone possessing a high degree
of expert scientific knowledge and skill in the particular branch of the
science to which the patent relates (Aventis Pharma Inc. v. Apotex Inc.,
2005 FC 1283 at para. 64, aff’d 2006 FCA 64, leave to appeal to S.C.C.
refused, [2006] S.C.C.A. No. 136 [Aventis Pharma]; Apotex Inc.
v. Syntex Pharmaceuticals International Ltd., [1999] F.C.J. No. 548 at para. 38
(C.A.) (QL)).
[100] Lastly, as
the '196 Patent was issued under the old Patent Act, all claims at issue
are to be construed as of the date of issue and grant of the patent (Pfizer
Canada Inc. v. Canada (Minister of Health), 2005 FC
1725 at para. 36).
B. Application of Principles to
the Case at Bar
(1) Person
Skilled in the Art
[101] Apotex
submits that the person skilled in the art of the '196 Patent is a medicinal
chemist, a pharmaceutical formulator, a biochemist, a pharmacologist or a
medical doctor with experience treating hypertension and/or cardiac
insufficiency in humans. Further, the person skilled in the art has at least a
Masters Degree with several years of experience.
[102] For its part,
Servier submits that there is no real dispute as to the person skilled in the
art, which it defines as a person having a Ph.D. in chemistry (synthetic
organic chemistry or medicinal chemistry) or pharmacology or a person holding a
medical degree. As with Apotex, Servier qualifies this definition by saying the
person has “some relevant experience”.
[103] Having
reviewed the parties’ submissions and the language of the specification of the '196
Patent, I am satisfied that the person skilled in the art includes individuals
fitting both of these definitions. I would therefore characterize the person to
whom the '196 Patent is addressed as being an individual having at least a few
years experience in academia or industry in their respective field and holding
a Masters or Ph.D. in synthetic organic chemistry; medicinal chemistry; pharmacology;
or biochemistry; or, a medical doctor having several years experience treating
hypertension or cardiac insufficiency in humans.
[104] Although some
of the expert witnesses testified that more specific experience is required in
order to understand the '196 Patent I am satisfied the definition provided
above corresponds with a “fair and generous view as to what sort of person
comprises a person skilled in the art” (Janssen-Ortho Inc. v. Novopharm Ltd.,
2006 FC 1234 at para. 90, aff’d 2007 FCA 217, leave to appeal to S.C.C.
refused, [2007] S.C.C.A. No. 442 [Janssen-Ortho]).
(2) Construction
of the Claims at Issue
[105] I begin by
making some brief preliminary observations.
[106] First, at
issue in the present suit are claims 1, 2, 3 and 5 of the '196 Patent. The date
of issuance, and therefore construction, for these claims is March 6, 2001, for
claims 1-3, and May 14, 2001, for claim 5. This later date for claim 5 is due
to the two corrections that occurred after the initial grant.
[107] Second, the '196
Patent is written in French. The significance of this point will become
apparent later in these reasons.
(a) Description
[108] I now turn to
the description of the '196 Patent.
[109] The
description of the patent begins at page 1 which states:
La présente invention a pour objet de
nouveaux imino diacides substitués, plus précisément des acides
azabicycloalcane dicarboxyliques substitués et leur procédé de préparation.
Spécifiquement l’invention concerne les
composés ré-
pondant à la formule générale:
dans
laquelle :
le cycle A est saturé et n = 0 ou 1, ou
bien le cycle
A est benzénique et n = 1,
R1 représente un groupe alkyle
inférieur de 1 à 4 atomes
de carbone pouvant porter un
groupe amino,
R2 représente un atome
d’hydrogène ou un groupe alkyle
de 1 à 4 atomes de carbone,
R3 représente un groupe alkyle
linéaire ou ramifié,
mono-ou di-cycloalkyl-alkyle
ou phényl-alkyle ayant
au plus au total 9 atomes de
carbone, ou bien un grou-
pe alkyle sustitué de
formule :
- (CH2)p
– Y - CH – R5
│
R4
avec R4 = H, alkyle
inférieur (C1 à C4) ou cycloal-
kyle (de C3
à C6)
R5 = H,
alkyle inférieur (C1 à C4), cycloalky-
le (C3
à C6) ou alcoxycarbonyle,
Y = S ou = N – Q où
= H, acétyle ou benzylo-
xycarbonyle,
et
p = 1 ou 2, et
q = 0 ou 1.
[110] In other
words, page 1 of the '196 Patent alerts the skilled reader to the fact that the
« objet » of the '196 Patent is substituted imino diacids, more precisely
substituted azabicycloalcane dicarboxylic acids. Even more precisely, the « concerne
» of the '196 Patent is compounds with structures falling into General Formula
I. The included compounds vary depending on: the A‑ring (which can be
saturated or unsaturated); the size of the other ring (which depends on whether
n = 0 or 1); the nature of the R1, R2,
and R3 groups; and the length of the side chain
(which depends on whether q = 0 or 1).
[111] The number of
compounds falling into General Formula I is further increased by the statement,
on page 2 of the '196 Patent, that therapeutically compatible salts are also
included. More importantly, the description states that the relevant compounds
will have a varying number of chiral centres and that the alleged invention
also includes racemic compounds as well as diastereomeric and enantiomeric
isomers:
Les composés de formule (I) comportent au
moins 3 atomes de carbone asymétrique. Selon la position des substituants et le
degré d'hydrogénation, il existe 3 à 6 centres d'asymétrie. Les composés
racémiques peuvent être dédoublés en leurs mélanges diastéréoisomères ou d'épimères,
ou dédoublés en leurs énantiomères de manière connue. Ces divers isomères font
partie de 1'invention de même que les composés racémiques.
[112] Page 2 of the
'196 Patent continues by directing the skilled reader to perhydroindole
derivatives corresponding to compounds falling into a different formula:
L'invention comprend plus
particulièrement les dérivés du perhydroindole (formule I ; A est saturé et n =
0) répondant a la formule générale :
dans laquelle les symboles R1,
R2 et R3 ont la même si-
gnification que dans la formule (I), sous
leur forme
racémique ou d’isomères optiques, ainsi
que leurs sels
obtenus avec des acides ou des bases
thérapeutiquement
compatibles
[113] This formula
(General Formula I') is in fact a subset of General Formula I where the ring
system on the C-terminus of General Formula I is specifically limited to a
perhydroindole.
[114] A set of
preferred compounds is then provided where R1 in General Formula I'
is defined to be « peut être utilement » as a methyl and R3 in
General Formula I' includes linear alkyls as previously defined in General
Formula I but which does not include phenethyl. However, as acknowledged by
both Apotex’s and Servier’s experts, this set of preferred compounds does not
correspond to any of the claims in the '196 Patent.
[115] The next
significant portion of the description begins on page 3 which sets out the
utility of the alleged invention. The paragraphs contained therein describe
some of the interesting pharmacological properties of compounds falling into
the alleged invention, in particular the inhibition of certain enzymes such as «
les carboxypolypeptidases, les enkephalinases ou la kininase II »
which in turn inhibits the transformation of angiotensin I into angiotensin II.
The section continues by noting that the therapeutic use of these compounds:
L'emploi en thérapeutique de ces composés
permet donc de réduire ou même supprimer 1'activité de ces enzymes
responsables de la maladie hypertensive ou de 1'insuffisance cardiaque. L'action sur la kininase
II a pour résultat 1'augmentation de la bradykinine circulante et également la
baisse de la tension artérielle par cette voie.
L'invention s'étend aussi aux
compositions pharmaceuti-ques renfermant comme principe actif au moins un
composé de formule générale I ou un de ses sels d'addi-tion, avec une base ou
un acide minéral ou organique, en association avec un excipient inerte, non
toxique, pharmaceutiquement acceptable. [Emphasis added.]
[116] In short, a
plain reading of the '196 Patent indicates that, through use of the compounds,
it is possible to reduce the activity of enzymes responsible for hypertension
or cardiac insufficiency. I will return to this point later in these reasons.
[117] The remainder
of page 3 and the majority of page 4 describe how the patent includes compounds
useful for pharmaceutical use and provides general guidance as to dosage forms
and strength. Next, starting with the last paragraph on page 4, the patent sets
out the process for preparing compounds falling into General Formula I. Six
examples are then given, starting on page 6, to illustrate the preparation
of compounds falling within the alleged invention. Analytical results on 28
compounds prepared in the examples, or through the use of similar techniques,
are presented in two tables at pages 24-27. The compounds included in the
tables are primarily, but not limited to, perhydroindole and include one
compound (compound 4) with a phenyl ring.
[118] Finally, on
pages 28-29 of the '196 Patent, we come to a section entitled « Etude
pharmacologique des composés de l'invention » wherein the '196 Patent
provides a description of the pharmacological studies to which the compounds
which were made were subjected.
[119] With this
background in mind I turn to the claims at issue.
(b) The
Claims at Issue
[120] Claim 1
reads:
1. Composés
répondant à la formule générale
dans laquelle :
R1 représente un atome
d'hydrogène ou un groupe alkyle de 1à 4 atomes de carbone
R2 représente un groupe alkyle
linéaire de 1 à 6 atomes de carbone
et leurs sels d'addition
pharmaceutiquement acceptables.
[121] Claim 2
reads:
Un composé selon la revendication 1 où R2
est un alkyle de 3 ou 4 atomes de carbone
et leurs sels pharmaceutiquement acceptables.
[122] Claim 3
reads:
Un composé selon la revendication 1 où R2
est un n-propyle
et ses sels pharmaceutiquement
acceptables.
[123] Finally,
claim 5 (as twice corrected) reads:
Le composé selon la revendication 1 qui
est le {N - [(1,S) éthoxycarbonyl - 1 butyle] (S) - alanyle} - 1 carboxy – 2(S)
(3aS,7aS) perhydroindole
et ses sels pharmaceutiquement
acceptables.
[124] With the
description in mind, I find a person skilled in the art would have no trouble
in construing the claims as follows:
·
Claim
1 corresponds to a subset of compounds falling under General Formula I where R1
is defined as a hydrogen atom or an alkyl group with one to four atoms, and R2
is a linear alkyl group with one to six carbon atoms, and their
pharmaceutically acceptable salts. Claim 1 has five chiral centres but does not
specify any particular stereochemical designation for any of the stereocentres.
It is an essential element that each compound of the claim contain both
a bicyclic 6,5 perhydroindole moiety on the C-terminus and a linear alkyl
group with one to six atoms on the N-terminus.
·
Claims
2, 3 and 5 are dependent on claim 1. As dependent claims they are necessarily
more limiting than claim 1 and must be construed consistently with the larger
claim (Dimplex, above at para. 65).
·
Claim
2 corresponds to a subset of compounds falling under claim 1 wherein R2
is restricted to n-propyl or n-butyl, and their pharmaceutically acceptable
salts. Claim 2 has five chiral centres but does not specify any particular
stereochemical designation for any of the stereocentres.
·
Claim
3 corresponds to a still narrower set of compounds falling under claim 1 where
R2 is limited to n-propyl, and their pharmaceutically acceptable
salts. As with claims 1 and 2, claim 3 has five chiral centres but does not
specify any particular stereochemical designation for any of the stereocentres.
Because there are five chiral centres or stereocentres, claim 3 encompasses 32
(25) different compounds.
·
Finally,
claim 5 (as it stands today) corresponds to a single stereoisomer where each of
the 5 chiral centres is designated as (S). It is undisputed that claim 5 encompasses
perindopril as well as its pharmaceutically acceptable salts. Although worded
as a dependent claim (« Le composé selon la revendication 1 »), the claim is to
a single compound. The words that indicate dependency are unnecessary to the
construction of claim 5.
(3) Apotex’s
Argument that there is but one “Invention”
[125] Interpretation
of the '196 Patent claims does not appear to be seriously in dispute. Rather, the
point “where the shoe pinches” between the parties is whether, in light of the
description, the claims should be construed as being examples of one alleged
invention or class of compounds encompassing all of General Formula I (as
Apotex submits), or whether the claims should stand on their own (as Servier
contends). To put it more generally, the question to be asked is: how should
the claims be construed when a patentee claims only a portion of the compounds
identified in the description?
[126] In my opinion,
the answer to this question can be found in the cases of C.H. Boehringer
Sohn v. Bell-Craig Ltd., [1962] Ex. C.R. 201, aff'd [1963] S.C.R.
410 [Boehringer] and Hoechst Pharmaceuticals of Canada Ltd. v. Gilbert
& Co., [1965] 1 Ex. C.R. 710, aff'd [1966] S.C.R. 189 [Hoechst].
[127] In Boehringer,
above, the patent at issue described in general terms the process for the
production of a large class of compounds. The patentee sued for alleged
infringement of one of the patent claims (claim 8) which was limited to a
single compound in the general class. Nowhere in the description was the single
compound mentioned except “as an example cited to describe advantages which all
members of this very large class of substances or possible substances are
claimed to have and except in two of the examples of how the processes for
making the class of substances may be carried out” (Boehringer, above at
210). In construing the patent in light of this apparent inconsistency, Justice
Thurlow made the following useful remarks:
In my opinion, the passages I have quoted
support the view that a claim for a single substance appended to a
disclosure purporting to relate only to the invention of a genus or class of
substances should not have been allowed in view of s. 38(1) of the Patent Act
because two different inventions or alleged inventions would be involved.
But whether or not claim 8 should have been allowed in the patent here in
question, as issued, the same subsection provides that no objection merely on
the ground that the patent has been granted for more than one invention can
succeed. Accordingly, as I view the matter, it becomes necessary because of the
presence of claim 8 to read the specification not only to see what it says that
refers to and describes an alleged invention of processes for the preparation
of the class of substances but also to see what, if anything, it says that
refers to and describes an invention of 2-phenyl-3-methyl morpholine and
processes for its production. For, if the requirements of s. 36 of the Patent Act
in respect of the description, etc., of the invention of
2-phenyl-3-methylmorpholine are complied with, the mere fact that the required
information is mixed with and included as part of the description of another
alleged invention will not by itself render claim 8 invalid. The problem of so
reading the specification is embarrassing for by its context the disclosure
throughout suggests one and only one invention. But, as a matter of
construction of the specification, this suggestion of the specification must, I
think, give way in order to give meaning to the specification as a whole which
includes claim 8 and thus indicates that besides the invention of the class an
invention of the single substance, 2-phenyl-3-methylmorpholine is involved in
the disclosure (Boehringer, above at 209-210). [Emphasis added.]
[128] Justice
Thurlow came to a similar conclusion in Hoechst, above at 718-719:
I turn now to the specifications. The
disclosure portion of these is the same in the case of all ten patents the only
differences between them being in the claims and in certain supplementary
examples which are admittedly not relevant to the present case. The disclosure
does not purport to be one of an invention of tolbutamide alone or of it and a
process or processes for its preparation but on the contrary purports to relate
to a class of sulphonyl ureas of which tolbutamide is one member, and it
proceeds to outline in general terms methods by which ureas of the class may be
produced and to assert utility for the substances of the class. Tolbutamide
is mentioned from time to time as an example of the class but not until one
reaches claim 10 (13 in the case of the last patent) is there any indication
that the invention is concerned with anything but a whole class of
substances and general methods of producing them. In this respect the
specifications resemble that considered in C.H. Boehringer Sohn v. Bell Craig
Ltd. ([1962] Ex. C.R. 201.) and for the reasons there given at pages 209 to 215
I am of the opinion that these specifications should be regarded as purporting
to disclose several different inventions, one or more pertaining to a class or
classes of substances, another to the single substance known as tolbutamide and
several others to the particular substances claimed in claims 11 to 19
inclusive (14 to 21 in the last). [Emphasis added.]
[129] Hoechst and Boehringer were both
recently referred to by the Federal Court of Appeal in Merck & Co. v.
Apotex Inc., 2006 FCA 323, leave to appeal to S.C.C. refused, [2006]
S.C.C.A. No. 507 [Merck (C.A.)]. In Merck (C.A.), Apotex
argued that the trial judge had wrongly interpreted Hoechst and Boehringer
as standing for “the broad proposition that each claim in a patent
represents a separate invention”. The Court of Appeal dismissed the argument after
concluding that the trial judge had relied on the earlier decisions only for
the narrow principle that where a patent application separately claims a class
of chemical compounds and a single compound within that class, each separate
claim discloses a separate invention (Merck (C.A.), above at para. 31).
Thus, Hoechst and Boehringer remain authoritative on the question
of defining the “invention”.
[130] With this
jurisprudence in mind I turn to the case before me.
[131] As previously
noted, the description of the '196 Patent outlines the general chemical
structure of a class of compounds (General Formula I) and the properties,
preparation, and utility of compounds falling into the general class. Nowhere
are claims 1, 2, 3 or 5 mentioned until one comes to the claims of the '196 Patent.
Reading the patent as a whole, I conclude that claims 1, 2, 3 and 5 form one or
more inventions that are distinct from the larger class of compounds of General
Formula I in the description. As described in claim 1, the claimed class of
compounds must have a bicyclic 6,5 perhydroindole moiety on the
C-terminus and a linear alkyl group with 1 to 6 carbon atoms on the
N-terminus. Both of these limitations are therefore essential elements of the '196
Patent. While the class of compounds of General Formula I may disclose an “invention”,
it is not the invention claimed. For that, we must turn to the claims of the '196
Patent.
[132] In oral
argument before me, Apotex cited the case of Consolboard Inc. v. MacMillan
Bloedel (Saskatchewan) Ltd., [1981] 1 S.C.R. 504 [Consolboard] in
support of its argument that to determine “the” invention of the '196 Patent
one has to look at the entire specification to ascertain the nature of the
invention, the disclosure and the claims. In my opinion there is nothing
inconsistent with this proposition and my conclusion that, in certain
circumstance, reading the claims in light of the specification will reveal that
there is more than one invention.
[133] In
conclusion, the specifications, when read as a whole, assist the person skilled
in the art in understanding the background to and substance of the claims. The
description does not define an invention; rather, the claims read in the
context of the description define the invention (or inventions) of the patent.
In the case of the '196 Patent, I find that the invention claimed by the
patent, on a purposive construction of the claims at issue, is that disclosed
by claims 1, 2, 3 and 5 and nothing more.
VI. Infringement
A. Overview
[134] Section 44 of
the Patent Act confers on a patentee and his legal representatives “the
exclusive right, privilege and liberty of making, constructing, using and
vending to others to be used the invention” of a patent. Servier claims that
Apotex infringes its rights under the '196 Patent, both directly and through
inducement of others to infringe. Apotex concedes, to some extent, the direct
infringement, subject to its counterclaims of invalidity (all of which are
considered later in these reasons). However, Apotex disputes the allegation of
inducement and claims that certain of its perindopril-containing products are
subject to exemption. In this section of the reasons, I examine these issues.
B. Direct Infringement
[135] The record of
this trial contains ample evidence of direct infringement by Apotex. Briefly,
the following facts related to Apotex’s manufacture and sale of perindopril
products, under the trade name Apo-Perindopril, are established:
·
Apotex
Inc. has purchased perindopril erbumine raw material since at least as early as
April
30, 2004.
From this material, Apotex used, manufactured (in Canada), sold, and continues
to use, manufacture and sell, perindopril erbumine tablets in 2, 4 and 8 mg
strengths, as well as tablets containing a combination of perindopril erbumine
and indapamide.
·
On
February 1, 2007, Apotex Inc. obtained a Notice of Compliance (NOC) in Canada
for Apo-Perindopril 8 mg tablets, which it has offered for sale and sold since
at least as early as March 6, 2007, for consumption in Canada.
·
Pharmachem,
located in Canada, previously known as Brantford Chemicals Inc., has been, to
date, the sole manufacturer and supplier of the perindopril raw material
acquired by Apotex Inc. and subsequently sold in Canada (8 mg tablet) and
exported for sale elsewhere.
[136] By way of
stipulation, Apotex has admitted that, subject to the validity of claims 3 and
5, and subject to the Court’s construction of claim 5, the perindopril erbumine
in Apo-Perindopril tablets falls within claims 3 and 5 of the '196 Patent.
[137] Dr. Bartlett
testified that the drug substance contained in Apotex’s perindopril products is
included in each of claims 1, 2, 3 and 5 of the '196 Patent. This evidence was
unchallenged.
[138] Thus, I find
that Apotex makes, constructs, uses, offers for sale and sells perindopril
products that are included in claims 1, 2, 3 and 5 of the '196 Patent. Subject
to the discussions that follow in these reasons, Apotex directly infringes the '196
Patent.
C. Inducement
[139] Having
concluded that Apotex has infringed the '196 Patent, the next question is
whether any of Apotex’s sales are acts of inducement. As stated in its
Statement of Claim, Servier seeks a declaration that Apotex has induced a
number of affiliated companies to infringe claims 1, 2, 3, and 5 of the '196
Patent. In particular, Servier alleges that Apotex has induced Apotex UK, GenRx,
Katwijk Farma B.V. (Katwijk), Orifarm Supply A/S (Orifarm) (collectively
referred to as the Foreign Purchasers) to infringe the '196 Patent.
[140] The evidence
establishes that Apotex has sold its 2, 4 and 8 mg perindopril erbumine tablets
for consumption outside of Canada to Apotex UK since July
24, 2006, to GenRx since October 20, 2006, to Katwijk since July 27, 2006, and
to Orifarm since December 7, 2007. Apotex has sold its combination product to
GenRx since at least as early as July 20, 2007. However, mere sale of an
infringing product to the Foreign Purchasers is not sufficient to establish
inducement.
(1) The
Test for Inducement
[141] As stated by
Chief Justice Jerome, as he then was, in Warner Lambert v. Wilkinson Sword
Canada Inc. (1988), 19 C.P.R. (3d) 402 at 407 (F.C.T.D.) [Warner Lambert],
“a defendant infringes the statutory rights of the plaintiff patentee where it
knowingly induces or procures another to infringe the plaintiff’s patent”. To
succeed in such a claim, a patentee wishing to rely on the doctrine of induced
infringement must prove each of the following elements (Warner Lambert
at 407; AB Hassle v. Canada (Minister of National
Health and Welfare), [2002] 3 F.C. 221 at para. 68 (T.D.),
aff'd 2002 FCA 421, leave to appeal to S.C.C. refused, [2003] S.C.C.A. No.
531):
(a)
the
act of infringement was completed by the direct infringer;
(b)
the
completed act of infringement was influenced by the seller, to the point where
without said influence, infringement by the buyer would not otherwise take
place; and,
(c)
the
influence must knowingly be exercised by the seller, such that the seller knows
that his influence will result in the completion of the act of infringement.
(2) Was
the Act of Infringement completed by the Direct Infringer?
[142] The first
branch of the test for inducement requires that Servier establish that the
Foreign Purchasers infringed the '196 Patent. It is undisputed that the Foreign
Purchasers distribute and sell perindopril tablets outside Canada. Those activities
do not infringe the '196 Patent. Only if some part of the activity of the
Foreign Purchasers takes place in Canada can I conclude that an
act of infringement was completed by the direct infringer.
[143] Servier
submits (correctly, in my view) that the purchase or possession of infringing
articles in Canada, with a view to sale or trade, or for the purpose of export,
constitutes infringement (H.G. Fox, Canadian Law and Practice Relating to
Letters Patent for Inventions, 4th ed. (Toronto: Carswell, 1969) at 393; Wellcome
Foundation Ltd. v. Interpharm Inc. (1992), 41 C.P.R. (3d) 215 at 226-7
(F.C.T.D.) [Fox]; Monsanto Canada Inc. v. Schmeiser, [2004] 1
S.C.R. 902 at paras. 55-58). In this case, Servier asserts that the
Foreign Purchasers take title to the perindopril tablets in Canada and then
export those tablets to the foreign jurisdiction. It follows, in their view,
that the Foreign Purchasers complete acts of direct infringement of the '196
Patent.
[144] Assessing the
merits of this assertion requires an examination of the contractual and
delivery arrangements between Apotex and each of the Foreign Purchasers. As
sales to Apotex UK are representative, I will focus on that
relationship.
[145] Servier
posits that the arrangement between Apotex Inc. and Apotex UK is defined by the
Agreement dated May 1, 2006, between Apotex Inc. and Apotex UK (the
Indemnity and Transfer Pricing Agreement). This position highlights the
overarching problem with the Servier submission; the Indemnity and Transfer
Pricing Agreement represents but one aspect of the overall commercial
arrangement between the affiliates.
[146] The purpose
of the Indemnity and Transfer Pricing Agreement appears to be two-fold. First,
in clauses 1 to 4, it provides Apotex UK with an indemnity in the event that
any action or proceeding “is commenced or threatened against [either party] and
which alleges that the manufacture of the Product [defined as a generic version
of COVERSYL] by Apotex and/or the distribution and sale of the Product by
Apotex UK in the Territory [defined as the United Kingdom] infringes any third
party patent or other intellectual property rights . . .”. In such an event,
Apotex “shall assume control and direct the defense of any such proceeding
within the Territory and Apotex shall bear all costs and expenses of defending
the proceeding”. Secondly, the agreement establishes the “Transfer Pricing” of
the products sold, in clause 5.
[147] For purposes
of this analysis, the only other clause of note in the Indemnity and Transfer
Pricing Agreement is clause 10 that provides that the Agreement “shall be
governed by and construed in accordance with the laws of Ontario and the laws
of Canada in force
therein”.
[148] The Indemnity
and Transfer Pricing Agreement is silent on when title passes from Apotex Inc.
to Apotex UK. This is not
surprising given the limited purpose of the agreement. As confirmed by Mr.
Darroch, no other agreement was produced that defines the point of title
transfer or any other terms governing the business relationship between the
parties. Since the Indemnity and Pricing Agreement is obviously not the only
agreement that sets out the relationship between the parties, we must look
beyond that agreement to determine the question of title transfer. In the
absence of any other written agreement, it is reasonable to conclude that the
relationship between these two affiliates is, to a large degree, based upon
verbal agreements and understandings. This would include any agreement as to
the point at which title to the product is passed to Apotex UK, the purchasing
affiliate.
[149] Here, we have
consistent and clear testimony from both vendor (Apotex Inc.) and at least two
of the Foreign Purchasers (GenRx and Apotex UK) that the
parties intend title to the goods to pass upon delivery of the products to the
foreign territory.
[150] On March 10,
2008, when questioned by counsel for Servier on the terms under which the
perindopril tablets were shipped, Dr. Sherman commented as follows:
The customer is buying it on the basis of
delivery in Australia. It is our job to get it
there.
. . .
It is CIF London, which means that we are
responsible for shipment and for getting this to London, including the freight and insurance.
. . .
[T]he customer simply wants the goods
delivered in Australia or in the United Kingdom. That’s the basis on which they're paying for. It’s our
job to get it there. And whether or not we take insurance and would cover it
or if we don't take insurance, if the goods are lost, it is our
responsibility. So we are responsible for the goods until they actually arrive
in Australia or in the United Kingdom and we are responsible for
getting them there.
