Eli Lilly and Company v. Apotex Inc., docket T-1100-97

Date: 19980220

Docket: T-1100-97

BETWEEN:

     ELI LILLY AND COMPANY and

     ELI LILLY CANADA INC.

     Plaintiffs

     - and -

     APOTEX INC.

     Defendant

     REASONS FOR ORDER

RICHARD J.:

BACKGROUND

[1]      In a statement of claim filed on May 23, 1997 and amended on July 14, 1997, the plaintiffs allege that claims 1, 2, 4, 5, 6 and 8 of Canadian Letters Patent 1,166,248 have been infringed by the defendant's manufacture, sale and offers to sell nizatidine capsules.

[2]      The defendant, in its statement of defence and counterclaim filed September 4, 1997, admits that the '248 patent issued to the plaintiff Eli Lilly and Company on April 24, 1984, identifying Richard P. Pioch as the inventor, but denies infringement and alleges invalidity of the patent and each of the claims in issue.

NATURE OF THE PROCEEDING

[3]      The plaintiffs have brought a motion for an order that the following portions of the statement of defence and counterclaim be struck out on the grounds that these portions of the statement of defence and counterclaim disclose no reasonable defence pursuant to Federal Court Rule 419(1)(a);

(a)      the portion of subparagraph 10(a) which reads "and include compounds that the alleged inventor did not or could not make or test as H2 receptor antagonist before Canadian Application 387,139 was filed";

(b)      subparagraph 10(l); and

(c)      paragraph 11 and the heading that appears immediately before paragraph 11.

[4]      Subparagraph 10(a) reads as follows:

10. With respect to the Plaintiffs' purported rights set out in paragraph [sic] 4 to 13 of the Amended Statement of Claim, Apotex states that the '248 patent is invalid, void, unenforceable and of no force or effect and each of claims 1, 2, 4, 5, 6, and 8 is also invalid, void, unenforceable and of no force or effect for the following reasons:

(a) The '248 patent as a whole and each of claims 1, 2, 5 and 6 relate to a class of thiazole derivatives, identified as Formula I (wherein R1, R2, R3, R5, Z, Q, B, m and n are defined in the patent). The '248 patent and claims 1, 2, 5 and 6 are over-broad, claim more that was invented (if any invention was made, which is denied) and include compounds that the alleged inventor did not or could not make or test as H2 receptor antagonists before Canadian Application 387139 was filed. The class of compounds includes at least hundreds of millions of compounds. The '248 patent includes only 20 examples of compounds which number of examples are not sufficient to support the breadth of the purported disclosure and claims 1, 2, 5 and 6. Therefore, the '248 patent and claims 1, 2, 5 and 6 do not constitute an invention with the meaning of the Patent Act.

[5]      Subparagraph 10(l) reads as follows:

The Plaintiffs failed in the prosecution of Canadian Patent Application Serial Number 387139 to disclose to the Canadian Patent Office that Mr. Richard P. Pioch, before his purported invention, had complete knowledge of Ranitidine and the particular substituents of Ranitidine and other H2 receptor antagonists and that different heterocyclic rings including thiazole, as for example taught in U.S. Patent 3,950,333 particularly at column I thereof, could be used in H2 receptor antagonists. By failing to bring same to the Patent Office's attention, the Patentee improperly caused the issuance of the '248 patent in breach of its duty when prosecuting patent applications before the Canadian Patent Office ex parte to disclose all material facts to the Patent Office to enable the Patent Office to determine if there has in fact been an invention. The '248 patent is therefore invalid, void, and of no force or effect as not constituting an invention within the meaning of the Patent Act.

[6]      Paragraph 11 reads as follows:

By reason of the facts set out in paragraph 10(1), Apotex states that the Plaintiffs are estopped from asserting the '248 patent against Apotex.

[7]      The grounds for the motion are:

It is plain and obvious that the statement "and include compounds that the alleged inventor did not or could not make or test as H2 receptor antagonists before Canadian Application 387139 was filed" contained in paragraph 10(a) of the Statement of Defence and Counterclaim should be struck out on the ground that it discloses no reasonable defence.

