Apotex Inc. v. Wellcome Foundation Ltd., 2002 SCC 77, [2002] 4 SCR 153

Apotex Inc. v. Wellcome Foundation Ltd., [2002] 4 S.C.R. 153, 2002 SCC 77

Apotex Inc. and Novopharm Ltd.                                                                   Appellants

v.

Wellcome Foundation Limited, Glaxo Wellcome Inc.,

Interpharm Inc. and Allen Barry Shechtman                                             Respondents

Indexed as:  Apotex Inc. v. Wellcome Foundation Ltd.

Neutral citation:  2002 SCC 77.

File No.:  28287.

2002:  February 14; 2002:  December 5.

Present:  McLachlin C.J. and L’Heureux‑Dubé, Gonthier, Iacobucci, Major, Bastarache, Binnie, Arbour and LeBel JJ.

on appeal from the federal court of appeal

Patents — Validity — Standard of review — Appropriate standard of review of patent issues of mixed fact and law.

Patents — Validity — Biotechnology — New use for old compound — Statutory requirement for invention — Utility — Doctrine of sound prediction — Patent holder identifying new use for compound in treatment and prophylaxis of AIDS — Whether patent valid — Whether doctrine of sound prediction applies — Patent Act, R.S.C. 1985, c. P‑4, ss. 2  “invention”, 27, 34(1).

Patents — Validity — Covetous claiming — Patent holder claiming prophylactic as well as treatment properties for AZT — Whether claim exceeds disclosure.

Patents — Inventorship — Inventors and verifiers — Patent holder identifying new use for compound in treatment and prophylaxis of AIDS — Whether verifiers who performed critical testing co‑inventors — Whether omission to name them “wilfully made for the purpose of misleading” — Patent Act, R.S.C. 1985, c. P‑4, s. 53(1) .

AIDS is one of the great health scourges of the modern world.  AZT was one of the earliest and is still one of the most effective drugs for its treatment.  The respondents (collectively referred to as “Glaxo/Wellcome”) identified a new use for an old compound.  They conceived the idea that AZT would work in humans against the HIV retrovirus.  Since Glaxo/Wellcome was not equipped to undertake the required testing, it turned to a number of outside laboratories.  One of these was the National Institutes of Health (NIH), where two scientists performed critical blind testing on the AZT and other compounds (none of which was identified) supplied by Glaxo/Wellcome.  In mid‑February 1985, the NIH scientists found that AZT did indeed inhibit HIV replication in their in vitro HIV assay system and so advised the respondents.  Thereafter, on March 16, 1985, Glaxo/Wellcome filed in the United Kingdom the patent application from which the Canadian patent claims priority. 

The appellants, generic drug manufacturers, challenged the validity of Glaxo/Wellcome’s patent on the basis that the necessary utility had not been established as of the priority date of the patent, that the claims covered more than the invention (prophylactic properties as well as treatment properties), and that the disclosure was misleading because it omitted any reference to the NIH “co‑inventors”.  The trial judge rejected the substance of this attack, and declared certain of the claims to be valid and infringed.  The Federal Court of Appeal, with a minor variation, dismissed the appeal.

Held:  The appeals should be dismissed.

The evidence accepted by the trial judge showed that by the date the U.K. patent was applied for, March 16, 1985, Glaxo/Wellcome had sufficient information about AZT and its activity against HIV in human cells to make a sound prediction that AZT would be useful in the treatment and prophylaxis of HIV/AIDS in human beings.  To the extent its claims went beyond the limits within which the prediction remained sound, the Federal Court properly struck them out.

The doctrine of “sound prediction” balances the public interest in early disclosure of new and useful inventions, even before their utility has been fully verified by tests, and the public interest in avoiding cluttering the public domain with useless patents and granting monopoly rights in exchange for speculation or misinformation.  While allowing a patent based on speculation would have been unfair to the public, requiring Glaxo/Wellcome to demonstrate AZT’s efficacy through the clinical tests required for approval of a new drug for medical prescription would have been unfair to Glaxo/Wellcome.  The disclosure made in the patent was and is of real use and benefit and Glaxo/Wellcome, by making the disclosure, fulfilled its side of the bargain with the public.  It was therefore entitled to legal protection for what it disclosed.

The Commissioner’s decision in this case largely raises mixed questions of law and fact.  The Patent Act  has no privative clause and provides an unfettered right of appeal to the Federal Court.  The statutory presumption of the patent’s validity in s. 45  is  weakly worded and adds little to the usual onus already resting on the attacking party.  Nevertheless, fact finding by the Commissioner, who has considerable expertise in these matters, generally commands deference.  In these circumstances, the appropriate standard of review is reasonableness simpliciter.