[151] Mr.
Millichamp, the managing director of GenRx, provided the following testimony
during his examination-in-chief:
Q. Okay. And in terms of risk of loss
and transfer of title to the goods, do you know when that occurs?
A. Under these terms, the risk will
pass - the risk will pass -- once it’s cleared Customs in Australia and GenRx takes control of
the product, the risk is passed to us.
Q. And what about title?
A. That’s passing as well.
[152] Mr. Darroch,
the managing director of Apotex UK, described the transfer of responsibility
for the product purchased from Apotex Inc. by Apotex UK during
examination-in-chief in the following terms:
Q. And perhaps only your finance
director knows, but do you know when Apotex U.K. takes responsibility for the product?
A. Oh, yeah, I do. The . . . product
becomes . . . the responsibility of Apotex U.K. at the point of clearing Customs, not
before.
. . .
Q. Where does it clear Customs?
A. Well, it depends. If it’s coming
directly from Canada, it will clear via Heathrow Airport. If it’s coming, let’s say,
on any one of our other products, it would come in, say, from the Netherlands, it will clear at a port of
receipt in the U.K.
Q. But specifically with respect to
perindopril?
A. Oh, perindopril. It will clear
through Heathrow.
[153] The evidence
could not be much clearer. Even though the written agreements may be silent on
this point, the intention of the Apotex Inc. and each of the Foreign Purchasers
is that title does not pass until the product is delivered by Apotex Inc. to
the destination country. Stated in the negative, the parties do not intend
title to pass in Canada.
[154] Servier
relies on the Ontario Sale of Goods Act, R.S.O. 1990, c. S.1 (Sale of
Goods Act) and provisions of the Incoterms (discussed below) to support its
position that title passes to the purchasing company upon delivery of the product
in Toronto for carriage by way of air waybill to its destination. In doing so,
Servier emphasizes the evidence before the Court on the method of shipment. A
review of the various invoices and waybills introduced into evidence
demonstrates that Apotex Inc. packages and delivers the product to a carrier
for air freight to the country of destination. The documents provide evidence
that Apotex Inc. uses Incoterms nomenclature – such as CIF, CPT or CIP – for
its shipments and sales. I will consider each of these arguments.
[155] By virtue of
s. 18(1) of the Sale of Goods Act, property in the goods “is transferred
to the buyer at such time as the parties to the contract intend it to be
transferred.” The intention is not a question of the parties' subjective
beliefs, but rather, the objective contractual intention (Naber Seed &
Grain Co. v. Prairie Pulse Inc., 2007 SKCA 58 at paras. 49-50, 59-60 [Naber]).
Absent convincing evidence to the contrary, rule 5 of section 19 of the Sale
of Goods Act presumes that the parties intend property in the goods to pass
to the buyer when they are “unconditionally appropriated to the contract”,
which occurs when “the seller delivers the goods [to a carrier] for the purpose
of transmission to the buyer”. Thus, Servier submits, title to the perindopril
products is presumed to have passed when Apotex delivered the goods to the
Canadian carrier for transmission to the Foreign Purchasers.
[156] There is one
obvious problem with this argument. In this case and as discussed above, there
is convincing evidence from the parties to the business transactions that the
parties intend property in the perindopril tablets to pass to the buyer only
once the tablets have cleared customs in the country of the purchaser. Further,
Naber is of no assistance to Servier. The parties involved in that case
were the seller and the buyer. Thus, the Saskatchewan Court of Appeal was
required to choose between conflicting testimony. In contrast, the evidence
before me is that both parties are in complete agreement on when title passes;
there is no need to apply the presumption of the Sale of Goods Act.
[157] During final
argument, Servier, for the first time, made reference to “Incoterms”. Incoterms
refers to the International Chamber of Commerce official rules of
interpretation for trade terms, such as “C-Terms” “CIF”, “CPT”, “CIP”, etc., in
respect of the parties' contract of sale (see International Chamber of
Commerce, Incoterms 2000 (Paris: ICC Publishing S.A., 1999) at 5 [Incoterms
2000]). Where parties make their contracts subject to Incoterms, courts
will apply those definitions, even where the Incoterm usage may be different
from the common law. (see A.G. Guest, ed., Benjamin’s Sale of Goods, 7th
ed. (London: Thomson
Sweet & Maxwell, 2005) at para. 18-002).
[158] The substance
of Servier’s argument on this point is this: since Apotex Inc. delivered
shipments of perindopril products to carriers in Toronto, by virtue of the
C-terms used in the commercial invoices, delivery was completed and the risk of
loss or damage to the goods was transferred in Canada to the Foreign Purchasers
(Incoterms 2000 at 13-14, 65-66, 68, 73-75, 81-82, 84-85).
[159] Apotex
objected to the introduction of Incoterms 2000 at this stage of the
trial, on the basis that this document could not be characterized as an
authority (AstraZeneca Canada Inc. v. Apotex Inc., 2003 FCA 487 at
paras. 6-10, 15). I heard the arguments of the parties on this point and
reserved my decision. Upon consideration of the arguments, I agree with Apotex
on this point and would exclude the use of the Incoterms at this stage of the
proceeding. Having said that, however, I am also not convinced that the
Incoterms help Servier in its argument. I do not read the Incoterms as
displacing the clear intention of the parties as to title or responsibility
during transit.
[160] In
conclusion, I am not persuaded that title to the perindopril or combination
tablets passes to the Foreign Purchasers in Canada. It follows
that there was no act of infringement by any of the Foreign Purchasers. Since
Servier has failed to satisfy the first branch of the test for inducement, its
claim on this point fails.
D. Exemptions from Liability
(1) Statutory Provisions
[161] Apotex relies
on s. 55.2(1) of the Patent Act (post October 1, 1989) to submit that it
should not be held liable for any infringement relating to its experimental and
regulatory uses of perindopril. Apotex is also asserting that it is not liable
for infringement in respect of: (a) its export sales; (b) the transfer of
technology for the production of perindopril to affiliates in India; and (c) any
manufacture, use or sale in or from India.
(2) Experimental
and Regulatory Use
[162] I begin with
the proposed exemption from liability based on s. 55.2(1) of the Patent Act
(as it now applies). That provision states that:
55.2(1)
It is not an infringement of a patent for any person to make, construct, use
or sell the patented invention solely for uses reasonably related to the
development and submission of information required under any law of Canada, a
province or a country other than Canada that regulates the manufacture,
construction, use or sale of any product.
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55.2(1)
Il n'y a pas contrefaçon de brevet lorsque l'utilisation, la fabrication, la
construction ou la vente d'une invention brevetée se justifie dans la seule
mesure nécessaire à la préparation et à la production du dossier
d'information qu'oblige à fournir une loi fédérale, provinciale ou étrangère
réglementant la fabrication, la construction, l'utilisation ou la vente d'un
produit.
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[163] The question
of possible exemptions to liability was carefully analyzed by Justice Hughes in
Merck & Co. v. Apotex Inc., 2006 FC 524 [Merck (F.C.)], rev’d
on other grounds 2006 FCA 323 [Merck (C.A.)], leave to appeal to S.C.C.
refused, [2006] S.C.C.A. No. 507. In Merck (C.A.) above, at para. 113,
the Court of Appeal agreed with his application of s. 55.2(1). Thus, it appears
to be settled that Apotex may claim an exemption from liability for certain
amounts of the infringing product. Servier did not disagree but stated simply
that the burden was on Apotex to demonstrate that the product was used for
permitted purposes (such as obtaining regulatory approval or to comply with
regulations).
[164] Meticulous evidence
was led at trial about quantities of products that fell within the scope of one
or more claims of the '196 Patent that Apotex Inc. or Pharmachem acquired or
made for research and development, experimental or regulatory uses. A number of
witnesses spoke to these quantities and to how they were manufactured, tested
and stored. The uses for the allegedly exempt product include initial
synthesis, scale-up, manufacture of submission/qualification batches, stability
testing, bioequivalence studies and in-process sampling. The sample
formulations and accompanying data were prepared and generated using Apotex’s
own inventory of bulk material, and that information was submitted and prepared
for the purpose of submission to the regulatory authorities in Canada, the United
States,
and other jurisdictions that required it.
[165] Apotex has
continued to generate, and to have available for submission, extensive written
records containing the analytical and testing information for each lot of raw
material and each batch of various finished goods required by the regulatory
regimes in the jurisdictions in which it sells perindopril products. Apotex has
retained samples of the bulk material it used and the finished dosage forms it
prepared in order to comply with the regulatory requirements governing the
manufacturing of the various pharmaceutical products in the jurisdictions in
which Apotex sells its perindopril formulations. Those regulations require
Apotex to keep a record of its testing procedures, and compile information
about its retained samples for the purpose of submission to the applicable
regulatory authorities as a condition of maintaining its establishment licence,
and in order to comply with specific regulatory requirements.
[166] Of critical
importance, in my view, none of the raw material or the actual formulations
that were made in the course of that development process were ever sold or used
for a commercial purpose. The amounts of material that were used in the
formulation development process were recorded on the raw material inventory
cards for the corresponding lots of bulk material, or were entered into Apotex’s
SAP inventory system.
[167] Mr. Fahner
reviewed these and related documents reflecting Apotex’s use of perindopril. He
prepared charts which identified the amount of raw material that Apotex used
from each lot it received for the various research and development activities
involved in the formulation development process, and a chart which identified
the amounts of perindopril from each lot Apotex received that were sampled and
retained for ongoing regulatory purposes.
[168] I am
satisfied that the identified quantities of perindopril fit within the
regulatory and experimental use exemption of s. 55.2 of the Patent Act
(post October 1, 1989). The specific amounts that qualify under this exemption,
as of January 15, 2008, were provided by Mr. Fahner in chart form (see exhibit D‑193).
(3) Other
Exemptions
[169] Apotex seeks two
other exemptions. In my view, I am not able to rule definitively on these
requested exemptions.
[170] Specifically,
I have no argument or evidence on which I could base a decision that the
transfer of technology for the production of perindopril to affiliates in India
or any manufacture, use or sale in or from India does not infringe the '196 Patent.
Nor am I entirely clear on what Apotex means by “transfer of technology”. If
Apotex is referring to a physical transfer of the quantities of perindopril
that are caught by the exemption under s. 55.2(1), I could likely agree with
Apotex’s assertion. However, it should be obvious that Apotex could not use
this “transfer of technology” exemption to send its entire existing inventory
of perindopril from Canada to India.
[171] As to the
request that I conclude that Apotex is not liable for its export sales, I have
some difficulty. The infringement by Apotex involves, in part, the manufacture
of perindopril for export. To that extent, I have found that Apotex has
infringed the '196 Patent and is liable to Servier Canada and ADIR.
(4) Conclusion
on Exemptions
[172] I find that
the volumes of perindopril set out in Ex. D-193 fall within the s. 55.2 exemption
as of January 15, 2008; Apotex is not liable for infringement for these
quantities.
[173] I note that
the evidence on this requested exemption was very detailed up to January 15, 2008. As stated by
counsel for Apotex, there may be further quantities that are produced beyond
that date that meet the requirements of s. 55.2(1). I expect that, post-trial,
Apotex will continue to keep the same meticulous records of these amounts.
Should there be any changes to the quantities produced or stored, Apotex should
be prepared to provide the same level of evidence for purposes of the damages
phase of these proceedings.
VII. Claim 5
Corrections
A. Overview
[174] It is not
disputed that claim 5, as its stands today, is a claim to perindopril. Apotex
concedes that the active ingredient of its Apo-Perindopril 2, 4 and 8 mg
tablets and the perindopril in its combination tablet come within the scope of
claims 1, 2, 3 and 5 (as it stands today) of the '196 Patent. However, Apotex
contends that, even if the Court concludes that claims 1, 2 and 3 are valid, it
does not infringe claim 5.
[175] The basis of
this claim of non-infringement is that the Commissioner of Patents improperly
corrected – twice – claim 5 of the Patent. In Apotex’s view, since the certificates
of correction were issued without legal basis, the determinative version of
claim 5 is the one issued on March 6, 2001. Since the March 6 version did not claim
perindopril, Apotex concludes that claim 5 is not infringed by the manufacture
or sale of Apo-Perindopril 2, 4 and 8 mg tablets or the perindopril in its combination
tablets.
[176] The arguments
of the parties on this issue involve addressing the following questions:
1.
Is
Apotex precluded from bringing this attack on the certificates of correction in
this action on the basis that the decision of the Commissioner to issue such certificates
may only be impugned by application for judicial review made under s. 18.1
of the Federal Courts Act, R.S.C. 1985, c. F-7 (the Federal
Courts Act)?
2.
Is
Servier precluded from raising the judicial review argument on the basis that
it was not pleaded?
3.
What
is the standard of review of a decision of the Commissioner to issue a certificate
of correction?
4.
Did
the Commissioner act unreasonably or incorrectly (depending on the standard of
review) in concluding that the errors (or either of them) were “clerical errors”
that could be corrected pursuant to the Commissioner’s authority under s. 8 of
the Patent Act as it stood in 2001?
B. Background to the Issue
[177] As discussed
earlier in these reasons, the '196 Patent was issued subsequent to the Nadon
Order. Attached to that Order were the Minutes of Settlement (the Settlement
Agreement) entered into by ADIR, Hoechst and Schering and appended to the
Settlement Agreement were the claims that were to be issued to each party. The
Nadon Order, the Settlement Agreement and the attached appendix of claims were
all issued in English. Clause 1(a) of the Settlement Agreement provided that:
Adir is entitled to the issuance of a
patent based on pending application serial no. 387,093 restricted to the claims
set out in Appendix A attached hereto[.]
[178] Pursuant to
Clause 2(a) of the Settlement Agreement, the parties, inter alia, agreed
that:
Adir will amend Adir’s Application to
delete all claims currently within this application and replace those claims
with the claims set out in Appendix A attached hereto[.]
[179] Appendix A
set out the ADIR claims, including, of particular relevance to this issue, the
following:
5. The compound
(2S)-2-[(1S)-1-carbethoxybutylamino]-1-oxopropyl-(2S,3aS,7aS)-perhydroindole-2-carboxylic
acid and its pharmaceutically acceptable salts thereof.
[180] As noted
above, the '093 Application
was filed with the Patent Office in French. The text of the '196 Patent, drawn
from the '093 Application,
had been prepared in French. As set out in the Patent Rules, S.O.R./96-423,
s.172(3) (the Patent Rules), “The text matter of the abstract, the
description, the drawings and the claims . . . shall be wholly in English or
wholly in French”. Accordingly, the claims were translated into French from the
English language of the Settlement Agreement. This task was apparently carried
out by Mr. Nelson Landry, as counsel and patent agent for ADIR. Once the
translation was completed and the document submitted to the Patent Office, the '196
Patent was issued on March 6, 2001. As issued, claim 5 read as follows:
Le composé selon la revendication 1 qui
est le {N - [(R,S) éthoxycarbonyl - 1 butyle] (S) - alanyle} - 1 (S) carboxy 2
(3aS,7aS) perhydroindole et ses sels pharmaceutiquement acceptables.
[181] As written,
submitted and issued in the '196 Patent, this did not accord with the claim 5
of the Settlement Agreement, as approved by the Court in the Nadon Order and
did not constitute a claim to perindopril. Specifically, this version had an
(R,S) for the ethoxycarbonyl group in the nomenclature and a displaced (S) in
relation to the carboxy group. As testified to by both Dr. Jaguelin and
Mr. Landry, the problem was brought to the attention of Mr. Landry in a
telephone call from Dr. Jaguelin, who had noticed the error, shortly after
March 6, 2001.
[182] Mr. Landry,
attempting to correct the error, filed a request for correction. The
Commissioner issued a certificate of correction dated April 3,
2001,
stating as follows:
La formule de la rendivication 5 a été
corrigé pur se lire comme suit “{N - [(2,S) éthoxycarbonyl - 1 butyle] (S) -
alanyle} - 1 carboxy – 2 (S) (3aS,7aS) perhydroindole.[”]
[183] Unfortunately,
this version contained another error. Instead of replacing the (R,S) for the
ethoxycarbonyl group with (1,S), the nomenclature was changed – as requested in
the letter from Mr. Landry – to (2,S). Mr. Landry was advised of the mistake in
a letter dated April 18, 2001, from Mr. Caignard, a colleague of Dr. Jaguelin and
the individual in charge of patent procedures at the time.
[184] Mr. Landry
made another letter request for a correction on April 25,
2001.
The second – and final – certificate of correction was issued by the
Commissioner on May 14, 2001. That certificate provided that:
La formule de la rendivication 5 a été
corrigé pur se lire comme suit “{N - [(1,S) éthoxycarbonyl - 1 butyle] (S) -
alanyle} - 1 carboxy – 2 (S) (3aS,7aS) perhydroindole.[”]
[185] At last,
claim 5 of the '196 Patent was the claim to perindopril.
C. Statutory Authority of the
Commissioner
[186] The
Commissioner holds the authority to correct “clerical errors” pursuant to s. 8
of the Patent Act. The section, as it stood in 2001, provides:
8. Clerical errors in any instrument of
record in the Patent Office do not invalidate the instrument, but they may be
corrected under the authority of the Commissioner.
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8.
Un document
en dépôt au Bureau des brevets n’est pas invalide en raison d’erreurs
d’écriture; elles peuvent être corrigées sous l’autorité du commissaire.
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D. Must
Apotex Proceed by way of Judicial Review?
[187] Servier contends
that Apotex cannot attack the decision of the Commissioner to issue the certificates
of correction in this action but must proceed by way of judicial review
pursuant to s. 18.1 of the Federal Courts Act. In their view, the
scheme of the Federal Courts Act (see, in particular, Federal
Courts Act, ss. 2, 18(1), 18(3)) mandates a litigant to proceed by way of
judicial review to have the decision of a federal board, commission or other
tribunal invalidated. Servier relies on a number of decisions of the Federal
Court of Appeal and this Court: see, for example, Grenier v. Canada,
2005 FCA 348, at paras. 20, 29, 31 [Grenier]; Mohiuddin v.
Canada, 2006 FC 664; Malkine v. Canada (Minister of
Citizenship and Immigration), 2007 FC 573 at paras. 5, 15.
[188] On the facts
of the situation before me, I am not persuaded that Apotex must proceed by way
of judicial review. I do acknowledge, however, that the issue is not free from
doubt.
[189] The case of Grenier,
above, contains a careful discussion of the principles affecting the mandate of
the Federal Court to hear and decide judicial reviews of the decisions of
federal boards, commissions and tribunals. The Court expressed concern about
the possibility of collateral attacks on tribunal decisions that might not
incorporate an analysis of the correct standard of review of the tribunal’s
decision. The Court was also concerned with the finality of decisions of
tribunals. At paragraph 31, Justice Létourneau, writing for the Court,
stated that:
The principle of the finality of decisions
likewise requires that in the public interest, the possibilities for indirect
challenges of an administrative decision be limited and circumscribed,
especially when Parliament has opted for a procedure for direct challenge of
the decision within defined parameters.
[190] On its face,
the same principles apply to a decision of the Commissioner, acting under his
authority of the Patent Act. Nevertheless, there are very significant
distinctions to be made in this case.
[191] The
jurisprudence referred to by Servier all involved litigants who were parties to
the original decision of the federal tribunal and who clearly would have had
standing to bring the judicial review.
[192] Mr. Grenier
in Grenier, above, by way of example, was a prison inmate who had been
sentenced to a one-hour administrative segregation by the institutional head of
the prison. He did not apply for a judicial review of the decision, but, some
three years later, brought an action for damages arising from the segregation.
In those circumstances, the Court of Appeal concluded that Mr. Grenier, in
accordance with s. 18 of the Federal Courts Act, had to apply directly
to have this decision nullified or invalidated by way of judicial review.
[193] In the case
before me, Apotex was not a party to the proceedings that resulted in the
issuance of the two certificates of correction; it is arguable that Apotex had
no standing to challenge the issuance of the certificates by way of judicial
review. Apotex, absent a continuous watch of all Commissioner decisions and the
'196 Patent file wrapper, would have had no knowledge of the certificates or
the context in which they were issued. How then, could Apotex have brought an
application for judicial review within the 30-day time limit set out in s.
18.1(2) of the Federal Courts Act?
[194] A further
distinguishing feature of the case before me is that the decisions of the
Commissioner to issue the certificates of correction arise from the Patent
Act. In my view, this is a critical distinction. As is evident, the basis
of the counterclaim being brought by Apotex is, inter alia, that claim 5
is invalid. Three different provisions of the Patent Act are relevant to
this issue:
·
Section
59 of the Patent Act provides that a defendant, “in any action for
infringement, may plead as a matter of defence any fact or default which by
this Act or by law renders the patent void . . .” ;
·
Section
60(1) sets out that “any claim may be declared invalid or void by the
Federal Court . . . at the instance of any interested person”; and
·
Pursuant
to s. 60(2), any person whose actions may be alleged to be infringing “may
bring an action in the Federal Court against the patentee for a declaration
that the process or article does not or would not constitute an infringement [of
the patent]”.
[195] There is no exception
carved out for claims of invalidity based on unlawful actions of the
Commissioner. It follows that Apotex may raise its allegations of unlawful
decisions of the Commissioner in the context of an action. Requiring Apotex to
bring an application for judicial review of the Commissioner’s issuance of the
two certificates of correction would render ss. 59 and 60(1)-(2) meaningless.
[196] For these
reasons, I conclude that the better legal view is that Apotex is not limited to
raising the actions of the Commissioner in issuing the certificates of
correction in an application for judicial review.
[197] Apotex raises
one additional defence to Servier’s assertions that Apotex lacked the capacity
to raise the issue of the corrections other than by way of judicial review. In
final argument, Apotex argued that Servier’s pleadings made no reference to
this objection. I agree that the pleadings are silent. However, since I am finding
that Servier’s objection on capacity grounds cannot be sustained on its merits,
there is no need to consider the failure of Servier to include the objection in
their pleadings.
[198] Having
concluded that the issue of the lawfulness of the Commissioner’s decisions need
not be determined through an application for judicial review, I now consider
the arguments raised.
E. Standard of Review of a
Commissioner’s Decision
[199] Any analysis
of the lawfulness of the Commissioner’s decisions to issue the two certificates
of correction must begin with an assessment of the appropriate standard of
review of the decisions in issue. Apotex argues that the question of whether a
requested amendment constitutes a “clerical error” is a question of pure law to
which the standard of review of correctness should apply. Servier argues that
the decision attracts the standard of reasonableness. For the reasons set out
in the following, I prefer Servier’s proposed standard of review.
[200] The
methodology to determine the appropriate standard of review of a decision of an
administrative tribunal was recently reformulated in Dunsmuir v. New
Brunswick,
2008 SCC 9 [Dunsmuir]. Justices Bastarache and Lebel, writing for the
majority, summarize the new “standard of review analysis” at paragraph 62 of
the decision:
In summary, the process of judicial
review involves two steps. First, courts ascertain whether the jurisprudence
has already determined in a satisfactory manner the degree of defence to be accorded
with regard to a particular category of question. Second, where the first
inquiry proves unfruitful, courts must proceed to an analysis of the factors
making it possible to identify the proper standard of review.
[201] Applying Dunsmuir,
I turn first to the existing jurisprudence on the standard of review with
respect to s. 8 of the Patent Act.
[202] The case law
with respect to s. 8 of the Patent Act is limited but consistent.
[203] In Pason
Systems Corp. v. Canada (Commissioner of
Patents), 2006
FC 753 [Pason], Justice Hughes determined that a Commissioner’s
decision under s. 8 involves two steps, each with its own standard of review:
This involves two steps, first there must
be a determination in that there has been such an error, then the Commissioner “may”
correct that error, that is, a discretion remains. The determination as to
whether a “clerical error” exists is essentially factual, it requires no
special expertise that the Commissioner may possess in patent or scientific
matters. A reasonable but not high degree of deference can be afforded to the
Commissioner in this regard. The second step, that of determination as to
whether to correct an error if it is seen to exist is discretionary (see Bayer
v. Commissioner of Patents (1980), 53 C.P.R. (2d) 70, per Justice Mahoney
at 74 (FCTD) and requires a substantial degree of deference (Pason, above
at para. 21).
[204] Justice
Barnes came to a similar conclusion in Dow Chemical Co. v. Canada (Attorney
General),
2007 FC 1236 at paras. 14-15, 26 where, quoting in part Bristol-Myers
Squibb Co. v. Commissioner of Patents (1997), 138 F.T.R. 144, aff'd (1998)
82 C.P.R. (3d) 192 (F.C.A.), he noted that the second step “should not be
overturned unless unreasonable” while the first step was deserving of “considerable
deference”.
[205] In other
words, both Justices Barnes and Hughes have concluded that the appropriate
standard of review with respect to both steps of a s. 8 decision is reasonableness.
Accordingly, it appears that the courts have “determined in a satisfactory
manner the degree of defence to be accorded” to the decision at issue in the
case at bar and I need not continue any further. However, as outlined below, I reach
the same conclusion after carrying out my own review of the relevant factors.
[206] To begin, I
find I am again in agreement with Justice Hughes in Pason, above at para. 21,
where he finds that CertainTeed Corp. v. Canada (Attorney General), 2006
FC 436 neatly summarizes three of the four relevant factors applicable to the
standard of review analysis:
·
The
Act does not contain a privative clause and s. 41 of the Act allows
an appeal from a decision of the Commissioner. Accordingly, this first factor
is neutral.
·
The
Commissioner is experienced in dealing with patent applications and appeals
under the Act. He has expertise in that area and accordingly, his
decisions will attract a high degree of deference.
·
The
purpose of the Act is to encourage invention and to regulate the
issuance of patents in Canada; see Pope Appliance Corp. v. Spanish River
Pulp and Paper Mills Ltd., [1929] A.C. 269 (Canada P.C.).
[207] With respect
to the nature of the question before the Court, Apotex, in essence, argues that
the Commissioner erred in granting the certificates of correction as the
corrections were not clerical in nature. In other words, Apotex takes issue
with the first step of the Commissioner’s decision under s. 8.
[208] The
determination of what constitutes a clerical error is highly factual (Pason,
above at para. 21) and, at best, a question of mixed fact and law.
This factor therefore suggests some deference.
[209] When taken
together with the other factors, (none of which suggests a correctness
standard), I conclude the appropriate standard of review is reasonableness.
F. Was either of the Decisions
of the Commissioner Unreasonable?
[210] The
Commissioner issued the certificates pursuant to s. 8 of the Patent Act.
In order to do so he had to be satisfied that the corrections were “clerical
errors”. As described in Dunsmuir, at paragraph. 47, on a standard
of reasonableness, the Court must determine whether the Commissioner’s
decisions fall “within a range of possible, acceptable outcomes which are
defensible in respect of the facts and law”.