Whether the scope of the claims in issue includes compounds that the inventor did not actually make or test is not relevant to the validity of the patent in suit or any other issue in this proceeding.

It is plain and obvious that subparagraph 10(1) and paragraph 11 of the Statement of Defence and Counterclaim should also be struck on the ground that they disclose no reasonable defence.

Paragraph 10(1) is premised on an alleged duty to inform the Canadian Patent Office of allegedly relevant prior art during the prosecution of its patent application. However, no such duty exists under Canadian Law. Indeed, the Court cannot review the procedure in the Patent Office and no allegation made by an applicant in the course of prosecution of a patent application can be relevant to the validity of the corresponding issued patent. As such, paragraph 10(1) of the Statement of Defence and Counterclaim is not relevant to the validity of the patent in suit or any matter in issue.

Paragraph 11 of the Statement of Defence and Counterclaim and the heading which appears immediately before it are dependent on paragraph 10(1) and should therefore be struck for the same reasons.

APPLICABLE PRINCIPLES

[8]      Rule 419(1)(a) reads:

419.(1) The Court may at any stage of an action order any pleading or anything in any pleading to be struck out, with or without leave to amend, on the ground that

(a) it discloses no reasonable cause of action or defence, as the case may be,

and may order the action to be stayed or dismissed or judgment to be entered accordingly.

[9]      Rule 419(2) provides:

(2) No evidence shall be admissible on an application under paragraph (1)(a).

[10]      The Court will only strike pleadings in plain and obvious cases where the case is beyond doubt¹.

[11]      The rule that the material facts in a pleading must be taken as true for the purpose of determining whether it discloses no reasonable cause of action or defence, as the case may be, does not require that allegations based on assumptions and speculations be taken as true².

ANALYSIS

Subparagraph 10(a)

[12]      The plaintiffs do not challenge the propriety of the defendant's pleading that the '248 patent and the claims in issue are over-broad and that the class of compounds includes at least hundreds of millions of compounds, and that the '248 patent includes only 20 examples of compounds which number is not sufficient to support the breadth of the purported disclosure and claims and therefore the patent and the claims in issue do not constitute an invention within the meaning of the Patent Act. Rather, the plaintiffs attack that part of the pleading which alleges that the inventor did not make or test all the compounds or could not make or test all the compounds before the Canadian patent application was filed.

[13]      It should be noted that the plaintiffs do not either dispute the propriety of the defendant's pleading that the claimed invention includes compounds which either cannot be made or lack utility, or that the efficacy or utility of the claimed invention is not fully disclosed in the '248 patent.

[14]      In my opinion, this matter is to be decided in accordance with the principles set out by Mr. Justice Pigeon in the Monsanto case³. That was an appeal from the Commissioner of Patents who had rejected two product claims of an application for a patent for new chemical compounds useful in the production of vulcanized rubber. The one claim was rejected on the ground that it was broader than the disclosure in that it went beyond sound predictability. The other claim was rejected because it covered 126 species when only 3 were shown to have been tested.

[15]      Mr. Justice Pigeon, at page 179, stated:

In the instant case, the Board, in spite of a complete absence of any evidence of unsoundness of the prediction, deny the claims and would in the end limit them to the area of proved utility instead of allowing them to the extent of predicted utility. In my view this is contrary to s. 42 of the Patent Act.

Under that section the Commissioner is instructed to refuse the patent when "satisfied that the applicant is not by law entitled" to it. Here what he has said in approving the decision of the Board is in effect "I am not satisfied you are entitled to it". In my opinion the Commissioner cannot refuse a patent because the inventor has not fully tested and proved it in all its claimed applications. This is what he has done in this case by refusing to allow claims 9 and 16 unless restricted to what had been tested and proved before the application was filed. If the inventors have claimed more than what they have invented and included substances which are devoid of utility, their claims will be open to attack. But in order to succeed, such attack will have to be supported by evidence of lack of utility. At present there is no such evidence and there is no evidence that the prediction of utility for every compound named is not sound and reasonable.