[211] I begin with
what the jurisprudence has said about clerical errors. A clerical error
pursuant to s. 8 of the Act has been described as one that “arises in
the mechanical process of writing or transcribing” (Bayer Aktiengesellschaft
v. Commissioner of Patents (1980), 53 C.P.R. (2d) 70 at 73 (F.C.T.D.)).
[212] Apotex
asserts that the errors made by Mr. Landry cannot be characterized as clerical
errors.
[213] Mr. Landry,
who acted as counsel and patent agent to ADIR during the relevant periods,
appeared as a witness at this trial under subpoena to speak only on the issue
of the corrections. Mr. Landry’s evidence establishes that the first error
arose during translation. As Mr. Landry testified, he knew that the '196 Patent
had to be issued in French, whereas the Settlement Agreement and Appendix A
were in English. Mr. Landry’s testimony was that he worked with both the '093 Application (which was
in French) and the English version of claim 5 to draft the French version of
claim 5 for the '196 Patent. The result of his deliberation contained two
errors: (a) an (R,S) for the ethoxycarbonyl group in the nomenclature instead
of (1,S); and, (b) a displaced (S) in relation to the carboxy group. In making
his first correction of the error, Mr. Landry committed the second error.
Instead of asking that the (R,S) for the ethoxycarbonyl group be replaced with
(1,S), Mr. Landry mistakenly requested that it be replaced with (2,S).
[214] Apotex
submits that an error that is committed in the process of translating a
document or a sentence therein is fundamentally different from an error which
arises in the copying, writing or transcribing of information from one document
to another. The latter processes are mechanical in nature and require little,
if anything, in the way of original and conscious thought. Accordingly, they
are accepted as the defining characteristics of a “clerical” error. On the
other hand, the act of translation, both general and especially in the specific
circumstances of this case, involves a thought process that is, in Apotex’s
view, the very antithesis of a clerical error. Translation, particularly here,
is not simply a matter of looking at equivalent words in an English-French
dictionary and replacing an English term with its French literal counterpart.
Apotex submits that an error arising from such a process cannot, in law, amount
to a clerical error.
[215] The second
correction can be easily dealt with. In my view, it is not unreasonable to
consider the mistaken insertion of (2,S) in place of (1,S) to be a clerical
error. Contrary to the assertion of Apotex, such a mistake is more likely than
not to be mechanical in nature and made without thought. Indeed, had Mr. Landry
applied any original and conscious thought to the process, he would have
realized his error. The inclusion of (1,S) for the ethoxycarbonyl group is
clearly set out in claim 5 in English in Appendix A to the Settlement
Agreement.
[216] The first
correction, arising as it did during the translation, may be more problematic.
In general, translation is a difficult task. In approaching the translation of
claim 5 from the English Appendix A to the French version required for the '196
Patent, Mr. Landry was required to apply some thought and analysis. As noted,
he worked with the French language '093 Application as well as the appendix to the
Settlement Agreement.
[217] Guidance to
Patent Office officers is set out in the Manual of Patent Office Practice
(MPOP). In the current version of the MPOP (Patent Office, Manual of Patent
Office Procedure, (Ottawa-Gatineau: Canadian Intellectual Property Office,
2006) paragraph 23.04 deals with s. 8 corrections. Paragraph 23.04.02 provides
that correction of a translation mistake is not a transcription mistake. Apotex
relies on the MPOP to demonstrate the unreasonableness of the Commissioner in
concluding that the first correction was a “clerical error”. There are at least
three problems with Apotex’s use of the current MPOP. The first is that the
MPOP in use at the time of the corrections (Canadian Patent Office, Manual
of Office Practice, (Ottawa-Hull: Canadian Intellectual Property Office,
1998) did not state that a translation error was not a transcription error.
Secondly, the MPOP is a guideline; it cannot be binding on the Commissioner.
[218] Thirdly, a
reasonable view of the errors is that they were not translation errors. The
fact that the errors arose during the process of translation, does not automatically
make them “translation errors”. This view is supported by the dictionary
meaning of “translate” or “translation”. As described in the Canadian Oxford
Dictionary, the most relevant meaning of “ translate” is to “express the sense
of (a word, sentence, speech, book, etc.) in another language” (Concise Canadian
Oxford Dictionary, s.v. “translate”).
“Translation” is “the act or an instance of translating” or “a written or
spoken rendering of the meaning of a word, speech, book, etc.” (Concise
Canadian Oxford Dictionary, s.v. “translation”). Stated in other
words, translation involves the expression of words, sentences, speeches, books,
etc. from one language to another. Thus, a person involved in the redaction of
a patent, may err in translating particular sentences or technical terms into
another language. In this case, however, the errors of Mr. Landry did not arise
from the translation of the claims or their words; rather they arose during the
process of translation. Each of the errors related to a letter/number
configuration (such as R,S or 1,S) and not to “words, sentences, speeches,
books, etc.” Thus, the errors may reasonably be characterized as merely
incorrect alpha-numeric designations and not translation errors. It follows
that the decision of the Commissioner, even if the current MPOP had been in
effect, cannot be said to be unreasonable.
[219] Finally, I
observe that, throughout the exercise, claim 5 of the '196 Patent was defined –
albeit in English – in Appendix A to the Settlement Agreement. All parties to
the Settlement Agreement were aware that a claim to perindopril was to be
awarded to ADIR. In addition, the Commissioner was aware of the specific claim
5 awarded to ADIR. Before the Commissioner was the entire file wrapper of the '196
Patent. Thus, all documents and correspondence leading to the grant of the '196
Patent formed part of the record. Of particular significance, the Commissioner
had the Nadon Order where the final resolution of the conflict was documented.
The Commissioner was required to give effect to that document; indeed, any
decision of the Commissioner to vary the Nadon Order, without further Court order,
could likely have been the subject of judicial review. An explicit term of that
Order was that ADIR was entitled to the claims set out in Appendix A of the
Settlement Agreement, one of which was ADIR’s claim to:
5. The compound
(2S)-2-[(1S)-1-carbethoxybutylamino]-1-oxopropyl-(2S,3aS,7aS)-perhydroindole-2-carboxylic
acid and its pharmaceutically acceptable salts thereof.
[220] Thus, the
Commissioner, in this case, was faced with an unusual set of facts. He was not
operating in a situation where a patentee was attempting to change the chemical
formula of a claim based solely on the assertion of the patentee. Here, the
Commissioner could read the claim from the Nadon Order and compare the
requested corrections to that claim. He would be aware that the object of the
corrections was to achieve the results contemplated by the Nadon Order. I
acknowledge that this does not explain why the Commissioner accepted the first,
incorrect request for a certificate of correction. Nevertheless, overall, I am
satisfied that the existence of the Appendix A claim 5 acted as a backstop.
Today, as a result of the two certificates of correction, ADIR’s patent
reflects accurately ADIR’s claim to perindopril as described in claim 5 of the '196
Patent.
[221] In light of
the unusual facts of this case and the record that was before the Commissioner,
I find that the Commissioner’s decisions to issue the two certificates of
correction fall within a range of possible, acceptable outcomes. They are
reasonable decisions and should not be overturned.
G. Conclusion on this issue
[222] Having
considered the arguments on this issue, I conclude that the certificates of
correction were not issued without legal basis (as asserted by Apotex). It
follows that claim 5 of the '196 Patent is not invalid by reasons of unlawfully
issued certificates of correction.
VIII. Obviousness
A. The Law
[223] Apotex argues
the '196 Patent is invalid for obviousness.
[224] I begin with
the relevant legal principles.
[225] The first
point to stress is that the onus lies on the attacking party to establish that
a claim is obvious on a balance of probabilities.
[226] Much has
been written about the test for obviousness in the case law. However, I think that
the Federal Court of Appeal in Janssen-Ortho Inc. v. Novopharm Ltd.,
2007 FCA 217, leave to appeal to S.C.C. refused, [2007] S.C.C.A. No. 442 [Janssen-Ortho
(C.A.)], has now provided a very useful summary of the test for obviousness
and the manner in which a trial judge should approach the question. Justice
Sharlow, writing for the Court of Appeal in Janssen-Ortho (C.A.),
outlined the test for obviousness at paras. 23-24:
The accepted legal test for obviousness
is stated as follows in the leading case of Beloit Canada Ltd. et al. v.
Valmet OY (1986), 8 C.P.R. (3d) 289 (F.C.A.) at page 294, per Hugessen
J.A.:
The classical touchstone for obviousness
is the technician skilled in the art but having no scintilla of inventiveness
or imagination; a paragon of deduction and dexterity, wholly devoid of
intuition; a triumph of the left hemisphere over the right. The question to be
asked is whether this mythical creature (the man in the Clapham omnibus of
patent law) would, in the light of the state of the art and of common general
knowledge as at the claimed date of invention, have come directly and without difficulty
to the solution taught by the patent. It is a very difficult test to satisfy.
The inquiry mandated by the Beloit test is factual and
functional, and must be guided by expert evidence about the relevant skills of
the hypothetical person of ordinary skill in the art, and the state of the art
at the relevant time. The expert evidence must be carefully assessed as to its
credibility and reliability. The classic warning from Beloit about hindsight must always
be borne in mind (at page 295, per Hugessen J.A.):
Every invention is obvious after it has
been made, and to no one more so than an expert in the field. Where the expert
has been hired for the purpose of testifying, his infallible hindsight is even
more suspect. It is so easy, once the teaching of a patent is known, to say, “I
could have done that”; before the assertion can be given any weight, one must
have a satisfactory answer to the question, “Why didn't you?”
[227] Of particular
assistance, at paragraph 25, Justice Sharlow described a number of factors that
could “guide the required factual inquiry” and that could be used “as a
framework for the factual analysis that must be undertaken”. Justice Sharlow
then listed and explained the following non-exhaustive list of factors that
could guide the factual inquiry. Those factors are the following:
Principal factors
1. The invention
2. The hypothetical
skilled person referred to in the Beloit
quotation
3. The body of
knowledge of the person of ordinary skill in the art
4. The climate in the
relevant field at the time the alleged invention was made
5. The motivation in
existence at the time [of] the alleged invention to solve a recognized problem
6. The time and effort involved
in the invention
Secondary factors
7. Commercial success
8. Meritorious awards
[228] Obviousness
must be assessed as of the date of the invention (Pfizer Canada Inc. v.
Canada (Minister of Health), 2005 FC 1205 at para. 89, rev’d on other
grounds 2007 FCA 209, leave to appeal to S.C.C. refused, [2007] S.C.C.A. No.
377 [Pfizer]). In the case at bar, nothing turns on whether the date of
invention is October 1, 1981, as claimed by Apotex in its pleading, or October 1,
1980, as claimed by Apotex in final argument. Accordingly, I will use the later
date of October 1, 1981.
B The State of the Art
[229] With this law
in mind, I turn to a review of the relevant prior art.
[230] Apotex, in
its submissions, referred to a number of scientific papers as being
representative of the state of the art. Apotex submits that the significance of
these papers, all of which relate to the captopril series of compounds, is as
follows:
·
Cushman
et al., “Inhibition of Angiotensin-Converting Enzyme by Analogs of
Peptides from Bothrops jaracara Venom” (1973) Experientia 29/8 1032 (the
Experientia paper): demonstrated the reasonable activity of the
tripeptide Phe‑Ala‑Pro as an ACE inhibitor, thus teaching that
proline (Pro) at the C-terminus contributed to binding to ACE;
·
Miguel
A. Ondetti & Bernard Rubin & David W. Cushman “Design of Specific
Inhibitors of Angiotensin-Converting Enzyme: New Class of Orally Active
Antihypertensive Agents” 196 Science 441 (the Science paper):
taught the preferred stereochemistry of the captopril series of compounds by
providing test data for stereoisomers of captopril;
·
Cushman
et al., “Design of Potent Competitive Inhibitors of
Angiotensin-Converting Enzyme Carboxyalkanoyl and Mercaptoalkanoyl Amino Acids”
(1977) 16 No. 25 Biochemistry 5484 (the Biochemistry paper); Cushman et
al., “Design of New Antihypertensive Drugs: Potent and Specific Inhibitors
of Angiotensin-Converting Enzyme” (1978) XXI No. 3 Progress in Cardiovascular
Diseases 176 (the Progress in Cardiovascular Diseases paper): together
these papers indicated that the substrate specificity of the active site of ACE
was “very broad” and that the moiety at the C‑terminus could vary.
Further, while they taught that proline was preferred at the C-terminus, they
also indicated that more sterically demanding amino acids still retained
activity; and
·
Hong-Son
Cheung et al., “Binding of Peptide Substrates and Inhibitors of
Angiotensin-converting Enzyme, Importance of the COOH - Terminal Dipeptide
Sequence” (1979) 255 No. 2 Issue January 25 401 (the Biological Chemistry
paper): taught that tryptophan, a moiety of greater steric size than proline,
had greater activity than proline when substituted for proline at the
C-terminus.
[231] Apotex
submits that the teachings of these papers were reinforced by a number of U.S. patents
obtained by Squibb (U.S. Patent 4,046,889, U.S. Patent 4,154,942, U.S. Patent
4,105,776, U.S. Patent 4,113,715, and U.S. Patent 4,105,789) which taught that
other amino acids could be used in place of proline at the C-terminus position.
[232] In addition
to captopril-related prior art, Apotex relies on prior art associated with Merck’s
work with enalapril. This prior art includes disclosures made at the Troy conference,
European Patent Application 0 012 401 A1 (the '401 Application), and Patchett,
A. A. et al., “A new class of Angiotensin-converting enzyme inhibitors”
288 Nature 280 (the Nature paper). The significance of this prior art,
Apotex submits, is three-fold:
·
They
taught that compounds in the S-configuration were to be preferred.
·
They
gave examples and taught that the preferred class of the enalapril class of
compounds included compounds where the side chain was a linear alkyl rather
than a phenethyl.
·
They
taught that bulkier moieties, including tryptophan, thiaproline and pipecolic
acid, could be substituted for proline at the C-terminus.
[233] Apotex also
relies on European Patent Application 0 012 845 B1 (the Tanabe Application).
The Tanabe Application, Apotex submits, discloses a class of compounds with a
6,6 bicyclic substitution (tetrahydroisoquinoline or THIQ) in the place of
proline on the captopril backbone. From this disclosure, therefore, one skilled
in the art would understand that moieties as bulky as THIQ at the C-terminus
would bind to ACE.
[234] Finally,
Apotex relies on a limited number of non-ACE inhibition art for the proposition
that bicyclic ring systems, including 6,5 ring systems, were known in the
literature as of 1976 and were incorporated into non-ACE inhibitor
anti-hypertensives.
[235] Servier does
not dispute that the content of the aforementioned art is anything other than
as stated by Apotex. Rather, Servier argued that some of the art cited by
Apotex should not be relied on for two reasons:
1.
Reliance
on prior art outside the field of ACE inhibition is “not only improper at law,
it is scientifically unsound”; and
2.
The
Tanabe Application was not known by Dr. Marshall prior to this case.
[236] Turning to
Servier’s first argument, I disagree that reliance on prior art outside the
field at issue will always be improper in law. However the jurisprudence does
indicate that it cannot be assumed that the unimaginative, non-inventive
technician skilled in the art would consider art in other fields (Almecon
Industries Ltd. v. Nutron Manufacturing Ltd., [1996] F.C.J. No. 240 at para. 67
(T.D.) (QL), aff’d (1997), 72 C.P.R. (3d) 397, leave to appeal to S.C.C.
refused, [1997] S.C.C.A. No. 374). In other words, there must be some reason,
supported by evidence, which would justify a person skilled in the art to look
beyond the field at issue. It is here where I find Apotex has stumbled.
[237] A review of
the Apotex experts on this point reveals several problems. Dr. Marshall’s
evidence is undermined by the fact that he was provided with the non-ACE
inhibition references by counsel for Apotex. Dr. Thorsett’s affidavit and
testimony is vague and general; he failed to direct the Court to any specific
piece of prior art which one skilled in the art would have been directed to.
Finally, Dr. McClelland relied solely on prior art stemming from Squibb
and Merck. Accordingly, his testimony is of no assistance to the Court on this
point.
[238] In sum, Apotex
has failed to convince me that the person skilled in the art would go beyond
the field of ACE inhibition. However, I note that my conclusion on this point
does not detract from the other papers, patents, and disclosures noted above,
all of which involve ACE inhibition.
[239] With respect
to Servier’s second argument, I find it goes to the weight of Dr. Marshall’s
testimony, as discussed below, and does not warrant excluding the Tanabe
Application from the relevant field of prior art. Indeed, neither Servier nor
any of its experts suggested the Tanabe Application should not be considered as
valid prior art.
[240] In sum, I am
satisfied that the aforementioned prior art formed the state of the art as of
October 1, 1981. The teachings of this art can be succinctly stated as follows:
·
A
working hypothesis of ACE, its nature, and how inhibitors interacted with ACE,
had been developed and published by scientists at Squibb and Merck;
·
It
was known that the effects of binding from modifying different parts of an
inhibitor molecule were largely independent. Thus, one skilled in the art would
hope for, and not be surprised to see, that a modification to the proline ring
in captopril that maintained or increased activity would have a similar or
increased effect relative to enalapril;
·
It
was known that the S2 prime subsite of ACE was capable of accepting a large
volume such as tryptophan and THIQ; and
·
By
October 1, 1981, it had been shown that considerable variation could be made to
the framework of a non-peptidic ACE inhibitor, particularly at the C-terminus.
C. Position of the Parties
[241] Having set
out the relevant prior art I will now summarize the position of the parties.
[242] Apotex
divides its submissions on the obviousness of the '196 Patent into essentially
two categories. First, it submits that the addition of the perhydroindole 6,5
ring to the Merck backbone was obvious. In support of this argument Apotex
relies on: (i) the prior art evidencing the promiscuity of the S2 prime subsite
of ACE to accept large moieties; (ii) Servier’s “effective admission” in the '196
Patent and the '093 Application
that there is no distinction between THIQ and perhydroindole; (iii) the general
skill of a medicinal chemist to use structure activity relationship (SAR)
methodology to modify these rings as necessary; (iv) the fact that there were
chemists at Hoechst, Warner-Lambert and Schering that also incorporated
bicyclic ring modifications following the Troy conference; and (vi) the alleged
motivation of these different groups of chemists. Second, Apotex submits that
the rest of the invention of the '196 Patent, namely the addition of linear
alkyl side chain, was obvious in light of the fact such side chains were
included in the '401 Application and the Nature paper and because there
is nothing in the description of the '196 Patent that suggests the invention is
limited to a linear alkyl side chain.
[243] In response,
Servier submits that, with respect to the addition of the perhydroindole 6,5
ring, the prior art, including the Tanabe Application, is too different from
the perhydroindole in perindopril to make the '196 Patent obvious. With respect
to the addition of the side chain Servier submits that neither the Nature paper
nor the '401 Application teaches the n-propyl side chain in claims 3 and 5 of
the '196 Patent. At best, n-propyl is one of billions of compounds disclosed.
Further, Servier submits that perindopril is the only post-captopril ACE
inhibitor to have received regulatory approval in Canada whose side
chain is a propyl. Finally, Servier stresses that the crystal structure of ACE
was not known until 2003 and submits that the commercial success of perindopril
should be taken into account in any discussion of the obviousness of the '196 Patent.
D. Application of the Law to
Facts
(1) Obviousness
of the 6,5 bicyclic ring
[244] I will
address each of Apotex’s arguments in light of the factors discussed in Janssen-Ortho
(C.A.), beginning with the question of the obviousness of the addition of
the 6,5 perhydroindole bicyclic ring.
[245] Before I
begin, however, I wish to comment on some general criticisms levelled by Apotex
to the Servier experts.
[246] Apotex
submits that each of Drs. Trost, Cimarusti and Bartlett erred by applying the
legal test, a matter that goes beyond their expertise. In each case, the expert
was provided a definition or test for obviousness from Servier’s counsel; their
reports stated and addressed the elements of the test. Apotex asserted that I
should ascribe no weight to opinions that were on the ultimate legal question.
I agree. It is not up to the experts to provide the answer to the question of
whether or not the compounds in the '196 Patent were obvious; that is the job
of this Court. However, that does not mean that the opinions and evidence that
these experts have given should, as a whole, be given no weight. It means that
I must come to my own conclusion on the question of obviousness and I have done
so.
[247] Apotex
also submits that the experts erred when they “parsed the art” by taking each
segment of the art and analyzing it as against the invention, rather than
considering the building blocks of prior art together as a whole. I cannot see
fault in the approach taken by each of the Servier experts for this reason,
even if I accept that this was their approach. As noted above, I am not relying
on any legal conclusions of the experts. Ultimately, I am accountable for
choosing the approach to the evidence and opinions that have been put before
me, however they were presented.
(a) The Invention
[248] Apotex
submits that there is no inventive distinction between the 6,5 perhydroindole
bicyclic moiety and other moieties, such as THIQ, and that Servier has, in the
disclosure of both the '196 Patent and '093 Application,
effectively admitted that there is no distinction. This is essentially a
repetition of its argument that there is but one invention in the '196 Patent.
[249] It is also
true that Servier includes THIQ compounds in Table 1 of the '196 Patent
disclosure. This cannot be taken as an admission by Servier that there is no
inventive distinction between the two chemical structures. Indeed, by not
claiming compounds with a THIQ moiety, Servier can be seen as recognizing the
differences between the two moieties.
[250] To repeat my
earlier finding, claim 1 of the '196 Patent forms an invention that is distinct
from the larger class of compounds of General Formula I in the description.
This invention has a bicyclic 6,5 moiety on the C-terminus of the compound and
a linear alkyl group with 1 to 6 carbon atoms on the N-terminus. The fact that
the descriptions of the '196 Patent and of the '093 Application do not distinguish
between a perhydroindole ring and other moieties is immaterial.
(b) The Skilled
Person
[251] The
hypothetical skilled person in the case at bar includes a number of skilled
individuals with experience in work or academia and holding a Masters, Ph.D.,
or medical degree. While the person of ordinary skill in the art is a capable “technician”,
he or she has “no scintilla of inventiveness or imagination” (Beloit Canada
Ltd. et. al v. Valmet OY (1986), 8 C.P.R. (3d) 289 (F.C.A.)). I would only
add that I agree with Apotex that, in this case, such an individual would have
knowledge of SAR methodology. I will return to this point when addressing the
fourth factor below.
(c) Body
of Knowledge
[252] I have
already summarized the body of knowledge the person of ordinary skill in the
art would be expected to have. With the exception of the non-ACE inhibition
prior art, I largely agree with Apotex’s summary of the state of the art as it
existed prior to October 1, 1981.
(d) Climate
in the Field
[253] The fourth
factor enumerated in Janssen-Ortho (C.A.) is the climate of the field at
issue at the relevant time. I accept that the general trend in the prior art
was that the S2 prime subsite of ACE was capable of accepting a wide variety of
moieties, some of which were larger than perhydroindole. I accept that two of
the moieties that were taught in the prior art, tryptophan and the THIQ in the
Tanabe Application, contain bicyclics (in tryptophan as an indole side chain). Furthermore,
I accept that a medicinal chemist would have the skill to use SAR methodology
to manipulate chemical compounds. Nevertheless, I still have doubts as to the
obviousness of the 6,5 perhydroindole ring in the '196 Patent from the prior
art. As pointed out by Dr. Cimarusti, the prior art does not show a single
example of a perhydroindole carboxylic acid moiety in a compound said to have
ACE inhibition. Accordingly, the person of skill would have to select and then
combine a series of disclosures from the prior art. I summarize the
complications which a person of ordinary skill in the art would have
encountered with tryptophan and THIQ (the prior art which Apotex focused on) as
follows:
·
Tryptophan:
o
Contains
a flexible side chain whereas perindopril does not. It was unknown how this side
chain fit into the S2 prime subsite.
o
The
amino group connects to the backbone of the molecule whereas in perindopril it
is the ring nitrogen that makes the connection.
o
Tryptophan
contains double bonds whereas perindopril does not. Although I accept that the
skilled user could potentially have used SAR methodology to reduce the bonds,
it is an additional complication;
·
Tanabe
Application:
o
The
skilled user would have to take the THIQ of the Tanabe Application and combine
it with the Merck side chain resulting in a compound called quinapril. Although
by no means determinative, it is insightful that the Federal Court of Appeal affirmed
a lower ruling that quinapril was not obvious based on either a June 19, 1980 or
October 3, 1980 date (Pfizer Canada Inc. v. Canada (Minister of Health),
2007 FCA 209 at paras. 133-134, leave to appeal to S.C.C. refused, [2007]
S.C.C.A. No. 377 [Pfizer (C.A.)];
o
The
THIQ in the Tanabe Application contains a 6,6 ring with double bonds whereas
perindopril contains a 6,5 ring without double bonds. This results in different
structural and electronic properties such that it would be expected to interact
differently. As with tryptophan, the skilled technician would have to overlook these
differences and reduce the bonds; and
o
Finally,
the skilled user would have to know to select a linear alkyl chain from the
possible side chains in the Merck disclosures. Regardless of whether I accept
Apotex’s claim that the linear alkyl side chain is not part of the 196
invention below, I note that this is an additional complication.
[254] As
acknowledged by Servier, a mosaic of prior art may be assembled in order to
render a claim obvious. Even uninventive skilled technicians would be presumed
to read a number of professional journals, attend different conferences and
apply the learnings from one source to another setting or even combine the
sources. However, in doing so, the party claiming obviousness must be able to
demonstrate not only that the prior art exists but how the person of ordinary
skill in the art would have been led to combine the relevant components from
the mosaic of prior art. This case is a good example. Apotex asks the Court to
conclude that a person of ordinary skill in the art, without inventiveness or
ingenuity, could collate a relatively large number of discrete pieces of
knowledge from a lengthy list of prior art on ACE inhibitors (and even some
sources outside the ACE inhibition field), make some fundamental assumptions
and combine this knowledge to come up with a perindopril molecule.
[255] Another
factor that makes the task more difficult is that, as conceded by Dr. Marshall,
small changes in structure can have unpredictable pharmacological effects
[256] The experts
produced by Apotex who spoke to this issue focussed on each of the individual
components from the prior art. When speaking of the obviousness of the 6,5
bicyclic ring, none of those experts effectively explained how a person skilled
in the art would have known to combine all of the disclosures of the prior art
to come up with the perhydroindole ring structure. I accept that there were
suggestions in the prior art that such a ring might work. However,
combining all of the suggestions of the prior art is, in my view, likely a task
that required ingenuity and inventiveness. Overall, I prefer the expert
evidence of Drs. Trost, Bartlett and Cimarusti.
(e) Motivation
[257] Moving to the
next factor, only one of Apotex’s witnesses, Dr. Marshall, spoke of the
motivation that existed within the ACE inhibition field around October 1, 1980.
In chief, he stated:
They were precluded by the IP position of
Squibb from going in certain directions. And so one of the directions that
many, I think at least four different pharmaceutical companies that I have
knowledge of, went was to basically make bicyclic analogs of, like, THIQ, for
example, the tetrahydroisoquinoline, or various other indole derivatives and so
on to basically replace the proline because they had plenty of evidence that
there was room to make modification.
[258] In short, Dr. Marshall
opines that the motivation of Servier was merely to get around Merck’s IP
position. I find this opinion to be completely speculative. Dr. Marshall
was not working at Merck, Squibb, or any other company involved with ACE
inhibition at the relevant time. His opinion on this point is not supported by
any corroborating evidence. In contrast, Dr. Horovitz, who was working at
Squibb in 1980, had this to say:
I think I just had mentioned that we had
a big effort -- when we saw that Merck had accomplished a better captopril, if
you would, we had a big effort trying to protect our franchise, which we
discovered, and trying to get compounds that were ACE inhibitors that had
advantages over captopril and hopefully enalapril, although we didn't
understand enalapril fully at that time.
And we were unsuccessful until early to
mid ‘80s, when we discovered a compound called to fosinopril, but we were
putting all of our basic knowledge in the field which we pretty much at Squibb
had discovered, and we still weren't able to do that until much later.
[259] In other
words, at least at Squibb, there was recognition, after the Troy conference, of
a specific problem to solve, namely, to come up with a better ACE inhibitor
than that developed by Merck. This testimony is support that a general
motivation existed in the industry to build upon, rather than merely work
around, Merck, and suggests that inventive ingenuity was employed in the case
at bar.
(f) Time
and Effort
[260] Turning to
the next Janssen-Ortho (C.A.) factor, it is uncontested that four
different groups of chemists – ADIR, Hoechst, Warner-Lambert and Schering –
developed compounds incorporating bicyclic ring modifications after Merck’s
disclosure at the Troy conference. Apotex submits that the fact that
so many competitors in the same field came to the same structure around the
same time suggests a finding of obviousness. The first problem with this
assertion is that it is not clear on the record that any of the other chemists discovered
perindopril, with its 6,5 bicyclic ring and a linear alkyl group. But, more
importantly, there was no evidence before me that any of the other compounds were
developed by persons of ordinary skill. We cannot equate the work of Drs. Smith
and Vincent, whose inventiveness and ingenuity is unquestioned, with that of
the person of ordinary skill in the art. Thus, this argument by Apotex provides
no support to their obviousness argument.
(g) Commercial
Success
[261] With respect
to commercial success, it is uncontested that perindopril represents 80% of
Servier Canada’s sales and a significant portion of ACE inhibitor sales in Canada. This
secondary factor, although of limited weight, favours a finding of
non-obviousness.
(h) Meritorious
Awards
[262] Finally, as
no evidence was produced as to whether perindopril received meritorious awards,
I find this factor to be neutral.
[263] Upon
consideration of all the Janssen-Ortho (C.A.) factors I am not persuaded
that the addition of the 6,5 perhydroindole bicyclic ring was obvious.
Accordingly, I need not address Apotex’s argument with respect to the linear
alkyl side chain. Nevertheless, I make the following additional observations.
(2) Obviousness of
linear alkyl side chain
[264] First, as with Apotex’s argument regarding the 6,5 perhydroindole
bicyclic moiety, Apotex’s argument that there is no language in the description
of the '196 Patent limiting the invention to a linear alkyl side chain is
immaterial. Again, the invention at issue in the case at bar is not General
Formula I but the compound, as claimed, having a bicyclic 6,5 moiety on the C‑terminus
and a linear alkyl group with 1 to 6 carbon atoms on the N-terminus.
[265] Second, although I recognize that both the Nature paper and
the '401 Application include substituents with linear alkyl side chains, it
does not mean that a person of ordinary skill in the art would be expected to
know to select, without difficulty, this class of substituents among the many
others written down (Janssen-Ortho (C.A.), above at para. 25).
E. Conclusion
[266] In conclusion, Apotex
has not met its burden to establish, on a balance of probabilities, that claims
1, 2, 3 and 5 of the '196 Patent were, as of October 1, 1981, obvious.
IX. Utility
A. Overview
[267] The Patent Act
defines an invention as something that is “new and useful” (Patent Act,
s. 2). From this comes the concept of “utility”.
[268] A number of principles
associated with the law of utility are well established through the
jurisprudence. To begin, the overarching concept is that, as of the relevant
date, there must have been a demonstration of utility of the invention or,
lacking that, a sound prediction of utility based on the information and
science available at the time of the prediction (see, for example, Merck
& Co. v. Apotex Inc. (2005), 41 C.P. R. (4th) 35 at para. 121 (F.C.); Pfizer
Canada Inc. v. Apotex Inc., 2007 FC 26 at paras. 36-40, aff’d 2007 FCA 195,
leave to appeal to S.C.C. refused, [2007] S.C.C.A. No. 371). Sound prediction
is addressed in the following section of these reasons.
[269] As with the other
questions of validity, Apotex bears the burden. To prove lack of utility,
Apotex must show “that the invention will not work, either in the sense that it
will not operate at all or, more broadly, that it will not do what the
specification promises that it will do” (Consolboard, above at 525).
[270] Beyond this general
statement of the law, there are a number of other guiding posts:
·
Where
the specification does not promise a specific result, no particular level of
utility is required - a “mere scintilla” of utility will suffice (Fox, above
at 153). However, as stated in Consolboard, above, where the
specification sets out an explicit “promise”, utility must be measured against
that promise;
·
Utility does not
depend upon marketability (Consolboard, above at 525; Aventis Pharma,
above at paras. 271-272). In other words, in assessing whether an invention has
utility, the issue is not whether the invention is sufficiently useful as to be
able to support commercialization, unless commercial utility is specifically
promised;
·
The relevant date
has been held to be the filing of the Canadian patent application (Aventis
Pharma, above at paras. 88-96); and
·
Where
a claim is to a class of compounds, lack of utility of one or more of the
compounds will invalidate all of the compounds of that particular claim (Aventis
Pharma Inc. v. Apotex Inc., 2006 FCA 64 at para. 26, leave to appeal to
S.C.C. refused, [2006] S.C.C.A. No. 136).
[271] Quite simply stated,
the question is whether the invention does what the patent promises that it
will do.
[272] Apotex submits that
there are compounds within claims 1, 2 and 3 of the '196 Patent that lack
utility. The two key pieces of evidence that, in Apotex’s view, lead one to
that conclusion are: (a) an article titled Vincent et al., “Synthesis
and ACE Inhibitory Activity of the Stereoisomers of Perindopril (S 9490) and
Perindoprilate (S 9780)” (1992) 9 Drug Design and Discovery 11 (the 1992
Vincent Article); and, (b) the testing performed by Dr. Gavras. The
question of the utility of claim 5 is not in issue; the evidence is clear that
the inventors had made and tested the compound of claim 5 (as twice corrected)
prior to the filing of the '093 Application.
B. Promise of the Patent
[273] Central to the
question of utility (and sound prediction which is discussed in the next
section) is the promise of the patent. As noted, utility is measured against
what the patentee promises will be accomplished by his invention. The views of
Apotex and Servier on this important concept diverge dramatically.
(1) Position of Apotex
[274] In simple terms,
Apotex argues that the '196 Patent promises that all of the claimed compounds
will have ACE inhibitory effect and therapeutic use as an anti-hypertensive. In
reaching this conclusion, Apotex relies on the expert testimony of Dr. Gavras,
Dr. Marshall, Dr. Thorsett, Dr. McLelland and Dr. Brunner.
[275] Dr. Gavras, in his expert report,
opines that:
[T]he '196
Patent promises that the compounds of the invention will inhibit the conversion
of Angiotensin I to Angiotensin II to obtain a reduction in the hypertensive
activity of Angiotensin II of about:
1) 50% to 100% after 30 to 90 minutes after administration, and
2) 40
to 80% more than 6 hours after administration.
Some
compounds (unidentified in the '196 Patent) remain active 24 hours after
administration. Thus, according to the '196 Patent teachings, the compounds of
the invention will be useful in reducing or suppressing the activity of the
enzymes responsible for hypertension and/or cardiac insufficiency.
[276] Dr. Marshall also
examined utility of the claims from a basic premise that all of the claims of
the '196 Patent promised utility in the treatment of hypertension and/or
cardiac insufficiency. Similarly, Dr. Thorsett provides his expectation
that all of the compounds are able to inhibit “the conversion of angiotensin I
to angiotensin II and thus provide anti-hypertensive action and cardiac
insufficiency treatment which is the utility ascribed to the compounds taught
in the '093 Application”. Dr. McLelland
also began his consideration of the question of utility with his opinion that
utility/sound prediction could only be shown if “all of the compounds forming
the subject matter of claims 1, 2 and 3 of the '196 Patent would have
pharmaceutical and therapeutic utility as ACE inhibitors, and thus would be
useful in the treatment of hypertension and/or cardiac insufficiency”. A
similar opinion was expressed by Dr. Brunner.
[277] Apotex also refers to
the Abstract of the '196 Patent, which includes a direct statement that « Ces
composés sont utiles comme médicaments. »
(2) Position of Servier
[278] The experts put
forward by Servier took a narrower view of the promise of the '196 Patent. Dr. Bartlett
was asked to examine the utility promised for the compounds disclosed by the patent.
Key facets of his opinion are the following:
·
The
'196 Patent teaches first and foremost that the compounds disclosed have
utility as inhibitors of certain enzymes, among them ACE;
·
An
anti-hypertensive effect of the compounds is not expressly promised in the
patent, although one skilled in the art would understand that the utility of an
ACE inhibitor is as a potential anti-hypertensive agent; and
·
The
'196 Patent makes no quantitative promise for all of the compounds, as stated
by Dr. Gavras. Nor would someone skilled in the art interpret the '196 Patent
to mean that every compound was tested.
[279] In his expert
report, Dr. Cimarusti concluded that the '196 Patent teaches that the
compounds claimed all have ACE inhibition activity. He opined that a person
skilled in the art would expect some of the compounds of the invention would
have the activity necessary to treat hypertension or cardiac insufficiency.
Further, he stated, “[N]o person skilled in the art would expect that each
compound claimed in the '196 Patent would have pharmacological activity
necessary to treat hypertension and cardiac insufficiency in humans.”
[280] Similarly, Dr. Karmazyn
summarized the promise of the '196 Patent as follows:
In summary, a person skilled in the art
would understand the utility of the patent to be enzyme inhibition, in
particular inhibition of carboxypolypeptidases, enkephalinases or ACE. There is
no teaching as to a particular threshold of inhibition nor any promise of
clinical or commercial utility.
(3) Analysis
[281] In determining
this question of the promise of the patent, I must remind myself that: “(...)
where the language of the specification, upon a reasonable view of it, can be
so read as to afford the inventor protection for that which he has actually in
good faith invented, the court, as a rule, will endeavour to give effect to
that construction (...)” (Consolboard, above at 157).
[282] Having
considered all of the expert evidence of all of the experts and the
specification of the '196 Patent, I find that the opinions of Drs. Bartlett,
Cimarusti and Karmazyn are to be preferred to those of Drs. Gavras,
Marshall, Thorsett, McLelland and Brunner.
[283] Some of the
Apotex witnesses were reading the patent document as requiring commercial
utility. Of particular note, I refer to Dr. Brunner’s testimony. He was
told by Apotex’s counsel that commercial utility is not to be confused with
utility in terms of patentability of the invention. In spite of this, when
cross examined, Dr. Brunner agreed that his concept of utility for this
patent was that a doctor would be able to prescribe the compound for treatment
of hypertension or cardiac insufficiency. This interpretation of the patent was
also the basis of Dr. Gavras’s testimony. By requiring that each and every
compound needs to be successful to the point of being a drug that a doctor
could prescribe, the experts are infusing their reading of the patent with the
need for a commercialized product.
[284] The first and
most significant reference to the utility of the '196 Patent is contained in
three paragraphs on page 3 of the specification:
Les composés selon l’invention ainsi que
leurs sels pos-sèdent des propriétés pharmacologiques intéressantes. Ils
exercent notamment une activité inhibitrice sur certaines enzymes, comme les
carboxypolypeptidases, lest enkephalinases ou la kininase II. Ils inhibent
notamment la transformation du décapeptide angiotensine I en l’octapeptide
angiotensine II, responsable dans certains cas de l’hypertension artérielle, en
agissant sur l’enzyme de conversion.
L'emploi en thérapeutique de ces composés
permet donc de réduire ou même supprimer 1'activité de ces enzymes responsables
de la maladie hypertensive ou de 1'insuffisance cardiaque. L'action sur la kininase
II a pour résultat 1'augmentation de la bradykinine circulante et également la
baisse de la tension artérielle par cette voie.
L'invention s'étend aussi aux
compositions pharmaceuti-ques renfermant comme principe actif au moins un
compose de formule générale I ou un de ses sels d'addi-tion, avec une base ou
un acide minéral ou organique, en association avec un excipient inerte, non
toxique, pharmaceutiquement acceptable.
[285] I think that
there can be no doubt that the promise of ACE inhibition is made, unambiguously
and without reservation, in the first paragraph cited above. As translated,
this passage states clearly that the compounds inhibit the transformation of
the decapeptide angiotensin I to the octapeptide angiotensin II.
[286] The second
paragraph refers to the therapeutic use but is to some degree ambiguous. Do the
words « permet donc de réduire ou même supprimer 1'activité de ces
enzymes . . . » mean that all of the compounds will have utility as anti-hypertensive
medicines in humans? Or, is the specification of the patent stating that
therapeutic use of the compounds may have therapeutic value? This
ambiguity is reflected in the disparate views of the experts. If there was one
common meaning, I would have expected all of the experts to have come to the
same view. They did not.
[287] In my view,
the passages cited do not teach that every one of the compounds has the same or
any therapeutic use in humans. The better and more reasonable view of the
second paragraph, read in its entirety with the balance of the '196 Patent, is
that it contains an explanation of how a particular compound could be
put to therapeutic use. In other words, the patent teaches that the ACE
inhibition exhibited by all of the compounds makes it possible that they
could be used to treat hypertension and cardiac insufficiency. I do not read a guarantee
into those words as was done by Drs. Gavras, Marshall, Thorsett, McLelland
and Brunner.
[288] Finally, I
refer to the sentence in the Abstract or Précis that reads « Ces composés sont
utiles comme médicaments. » Apotex submits that this is another embodiment of
the promise of the patent. I do not agree. These exact words were also
contained in the '093 Application.
Subsection 175(1) of the Patent Rules is a response to Apotex’s
argument. That provision states that:
An
application shall contain an abstract that provides technical information and
that cannot be taken into account for the purpose of interpreting the scope
of protection sought or obtained.
|
La
demande contient un abrégé qui présente de l’information technique et qui ne
peut être pris en considération dans l’évaluation de l’étendue de la
protection demandée ou obtenue.
|
[289] The direction
and intent of this provision is clear; the abstract cannot be taken into
account in interpreting the scope of protection sought or obtained.
Whatever the purpose of the abstract, it cannot be used – before or after the
issuance of the patent – to construe the patent or its promise.
[290] My assessment
of the promise of the '196 Patent is not inconsistent with the determination of
Justice Heneghan in Pfizer, above. In that case, Justice Heneghan was
asked to examine the utility of claims of Canadian Patent No. 1,341,330 ('330
Patent), which patent covers quinapril. Pfizer argued that a purposive
construction of the relevant claims, including reference to the specifications,
discloses that the invention of the '330 Patent relates to ACE inhibition. On
the other hand, Apotex argued that all of the claims of the '330 Patent promise
compounds useful in reducing or relieving hypertension, which is distinct from
ACE inhibition. It submitted that not all ACE inhibitors have sufficient
inhibition activity to be capable of acting as an anti-hypertensive useful in
the treatment of hypertension. With reference to the specification of the '330
Patent, Justice Heneghan concluded that the claims of the '330 Patent would be
read by a person skilled in the art as referring to compounds useful for the
relief of hypertension (Pfizer, above at para. 64). However, it
appears clear that she reached this conclusion on the basis of specific words
in the '330 Patent. The abstract of the patent stated that: “The compounds of
the invention, their salts and pharmaceutical compositions thereof are
useful as antihypertensive agents” [Emphasis added]. Another example of
this direct promise could be seen in the sentence in the specification that
read:
Thus by the administration of a
composition containing one or a combination of compounds of formula I or
pharmaceutically acceptable salts thereof, hypertension in the species of
mammal suffering therefrom is alleviated (Pfizer, above at para. 65).
[291] Although
reversed in the Federal Court of Appeal, the Court of Appeal concluded that
Justice Heneghan’s characterization of the promise “is reasonable in light of
the passage cited above and the overall [tenor] of the disclosure” (Pfizer
(C.A.), above at para. 121).
[292] There are
important distinctions to be made between the “overall [tenor] of the
disclosure” disclosed in the specification for the '330 Patent and that of the '196
Patent. In particular, there is no statement in the '196 Patent, as there was
for the '330 Patent, that the compounds of the invention, their salts and
pharmaceutical compositions thereof are useful as antihypertensive agents.
[293] In sum, I
conclude that the promise of the '196 Patent is that all of the compounds
claimed will have some level of ACE inhibition when measured in vitro
and that some of the compounds will have sufficient activity to treat
hypertension and cardiac insufficiency.
[294] With this
promise in mind, I turn to the two arguments made by Apotex.
C. The 1992 Vincent Article
[295] Apotex’s
first argument relates to the 1992 Vincent Article. The paper, while published
in 1992, was the result of work carried out by a number of employees within
Groupe Servier beginning in 1985. Two of the authors – Dr. Vincent and Dr.
Jaguelin – appeared as witnesses at the trial and spoke to the 1992 Vincent
Article. Dr. Laubie did not appear as a witness at the trial. However, he
was a witness on discovery for Servier and was examined on, inter alia,
the 1992 Vincent Article.
(1) Context
of the 1992 Vincent Article
[296] I think that
it is useful to situate the 1992 Vincent Article. What was disclosed? What did
the authors conclude?
[297] It is clear
that the authors assumed the huge task of producing and testing the 32
stereoisomers of perindopril (referred to as 1 (S SS SS) in the paper,
that being a reference to the chirality of the 5 stereocentres of perindopril).
But why did they do that? I begin by looking at the text of the 1992 Vincent
Article. The article’s abstract is of some limited help in this regard:
Perindopril, a powerful ACE inhibitor
contains 5 chiral carbons, thus there is the possibility of 25 = 32
stereoisomers for the general structure 1. These 32 stereoisomers were
synthesized by cross-coupling the 8 stereoisomer of perhydroindole 2-carboxylic
acid benzylester with the 4 stereoisomers of 2-(1-carbethoxybutylamino)
propionic acid 4, then hydrogenating the resulting benzylesters. Each
stereosoismer of perindopril furnished by saponification the corresponding
diacids stereoisomer 2 of perindoprilate which is the active form of
perindopril. For each of the 32 stereoisomer 2 the in vitro ACE
inhibitory potency (IC50) was determined. Four of them, including
perindoprilate, had activities in the nanomolar range, and four more were ca.
10 x less active. The four acid esters 1 corresponding respectively: to the
four most active diacids 2 in vitro were studied (1 mg/kg via the
oral route) for their in vivo activity in dogs. It could be concluded
that p.o. absorption of the active acid esters 1 and their activation to the
active diacid 2 depended only on the chiralities of the two ring junction
carbons of the perhydroindole ring.
[298] Turning to
the actual text of the article, we see a brief history of the development of
perindopril at page 12, where the authors state:
Many difficulties were
encountered during the course of the synthesis of 1 (S SS SS), mainly
because it contains five asymmetric carbon atoms. Thus there is the possibility
of 25 = 32 stereoisomers for the general structure 1.
These problems have been
solved and now large quantities of 1 (S SS SS) are produced
industrially. Nevertheless, one or several stereoisomers of 1 and/or 2
could be present as impurities in some batches. Moreover, these “impurities”
could be eventually active as inhibitors of ACE. For these reasons, we decided
to realize the synthesis of the thirty-two stereoisomers of 1 and of the
thirty-two stereoisomers of 2 [perindoprilate].
Here we describe the synthesis
of these sixty-four compounds and we also report the values obtained by
measuring the inhibitory activity (IC50) of the stereoisomers of 2
on ACE in vitro. The knowledge of IC50 for all stereoisomers
of 2 is the source of very interesting chirality-activity relationships.
[299] After
spending considerable time describing the method of synthesis, the authors
reported on the in vitro testing of the 32 isomers of diacid 2,
beginning at page 18. On the basis of the testing results, the compounds were
divided into three groups. The first group of four compounds (with
configurations (S SR SS), (S RS SS), (S SS SS) and (S RR SS) demonstrated the
highest activity. The second group of four (S SS SR), (S SR SR), (S RR SR) and
(S RS SR) “retained 1/10 of the
activity given by the first group
derivatives”. The authors reported on the remaining 24 compounds as follows:
A third group contained all of the
other compounds, with low to zero activities. Their C2 and/or
C9 being of R configuration, no rational conclusions can be drawn
from their structure-activity relationships. These compounds seemed not to
be able to bind to the active site of ACE. [Emphasis added.]
[300] The authors
went on to test the group 1 compounds in vivo.
(2) Table
I in the 1992 Vincent Article
[301] One prong of
Apotex’s attack on the utility of the '196 Patent is that a number of the 32
compounds claimed by claim 3 of the '196 Patent are not active as ACE
inhibitors. That is, even on the narrower construction of the promise of the '196
Patent, many of the stereoisomers of perindopril show no ACE inhibition. Apotex
points to the statement in the 1992 Vincent Article (set out above) that
describes 24 of the stereoisomers that would be covered by claim 3 of the '196
Patent as having “low to zero activities” and as seeming to be unable “to bind
to the active site of ACE”.
[302] Both parties
and a number of expert witnesses referred extensively to Table I, at page 19 of
the article. I have reproduced the information contained in Table I in the
following chart:
[303] The measure
of activity was the IC50 value. Dr. Horovitz, in his expert report,
described the IC50 measurement as follows:
IC50 refers to the
concentration of the drug that inhibits fifty percent (50%) of the activity of
the enzyme in vitro. The lower of the IC50 value, the less
amount of compound is necessary to inhibit the response. In other words, the
lower the number for IC50, the more potent the compound. IC50
is usually expressed in terms of moles per litre (M). The calculation of IC50
is made from the assessment of the activity of a compound at different
concentrations. An IC50 is the standard measure of an activity of a
compound at different concentrations. An IC50 is the standard
measure of activity of a compound in vitro, both in 1981 and today.
(3) Dr. Laubie’s
Admission
[304] An important
aspect of the evidence that, in Apotex’s view, supports their position comes
from an “admission” by Dr. Laubie. Dr. Laubie is one of the named
inventors of the '196 Patent and a co-author with Dr. Vincent and others
of the 1992 Vincent Article. Dr. Laubie was examined in discovery. The
parties agreed that his discovery testimony would be accepted as read in and that
Dr. Laubie would not be called as a witness in the trial.
[305] Apotex
submits that Dr. Laubie agreed with the conclusion at page 20 of the 1992
Vincent Article that a number of the compounds in Table I had “low to zero
activities” in vitro. In response, Servier contends that, during the
discovery questioning, Dr. Laubie was referring to in vivo activity
and not to in vitro activity. The difference is important; a compound
may be active in vitro and inactive in vivo. If Dr. Laubie
was speaking of in vivo – and not in vitro compounds, this aspect
of Apotex’s argument is substantially weakened.
[306] I begin by
setting out the entire passage from the discovery of Dr. Laubie by counsel
for Apotex:
BY MR. RADOMSKI:
Q. Okay, can we look at page 20, the
paragraph before the one that reads in vivo studies. I’m wondering whether what
is expressed in this paragraph was your view when this paper was written about
the third group of compounds that are discussed in this paragraph?
MR. RADOMSKI: I’m happy for you to
translate the paragraph for the, Doctor ([r]eferring to the interpreter.)
THE WITNESS: All of these products that
you see here and the results, all of these are inactive products, 10 minus 3,
all of these are inactive.
BY MR. RADOMSKI:
Q. He’s pointing to the table on page 19;
is that right?
A. Yes.
Q. And you say all of these products in
table 1 are inactive?
A. Not all of them.
Q. Which?
A. I would say, if you look at this
series, there are at the most three or four active products in vivo.
Q. They’re the first three or four?
A. Yes.
Q. And the balance, in your view, are
inactive?
A. That is correct.
Q. And so going back to the paragraph on
page 20, before the heading “in vivo studies”, I take it you agree with the
conclusion in that paragraph?
A. Yes.
[307] The question
is whether, from this transcript reference, I can conclude that Dr. Laubie
admitted that the third group of compounds had “little to zero” activity in
vitro. There are a number of difficulties with this passage. First, while
the words in vivo appear twice in the extract, there are no explicit
references to in vitro. While Mr. Radomski may have been clear, in his
own mind, that he was asking about in vitro activity, he did not put
those words to the witness. In contrast, when Dr. Laubie stated, “I would
say, if you look at this series, there are at the most three or four active
products in vivo”, it is clear that the witness was focussed on in
vivo activity – at least at that moment. At best, there is ambiguity.
[308] I also take
into account that the examination involved an interpreter. In that situation,
it is always possible that either the witness or the counsel misunderstood the
questions or answers.
[309] In light of
the explicit reference to “in vivo” by Dr. Laubie and the difficulties
inherent in translation, I find that it is more likely than not that Dr. Laubie
was speaking about in vivo activity.
[310] However, even
if Dr. Laubie’s words can be interpreted as an admission, any such
admission must be weighed with the other evidence relating to the meaning of
the 1992 Vincent Article.
(4) The
Purpose of the 1992 Vincent Article
[311] The purpose
for which the article was written must be considered.
[312] As written,
it appears to me that the first purpose of the paper was to report on the
successful synthesis of the 32 stereoisomers of each of perindopril and
perindoprilate. Secondly, the paper was intended to stress the importance of
chirality on structure-activity relationships. This second objective was
attained by comparing the relative activities of the various compounds, with the
focus on those with the highest activities (group 1). To put this into the
negative, I would not read the 1992 Vincent Article as a description of the
absolute activity of all 32 stereoisomers of perindopril.
[313] As stated by Dr. Bartlett,
the purpose of the 1992 Vincent Article was “to compare the levels of ACE
inhibitory activity among the various stereoisomers, not to establish the
presence or absence of activity for any particular stereoisomer.” In Dr. Bartlett’s
view, the article “only establishes that the IC50 values of certain
compounds are no better than 10-4 nM, not that they fail to meet the
utility promised by the '196 Patent.” I agree with this assessment by Dr. Bartlett.