---

[16]      Mr. Justice Pigeon quoted a passage from Graham J. in Olin Mathieson⁴:

Where, then, is the line to be drawn between a claim which goes beyond the consideration and one which equiparates with it? In my judgment this line was drawn properly by Sir Lionel when he very helpfully stated in the words quoted above that it depended upon whether or not it was possible to make a sound prediction. If it is possible for the patentee to make a sound prediction and to frame a claim which does not go beyond the limits within which the prediction remains sound, then he is entitled to do so. Of course, in so doing he takes the risk that a defendant may be able to show that his prediction is unsound or that some bodies falling within the words he has used have no utility or are old or obvious or that some promise he has made in his specification is false in a material respect; but if, when attacked, he survives this risk successfully, then his claim does not go beyond the consideration given by his disclosure, his claim is fairly based on such disclosure in these respects, and is valid.

[17]      Mr. Justice Pigeon added at page 176:

I have quoted again the passage quoted by the Board because I consider the last sentence of the paragraph of some importance as it does clearly indicate what is meant by a "sound prediction". It cannot mean a certainty since it does not exclude all risk that some of the area covered may prove devoid of utility. It thus appears to me that the test formulated by Graham, J., involves just two possible reasons for rejecting claims such as those in issue.

     1. There is evidence of lack of utility in respect of some of the area covered;

     2. It is not a sound prediction.

[18]      It is not a ground of invalidity of a patent that the inventor has not tested and proved it in all its claimed applications.

[19]      If the inventor has claimed more than was invented and included substances which are devoid of utility, the claims will be open to attack, but in order to succeed it must be supported by evidence of lack of utility.

[20]      The claim may also be declared invalid for the reason that it is not a sound prediction.

[21]      Counsel for the defendant referred to the later decision of the Supreme Court in Hoechst⁵ and in particular to the passage at page 194 where the Court referred to counsel's characterization of the patents as "an unproved and untested bypothesis in an uncharted field". However, the court upheld the invalidity of the patent on the ground that it was too wide in scope.

[22]      That allegation is still open to this defendant if the plea of no testing is struck since the plea of overclaiming will remain as will the plea of lack of utility.

[23]      Accordingly, the following words in subparagraph 10(a) "and include compounds that the alleged inventor did not or could not make or test as H2 receptor antagonists before Canadian Application 387139 was filed" are struck out.

Subparagraph 10(l) and Paragraph 11

[24]      The defendant alleges that the plaintiffs failed to disclose to the Canadian Patent Office some allegedly relevant prior art during the prosecution of its patent application. The United States Patent No. 3,950,333 which is specifically mentioned in subparagraph 10(l) is one of the prior art relied on by the defendant in subparagraph 10(i) of its defence.

[25]      The defendant relies on subsection 53(1) of the Patent Act to support this plea. It provides that a patent is void if any material allegation in the petition of the applicant in respect of the patent is untrue, or if the specification and drawings contain more or less than is necessary for obtaining the end for which they purport to be made, and the omission or addition is wilfully made for the purpose of misleading.

[26]      This matter was specifically dealt with by the President of the Exchequer Court of Canada in the Lovell case⁶.

[27]      In that case, it was alleged that the applicant for the patent in issue had made material allegations which were untrue and deliberately misleading during the prosecution of the patent application before the Canadian Patent Office. It was alleged that the applicant had failed to inform the Canadian Examiner that certain claims had been rejected by the U.S. Patent Office. Although the immediate question before the Court was whether the file wrappers were inadmissible, the conclusion and reasons given by Thorson, P. in rejecting that contention apply equally as well here.

There is a conclusive answer to counsel's contention. Section 53(1) [rep. & sub. 1947, c. 23, s. 16] of the Patent Act, 1935, 1935 (Can.), c. 32, which was in effect when the patents in suit were granted and issued on February 5, 1952, provided as follows:

"53(1) A patent shall be void if any material allegation in the petition of the applicant in respect of such patent is untrue, or if the specification and drawings contain more or less than is necessary for obtaining the end for which they purport to be made, and such omission or addition is wilfully made for the purpose of misleading."