(5) The
Underlying Data
[314] It is helpful
that we have the underlying internal pharmacological testing data for all of
the results shown in Table I in the 1992 Vincent Article. Each and every one of
the compounds showed some activity. This is evidenced by the pharmacological
testing sheets, where it appears that a cut-off point of 10-5 nM was
used for reporting purposes. However the pharmacological data show that, as the
concentrations increased, the compounds showed good inhibition. For example, Dr. Horovitz
discussed the all-R stereoisomer of perindopril which, at the highest concentration
tested, inhibited ACE by 46%. His unchallenged and uncontradicted evidence is
that, had a higher concentration been tested, an inhibition over the 50% mark
would have occurred and a precise IC50 value could have been
calculated.
[315] The Apotex
experts provided little insight or opinion on the internal pharmacological
testing data. Dr. Marshall suggested that any activity seen with R
stereoisomers was due to some contamination with S stereoisomers. Dr. Marshall
admitted not only that this was speculation but that the R stereoisomers have
some IC50 potency themselves which is not due to contamination.
[316] Why would the
authors not refer to the actual test results for the least active compounds but
refer only to approximate values? The answer to this comes from the purpose of
the paper. The authors were examining relative activity and not absolute
activity. In that context, they were only pointing out the relative lack of
activity and their own disinterest in the compounds that would not be capable
of commercialization. However, the fact remains; the internal pharmacological
testing data demonstrate that all of the compounds had ACE inhibition
activity. This, in my view, satisfies the requirement that a “mere scintilla”
of utility be shown.
(6) Dr. Vincent’s
Testimony
[317] Finally, I
turn to the testimony of Dr. Vincent, one of the authors. When asked about
the “low to zero” comments in the paper and Table I, Dr. Vincent stated
the following:
Là, j'ai exagéré. Ce ne sont pas des
composés qui n'ont pas d'activité. S'ils avaient une activité zéro, dans la
colonne de droite on aurait mis zéro, on n'aurait pas mis des chiffres.
Ces chiffres sont élevés, mais il y a une
très petite activité. Cette très petite activité veut dire que ces produits ne
seraient pas, de toute façon, commercialisables.
Ça veut dire que ces produits sont d'une
activité faible, non nulle, mais qui ne sont pas commercialisables. Je crois
qu'il faut insister là‑dessus.
Le zéro est de trop. Si c'était zéro,
j'aurais mis zéro. Il y a pas zéro. [Emphasis added.]
[318] When asked
during cross-examination about the sentence in the paper that reads, “These
compounds seemed not to be able to bind to the active site of ACE”, Dr. Vincent’s
response was:
[S]’ils avaient été totalement incapables
de se lier, je n’aurais pas écris “Ces composés ne semblent pas être capables.”
J’aurais écrit “Ces composés ne se lient pas.” Et ça aurait été en relation
avec ce zéro, qui lui, est une erreur.
(7) Conclusion
in Respect of the 1992 Vincent Paper
[319] Weighing all of the
evidence before me with respect to the meaning of the 1992 Vincent Article, I
find that the 1992 Vincent Paper does not, on a balance of probabilities,
either expressly or by inference, demonstrate that any of the compounds of
claim 3 of the '196 Patent lack utility. I make this finding, in spite of the
reference in the journal article to “low to zero activity”, based on the
following evidence:
·
The
evidence of Dr. Laubie on this point is, at best, ambiguous;
·
The
purpose of the article was not to describe absolute activity or inactivity;
·
Table
I does not state that the least active, third group, of compounds had “zero”
activity;
·
As
evidenced by the underlying pharmacological testing data, an IC50
value was obtained for every one of the compounds; and
·
Dr. Vincent,
one of the authors, was clear in his explanation of the “low to zero” activity.
D. Dr. Gavras’s Testing
Report
[320] Apotex’s
second argument on utility relates to testing performed by Dr. Gavras. In
Apotex’s view, the test results demonstrate that at least one of the compounds
of claim 3 of the '196 Patent lacks utility.
(1) Description
of the Testing
[321] At the
request of counsel to Apotex, Dr. Gavras carried out supervised in vivo
and in vitro testing of three compounds to evaluate their ACE inhibiting
capacity and anti-hypertensive activity in comparison to perindopril. Dr. Gavras’s
results and testing methodology were set out in his report (the Gavras Report).
[322] The three
compounds tested against perindopril consisted of an (R RR RR) stereoisomer of
perindopril and two analogs. As such, they would all have been included in
claim 3 of the '196 Patent. As described in the Gavras Report, the compounds
were:
A – (R,R,R,R,R)-Perindopril methyl ester
analog
B – (R,R,R,R,R)-Perindopril butyl analog
C – (R,R,R,R,R)-Perindopril
[323] Compound D
was perindopril as set out in claim 5 (as twice corrected) of the '196 Patent.
[324] Dr. Gavras
described his task as follows:
The compounds were to be tested in
vitro for their capacity to inhibit the effect of pure ACE to hydrolyze
peptide substrates by removing two amino acids from the C-terminal of a
polypeptide . . . ; and in vivo for their capacity to inhibit
conversion of angiotensin I (Ang I) to angiotensin II (Ang II) in normotensive
rats and for their capacity to lower the blood pressure in renin-dependent
hypertension of renovascular hypertensive rats in the early phase of
hypertension, which is purely angiotensin-dependent.
[325] Dr. Gavras
noted that all four compounds were provided and utilized for the in vitro
testing in ester form. Dr. Gavras acknowledged, in his report, that all
four compounds should have been completely deesterfied prior to testing since “the
active compounds in vivo are the diacids”. Nevertheless, he noted that
Compound D, even though in ester form, gave almost complete ACE inhibition.
[326] Dr. Gavras
reported that, relative to compound D (perindopril), compound A had a 50%
inhibitory capacity in vitro; and that in vitro effects of
compounds B and C were described as “totally devoid of ACE inhibiting activity”.
[327] The in
vivo studies on normotensive rats showed that none of the three compounds
(A, B or C) could inhibit the conversion of exogenously injected Ang I to Ang
II; and complete inhibition by Compound D.
[328] The in vivo
testing on rats with renovascular hypertension of the two-kidney-one-clip type
showed no drop in blood pressure for compounds A, B or C; and a 47 mmHg fall in
mean blood pressure lasting for several hours for Compound D.
(2) Apotex’s
Argument
[329] As stated in
their written final argument, Apotex’s position on this issue is the following:
When the question of whether all of the
compounds claimed by claims 1, 2 and 3 of the '196 Patent are able to generate
a therapeutic anti-hypertensive effect is asked, Apotex respectfully submits
that the in vivo testing performed by Dr. Gavras clearly
demonstrates that some of the compounds do not provide such an effect.
(3) Apotex’s
Underlying Premise
[330] The first
point to highlight is that Apotex’s argument assumes that the promise of claims
1, 2 and 3 is that the compounds of those claims have a “therapeutic
anti-hypertensive effect”. As discussed above, I do not accept this broad
interpretation of the promise of the '196 Patent. Accordingly, Dr. Gavras’s
testing conclusions, as relied on by Apotex, are not relevant.
(4) Problems
with the Testing Methodology
[331] However, even
if I were to carry on to assess the results obtained by Dr. Gavras, I
would come to the conclusion that the results should be given little to no
weight.
[332] Drs.
Horovitz, Cimarusti and Karmazyn, in particular, were very critical of Dr. Gavras’s
testing methodology, to the point where they concluded that the experimental
design renders it impossible to determine whether compounds A, B or C had ACE
inhibition activity.
[333] Dr. Brunner
replied, in his Reply Affidavit and in oral testimony, to the various
criticisms of Dr. Gavras testing methodology. During his oral testimony, Dr. Brunner
described what I believe was his approach to all of the criticisms as follows:
I would -- my point is that this is -- as
I said before, this is not a study submitted to a scientific journal to
describe the three compounds with the positive control of the fourth of
perindopril.
This is just evaluation to these three
compounds to fulfil the promise of the patent, or not, which is therapeutic
utility.
[334] The problem
that I see with this line of reasoning is that, while the study was not done
for submission to a scientific journal, it was done for the purpose of
invalidating a patent. This is a very serious consequence. While I would not
demand perfect compliance with the norms required for peer-reviewed
publications, I would expect an adequate level of scientific rigour.
[335] I turn to the
specific criticisms.
[336] Lack of
statistical analysis. No statistical analyses were conducted on any
of the testing results. Apotex and Dr. Brunner (in addition to his general
rejection of all of the criticisms) dismiss this criticism on the basis that
statistical analysis is not needed when no activity is shown. If this were the
only concern that I had with the testing, I would likely agree with Dr. Brunner.
[337] State of test
compounds.
Even Dr. Gavras acknowledged that all four compounds should have been
completely deesterfied prior to testing since “the active compounds in vivo
are the diacids”. Theoretically, none of the compounds should have shown
results in vitro. Nevertheless, Dr. Gavras found that Compound A
inhibited ACE, relative to perindopril, by 50%. To explain this apparent
anomaly, Dr. Gavras was forced to assume that some of the compounds had
partly deesterified. Yet, because no analytical testing was conducted, Dr. Gavras
had no way of knowing whether or to what extent the other compounds had
deesterified. The state of the compounds thus remains a mystery and the effect
of partial deesterification on the testing is unknown. This is a serious
shortcoming in the testing.
[338] Only one
concentration/dose tested. Contrary to the protocol that he established, Dr. Gavras
did not test multiple concentrations or doses of the compounds in vitro.
The reason given was that to determine relative efficacy, one only needs to
give one dose. Accordingly, the only conclusion that can be made from the Gavras
Report is what effect one concentration dose had on inhibiting ACE. There is no
evidence whatsoever that a higher concentration or dose would not have resulted
in increased ACE inhibition activity. I agree with this criticism.
[339] Waiting
period for in vivo activity assessment. Dr. Gavras’s
protocol mandated that the level of activity for each compound be tested for
several hours after administration in vivo. However, Dr. Gavras
admitted that in only one animal (Ql) did he wait more than 20 minutes. In the
opinions of both Dr. Karmazyn and Dr. Horowitz, the consequence of
not waiting the minimum 30 minutes to one hour is that one cannot be certain
that the compound has converted to the active diacid form. In my view, this is
another serious flaw.
[340] Lack of
controls and lack of randomization. Dr. Gavras did not
a use sham control and did not randomize his animals in the in vivo
testing. Drs. Horowitz and Karmazyn opined that both are important
controls to ensure that an effect or lack thereof is not attributable to the
design protocol. Particularly on the question of randomization, I agree with the
criticisms.
[341] Having
reviewed the evidence and testimony surrounding the testing by Dr. Gavras,
I conclude that the results are seriously compromised by the problems described
above. The cumulative impact of the problems pointed out by the experts cannot
be ignored. Accordingly, I would give no weight to the Report of Dr. Gavras
on the testing of the compounds.
(5) Conclusion
on the Gavras Report
[342] In summary on
the Gavras Report and its relationship to utility, I find that Apotex’s
arguments do not establish a lack of utility for the compounds of claim 3. The
reasons, as described in detail above, are as follows:
(a)
Apotex
relies on the Gavras Report to demonstrate that certain of the compounds of
claim 3 do not have a “therapeutic anti-hypertensive effect”. Since this is not
the promise of the patent, the testing results are irrelevant.
(b)
In
any event, the testing methodology of Dr. Gavras is so seriously flawed
that little weight can be given to his results.
E. Conclusion on Utility
[343] Based on the
above analysis, I find that Apotex has not satisfied its burden to show that
the compounds of claims 1, 2 and 3 of the '196 Patent lack utility.
X. Sound
Prediction
A. Overview
[344] Given that
Apotex has failed to persuade me of the lack of utility of the compounds of
Claim 3 on the basis of the Gavras Report or the 1992 Vincent Article, I turn
to the notion of sound prediction. As noted in the section that precedes, the
law requires that, as of the relevant date, there must have been a
demonstration of utility of the invention or, lacking that, a sound prediction
of utility based on the information and science available at the time of the
prediction.
[345] As noted,
claims 1, 2 and 3 are claims to a class of compounds. The evidence before me
shows that some but not all of the compounds were tested by the inventors prior
to application of the patent. It is not, however, essential that complete
testing have been carried out. The doctrine of sound prediction can be relied
upon by an inventor to justify patent claims whose utility has not been
actually demonstrated, but can be soundly predicted based upon the information
and expertise available (Apotex Inc. v. Wellcome Foundation Ltd., [2002]
4 S.C.R. 153 [Wellcome (S.C.C.)]). Because there was not testing of all
of the compounds included in claims 1, 2 and 3, the question is whether, based
on the information and science available at the time of the prediction, the
inventors could make a prediction of utility for all of the compounds claimed.
[346] The soundness
or otherwise of the prediction is a question of fact.
[347] In Wellcome
(S.C.C.) above, at para. 70, the Supreme Court of Canada articulated a
three-part test that must be satisfied in order to establish that a sound
prediction has been made by the purported inventor. The three elements of the
test are:
1.
There
must be a factual basis for the prediction;
2.
The
inventor must have an articulable line of reasoning from which the desired
result can be inferred from the factual basis; and
3.
There
must be proper disclosure, although it is not necessary to provide a theory as
to why the invention works.
[348] To be sound,
a prediction does not need to amount to a certainty, as it does not exclude the
risk that some compounds within the area claimed may prove to be devoid of
utility. The test contemplates that the Canadian filing date be used for the
purposes of assessing the soundness of the prediction.
[349] Thus, the
question is whether, as of the date of the Canadian filing, ADIR and its
scientists had a factual basis for their prediction, and an articulable line of
reasoning from which the desired result could have been inferred from the
factual basis.
[350] Under the
heading of sound prediction, Apotex makes two separate assertions:
1.
The
inventors could not have predicted that the compounds with an (R,R,R)
configuration on the backbone would have any ability to fulfill the promise of
the patent; and
2.
The
'196 Patent does not disclose any methodology as to how to make the trans
perhydroindole molecules claimed by claims 1, 2 and 3.
[351] I will
consider each of these in turn.
B. Prediction of Utility of the
(R,R,R) Compounds
[352] I begin my
analysis by noting that Dr. Brunner did not did not speak to the soundness of
the all-R backbone. His testimony is therefore not relevant to this issue.
Furthermore, a review of Dr. Gavras’s testimony reveals he erroneously
approached the question of sound prediction by examining ex-post facto material
such as the 1992 Vincent Article as well as his own testing of the '196 Patent.
Accordingly, I give no weight to his opinion with respect to this issue either.
[353] Apotex
correctly points out that the '196 Patent, in claims 1, 2 and 3, claims a
number of compounds with one or more stereocentres in the R-configuration. As
of October 1, 1981, the inventors had not tested any compounds with an (R,R,R)
configuration on the backbone of the claimed molecule. Apotex submits that the
named inventors of the '196 Patent did not have, and could not have had, a
prediction that compounds with the (R,R,R) configuration on the backbone of the
molecule would possess the promised utility of the '196 Patent. Indeed, Apotex
asserts that, in light of the state of the art as of the filing date of the '196
Patent, the undeniable prediction would be that such compounds would not
possess utility as anti-hypertensive agents or even as ACE inhibitors.
[354] In support of
its claim, Apotex relies on a number of captopril-related scientific papers
which Apotex argues demonstrate that it was known, as of October 1, 1981, that
compounds with
the S-configuration on the two
stereocentres of captopril and its analogs had markedly superior activity in
comparison to those with the R-configuration. These papers include:
·
the
Experientia paper;
·
the
Science paper;
·
the
Biochemistry paper;
·
the
Progress in Cardiovascular Diseases paper; and
·
the
Biological Chemistry paper.
[355] Apotex
submits that the teachings of the captopril-related papers were reinforced by
the Merck disclosures at the Troy conference in June 1980, in the '401
Application, and in the Nature paper, which, together, stated that
compounds with the S-configuration were significantly more active than
compounds with the R-configuration and that the S-configuration was to be
preferred.
[356] Servier, for
its part, relies on the same prior art cited by Apotex, above, but offers a
different interpretation as to how the art would be understood by the person
skilled in the art. In brief, Servier submits that a proper reading of the
prior art suggests that compounds with the (R,R,R) configuration would have less
but still some activity.
[357] I agree with
Apotex that, as of October 1, 1981, the prior art had taught that the (S,S,S)
configuration at the three stereocentres of the backbone was preferred to the
(R,R,R) configuration. I also agree that the prior art had demonstrated that
compounds with an all S-configuration showed significantly more activity than
compounds with the R-configuration. Regardless, upon reviewing the prior art, I
am still not persuaded that Servier did not have a sound basis for predicting
that compounds with the all R-configuration would have ACE inhibitory activity.
In making this conclusion I return to the promise of the patent at issue.
[358] To reiterate
my earlier finding, the promise of the '196 Patent was that all of the
compounds claimed would have some level of ACE inhibition when measured in
vitro and that some of the compounds would have sufficient activity to
treat hypertension and cardiac insufficiency. There was no prediction or
promise that all of the compounds of claims 1, 2 and 3 would be capable of
treating hypertension or cardiac insufficiency. It follows that there was no
prediction that any of the compounds with an all R-configuration on the
backbone would necessarily be capable of treating hypertension or cardiac
insufficiency.
[359] While
admittedly demonstrating that compounds with the R-configuration had a low
level of activity as compared to those with the S-configuration, the conclusion
I draw from the prior art relied on by Apotex is that compounds with the
R-configuration at various positions of the backbone would be expected to have some
level of ACE inhibition. Indeed, this was not disputed by Apotex’s experts,
Drs. Marshall, McClelland, and Thorsett, who agreed that some activity was
recorded in the prior art when
stereoisomers with the R-configuration had been used. For example, in his
affidavit, Dr. Thorsett writes:
By the filing date of the '093 Application… it had been established as
part of the common knowledge of the person skilled in the art that certain
stereochemical configurations at centers 1-3… namely one or more of them being “R”
was readily associated with an extremely poor and non-useful inhibitor
activity against ACE in vitro. [Emphasis added.]
[360] Similarly,
Dr. McClelland’s affidavit states:
Taking into account the multiple binding,
the skilled person would understand that multiple changes from (S) to (R) would
result in compounds that were very poor inhibitors of ACE, if they
inhibited at all, and that such compounds would not be useful in the treatment
of hypertensive disease or cardiac insufficiency. [Emphasis added.]
[361] During
cross-examination of Dr. Marshall the following exchange took place with
respect to the Biochemistry paper:
Q. But the question is not whether
there is significant activity. The question is whether there is a recorded
activity.
A. There is a recorded activity.
And I think the reason it’s recorded is because of the contamination problem.
I can't be sure of that, because there was no effort made at that time, nor
were there methods available to quantitate the amount of contamination.
[Emphasis added.]
[362] While Dr.
Marshall suggested that the recorded activity was due to possible
contamination, it is clear that he was merely speculating on the issue, and did
not disagree that the prior art did in fact record activity when the
R-configuration was used.
[363] In my view,
even a poor level of ACE inhibition supports a prediction of some level of ACE
inhibition.
[364] In addition
to the prior art, I find that the teachings that the soundness of Servier’s
prediction was reinforced by the making and testing by Servier of perindopril,
which falls within claim 3 of the '196 Patent. Although, it is true that
Servier had not tested any compounds with an (R,R,R) configuration on the
backbone of the claimed molecule as of the filing date, the state of knowledge
at the time suggested that compounds with the same backbone, but in the
R-configuration, would have some level of ACE inhibition.
[365] The case at
bar can be contrasted with Aventis Pharma, above, where Justice Mactavish
found that claim 12 of the '206 Patent had
not been soundly predicted. Claim 12 of the '206 Patent had described a
group of eight stereoisomers with a 5,5 bicyclic ring structure in lieu of the
proline ring in the class of compounds disclosed and claimed by Merck in the
enalapril patent. The prediction at issue was characterized by Justice Mactavish
at paragraph 110 of her decision as follows:
What precisely was Schering’s prediction?
Schering states that it predicted that by putting bicyclic rings on the proline
end of an enalapril molecule, one would have compounds that would be useful as
ACE inhibitors and anti-hypertensive agents. [Emphasis added.]
[366] This is an
entirely different prediction than that made by Servier in the case at bar,
namely that all compounds in claim 3 would have some level of ACE inhibition
and some would have sufficient activity to treat hypertension and
cardiac insufficiency. Aventis Pharma can be further distinguished from
the case at bar given that, in contrast to the case before me, it involved
a proceeding under the Patented Medicine (Notice of Compliance) Regulations,
S.O.R./93-133 (NOC Regulations) and, prior to the filing date, the
chirality of the only compound that had been created by the inventors was
unknown (Aventis Pharma, above at para. 130).
[367] In sum, the
combined teachings of the prior art, most significantly the Nature paper
and the '401 Application (which used the same Merck backbone as perindopril),
convince me that it is more likely than not that the inventors had a factual basis
and sound line of reasoning upon which they could predict that the compounds of
claim 3 would have some level of ACE inhibition.
[368] Apotex did
not argue, on this point, that the '196 Patent does not satisfy the disclosure
element of the three part test for sound prediction. In any event, even if it
had, I am satisfied that the specification provides a full, clear and exact
description of the nature of the invention and the manner in which it can be
practised (Wellcome (S.C.C.), above at para. 70).
C. The “Trans” Compounds
[369] Each of the
compounds claimed by claims 1, 2 and 3 contains a fused 6,5 bicyclic ring.
There are two asymmetrical carbons on the ring fusion or bridgehead. This means
that there can be four possible configurations at the sites of these two
carbons. Where the two hydrogen atoms are on the same side as each other, the
configuration is referred to as “cis”; when they are on opposite sides to each
other, the configuration is referred to as “trans”. As an example, one half of
the 32 compounds claimed by claim 3 are in the trans configuration.
[370] Apotex argues
that neither the '093 Application
nor the '196 Patent discloses a process to make the trans configuration and
that a person skilled in the art would not, as of the relevant date, have known
how to synthesize such compounds. Thus, they argue, the inventors had no basis
on which to predict that the trans configurations would have utility as ACE
inhibitors. Apotex does not argue that the trans compounds could not have been
predicted to have utility; rather, they submit only that the inventors did not
know how to make the trans compounds. In support of its proposition, Apotex
cites: (a) Wellcome (S.C.C.), above, at paras. 69, 70, 84; and, (b) Aventis
Pharma, above at para. 86.
[371] In effect, Apotex
is arguing that the test for sound prediction can only be met if the inventors
can satisfy two requirements: (a) that the trans compounds would have utility
to meet the promise of the patent; and (b) the inventors would have and
disclose, in the patent, a sound prediction of how to make the trans compounds.
[372] With respect
to the Wellcome (S.C.C.) decision, Apotex refers to the comments of
Justice Binnie, on a hypothetical patent for the Wright brothers’ airplane and
argues that these comments are authority for its position. Specifically, at
paragraph 82, Justice Binnie stated the following:
The hypothetical Wright brothers patent
relates to a new and useful product, rather than (as here) to a new use
for an old product, but all the same it illustrates, I think, the flaw in the
Glaxo/Wellcome argument. The mere idea of a “heavier-than-air flying machine”
is no more patentable than would be “anything that grows hair on bald men”
(emphasis in original): Free World Trust v. Électro Santé Inc., [2000] 2
S.C.R. 1024, 2000 SCC 66, at para. 32. The patent (even in this improbable
scenario) would have to teach precisely how the machine could be made to
fly. Section 34(1)(b) of the Patent Act requires the applicant to set out
in the specification “the method of constructing, making ... or using a machine
... in such full, clear, concise and exact terms as to enable any person
skilled in the art ... to make, construct ... or use it”. This means the
Wright brothers' hypothetical patent would have to describe, amongst other
things, how to design an air foil that creates “lift” by reducing the air
pressure on the upper surface of the wing as the air rushes over it, as
well as a suitable airborne method of forward locomotion. If the essentials
of the heavier-than-air flying machine were set out with sufficient precision
to allow the reader actually to make a flying machine that flies, it is hard to
accept the “hypothetical” that experts would continue to insist, after it had
flown, that the prediction was unsound. [Emphasis added.]
[373] In my view,
Apotex has taken the paragraph from the Wellcome (S.C.C.) decision out
of context.
[374] The patent at
issue in that case related to a new use for a known compound – the use of the
drug AZT for the treatment of HIV/AIDS. The issue of sound prediction or
utility was of prime importance. As stated by Justice Binnie, at paragraph 55:
if the utility of AZT for the treatment
of HIV/AIDS was unpredictable at the time of the patent application, then the
inventors had not made an invention and had offered nothing to the public in
exchange for a 17-year monopoly except wishful thinking.
[375] Justice
Binnie described the overall objective of the notion of sound prediction as
follows, at para. 66:
The doctrine of “sound prediction”
balances the public interest in early disclosure of new and useful inventions,
even before their utility has been verified by tests (which in the case of
pharmaceutical products may take years) and the public interest in avoiding
cluttering the public domain with useless patents, and granting monopoly rights
in exchange for misinformation.
[376] Nowhere in
the analysis leading to this overarching statement does Justice Binnie refer to
the need to know how to predict the making of a compound as a component of
utility. Indeed, it appears to me that there may be cases – particularly in the
context of pharmaceutical genus patents – where the utility of a particular
class of compounds can be established by reference to the architecture of the
particular class. That does not mean that the inventors may avoid telling the
world how to practise the patent; that is precisely why the specifications of a
patent must be sufficient.
[377] I next
observe that the quote from paragraph 82 of the Wellcome (S.C.C.)
decision is contained in a section of the reasons entitled “Glaxo/Wellcome’s
After-the-Fact Validation Theory”. In this section of the reasons, Justice
Binnie was considering Glaxo/Wellcome’s contention that, because AZT turned out
to have both treatment and (limited) prophylactic properties, its prediction
must necessarily have been sound, and the patent upheld on that basis. In
rejecting this argument, Justice Binnie was responding to the example that had
been relied on, before the Supreme Court, by Glaxo/Wellcome. I am not convinced
that, by making these comments on a hypothetical airplane patent, Justice
Binnie meant to revise the test for sound prediction as submitted by Apotex.
[378] If we look to
paragraph 83 of the decision, we see the following statement:
On the other hand, if the patent failed to
disclose the essentials of a heavier-than-air flying machine, such that no one
could “soundly predict” whether or not the ill-defined thing could get off the
ground, then the patent would be rightly invalidated, even though the inventors
had eventually flown some sort of machine in the meantime.
[379] In sum, what
is necessary for satisfying the test is disclosure of “the essentials”. In the
case before me that requires that someone (our person skilled in the art) could
soundly predict whether or not the trans compounds would have utility as ACE
inhibitors and not whether or not they can be made.
D. Conclusion
[380] With respect
to the issue of sound prediction, I am satisfied, on a balance of
probabilities, that, as of the date of the Canadian filing, the inventors’
prediction that all of the compounds included in claim 3 of the '196 Patent
would have activity as ACE inhibitors was sound. Further, I am also not
persuaded that Apotex has met its burden of demonstrating that a person skilled
in the art, as of the date of filing the '093 Application, could not
soundly predict that the trans compounds of claims 1, 2 and 3 would have
utility.
XI. Inventorship
A. Overview
[381] Apotex asserts that the named
inventors of the '206 Patent, namely Elizabeth M. Smith, Bernard R. Neustadt
and Elijah H. Gold (collectively, the Schering inventors), first invented the “invention”
of the '196 Patent. It follows that the
claimed invention of the '196 Patent was “known or used by another person” (as
contemplated by s. 27(1)(a) of the Act) before it was invented by the
ADIR scientists. Accordingly, Apotex claims, the ADIR inventors were not
entitled to the issuance of the '196 Patent.
[382] Servier first submits that s.
61(1) of the Act prohibits Apotex from challenging the inventorship of
the '196 Patent. Further, Servier
argues, Apotex has failed to prove, on a balance of probabilities, that the
Schering inventors knew or used the subject-matter of claims 1, 2, 3 or 5 in
the '196 Patent.
[383] Apotex further asserts that,
even on the interpretation of s. 61(1) proposed by Servier, certain third
person claims that should have been placed in conflict by the Commissioner were
not placed into conflict (referred to as missed conflicts). Thus, Apotex
argues, there were missed conflicts and they fall within the exception of s.
61(1)(b). Servier disagrees.
[384] The sub-issues raised in
respect of the inventorship question are the following:
1.
Does s.
61(1) of the Act preclude Apotex from challenging the validity of the '196 Patent on the grounds of
inventorship; or, can Apotex challenge the patent’s validity on the grounds of
inventorship on the basis that s. 61(1)(b) of the Act applies? This is a
question of statutory interpretation revolving around the words “on which
conflict proceedings should have been directed”.
2.
Did the
Commissioner’s failure to place certain claims in conflict with those of ADIR
result in a missed conflict such that the prohibition of s. 61(1) does not
apply? The response to this question requires that I address the question of
whether only the Commissioner may “direct” that claims be placed into conflict
or whether the Court, by order, may do so.
3.
Has Apotex
satisfied its evidentiary burden to demonstrate that Dr. Smith or Schering was
the first to know or use the “invention” of the '196 Patent? This is a factual
determination for the most part.
B. Relevant Statutory Framework under the Patent Act
[385] I begin by reviewing the
relevant statutory provisions of the Patent Act, reminding the reader
that the operative provisions are those contained in the Act as it
existed in 1981.
[386] Of critical importance to the
issues before me, the overall scheme under the Act was one of first to
invent. By contrast, the scheme under the current Patent Act can be
described as first to file. The notion of first inventorship is embodied in s.
27(1) of the Act:
Subject to this section, any inventor
or legal representative of an inventor of an invention that was
(a) not known or used by any
other person before he invented it,
(b) not described in any patent
or in any publication printed in Canada or in any other country more than two
years before presentation of the petition hereunder mentioned, and
(c) not in public use or on sale
in Canada for more than two years prior to his application in Canada,
may, on presentation to the
Commissioner of a petition setting out the facts, in this Act termed the
filing of the application, and on compliance with all other requirements of
this Act, obtain a patent granting to him an exclusive property in the
invention.
|
Sous réserve des autres dispositions du
présent article, l'auteur de toute invention ou le représentant légal de
l'auteur d'une invention peut, sur présentation au commissaire d'une pétition
exposant les faits, appelée dans la présente loi « le dépôt de la demande »
, et en se conformant à toutes les autres prescriptions de la présente loi,
obtenir un brevet qui lui accorde l'exclusive propriété d'une invention qui
n'était pas :
a) connue ou utilisée par une
autre personne avant que lui-même l'ait faite;
b) décrite dans un brevet ou
dans une publication imprimée au Canada ou dans tout autre pays plus de deux
ans avant la présentation de la pétition ci-après mentionnée;
c) en usage public ou en vente
au Canada plus de deux ans avant le dépôt de sa demande au Canada.
|
[387] Recognizing that more than one
person might claim inventorship to similar or overlapping subject matters,
Parliament provided means for identifying and resolving such a conflict. To
begin, s. 43(1) of the Act defines when a conflict exists:
Conflict
between two or more pending applications exists
(a) when
each of them contains one or more claims defining substantially the same
invention; or
(b) when
one or more claims of one application describe the invention disclosed in one
of the other applications.
|
Se produit un conflit entre deux ou
plusieurs demandes pendantes dans les cas suivants:
a) chacune
d'elles contient une ou plusieurs revendications qui définissent
substantiellement la même invention;
b) une
ou plusieurs revendications d'une même demande décrivent l'invention
divulguée dans l'autre ou les autres demandes
|
[388] The balance of s. 43 sets out
the procedures to be followed in declaring and dealing with conflicts. Of
particular significance in this motion are two provisions. The first is s.
43(7) which provides for the issuance of a decision by the Commissioner in
which he determines “which of the applicants is the prior inventor to whom he
will allow the claims in conflict”. The second is s. 43(8) which permits a
party to a conflict to commence proceedings in the Federal Court for a “determination
of [the] respective rights” of the parties to the conflict.
[389] In practical terms, the
proceedings under s. 43(8) are commenced by way of an action, with full
discovery and other procedures allowed by the Federal Courts Rules. When
s. 43(8) is engaged, the Commissioner’s decision is suspended and no patents
may issue until the Federal Court determines that:
(a) there is in fact no conflict
between the claims in question;
(b) none of the applicants is
entitled to the issue of a patent containing the claims in conflict as
applied for by him;
(c) a patent or patents,
including substitute claims approved by the Court, may issue to one or more
of the applicants; or
(d) one
of the applicants is entitled as against the others to the issue of a patent
including the claims in conflict as applied for by him
|
a) de fait, il n'existe aucun
conflit entre les revendications en question;
b) aucun des demandeurs n'a
droit à la délivrance d'un brevet contenant les revendications concurrentes,
selon la demande qu'il en a faite;
c) il peut être délivré, à l'un
ou à plusieurs des demandeurs, un ou des brevets contenant des revendications
substituées, approuvées par le tribunal;
d) l'un des demandeurs a droit
à l'encontre des autres, à la délivrance d'un brevet comprenant les
revendications concurrentes, selon la demande qu'il en a faite.
|
[390] While s. 27(1) accords the
right to a patent to the first inventor, the Act also contemplates that
legal proceedings may be brought with respect to the validity of patents (see
Act, starting at s. 53). In particular, s. 59 of the Act
permits a defendant (such as Apotex) in a patent infringement action to plead “any
fact or default which by this Act or by law renders the patent void”.
Under s. 60(1) of the Act, a patent or any claim in a patent may be
“declared invalid or void by the Federal Court . . . at the instance of any
interested person.”
[391] However, when the validity of
a patent is being challenged on the question of inventorship, s. 61(1) is a
limiting or qualifying provision:
No patent or claim in a patent shall be
declared invalid or void on the ground that, before the invention therein
defined was made by the inventor by whom the patent was applied for, it had
already been known or used by some other person, unless it is established
that
(a) that other person had,
before the date of the application for the patent, disclosed or used the
invention in such manner that it had become available to the public;
(b) that other person had,
before the issue of the patent, made an application for patent in Canada on
which conflict proceedings should have been directed; or
(c) that
other person had at any time made an application in Canada which, by virtue of section 28, had
the same force and effect as if it had been filed in Canada before the issue of the patent and on
which conflict proceedings should properly have been directed had it been so
filed.
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Aucun brevet ou aucune revendication
dans un brevet ne peut être déclaré invalide ou nul pour la raison que
l'invention qui y est décrite était déjà connue ou exploitée par une autre
personne avant d'être faite par l'inventeur qui en a demandé le brevet, à
moins qu'il ne soit établi que, selon le cas :
a) cette
autre personne avait, avant la date de la demande du brevet, divulgué ou
exploité l'invention de telle manière qu'elle était devenue accessible au
public;
b) cette
autre personne avait, avant la délivrance du brevet, fait une demande pour
obtenir au Canada un brevet qui aurait dû donner lieu à des procédures en cas
de conflit;
c) cette
autre personne avait à quelque époque fait au Canada une demande ayant, en
vertu de l'article 28, la même force et le même effet que si elle avait été
enregistrée au Canada avant la délivrance du brevet et pour laquelle des
procédures en cas de conflit auraient dû être régulièrement prises si elle
avait été ainsi enregistrée.
|
[392] No arguments were raised as to
s. 61(a) or (c) of the Act and accordingly my analysis will be limited
to s. 61(1)(b).
C. Interpretation of s. 61(1)(b)
(1) General Comments and Position of Parties
[393] Inventorship, as discussed
above, is the key to the issuance of patents under the Act; the first
inventor is entitled to the patent. Sections 61(1) and 27(1), read together,
indicate the manner in which a patent can be held to be invalid on the grounds
of prior inventorship. As stated in s. 61(1)(b), no patent will be declared
invalid on the grounds of prior inventorship by some other person unless
the challenging party can establish that the other person had, before the issue
of the patentee’s patent, made an application for patent in Canada on which
conflict proceedings should have been directed. Stated in other words, a
party may only successfully raise inventorship as an issue if: (a) the
invention in the patent or claim had already “been known or used by some other
person”; (b) the other person made a patent application for this prior
invention in Canada; and (c) “conflict proceedings should have been directed”.
[394] In this case, there is no
question that there were a number of persons who applied for Canadian patents
involving ACE inhibitors and that a number of claims described in the various
applications were placed into conflict by the Commissioner. There is
disagreement between Apotex and Servier as to whether any of those applications
disclosed an invention that was known or used before the patent application of
ADIR and whether there were conflicts that existed and were not declared. If
Servier’s interpretation of s. 61(1)(b) is correct, Apotex will not be able to
dispute the inventorship as to the third person claims that were put into
conflict. However, even if Servier is correct on the proper interpretation of
s. 61(1)(b), Apotex may still be able to raise the inventorship issue on the
basis that there was a missed conflict. These two sub-issues are dealt with
later in these reasons.
[395] With respect to this
sub-issue, Apotex and Servier differ on the interpretation of the phrase “on
which conflict proceedings should have been directed”. Servier asserts that s.
61(1)(b) applies to the case at bar because, not only should conflict
proceedings have been directed, they actually were so directed. In
effect, they argue that, under s. 61(1)(b), an attack on the basis of prior
inventorship is not permitted where, as here, another person’s invention was
known and put into conflict proceedings. That is, s. 61(1)(b) applies only when
there has been a “missed conflict”. This appears to be the literal
interpretation of s. 61(1)(b).
[396] Apotex argues that Servier is reading
language into s. 61(1)(b) that, in effect, limits the application of the
provision. In their view, this violates a basic principle of statutory interpretation
(Ruth Sullivan, Sullivan and Driedger on the Construction of Statutes,
4th ed. (Toronto: Butterworths, 2002), at
131). Thus, they assert, the provision means simply that the circumstances
which ought to have given rise to conflict proceedings pursuant to s. 43(1) of
the Act must have existed (in simple terms, similar or overlapping
claims). In their view, whether the conflict proceedings actually occurred is
immaterial. On Apotex’s interpretation, any of the patents arising from the '093,
'336, '787 and '453 Applications would potentially satisfy the requirement of
s. 61(1)(b), provided that the challenging party could demonstrate that there
was an earlier disclosure of the invention to the public.
[397] There is no reported
jurisprudence directly on point with respect to the proper interpretation of s.
61(1)(b) (see Les Laboratoires Servier v. Apotex Inc. (2007), 61 C.P.R.
(4th) 408 at para. 46 (F.C.A.)). Given this fact, I turn to a fresh consideration
of the meaning of s. 61(1)(b).
[398] It is a well-established
principle of statutory interpretation that words of a statute are to be read in
their entire context in their grammatical and ordinary sense harmoniously with
the scheme of the Act, the object of the Act, and the intention
of Parliament (Elmer Driedger, Driedger on the Construction of Statutes
(2nd ed.) (Toronto: Butterworths, 1983), cited in Rizzo & Rizzo Shoes
Ltd. (Re), [1998] 1 S.C.R. 27, at para. 21[Rizzo Shoes]). Keeping
this guidance in mind, the place to begin is with an examination of the context
of conflict proceedings under the Act.
(2) The Context of Conflict
Proceedings
[399] Under the scheme of the Act,
conflict proceedings were an important feature of determining the question of
first inventorship in co-pending applications and, hence, the right to a
patent. Conflicts arose when an application disclosed one or more claims (a)
defined “substantially the same invention” (s. 43(1)(a)); or (b) described “the
invention disclosed in one of the other applications” (s. 43(1)(b)). Under s.
43(3) of the Act, the Commissioner was to notify the affected applicants
if any of these claims were “so nearly identical that, in the opinion of the
Commissioner, separate patents to different patentees should not be granted”.
After the applicants made submissions and filed affidavits (see ss. 43(4) and
43(5)), the Commissioner determined “which of the applicants is the prior
inventor to whom he will allow the claims in conflict” (s. 44(7)). It is
interesting to note that there were no oral proceedings held and, in fact, the
applicants in conflict were not even provided copies of the other applicants’
affidavits until after the Commissioner reached his decision. If any of the
applicants disagreed with the Commissioner’s determinations, they had the right
to commence “proceedings in the Federal Court for the determination of their
respective rights” (s. 44(8)). In that situation, the Commissioner could not
issue any patents until the Federal Court proceedings resulted in one of a
number of ultimate resolutions. Those possible outcomes of s. 44(8)(a) to (d)
are set out in the provision (see above). One of the possible outcomes (and,
the one that occurred in the case before me) is that set out in s. 44(8)(c)
whereby the Court approves substitute claims that may be issued to one or more
of the applicants. In brief, the conflict proceedings set out in the Act
provided a very detailed process for determining the issue of first
inventorship.
[400] The Act does not
provide for third party intervention. That is, the Act does not give a
non-applicant the ability to challenge the Commissioner’s decisions. Does that
mean that, once a patent is issued, conflict proceedings foreclose a third
party from ever challenging the patent? The answer is clearly no.
[401] A number of cases have
considered the role of conflict proceedings. In Texaco Development Corp. v.
Schlumberger Ltd. (1966), 49 C.P.R. 225 at 233 (Ex. Ct.), it was held that
s. 45 of an earlier Patent Act (s. 43 under the Act) allowed an
interruption in the processing of an application for a patent “for the sole
purpose of deciding which of two applicants is the inventor.” Justice Jackett
was careful, however, to state that all other objections to the granting of a
patent “should be dealt with in the ordinary course of events”. In other words,
he acknowledged that, because of the operation of the statute, inventorship is
carved out for special treatment.
[402] Nekoosa Packaging Corp. v.
Amca International Ltd.
(1989), 27 C.P.R. (3d) 153 at 157-8 (F.C.T.D.), aff'd (1994), 56 C.P.R. (3d)
470 (F.C.A.) [Nekoosa Packaging Corp.] is also relevant on this point
and helpful as Justice Cullen spent considerable time in summarizing the state
of the law at that time. The case involved a patent infringement action which
had been preceded by a conflict action. The earlier conflict action had
resulted in a final determination by the Federal Court of Appeal. The court in
the subsequent patent infringement action held that a determination by the
court made during conflict proceedings does not give rise to an argument of
estoppel in later proceedings respecting the validity of a patent. This was
because conflict actions are directed to the issue of priority and do not put
an imprimatur on the validity of claims in conflict beyond directing the
Commissioner to issue a patent containing such claims. In short, the plaintiffs
were not prevented from bringing claims of invalidity on the grounds of
obviousness. It should be noted that, in the case before Justice Cullen, prior
inventorship was not an alleged ground of invalidity. Thus, this case is a good
example of a consistent line of jurisprudence that states that other grounds of
invalidity may be raised after the conclusion of conflict proceedings. The
reasoning is apparent. Conflict proceedings deal only with inventorship;
thus, no other possible grounds of invalidity have been considered during such
conflict proceedings.
[403] The case law on the
interpretation of s. 61(1) of the Act appears, at first blush, to be at
odds with the jurisprudence on the scope of conflict proceedings. On the one
hand, conflict proceedings have been generally held not to decide the issue of
the validity of the patent. On the other hand, those validity claims relating
to inventorship of the patent, are precluded from being raised by s. 61(1) if
there is no “missed conflict”. If both lines of authority are accepted, the
result is to make conflict decisions by the Commissioner of Patents, or, if
appealed, by the Federal Court, while not necessarily determinative of
inventorship (as held in Nekooska Packaging Corp.), unimpeachable on
that issue. In my view, such an interpretation of s. 61(1) is logical and
should be adopted.
(3) Intent of
Parliament
[404] Rizzo Shoes teaches that the intention of
Parliament should be considered when interpreting the provisions of a statute.
In this case, the precursor to s. 61(1) was first enacted by Parliament in 1932,
An Act to Amend the Patent Act, S.C. 1932, c. 21, s. 4. Discerning the
intention of Parliament some 76 years after the inclusion of a provision in a
statute is difficult. We do know, from the timing of the enactment, that at least
some of the impetus for the provision came from the decision of the Judicial
Council of the Privy Council in Rice v. Christiani, [1931] 4 D.L.R. 273
(P.C.) [Christiani (P.C.)], a decision rendered on appeal from the
Supreme Court of Canada (Christiani v. Rice, [1930] S.C.R. 443 (S.C.C.)
[Christiani (S.C.C.)]). The question before the Courts can be described
as follows: could a Danish company (Christiani) whose process for making a
cellular concrete building material known as porous cement patent was invented
first and patented in Denmark, challenge the validity of Mr. Rice’s Canadian
patent for the identical process?
[405] Although the validity of Mr.
Rice’s Canadian patent was upheld at trial in the Exchequer Court, the result was overturned on appeal to
the Supreme Court of Canada. In turn, the decision of the Supreme Court was
affirmed by the Privy Council.
[406] In interpreting the provisions
of the Patent Act in force at that time, the Privy Council concluded
that:
[T]he knowledge and user of Bayer [the
inventor who subsequently assigned his patent rights to Christiani] and his
associates, before December 21, 1922, although in Denmark and although secret and
confidential, and not made available to the public, was, upon the true construction of s. 7
of the Act of 1923, sufficient to invalidate the appellant’s [Dr. Rice’s]
patent (Christiani (P.C.), above at 283). [Emphasis added.]
[407] In doing so, their Lordships
expressly overruled two Exchequer Court decisions in The Queen v. La Force,
4 Ex. C.R. 14 and Gerrard Wire Tying Mach. Co. Ltd. v. Cary Mfg. Co.,
[1926] 3 D.L.R. 374, where contrary conclusions were reached.
[408] As described by Apotex counsel
in final argument, Christiani (P.C.) allowed “the secret person hiding
out in the hills” to challenge the validity of a patent. Apotex submits that
the intent of Parliament in amending the Patent Act, in 1932, was only
to undo this stark result – to prevent those secret persons holding patents
elsewhere from asserting first inventorship after the fact by restoring the pre-Christiani (P.C.) law.
In Apotex’s view, Parliament never intended to do any more than that;
Parliament did not intend to prevent a third party, such as Apotex, from
subsequently challenging the validity of a patent on the grounds of
inventorship. There are a number of problems with Apotex’s version of the
intent of Parliament.
[409] The first problem is that
Apotex presented no evidence, such as Hansard or transcripts from the
Parliamentary or Committee debates that took place at that time. Their view is,
at best, speculation that Parliament’s sole intention was to prevent the “secret
person hiding out in the hills” from challenging inventorship.
[410] The next problem is that, if
Parliament had intended to act only in the limited way proposed by Apotex, it
could have done so with much clearer language. Parliament could have brought
the pre-Christiani (P.C.) law back into effect simply by requiring that
a challenge to inventorship could not be sustained unless the challenger had
made a patent application that was co-pending. That is not what is stated in s.
61(1). It can be inferred that Parliament chose not to prevent only
co-applicants from contesting inventorship but enacted the provision to apply
generally to all persons who would challenge the validity of a patent on the
grounds of inventorship.
(4) The Object of
the Patent Act
[411] The final problem with Apotex’s
interpretation of s. 61(1) is that it ignores the scheme of the Act
vis-à-vis the critical concept of “first inventorship”. Apotex appears to be
arguing that Parliament would never have intended to remove the right of a
third party to challenge the question of first inventorship. I acknowledge
that, with Servier’s (and my) interpretation, third parties are precluded from
being part of the process for the determination of conflict proceedings. In
response, I observe, firstly, that a third party is not prohibited from raising
the existence of prior art; this is a question of anticipation that is often
raised in infringement proceedings. Thus, the potential problem is limited to
only those situations where there are competing applications and declared
conflicts.
[412] Next, I note the extensive
process set out in the Act, involves the careful review by the
Commissioner and subsequent involvement of the Federal Court. It appears to me
that the goal of ensuring patent security for the person ultimately determined
through this process is in keeping with the concept of first inventorship.
[413] In any interpretation of
patent legislation, and therefore the patent system, it is helpful to recall
Justice Binnie’s comments in Free World Trust v. Électro Santé Inc.,
[2000] 2 S.C.R. 1024 at paras. 41-43 [Free World Trust], that,
The scope of patent protection must not
only be fair, it must be reasonably predictable . . .The patent owner,
competitors, potential infringers and the public generally are thus entitled to
clear and definite rules as to the extent of the monopoly conferred.
[414] This is particularly true
under the Patent Act where the defining concept is one of
inventorship. The intent of the legislative scheme is to provide a means for
identifying the true first inventors and dealing with conflicts that may arise
prior to the issuance of the patent. Where a patent has issued pursuant to this
process, Parliament has provided that it is protected from further attacks on
the question of inventorship, except in the circumstances contemplated by the Patent
Act, specifically, s. 61(1)(b).
[415] I further observe that none of
the jurisprudence dealing with invalidity allegations after conflict
proceedings considered the special circumstances of inventorship. Thus, the
cases do not directly conflict in any way with the interpretation of s.
61(1)(b) put forward by Servier.
[416] I also highlight another
concern with Apotex’s interpretation of the provision. The difficulty with
their interpretation of the words “should have been directed” is that it
renders s. 61(1)(b) essentially meaningless. With the interpretation proposed
by Apotex, the existence of conflicts is immaterial. An established principle
of statutory interpretation is that Parliament has intended the words in a
statute to have meaning. On Apotex’s interpretation, the phrase would capture
not only missed conflicts, but every application where conflict proceedings
were directed. A declared conflict, regardless of how it was resolved, would
become irrelevant thereby removing from the operation of the Act any
concept of certainty for the issued patent. In effect, Apotex is also reading
words into the provision; in their view, the provision should read: an
application on which conflict proceedings should have been directed, whether
or not they were so directed. In the alternative, they are reading the
provision as an application on which conflict proceedings could have
been directed. In either case, Apotex is providing an interpretation that, in
my view, cannot be read harmoniously with the scheme of the Act.
(5) Relevant
Jurisprudence
[417] As noted above, there is no
jurisprudence directly on point. Nevertheless the provision has been referred to
on at least three occasions. These cases in my view, provide an interpretation
that is consistent with that asserted by Servier.
[418] An example of the use of s.
61(1)(b) of the Act is set out in AT & T Technologies, Inc. v.
Mitel Corp. (1989), 26 C.P.R. (3d) 238 (F.C.T.D.) [AT & T],
where the validity of a patent was in issue. According to the defendant, the AT
& T patent was invalid because the named inventors “were not the first to
invent and there existed a patent application in the patent office at the time
the AT & T patent was filed, with which it should have been put in conflict”
(AT&T, above at 265). As discussed by Justice Reed in that case, s.
27(1) of the Act accords the first inventor the right to the grant of a
patent.
[419] However, Justice Reed also
acknowledged the qualification of the “first inventorship” requirement by s.
61(1)(b). After a careful review of the evidence before her, which included two
patent applications, Justice Reed concluded, as follows, at page 272:
There is no doubt that the two patent
applications should have been put in conflict.
...
All that must be proved is that there was
a prior invention of the process, and device, before the plaintiff’s invention
date and that there were patent applications which should have been put in
conflict. This has been proven. The plaintiff’s patent is therefore clearly
invalid.
[420] As I read this holding, the
conclusion of invalidity was made for two reasons: (1) there was a prior
invention; and (2) there were patent applications that should have been put in
conflict. Both requirements had to be met. Had the defendant been unable to
satisfy the Court that there were patent applications that should have been put
in conflict, the defendant would not have been able to meet the test set out in
s. 61(1)(b) and the patent would not have been declared invalid on the ground
of prior inventorship. In sum, Justice Reed gave an interpretation to s.
61(1)(b) that is consistent with that proposed by Servier in this motion.
[421] This interpretation of s.
61(1)(b) was adopted by Justice Mactavish in Aventis Pharma, above at paras.
341-344, where the learned Justice was considering an argument of patent
invalidity by the respondent based on s. 61(1)(b) of the Act. In Justice
Mactavish’s view, the respondent, to be successful, had to establish that “there
was both prior knowledge or use by Hoeschst, and a missed conflict” [emphasis
in original]. However, it should be noted that, as Justice Mactavish concluded
that the respondent had failed to establish that there was prior knowledge or
use by Hoechst, she did not need to deal with the issue of whether, in that
case, there was a missed conflict (Aventis Pharma, above at para. 349).
However, once again, we have a judicial interpretation of s. 61(1)(b) that
accords with that proposed by the Plaintiffs.
[422] The next case in which s.
61(1)(b) has been considered is Pfizer (C.A.). The issue before the
Court of Appeal was whether the trial judge had erred in applying the wrong
test for anticipation. In response, Justice Nadon, speaking for the Court of
Appeal, endorsed the written submissions of Pfizer, the respondent to the
appeal, at paragraph 138:
It appears from paragraphs 85 and 86 of
Heneghan J.’s Reasons that she did apply the anticipation by prior publication
test. In this respect, I find particularly convincing paragraph 27 of Pfizer’s
Reply Memorandum of Fact and Law which states:
Apotex argues that Justice Heneghan erred
by failing to consider s. 27(1)(a) of the Patent Ac[t], which requires a patent
to be “known or used” by any other person before the inventor invented it. This
was not an error. Section 61(1) prevents a patent from being invalidated on the
basis that it was “known or used” unless it was “disclosed or used ... in such
manner that it had become available to the public” or if it was the subject of
an application for a patent in Canada on which “conflict
proceedings should have been directed.” Neither of these conditions are met in
this case. There is no evidence that the Hoechst patent application was known
to the public. Moreover, this is not a case in which “conflict proceedings should
have been directed”. Rather, conflict proceedings were directed, did
occur, and the patent ultimately issued to Warner Lamber. [Emphasis in
original.]
[423] Justice Nadon continued his
analysis by pointing out that Apotex had not filed into evidence a copy of the
Hoechst Patent. Thus, it was impossible to discern the filing or issuance date
of that patent. Accordingly, Justice Nadon did not have to directly assess
whether conflict proceedings that resulted in a settlement met the requirement
of s. 61(1)(b). Nevertheless, I infer from his endorsement of the entire
submission of Pfizer (C.A.) that he did not disagree with this
proposition.