This provision was carried forward into s. 55(1) of the Patent Act, R.S.C. 1952, c. 203. Under it evidence would clearly be admissible to show that a material allegation in the petition for the patent was untrue, but there is no provision in the Patent Act that an untrue allegation, even amounting to a misrepresentation, made in the course of the prosecution of the application for the patent in the Canadian Patent Office has any effect on the validity of the patent. Once the patent has issued there is a statutory provision for its prima facie validity in s. 47 [now s. 48] of the Act, which reads as follows:

"47. Every patent granted under this Act shall be issued under the signature of the Commissioner and the seal of the patent Office. The patent shall bear on its face the date on which it was granted and issued and it shall thereafter be prima facie valid and avail the grantee and his legal representatives for the term mentioned therein, . . . "

Moreover, there is a recital in each of the patents in suit that the applicant Walter Lee Kauffman II "has complied with the requirements of The Patent Act". The effect of this recital in a patent was considered by the Supreme Court of Canada in Fada Radio Ltd. v. C.G.E. Co., [1927] 3 D.L.R. 922 at p. 925, [1927] S.C.R. 520">[1927] S.C.R. 520 at p. 524, where Anglin, C.J.C., in delivering the judgment of the Court, said: "The recital of the patent that the applicant . . . ,has complied with the requirements of the Patent Act4 is conclusive against the appellant in the absence of fraud."

In my opinion, even if the facts alleged in para. 30 of the amended particulars of objection were true they would have no effect on the validity of the patent. They could have no more effect on its validity than a misrepresentation in the course of a parliamentary debate could have on the validity or meaning of a Parliamentary enactment.

Consequently, since the facts referred to, even if true, could not affect the validity of the patent the admission of the file wrappers in order to enable counsel to prove such facts could not support counsel's contention. They were, therefore, inadmissible for the purpose sought to be served.7

[28]      Counsel for the defendant relied on the later decision of Mr. Justice Rouleau in the Rothmans case⁸ as giving a more expansive reading of subsection 53(1) of the Patent Act. In that case, Rouleau J. was dealing an untrue allegation in the disclosure.

[29]      The plea in subparagraph 10(l) of the defence does allege anything in the petition itself to be untrue, but rather that the applicant withheld relevant information from the Canadian Examiner during the prosecution of the application. In my view, the decision of Thorson, P. in the Lovell case disposes of that matter.

[30]      Paragraph 11 is entirely dependent on subparagraph 10(l).

[31]      Accordingly, subparagraph 10(l) and paragraph 11 are struck out.

CONCLUSION

[32]      The plaintiffs' motion is allowed with respect to subparagraphs 10(a) and 10(l) and to paragraph 11.

[33]      The statement of defence is to be amended accordingly.

[34]      The costs of this motion are awarded to the plaintiffs.

     __________________________

     Judge

Ottawa, Ontario

February 20, 1998

__________________

¹[1980] 2 S.C.R. 735">      Canada (A.G.) v. Inuit Tapirisat of Canada, [1980] 2 S.C.R. 735; Operation Dismantle Inc. v. The Queen [1985] 1 S.C.R. 441; Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959.

²      Operation Dismantle at p. 455.

³      Monsanto Co. v. Commissioner of Patents, (1979) 42 C.P.R. (2d) 161 at 175.

⁴      Olin Mathieson Chemical Corp. et al. v. Biorex Laboratories Ltd. et al., [1970] R.P.C. 157 at 193.

⁵[1966] S.C.R. 189">      Hoechst Pharmaceuticals of Canada Limited et al. v. Gilbert & Company, et al., [1966] S.C.R. 189 (Ex. Ct.).

⁶      Lovell Manufacturing Co. v. Beatty Bros. Ltd. (1962), 41 C.P.R. 18.

⁷      Supra, note 6, at 40-41.

⁸      Rothmans, Benson & Hedges Inc. v. Imperial Tobacco Ltd./Ltée. (1991), 35 C.P.R. (3d) 417 (F.C.T.D.).