[424] The Pfizer (C.A.) case
is particularly instructive because it involves a situation that is very
similar to that before me. The applicants in that case relied on two patents.
One of those patents (the '330 Patent) was placed in conflict with a patent owned by a
German company. The Commissioner determined that the German company was the
first to invent and awarded the patent to that company. In 1999 a consent
judgment was entered whereby the '330 Patent was issued only to the
applicants.
[425] Thus, in sum, a consideration
of the case law supports the interpretation that I would provide to the
provision.
(6) Conclusion on this
Issue
[426] An interpretation of s.
61(1)(b) as set out above is consistent with the principles identified in Free
World Trust, consistent with both the s. 61(1)(b) and conflict proceedings lines
of authority, and helps, not hinders, the patent system embodied in the Act.
On this purposive interpretation of the statutory provisions of the Patent
Act, it is entirely consistent to separate out the concept of inventorship
for “special treatment”. By preventing a finding of invalidity where conflict
proceedings have been directed, the foundation concept of first inventorship is
protected. On the other hand, no special provisions are contained within the
Patent Act that would protect a patentee from other grounds of invalidity
attacks. Accordingly, those other grounds may be raised in the usual course. In
my view, this is the result that Parliament intended.
[427] Furthermore, it should be
emphasized again that such an interpretation would be limited to precluding
parties where there is no “missed conflict” from advancing an allegation of
prior inventorship. Other grounds for questioning the validity of a patent are
unaffected.
D. Was there a Missed Conflict?
[428] Apotex submits that, even if
paragraph 61(1)(b) requires that a party prove a missed conflict before it can
raise a first inventorship allegation, there was, in fact, a missed conflict in
the present case. A description of the conflict proceedings is contained in
section IIIA(5) of these Reasons.
[429] The missed conflict, in Apotex’s
view, relates to an alleged “almost complete overlap of subject matter” between
claim C39, which was awarded to Schering, and claim C26, which was awarded to
ADIR. Schering was not made a party to conflict claim C26 by the Commissioner. Apotex
argues that the failure to place claim C39 in conflict with claim C26 constitutes
a missed conflict within the meaning of paragraph 61(1)(b).
[430] The two claims are as follows:
C26 Compounds
having the general formula H
|
C 39 A
compound having the general formula Q:
|
wherein:
-
Raa represents a C1-4 alkyl group which may
contain an amino group;
-
Rbb is selected
from:
-
hydrogen; and
-
C1-4
alkyl; and
-
Rdd is
selected from:
-
C1-4 alkyl;
-
C3-7
cycloalkyl; and
-
phenyl
and their pharmaceutically acceptable
salts.
|
wherein :
-
n is selected from 0 or 1;
-
R5 is
selected from;
-
C1-4
alkyl group which may be substituted with amino;
-
R6 is
selected from;
-
hydrogen; and
-
C1-4
alkyl and
-
R11 is
selected from;
-
C1-9
alkyl;
-
phenyl-C1-3
alkyl; and
-
- (CH2)1-2-Y-C1-4
alkyl wherein:
-
Y is selected from:
-
S; and
-
NH
and its
pharmaceutically acceptable salts
|
[431] To persuade me that there was
a missed conflict in respect of Schering’s claim C39, Apotex must demonstrate
two things:
(a)
that the
C39 and C26 claims should have been placed in conflict because they were “so
nearly identical that, in the opinion of the Commissioner, separate patents to
different patentees should not be granted” (s. 43(3)); and
(b)
the
subsequent Order of Justice Joyal, dated May 27, 1997, consolidating a number
of court files, did not have the effect of bringing all of the claims referred
to in the relevant Court files – including the C39 and C26 claims – into
conflict.
[432] Assuming for purposes of this
question, without deciding, that there was an “almost complete overlap” between
Schering’s claim C39 and ADIR’s claim C26, would there have been a missed
conflict? Had the Commissioner’s decision been accepted by the parties and the
patents issued, I think that the answer would be yes. However, the Joyal Order
cannot be ignored.
[433] As noted earlier, none of
Hoechst, ADIR or Schering was pleased with the Commissioner’s decisions. Each,
as allowed for under the scheme of the Act, brought applications to the
Federal Court. Six separate actions were commenced. The Joyal Order, made upon
consent, consolidated all of the Court files and continued the action as Court
file no. T-228-97. Of particular relevance, clause 2 of the Order provided as
follows:
In the T-228-97 action (“the action”),
any of the parties shall be entitled to contest any aspect of any decision of
the Commissioner of Patents pursuant to s. 43(8) of the Patent Act RSC
1985, c. P-4 regarding the award of any particular claim declared to be in
conflict between and amongst any of the parties to this action by the
Commissioner, namely, conflict claims C17 through C40 inclusive (the “conflict
claims”), and claim any relief available pursuant to s. 43(8) of the Patent
Act with respect to any conflict claim, including whether a claim is
patentably distinct, irrespective of whether that party was directly involved
in conflict proceedings in the Patent Office with respect to that particular
claim, provided that all parties shall be permitted to plead issues concerning
the degree of support for any such conflict claim within the disclosure of any
patent application referred to in the conflict proceedings among the parties.
[434] The effect of this provision
of the Order cannot be clearer; all of Claims C17 to C40 were placed into
conflict for purposes of the Federal Court action. Each party was granted the
right to claim entitlement to any of the conflict claims, C17 to C40, which
includes C26 and C39, whether or not that party had been “directly involved” in
the Commissioner’s findings of conflict and whether or not the Commissioner had
declared a conflict. Thus, even though Schering had not been invited by the
Commissioner to argue that it was the inventor of the subject-matter of its
claim C39 in priority to ADIR’s claim C26, it was now granted the right to do
so.
[435] Apotex, in effect, argues that
only a conflict declared by the Commissioner can meet the requirements of s.
61(1)(b); such a declaration cannot be made by the Court. In support of their
position, they point to the case of Radio Corp. of America v. Hazeltine
Corp. (1977), 33 C.P.R. (2d) 211 (F.C.A.) [Radio Corp], where the
Federal Court of Appeal ruled that the Commissioner was entitled to place
additional claims in conflict after an initial declaration involving claims
that had been put in conflict some three years earlier.
[436] In my view, the words of s.
61(1)(b) do not restrict the conflict to one declared by the Commissioner. In
the words of the provision, s. 61(1)(b) operates where there has been an
application “on which conflict proceedings should have been directed”. There is
no limitation on who may declare the conflict. Nor, is the term “conflict”
defined in the Act. Certainly, the procedure outlined in s. 43 sets out
that the process of declaring conflicts must be initiated and carried out by
the Commissioner. However, this does not prevent the Court, in exercise of its
authority, from declaring other claims to be in conflict for the subsequent
Court proceedings.
[437] The case of Radio Corp.
obviously is authority for a conclusion that the Commissioner may add claims to
a conflict even where a previously declared conflict exists. It does not stand
for the proposition that only the Commissioner may do so. Nor does it address
the question of the application or interpretation of s. 61(1)(b).
[438] Further, Apotex submits that
the specific claims 1, 2, 3 and 5 of the '196 Patent were never explicitly
part of ADIR’s '093 Application. Thus, Apotex argues, a conflict should have
been directed for claims 1, 2, 3 and 5 and was not. Since no conflict was
declared, the claims are ones for which “conflict proceedings should have been
directed”, within the sense of s. 61(1)(b). There was a missed conflict and
Apotex should be entitled to question first inventorship. Once again, I do not
agree.
[439] By the terms of s. 43(8)(c),
the Court, in conflict proceedings, may direct that “substitute claims” be
issued. That is exactly what was done here. Whether or not the precise wording
of the ADIR claims or the claims issued to Schering and Hoechst was included in
the patent applications, there is, in my mind, no question that the specific
claims fall within the subject matter of the applications for patent that had
been declared in conflict. Thus, I conclude that the specific ADIR claims were
properly part of the conflict. Claims 1, 2, 3 and 5 of the '196 Patent fall within the
meaning of s. 61(1)(b). There was no missed conflict.
E. Who was the First Inventor of the '196 Patent?
[440] The foregoing is sufficient to
dismiss the inventorship claim of Apotex. However, in the event that I am wrong
on the questions of the interpretation of s. 61(1)(b) and whether there were,
in spite of that interpretation, “missed conflicts”, I turn to the remaining
question; that is, was Dr. Smith the first to invent the invention of the '196 Patent, as argued by Apotex?
To succeed on this question, Apotex must discharge the “weighty burden” of
proving that Dr. Smith knew or used the subject-matter of those claims by
reason of having invented them prior to ADIR (Diversified Products Corp v.
Tye-Sil Corp. (1991), 35 C.P.R. (3d) 350 at 363 (F.C.A.)).
[441] Subsection 27(a) of the Act
limits the grant of a patent to an inventor of an invention where it was not
known or used by any other person before he invented it. Thus, where the
invention was first known or used by another, an inventor may not receive a
patent for that invention (see, for example, AT&T, above at 265).
[442] The Court heard the testimony
of Dr. Smith, in Newark, New Jersey, under subpoena
and by way of commission (as provided for in r. 272 of the Federal Courts
Rules). Dr. Smith, a long-time employee of Schering, is an eminent
scientist. She is one of the named inventors of the '206 Patent, one of the
other patents that issued pursuant to the Settlement Agreement and the Nadon
Order. As part of the conflict proceedings in Court File No. T-228-97, Dr.
Smith provided an affidavit that was in the public domain. That affidavit
became an exhibit in this action and was spoken to by Dr. Smith.
[443] The Troy conference, held in June 1980, and its
important role in the development of the compounds claimed by ADIR, Schering
and Hoechst are discussed earlier in these reasons. Dr. Smith’s evidence
is that, prior to the Troy Conference, Schering had already undertaken efforts
to develop an ACE inhibitor, employing modifications to captopril. Dr. Smith
attended the Troy Conference in June of 1980 where the structure of compounds
including enalapril, enalaprilat and lisinopril were disclosed.
[444] Upon returning from Troy, Dr.
Smith immediately knew that the combination of the bicyclics that Schering had
been working with, the spiral moiety and the perhydroindole moiety, and Merck’s
new backbone should be as good or better than that which was disclosed at Troy. On June 20, 1980 (two days following
the Troy conference), Dr. Smith recorded,
in a notebook she referred to as her “invention disclosure book”, her drawings
of compounds comprising a bicyclic substitution variation for the proline
moiety of the Merck backbone with attendant substituents, as follows:
[445] This disclosure encompassed a
number of substitutions for R, R1 and R2, including the
substitution of R2 with lower alkyl, and included all possible
stereoisomers. The disclosure encompassed a number of bicyclic rings and also
provided a method of synthesis for the spiral moiety substitution for proline
and for the perhydroindole substitution for proline, both attached to the Merck
backbone.
[446] One of compounds made by Dr.
Smith following the Troy Conference and following the drafting of the
disclosure set out above was SCH 31335. SCH 31335 combines a perhydroindole
with the Merck backbone and was depicted by Dr. Smith as having the following
structure:
[447] SCH 31335 was made on August 7, 1980 and was sent for analytical
testing on August
13, 1980. SCH
31335 was tested in vitro on August 15, 1980 and was tested in vivo
no later than August 21, 1980, when the results were reported to Dr. Smith.
Dr. Smith testified that the results from the testing indicated that SCH 31335
was active as an ACE inhibitor in vitro and in vivo.
[448] As a result, the Schering
inventors had synthesized and tested an active compound for ACE inhibition that
contained a bicyclic substitution for the proline moiety and the Merck backbone
by August 21,
1980.
[449] Apotex contrasts these
discoveries and disclosures with those of the ADIR scientists and submits that
the ADIR scientists did not synthesize and test a compound that contained a
bicyclic substitution for the proline moiety and the Merck backbone until after
August 26, 1980.
[450] As testified to by Dr. Vincent
and described in the “S-series” notebooks the ADIR scientists synthesized two
compounds with a bicyclic proline substitution added to the Merck backbone as
set out in S-9178-1 and S-9179-1. The structure of those two compounds is as
follows:
S-9178-1 S-9179-1
[451] Both compounds were
synthesized on August
26, 1980, and
transmitted to pharmacological testing on that same day. S-9178-1 was tested in
vivo starting August 28, 1980 and the results of the in vivo testing
were reported on September 11, 1980. S-9179-1 was tested in vivo
starting August 29 and the results of the in vivo testing were
reported on August 29 and in September of 1980.
[452] On this evidence, Apotex
points out that Dr. Vincent synthesized and Dr. Laubie tested two compounds
that contained a bicyclic substitution for the proline moiety and the Merck
backbone after the work and testing of Dr. Smith. This, they submit is
sufficient to show that Dr. Smith and her fellow Schering inventors were the
first to invent the “purported invention” of the '196 Patent.
[453] What does Apotex mean by the “purported
invention”? The answer to that question is the key to this analysis. Apotex
asserts that the invention is a “class of compounds”. During final argument,
Apotex’s counsel summarized the argument in this way:
The invention was a class. In order to
determine who invented the class, we know that neither Schering nor Adir could
possibly make anywhere close to the number of compounds in the class. Neither
of them did that. And so we know that they and all of the others who purported
to invent classes did so on the basis of a sound prediction to the class. That
then drives you to ask the question, who first had the ability to make that
sound prediction? I could argue, but I don't need to that when Dr. Smith wrote
down what she wrote down she had already invented.
And I will argue that to My Lady, that
even without the making of a compound, by the writing down of the structure
with all of the substituents and the synthesis and saying all of the
stereochemical isomers because of her work with captopril and bicyclics, she
had in the words of the Supreme Court of Canada, a sound basis for making the
prediction that all of these compounds would work as ACE inhibitors and
antihypertensives but she did more.
Before the Adir inventors or scientists
made a single compound that fell within the class of compounds that they say
invented, Dr. Smith actually made one of the compounds and, thus, if necessary
completed her conception by making a compound that worked within the class and
she had a sound basis for predicting that she had a class invented.
[454] As confirmed during final oral
argument by counsel for Apotex, the class of compounds to which Apotex refers
is that set out as General Formula I in the '196 Patent specification. The
three compounds described by Apotex (Schering’s SCH 31335 and ADIR’s S-9178-1
and S‑9179‑1) fall within the compounds that would be included in General
Formula I set out in the specifications of the '196 Patent. Thus, there is no doubt
that the Schering scientists made at least one compound with ACE inhibition
activity that falls within General Formula I before the ADIR scientists made
and tested their two compounds. Apotex, on the other hand, presents no evidence
to show that the two Schering compounds (or any other earlier-made compounds)
fall within claims 1, 2, 3 or 5 of the '196 Patent. Thus it follows that
Apotex’s argument can only succeed if the “invention” of the '196 Patent includes all of the
compounds of General Formula I.
[455] The problem with Apotex’s
submission on the issue of inventorship is that the invention of the '196 Patent is not General Formula
I. I have already discussed and determined the scope of the invention in the
section of these reasons dealing with the '196 Patent construction. As held
in paragraph 133, the invention claimed by the patent, on a purposive
construction of the claims at issue, is that disclosed by claims 1, 2, 3 and 5
and nothing more.
F. Summary of Inventorship Issue
[456] The counterclaim of Apotex on
the grounds that the ADIR scientists were not the first inventors of the
compounds patented under the '196 Patent must fail on the basis that:
·
On a
proper statutory interpretation, s. 61(1) of the Act precludes Apotex
from challenging the validity of the '196 Patent on the grounds of inventorship.
This is because the claims involved in the conflict proceedings were ones “on
which conflict proceedings should have been directed”.
·
There were
no “missed conflicts” Both Schering’s claim C39 and the individual claims 1, 2,
3 and 5 of the '196
Patent were incorporated into the conflict proceedings.
·
In any
event, Apotex has failed to satisfy its evidentiary burden to demonstrate that
Dr. Smith was the first to know or use the invention of the '196 Patent.
XII. Competition
Act Claim
A. Overview
[457] As described
earlier in these reasons, the conflict claims before the Commissioner were
ultimately resolved through settlement among ADIR, Schering and Hoechst. The
settlement was embodied in the Minutes of Settlement (also referred to as the
Settlement Agreement) that were attached to the Nadon Order.
[458] In its
counterclaim, Apotex seeks damages pursuant to s. 36 of the Competition Act.
As pleaded and in summary form, the allegations of Apotex related to this requested
remedy are as follows:
·
the
actions of ADIR and the other parties to the Settlement Agreement “ensured that
the parties to the [Settlement] Agreement would gain effective control over the
manufacture and supply of a number of ACE inhibitors, including those within
the scope of the claims of the '196 Patent, and thereby prevent, limit or
lessen unduly, competition in the market for ACE inhibitors”;
·
the
parties entered into the Settlement Agreement “willfully, for the purpose and
with the effect of preventing, limiting or lessening unduly the competition in
the market for ACE inhibitors”; and
·
the parties to the Settlement Agreement “have
conspired . . . to prevent, limit or lessen unduly . . . competition . . .
contrary to section 45 of the Competition Act” .
[459] In
determining this aspect of Apotex’s counterclaim, a number of sub-issues have
been raised:
1.
Does
the existence of a valid patent preclude Apotex from raising a Competition
Act claim relating to the manner in which the patent was issued?
2.
Is
Apotex precluded from bringing this Competition Act claim on the basis
of the limitation set out in s. 36(4)(a)?
3.
Has
Apotex satisfied its burden to demonstrate that the Plaintiffs have committed
the elements of the s. 45 offence?
4.
Even
if Apotex’s claim is statute-barred by the operation of s. 36(4), do ADIR’s
anti-competitive actions serve to disentitle ADIR to the relief sought in its
claim?
B. Relevant Statutory Provisions
[460] Sections 36
and 45 of the Competition Act together create a civil cause of action
where a party has suffered a loss or damage as a result of an agreement that
unduly lessens or prevents competition. The basis of the offence alleged is set
out in s. 45(1), in Part VI, of the Competition Act:
45. (1) Every one who conspires, combines,
agrees or arranges with another person
(a) to limit unduly the facilities for
transporting, producing, manufacturing, supplying, storing or dealing in any
product,
(b) to prevent, limit or lessen,
unduly, the manufacture or production of a product or to enhance unreasonably
the price thereof,
(c) to prevent or lessen, unduly,
competition in the production, manufacture, purchase, barter, sale, storage,
rental, transportation or supply of a product, or in the price of insurance
on persons or property, or
(d) to otherwise restrain or injure
competition unduly,
is
guilty of an indictable offence and liable to imprisonment for a term not
exceeding five years or to a fine not exceeding ten million dollars or to
both
|
45. (1) Commet un acte criminel et encourt
un emprisonnement maximal de cinq ans et une amende maximale de dix millions
de dollars, ou l’une de ces peines, quiconque complote, se coalise ou conclut
un accord ou arrangement avec une autre personne :
a) soit pour limiter, indûment, les
facilités de transport, de production, de fabrication, de fourniture,
d’emmagasinage ou de négoce d’un produit quelconque;
b) soit pour empêcher, limiter ou
réduire, indûment, la fabrication ou production d’un produit ou pour en
élever déraisonnablement le prix;
c) soit pour empêcher ou réduire,
indûment, la concurrence dans la production, la fabrication, l’achat, le
troc, la vente, l’entreposage, la location, le transport ou la fourniture
d’un produit, ou dans le prix d’assurances sur les personnes ou les biens;
d) soit, de toute autre façon, pour
restreindre, indûment, la concurrence ou lui causer un préjudice indu.
|
[461] Entitlement
to bring a civil action for damages is set out in s. 36(1)(a):
36.
(1) Any person who has suffered loss or damage as a result of
(a)
conduct that is contrary to any provision of Part VI, or
. .
.
may,
in any court of competent jurisdiction, sue for and recover from the person
who engaged in the conduct or failed to comply with the order an amount equal
to the loss or damage proved to have been suffered by him, together with any
additional amount that the court may allow not exceeding the full cost to him
of any investigation in connection with the matter and of proceedings under
this section.
|
36. (1)
Toute personne qui a subi une perte ou des dommages par suite :
a) soit d’un comportement allant à l’encontre d’une disposition de la
partie VI;
. . .
peut, devant tout tribunal compétent,
réclamer et recouvrer de la personne qui a eu un tel comportement ou n’a pas
obtempéré à l’ordonnance une somme égale au montant de la perte ou des
dommages qu’elle est reconnue avoir subis, ainsi que toute somme
supplémentaire que le tribunal peut fixer et qui n’excède pas le coût total,
pour elle, de toute enquête relativement à l’affaire et des procédures
engagées en vertu du présent article.
|
[462] Relevant to
this action, claims under Part VI of the Competition Act must be brought
within a limitation period set out in s. 36(4)(a):
(4)
No action may be brought under subsection (1),
(a)
in the case of an action based on conduct that is contrary to any provision
of Part VI, after two years from
(i)
a day on which the conduct was engaged in, or
(ii)
the day on which any criminal proceedings relating thereto were
finally disposed of,
whichever
is the later . . .
|
(4) Les actions visées au paragraphe (1)
se prescrivent :
a) dans le cas de celles qui sont fondées
sur un comportement qui va à l’encontre d’une disposition de la partie VI,
dans les deux ans qui suivent la dernière des dates suivantes :
(i) soit la date du comportement
en question,
(ii) soit la date où il est statué
de façon définitive sur la poursuite;
|
C. The Existence of the Patent as
a Bar
[463] As I have
determined, the '196 Patent is valid. Further, absent any court determination
to the contrary, the other patents that resulted from the Settlement Agreement
are also valid. There was no evidence presented to the Court that the parties
to whom these valid patents were issued did anything contrary to the provisions
of the Patent Act in order to obtain those patents. Each of ADIR,
Schering and Hoechst acted within their rights under the Patent Act. Nevertheless,
the question is whether the manner in which they did so can constitute an
offence under s. 45 of the Competition Act.
[464] A patent
excludes all but the patentee (and its assignees or licensees) from making,
constructing, using and vending the invention of the patent (Patent Act,
s. 44). In this case, so long as the '196 Patent is in effect, no other party
may sell perindopril. Thus, the very existence of a patent lessens competition.
On its face, this is in direct conflict with the provisions of the Competition
Act, which legislation has as its stated purpose:
1.1
The purpose of this Act is to maintain and encourage competition in Canada in
order to promote the efficiency and adaptability of the Canadian economy, in
order to expand opportunities for Canadian participation in world markets
while at the same time recognizing the role of foreign competition in Canada,
in order to ensure that small and medium-sized enterprises have an equitable
opportunity to participate in the Canadian economy and in order to provide
consumers with competitive prices and product choices.
|
1.1
La présente loi a pour objet de préserver et de favoriser
la concurrence au Canada dans le but de stimuler l’adaptabilité et
l’efficience de l’économie canadienne, d’améliorer les chances de
participation canadienne aux marchés mondiaux tout en tenant simultanément
compte du rôle de la concurrence étrangère au Canada, d’assurer à la petite
et à la moyenne entreprise une chance honnête de participer à l’économie
canadienne, de même que dans le but d’assurer aux consommateurs des prix
compétitifs et un choix dans les produits.
|
[465] In spite of
this apparent conflict, Courts have consistently held that the existence of a
patent is not an offence under the Competition Act (see, Molnlycke
AB v. Kimberly-Clark of Canada Ltd. et al. (1991), 36 C.P.R. (3d) 493 at
499 (F.C.A.) [Molnlycke]; Eli Lilly and Co. v. Apotex Inc. (2005),
44 C.P.R. (4th) 1 at para. 30 (F.C.A.) [Eli Lilly (F.C.A. 2)]; Eli
Lilly and Co. v.
Apotex Inc. (2004), 32
C.P.R. (4th) 195 paras. 14-16 [Eli Lilly (F.C.A. 1)]). As noted in Molnlycke,
at page 498:
Certainly the existence of a patent is apt
to limit, lessen, restrain or injure competition - monopolies do - but its
issuance and the inherent impairment of competition has been expressly provided
for by an Act of Parliament, which has made provision for compulsory licensing
in circumstances where it has considered the ordinary incidence of the
statutory monopoly to be contrary to public policy. It is the existence of
the patent, not the manner in which issue was obtained or how and by whom its
monopoly is agreed to be enforced and defended, that impairs competition.
[Emphasis added.]
[466] Apotex, I
believe, acknowledges that the patent itself cannot be the focus of an offence
under the Competition Act. In their view, it is not the patent that
constitutes the offence but the actions of ADIR, Hoechst and Schering in
obtaining the patent. As described in a response to an undertaking provided
during the discovery of Mr. Peter Gingras, global program manager to Apotex
Inc., the Settlement Agreement limited or lessened competition in the ACE
inhibition market:
By enabling the participants to control
the commencement and duration of the monopoly periods for medicinal substances
in the relevant market, and control, and thereby limit, the entry of competing
substances in the same market.
[467] This is not
the first time that similar arguments have been made to the Courts.
[468] A good
example of that is contained in the decision of the Federal Court of Appeal in Molnlycke,
above. In that case, Molnlycke A.B. and Kimberley-Clark of Canada Ltd. (K-C
Canada) had brought an action against Proctor and Gamble Inc. (P&G) for
infringement of Canadian patent entitled “Disposable Diapers with Refastenable
Tabs”. A patent for the invention was originally issued to Molnlycke, under no.
1,213,702, November 12, 1986. K-C U.S. was a licensee of that
patent and K-C Canada its sublicensee. That patent was surrendered and reissued
on August 2, 1988, under no. 1,239,752. By assignment recorded in the Patent
Office on October 14, 1988, Molnlycke A.B. assigned the reissued patent to K-C
Canada and commenced the action on October 21, 1989 against P&G. In
its defence and counterclaim, P&G alleged, inter alia, an agreement
among Molnlycke A.B., K-C Canada and K-C U.S which contravened s. 45(1) of the Competition
Act.
[469] In allowing
the appeal and dismissing the counterclaim the Court of Appeal commented on the
interaction between the Competition Act and the Patent Act at page
499:
Parliament has, in the Patent Act,
defined a “due” impairment of competition. In my opinion, as a matter of law,
it is not arguable that the impairment of competition inherent in the exercise
of rights expressly provided by that Act - the obtaining of a patent or reissue
of a patent, its assignment and action by the assignee to enforce its monopoly
- can be undue. It follows that undue impairment of competition cannot be
inferred from evidence of the exercise of those rights alone.
[470] The Court of
Appeal revisited Molnlycke, above, in the related cases of Eli Lilly
(F.C.A. 1) and Eli Lilly (F.C.A. 2), above. In those cases, Eli
Lilly and Company and Eli Lilly Canada Inc. (Lilly) had commenced an action
against Apotex for infringement of eight patents related to the antibiotic
cefaclor. Four of the eight patents had been assigned, after their issuance to
Shionogi & Co. Ltd. (Shionogi), by Shionogi to Lilly. In its counterclaim,
Apotex claimed damages under the Competition Act. Apotex argued that
the assignment by Shionogi of four existing patents to Lilly, who already held
a number of patents, resulted in one company, Lilly, acquiring patent rights
that allowed it to control all of the commercially viable processes for making
cefaclor where, before the agreement, those processes were controlled by two
companies, Shionogi and Lilly. The effect, Apotex asserted, was anti-competitive.
Lilly submitted that, since patents were assignable under s. 50 of the Patent
Act and because of Molnlycke, above, Apotex was precluded from
bringing its counterclaim. The Court of Appeal agreed with Apotex that the
counterclaim was not precluded.
[471] In both Eli
Lilly (F.C.A. 1) and Eli Lilly (F.C.A. 2), the Courts held open the
possibility that agreements related to patents could, in certain circumstances,
be the subject of a claim under ss. 36 and 45 of the Competition Act. In
Eli Lilly (F.C.A. 2), above at paragraph 21, Justice Evans
concluded that s. 50 of the Patent Act (the right to assign a patent) “does
not immunize an agreement to assign a patent from section 45 of the Competition
Act when the assignment increases the assignee’s market power in excess
of that inherent in the patent rights assigned” [emphasis added]. In his
conclusion, at paragraph 36, he stated as follows:
To conclude, in my respectful opinion,
the Judge erred in law by holding that the assignment of patents is exempt from
section 45 when, by reason of the assignee’s existing ownership of other
patents, the assignment transfers more market power than that inherent in
the patents assigned. He also erred in regarding Molnlycke as authority for the
proposition that, in these circumstances, any lessening of competition could
not be undue for the purpose of section 45. [Emphasis Added.]
[472] It appears to
me that the Court of Appeal in both Eli Lilly (F.C.A. 1) and Eli
Lilly (F.C.A. 2) must be read as qualifying or expanding on Molnlycke,
above. Before me both counsel remarked that the case law stands for the
proposition that there must be “something more” beyond the mere assertion of
patent rights. On the basis of these two cases, I agree. The question becomes: what
is “something more”?
[473] In Eli
Lilly (F.C.A. 1) and Eli Lilly (F.C.A. 2), Lilly added to its
existing patents through assignments and had shut all other potential
competitors out of the market. That was, in the view of Justice Evans, “something
more”. In Molnlycke, above, this “something more” did not exist since
the only effect of the assignment was that a different company could sue the
defendant for infringement.
[474] The
significant difference between Eli Lilly (F.C.A. 1) and Eli Lilly
(F.C.A. 2) and that before me relates to the lack of existing ownership
by ADIR of patent rights that would result in more market power than that
inherent when patents are obtained. The assignment agreement between Shionogi
and Lilly was entered into after the grant of the eight patents; in
other words, those parties already held a certain level of market power granted
to them through the patents. The action of combining those two sets of patents
through assignment, after the patents had issued, resulted in a total control
of the cefaclor market. The Courts in Lilly (F.C.A. 1) and Eli Lilly
(F.C.A. 2) concluded that this was “something more” than the exercise of
patent rights.
[475] In contrast,
the situation before me involves a settlement agreement that was entered into
prior to the grant of the patents to ADIR, Schering and Hoechst. Until and
unless the patents issued, there could be no market power held by ADIR and no
impairment of competition. While it is true that ADIR had applied for and was
awaiting final resolution of the conflict proceedings, the Patent Act
provided for appeals of the Commissioner’s decisions regarding the conflicts to
the Federal Court. Moreover, the rules and practices of the Federal Court allow
for the settling of actions. Every step of the process – from the applications
of each of the parties, through the settlement process and the Nadon Order to
the ultimate issuance of the '196 Patent – was in accordance with the rights
of ADIR under the Patent Act and the Federal Courts Rules. The
Settlement Agreement was simply one step in ADIR’s exercise of patent rights.
[476] Had ADIR
already held patents related to perindopril or even to other ACE inhibitors, it
is arguable that there would have been “something more”, as it would have
gained more market power than that inherent in its obtaining the '196 Patent.
[477] Here,
however, regardless of whether perindopril is in the same market as other ACE
inhibitors, ADIR could only gain as much market power as that inherent in the '196
Patent. Since there is no evidence it obtained this power by methods other than
that authorized by the Patent Act, there is nothing more and Molnlycke
applies.
[478] In sum,
because ADIR was merely exercising its rights under the Patent Act to
obtain patents and nothing more, I am satisfied that Apotex’s claim for damages
under the Competition Act must fail.
D. Limitation
Period
[479] In the event
that I am wrong in my conclusion that ADIR was exercising its rights under the Patent
Act in a manner that precludes Apotex from claiming damages under the Competition
Act, I will consider the next issue – the application of the limitation
period in s. 36(4) of the Competition Act. As noted above, s. 36(4)(i)
precludes a party from bringing an action under s. 36 “based on conduct that is
contrary to any provision of Part VI, after two years from a day on which the
conduct was engaged in”.
[480] Servier
submits that Apotex is statute-barred from bringing the counterclaim under the Competition
Act by virtue of s. 36(4) of the Competition Act for two reasons:
(a) the “conduct”, being the entering into the Settlement Agreement, occurred
some six years prior to the commencement of the counterclaim; and (b) Apotex
has known of the Settlement Agreement since April 2003. Apotex, in turn, argues
that the conduct of ADIR occurred, not only on the date that ADIR entered into
the Settlement Agreement but has occurred on every day thereafter so long as
the patents that issued from the Settlement Agreement are in effect. Further, it
argues, an interpretation of s. 36(4) as proposed by Servier would preclude Apotex
from ever bringing an action under the Competition Act. This is because
Apotex could only bring an action under s. 36 of the Competition Act
where it has “suffered loss or damage”; its loss or damage only flows from a
successful claim by Servier of infringement of the '196 Patent by Apotex.
[481] In spite of
the capable arguments of counsel for Apotex on this point, I am of the view
that the conduct in this case is most likely the entering into of the
Settlement Agreement. At the latest, the conduct is the issuance of the '196 Patent
(and the patents to Schering and Hoechst that also resulted from the Nadon
Order). The undue lessening of competition (if it exists) is the effect of the
alleged conspiracy and not the “conduct”.
[482] This view is
supported by the words of the statutory offence. Specifically, s. 45 provides
that “Every one who conspires, combines, agrees or arranges with another person
[to unduly lessen competition] . . . is guilty of an offence . . .” The offence
is the conspiracy or agreement. The effect of the conspiracy or
agreement is undue lessening of competition. While the undue lessening of
competition may continue, the act of the conspiracy will, in most cases, occur
at an identifiable time. Thus, when we come to the limitation set out in s.
36(4), the provision refers to the day on which the agreement or conspiracy was
entered into. The conduct, for purposes of this action, was the date of the
Settlement Agreement among ADIR, Schering and Aventis – in or around December
2000. Thus, the two-year limitation set out in s. 36(4) has been exceeded.
[483] My conclusion
may have been different if I had evidence of continuing collusion or agreement
among the parties to the Settlement Agreement. I do not. In fact, the evidence
is that the parties to the agreement actively compete (for example, as
explained by Mr. Sumpter, through the use of visual aides comparing the utility
of the various ‘prils used by Servier’s sales force team). The situation in 351694
Ontario Ltd. v. Paccar of Canada Ltd., 2004 FC 1565 [Paccar], a case
relied upon by Apotex, was quite different.
[484] In Paccar,
the plaintiffs had been selling truck parts at a deep discount. In response the
defendants instituted a rule (referred to as the Palings rule) under which
parts were provided to dealers. The operation of the Palings rule “reduces the
dealer’s possibility for profit and likely will diminish sale. An inference can
be drawn that under these circumstances it amounts to act of discrimination in
the supply of goods [contrary to s. 61(1)(b) of the Competition Act]” (Paccar,
above at para. 26). Justice Von Finkenstein concluded, at paragraph 27 that:
This Palings rule was an ongoing rule
which remained in place with respect to both dealerships right until the date
of termination; i.e. well into the limitation period.
[485] At paragraph 30,
the learned judge stated:
Given my finding above regarding possible
violations of s. 61(1)(b) based on the Palings rules, and given that this rule
was applied to both dealerships any allegations in respect of parts based on
proven violation of s. 61(1)(b) would not be barred by s. 36(4)(a)(1).
[486] The facts of Paccar
are distinguishable from the case before me. In Paccar, there was
continuing co-operation between the plaintiffs, presumably under some on-going
agreement. The Palings rule continued to be applied by the plaintiffs.
In effect, the agreement did not terminate. The act of conspiracy occurred
every time a transaction occurred under the Palings rule. In the case before
me, there is no such evidence. Upon the Nadon Order or, at the latest, the
issuance of the patents, the Settlement Agreement had no continuing effect; it
was fully executed. This is a significant distinction.
[487] I conclude
that the limitation period runs from the date of the Settlement Agreement or,
at the latest, the date of the issuance of the '196 Patent.
[488] The
discoverability principle can, in some circumstances, operate to extend a
limitation period. This principle operates where a party could not reasonably
have known about the existence of an event. In this case, Servier asserts that,
since the statutory limitation period in s. 36(4) expressly runs from a
specific date independent of knowledge, the discoverability principle cannot
apply. I think that this is likely a correct view of the law (see Fehr v.
Jacob (1993), 85 Man. R. (2d) 64 (Man. C.A.)).
[489] However, the
discoverability principle, if it applies, does not assist Apotex. It is
arguable that Apotex had effective knowledge of the Settlement Agreement
either: (a) as soon as it was placed on the public record in Court File T-228-97
as an appendix to the Nadon Order; or (b) when the '196 Patent issued in 2001.
At either of those two points in time, Apotex could be presumed to have been
aware that a patent had issued for perindopril and that the '196 Patent had
issued pursuant to an agreement among three companies. Even if I cannot
definitively conclude that Apotex knew about the alleged conspiracy in 2001,
the evidence before me is unequivocal that Apotex knew about the Settlement
Agreement no later than April 2003. Mr. Peter Gingras, global program manager with
Apotex Inc., in responses to undertakings given during his examination in
discovery, advised that Apotex became aware of and received a copy of the
Settlement Agreement in April 2003. Thus, even if the discoverability principle
applies, the latest date from which the two-year limitation period runs would
be April 2003. Apotex is, therefore, well beyond the two-year limitation of s.
36(4).
[490] For these
reasons, I find that Apotex is statute barred from bringing an action under s.
36 of the Competition Act on the basis that Apotex brings this action
more than two years after the alleged conduct was engaged in.
E. Conclusion
[491] Apotex’s
counterclaim under the Competition Act fails on the grounds that: (a)
ADIR was exercising its rights under the Patent Act; and (b) in any
event, Apotex brought this action beyond the two-year limitation set out in the
Competition Act. Accordingly, I do not need to deal with the substance
of the arguments and conflicting expert evidence put forward on Apotex’s
counterclaim.
[492] Apotex also
asks that, even if the claim is statute barred, I consider whether ADIR’s
anti-competitive actions serve to disentitle Servier to the relief it seeks.
In short, Apotex’s argument is that anti-competitive conduct can disentitle a
party to equitable relief.
[493] In response
to this argument, I return to my first conclusion in this section. In entering
into the Settlement Agreement, Servier (or ADIR) was exercising its rights
under the Patent Act. Apotex has not shown that ADIR did anything more
than that which was explicitly contemplated by the provisions of the Patent
Act and the Federal Courts Rules. On these facts, Apotex has failed
to show that there was conduct that would disentitle Servier to any of the
equitable remedies that it may seek.
[494] Apotex’s
counterclaim for damages under s. 36 of the Competition Act will be
dismissed.
XIII. Remedies
A. Overview
[495] Servier Canada and ADIR
have been successful in this action, except with respect to their claim of
inducement. The '196 Patent as well as claims 1, 2, 3 and 5 of the '196 Patent
are found to be valid and infringed by Apotex, subject to certain exemptions
afforded by section 55.2(1) of the Patent Act. Servier seeks the
following remedies:
·
A
declaration that the '196 Patent is valid and subsisting;
·
A
declaration that Apotex Inc. and Pharmachem have infringed claims 1, 2, 3 and 5
of the '196 Patent;
·
A
permanent injunction on various terms;
·
Damages
or, if they so elect, an accounting of profits;
·
Punitive
or exemplary damages;
·
Pre-judgment
and post-judgment interest and all applicable taxes;
·
Costs
of the proceedings on a solicitor-client basis or an elevated scale; and
·
All
experts’ fees
[496] In general,
the Court’s authority to grant the requested relief arises from specific
provisions in the Patent Act or the Federal Courts Act. Section
55 of the Patent Act provides that the patentee and all persons claiming
under the patentee (in this case, Servier Canada and ADIR)
are entitled to damages. Section 57 of the Patent Act permits the
Court to award an injunction and an accounting of profits in appropriate
circumstances. Normally, an order for delivery up of infringing material would
follow the award of an injunction. The Court has power to award pre-judgment
interest; ss. 36 and 37 of the Federal Courts Act directs the Court
to look at the laws of an appropriate province in that regard. The Court has
inherent power to award exemplary or punitive damages where appropriate, and to
award costs.
B. The Bifurcation Order
[497] By Order
dated March 14, 2007, Prothonotary Aronovitch provided for a bifurcation of the
trial of this action so as to leave the calculation as to quantum of damage or
profits to a later time. In specific terms, the Order stated as follows:
2. Pursuant to Rule
107(1), this matter may proceed to trial without requiring the parties to
adduce evidence at trial, or to conduct discoveries, or make production on any
issue of fact where such evidence relates solely to:
a. the calculation of
the quantum of damages suffered by the plaintiffs as a result of the
infringement by defendants of Canadian Patent 1,341,196 (hereinafter the “'196
Patent”);
b. the calculation of
the quantum of profits made by the defendants as a result of the infringement
by defendants of the '196 Patent; and
c. the calculation of
the quantum of the defendants’ damages resulting from a breach by plaintiffs of
section 45 of the Competition Act.
3. A hearing under
Rules 107 and/or 153 of the Federal Courts Rules shall be conducted
following the final determination of all remaining issues herein, if it then
appears that such issues are required to be decided, including necessary
documentary and oral discovery.
C. Permanent Injunction
[498] Servier
submits that the issuance of a permanent injunction against Apotex, effective
immediately upon Judgment, is an appropriate remedy in this case to prevent
Apotex from further infringing the '196 Patent until patent expiry (Merck
(C.A.), above at para. 69).
[499] While not objecting
in principle to the imposition of a permanent injunction, Apotex submits that a
“grace” period of 30 days be allowed before the injunction comes into effect.
This was done recently in Janssen-Ortho, above.
[500] The grant of
a permanent injunction is a discretionary remedy (Janssen-Ortho, above
at para. 133). I acknowledge, as pointed out by Servier, that the Plaintiffs in
this action acted swiftly to bring this action. However, Apotex’s sale of the 8
mg tablets of perindopril in Canada was done in compliance with the NOC
Regulations. Servier’s failure to seek the protection of the NOC
Regulations for its 8 mg tablet enabled Apotex to obtain the necessary NOC for
that dosage. This situation where Apotex was legally able to sell the 8 mg
tablets in Canada (subject to any claim of infringement, of course) is, in my
view, similar to the facts in Janssen-Ortho, above.
[501] Thus, as was
done in Janssen-Ortho, above, I am prepared to allow a 30 day period
after my judgment before the injunction will come into effect with respect to
the sale of perindopril. During that time, Apotex may continue to sell or
otherwise dispose of its perindopril products already in its possession,
custody or control, but only in the normal course of business and provided that
all monies received in respect thereof are accounted for and held in a separate
trust fund to be paid to Servier, or as they may direct, by October 31, 2008.
These monies are to be taken into consideration, by way of set off or
otherwise, when a final calculation as to damages is made.
D. Damages or Profits
[502] It is
accepted by both parties that, once a patentee has successfully demonstrated
infringement, the court has the discretion to grant the patentee’s choice of
remedies – either damages (as provided for in s. 55 of the Patent Act)
or an accounting of profits (pursuant to s. 57). Servier wishes to be able to
elect an accounting of profits and asks this Court to so direct. Apotex argues
that I should not exercise my discretion in this case.
[503] While both
damages and accounting of profits are intended to provide compensation to a
wronged plaintiff, the fundamental principles underlying the two remedies and
the practical considerations are substantially different.
[504] The object of
an award of damages is to make good any loss suffered by the plaintiff as a
result of the defendant’s infringement of the patent. Quantification of the
award is based on the losses suffered by the plaintiff; any gains realized by
the defendant because of its wrongdoing are not relevant. On the other hand, an
accounting of profits is based on the premise that the defendant, by reason of
its wrongful conduct, has improperly received profits which belong to the
plaintiff. The objective of the award is to restore those actual profits to
their rightful owner, the plaintiff, thereby eliminating whatever unjust
enrichment has been procured by the defendant. Calculation is based on the
profits wrongfully gained by the defendant; any other losses suffered by the
plaintiff are irrelevant.
[505] An accounting
of profits is not an easy calculation. As was stated by the late Justice
Rouleau, of this Court, when speaking about such an accounting in Beloit
Canada Ltd. v. Valmet-Dominion Inc. [1994] F.C.J. No. 682 at
para. 3 (T.D.) (QL), rev’d in part [1995] F.C.J. No. 733 (C.A.) (Q.L.), leave
to appeal to S.C.C. refused, [1995] S.C.C.A. No. 388:
This was undoubtedly a most expensive,
lengthy and difficult reference and one which clearly underlines the pitfalls
of granting the remedy of an accounting of profits other than in exceptional
and appropriate circumstances and after due deliberation by the court.
[506] In spite of
practical difficulties, the Court of Appeal in Beloit Canada Ltd. v. Valmet
Oy (1992), 45 C.P.R. (3d) 116 at 119 (F.C.A.), stated that it could:
...see no reason in principle why a
patentee, whose property has been wrongly appropriated through infringement,
should not recover all the profits, direct and indirect, derived by the
infringer from his wrongful infringement.
[507] It is
necessary for a party seeking an equitable remedy, such as profits, to show
some basis for the exercise of equity (Janssen-Ortho, above at para.
132).
[508] In my view,
there are a number of facts in this case that show a sound basis for an
exercise of discretion:
·
There
has been no inequitable conduct by the Plaintiffs which would disentitle them
to such relief.
·
In
contrast to the situation before the Court in Merck (F.C.), above, where
there was delay in bringing the matter to trial, Servier commenced this action
and cooperated in bringing the matter to trial in a relatively short period of
time.
·
With
Apotex infringement dating back only to 2006, quantification of profits should
not be unduly complex.
·
Servier
Canada has continued to fully promote its perindopril products in Canada, and has
taken steps to maintain competitiveness. Once again, this situation differs
from that before Justice Hughes in Merck (F.C.), above, where the
plaintiffs “threw in the towel”.
[509] In contrast,
the behaviour of Apotex must also be taken into account. Apotex, fully aware of
the '196 Patent, chose Canada as the manufacturing
site for perindopril products. Apotex could have avoided all of the
manufacturing infringement by making perindopril-containing products outside of
Canada. This is not
just speculation. As acknowledged by a number of witnesses for Apotex, Apotex
also has manufacturing facilities in India and is in the process
of obtaining authorization to produce perindopril from that site. Indeed, as
stated by Dr. Sherman, during his testimony, Apotex had “determined that it
would make sense to have the facilities outside of Canada qualified in
case it turned out we would lose at trial”. I have no problem with Apotex and
other related companies arranging their business affairs in any way they see
fit. However, they must also bear the consequences of their choices where they
are perfectly aware that a patent will be infringed. In this case, Apotex chose
to make perindopril in Canada fully knowing that making perindopril
would constitute infringement and that it might be required to disgorge its
profits.
[510] Apotex notes
that it was able to obtain an NOC for the 8 mg tablets due to an oversight on
the part of Servier and asks that I take this into account in determining
whether profits should be available to Servier. In my view, on the facts of
this case, the failure of Servier to protect the 8 mg dosage is not material.
Apotex did not commence sales of the 8 mg tablets until after the launch
of this lawsuit, when Apotex was well aware that Servier was aggressively
asserting its patent rights. Once again, I believe that Apotex should not now
be permitted to isolate itself from an election of profits on the basis of its
commercial decisions and the oddities of Canada’s NOC
Regulations.
[511] Balancing the
facts in this case, I am persuaded that I ought to exercise my discretion and
allow Servier to elect an accounting of profits.
E. Interest
[512] Servier
requests an award of pre-judgment interest running from the date of the first
shipment or sale by Apotex in 2006 of infringing perindopril products at the
average bank prime commercial lending rate plus one and a half percent (1.5%),
or in any event no less than five percent (5%), compounded semi-annually.
Servier requests the same compounded rate for post-judgment interest. The
parties acknowledge that, if Servier elects an account of profits,
determination of interest should be done as part of the reference or
pre-judgment trial that determines profits.
[513] In the event
that Servier elects an award of damages, I see no reason to depart from the
conclusions of my colleague Justice Hughes in Janssen-Ortho, above at paras. 135-136
(see also Merck (F.C.), above at para. 241):
Pre-judgment interest is allowed in
respect of any monetary award of damages. It should not be compounded. The rate
of such interest should be calculated separately for each year since the
infringing activity began at the average annual bank rate established by the
Bank of Canada as the minimum rate at which it makes short term advances to the
banks listed in Schedule I of the Bank Act, R.S.C. 1985, c. B-1.
Post-judgment interest, not compounded,
follows the establishment of the quantum of damages at the rate of five percent
(5%) established by the Interest Act, R.S.C. 1985, c. I-15, s. 4.
F. Punitive or Exemplary damages
[514] Servier also
seeks punitive or exemplary damages. The parties are agreed that it would be
premature for me to make that determination prior to the reference on damages.
As stated by Justice Sharlow, writing for the Court of Appeal in Apotex Inc.
v. Merck & Co., 2003 FCA 291 at para. 34:
The purpose of punitive damages is to
punish, to deter the wrongdoer and others, and to denounce wrongful behaviour.
Punitive damages are awarded only where compensatory damages and other normal
civil remedies are insufficient to accomplish those objectives, and in an
amount that is no greater than necessary to accomplish that objective: Whiten,
supra; Hill v. Church of Scientology of Toronto, [1995] 2 S.C.R. 1130. It is
axiomatic that until all the ordinary civil remedies are finally determined
(which in this case would include a determination as to whether the remedy is
an award of damages or an accounting of profits, and the quantum), it is
impossible to determine whether punitive damages are required to meet the
objectives of punishment, deterrence and denunciation.
[515] Accordingly,
consideration of the issue of exemplary or punitive damages will be deferred
until after damages or profits are awarded.
G. Conclusion
[516] In sum,
Servier Canada and ADIR will be entitled to the following, as more particularly
described in the foregoing and in the judgment:
·
A
declaration of the validity of the '196 Patent;
·
A
permanent injunction, subject to the right of Apotex to sell its perindopril
products for a further 30 days from the date of this judgment;
·
Damages
to be quantified subsequent to this judgment;
·
Pre
and post-judgment interest.
[517] I take no
decision and express no views, as part of this judgment, on the question of
punitive or exemplary damages.
XIV. Overall
Conclusion
[518] For these
reasons, Servier’s claim will be allowed insofar as it relates to Servier
Canada and ADIR; the claims of all other Plaintiffs will be struck. Apotex’s
counterclaim is dismissed.
[519] I reserve as
to costs and ask that the parties provide written submissions as to costs, within
thirty (30) days from the delivery of these Reasons. These submissions should
address those matters set out in Rule 400(3) of the Federal Courts Rules
as well as experts, number of counsel, disbursements, any offer to settle and
any other matter relevant to the award of costs. These submissions should not
exceed ten (10) pages.
JUDGMENT
For the Reasons set out
herein, following the trial of this action, this Court adjudges and declares
as follows:
1.
Les
Laboratoires Servier, Oril Industries, Servier Laboratories (Australia) Pty Ltd and Servier
Laboratories Limited are hereby struck from the style of cause of this action
and shall have no rights as Plaintiffs in respect of this action;
2.
Claims
1, 2, 3 and 5 of Canadian Letters Patent No 1,341,196 are valid and have been infringed
by the Defendants, Apotex Inc. and Apotex Pharmachem Inc., or either of them,
by their manufacture, sale, offering for sale and other dealing in perindopril
containing products in Canada;
3.
An injunction
shall issue to take effect after the expiry of thirty (30) days from the date
of issue of these Reasons prohibiting the Defendants and all those over whom
they may exercise control, from manufacturing, selling, offering for sale or otherwise
dealing in perindopril containing products in Canada; provided, however, that
from the date of issue of these Reasons until the expiry of said thirty (30)
days, the Defendant may continue to sell or dispose of such product as it
already has in its possession, custody or control as of the date of issue of
this Judgment, in the normal course of business and provided that all monies received in respect thereof are
accounted for and held in a separate trust fund to be paid to the Plaintiffs,
or as they may direct, by October 31, 2008;
4.
The
Defendants may, at their election, do one of the following in respect of
perindopril containing products in their possession, custody or control as of
the date of issue of this Judgment:
a)
Sell
them in the normal course of business in accordance with paragraph 3 above,
provided that all unsold product at the end of the thirty (30) day period shall
be treated in the manner provided in one of b) or c) below;
b)
Destroy
them and provide an appropriate affidavit of a responsible officer of the
Defendants to that effect; or
c)
Deliver
them up to the Plaintiffs at a place and manner as the Plaintiffs may direct
provided that if such delivery is to take place outside of the Greater Toronto
area it shall be at Plaintiffs’ expense;
5.
The
Plaintiffs are entitled to elect either an accounting of profits of the
Defendants or all damages sustained by them by reason of the activities of the
Defendant which infringe claims 1, 2, 3 or 5 of the '196 Patent. A separate
trial, preceded by discovery if requested, shall be held to determine either an
accounting of the Defendants’ profits or the quantum of damages. Any monies
paid as set out in paragraph 3 above shall be taken into consideration by way
of set off or otherwise, in the final calculation of damages or profits.
6.
The
Plaintiffs are entitled to pre-judgment interest on the award of damages (if
elected), not compounded, at a rate to be calculated separately for each year
since infringing activity began at the average annual bank rate established by
the Bank of Canada as the minimum rate at which it makes short term advances to
the banks listed in Schedule 1 of the Bank Act, R.S.C. 1985, c. B-1. In
the event that the Plaintiffs elect an accounting of profits, interest will be
determined as part of the separate trial referred to in paragraph 5;
7.
The
Plaintiffs are entitled to post judgment interest, not compounded, at the rate
of five percent (5%) per annum. This interest shall commence upon the final
assessment of the damage or profits amount;
8.
The
question of exemplary or punitive damages is deferred until after the award of
damages or profits has been determined; and
9.
The
parties shall make submissions as to costs within thirty (30) days hereof in
the manner set out in the Reasons.
10.
The
Defendants’ Counterclaim is hereby dismissed.
“Judith
A. Snider”