Utility is an essential part of the statutory definition of an “invention”.  The inventor must be in a position to establish utility as of the date the patent is applied for, on the basis of either demonstration or sound prediction based on the information and expertise then available.  Where the subject matter of the patent is a new use for an old chemical compound, it is not enough that the invention is reduced to a definite and practical shape by the formulation of a written or oral description.  Nor is it enough for a patent owner to be able to buttress speculation with post‑patent proof.  If a patent sought to be supported on the basis of sound prediction is subsequently challenged, the challenge will succeed if the prediction at the date of application was not sound, or, irrespective of the soundness of the prediction, there is evidence of lack of utility in respect of some of the area covered. 

The doctrine of sound prediction has three components.  Firstly, there must be a factual basis for the prediction.  Secondly, the inventor must have at the date of the patent application an articulable and “sound” line of reasoning from which the desired result can be inferred from the factual basis.  Thirdly, there must be proper disclosure.  The soundness (or otherwise) of the prediction is a question of fact.  The doctrine of sound prediction, in its nature, presupposes that further work remains to be done.  Care must be taken, however, that the doctrine is not abused, and that sound prediction is not diluted to include a lucky guess or mere speculation. 

With regard to covetous claiming, it was open to the respondents to claim prophylactic as well as treatment properties.  The patent disclosure includes some information described as “Preventing Infection by AIDV”, which describes an experiment which showed “decreased infection” of cells in the presence of AZT.  The patent then identifies the mechanism by which AZT prevents “the development of signs and symptoms” of AIDS (and is thus prophylactic to AIDS).  HIV offers an incubation period in which the virus is present but vulnerable to attack.  It is this specific feature that was targeted by the “chain termination” effect known and disclosed by Glaxo/Wellcome at the time of the patent application, and which afforded the basis for its prediction that AZT had prophylactic properties.  In these circumstances, the appellants have not demonstrated any palpable and overriding error with respect to this finding by the trial judge.

The appellants contend that the NIH scientists were “co‑inventors” and ought to have been so identified in the patent.  In the steps leading from conception to patentability, the inventor(s) may utilize the services of others, who may be highly skilled, but those others will not be co‑inventors unless they participated in the inventive concept as opposed to its verification.  If Glaxo/Wellcome had soundly predicted that AZT could cure nausea in the weightlessness of space for example, it might require NASA and all its rocket ship expertise to “establish” the utility, but NASA would not on that account become a co‑inventor.  Despite the contribution of the NIH scientists, therefore, they were not co‑inventors of the patent in suit.

Moreover, a patent is only void pursuant to s. 53(1)  of the Patent Act  if it contains a “material” misstatement that is “wilfully made for the purpose of misleading”.  Here, there was no evidence whatsoever that the omission to name the NIH scientists was “wilfully made for the purpose of misleading”.

Cases Cited

Considered:  Monsanto Co. v. Commissioner of Patents, [1979] 2 S.C.R. 1108; Olin Mathieson Chemical Corp. v. Biorex Laboratories Ltd., [1970] R.P.C. 157; Ciba‑Geigy AG v. Commissioner of Patents (1982), 65 C.P.R. (2d) 73; Beecham Group Ltd. v. Bristol Laboratories International S.A., [1978] R.P.C. 521; distinguished:  Harvard College v. Canada (Commissioner of Patents), [2002] 4 S.C.R. 45, 2002 SCC 76; Ernest Scragg & Sons Ltd. v. Leesona Corp., [1964] Ex. C.R. 649; Koehring Canada Ltd. v. Owens‑Illinois Inc. (1980), 52 C.P.R. (2d) 1, leave to appeal refused, [1980] 2 S.C.R. ix; Permutit Co. v. Borrowman, [1926] 4 D.L.R. 285; C.G.E. Co. v. Fada Radio Ltd., [1930] 1 D.L.R. 449; referred to:  Shell Oil Co. v. Commissioner of Patents, [1982] 2 S.C.R. 536; Tennessee Eastman Co. v. Commissioner of Patents, [1974] S.C.R. 111; Burroughs Wellcome Co. v. Barr Laboratories Inc., 32 U.S.P.Q. 2d 1915 (1994); Travis v. Baker, 137 F.2d 109 (1943); Rubbermaid (Canada) Ltd. v. Tucker Plastic Products Ltd. (1972), 8 C.P.R. (2d) 6; Canada (Director of Investigation and Research) v. Southam Inc., [1997] 1 S.C.R. 748; Procter & Gamble Co. v. Bristol‑Myers Canada Ltd. (1979), 42 C.P.R. (2d) 33, aff’g (1978), 39 C.P.R. (2d) 145; Christiani v. Rice, [1930] S.C.R. 443; May & Baker Ltd. v. Boots Pure Drug Co. (1950), 67 R.P.C. 23; In re I. G. Farbenindustrie A. G.’s Patents (1930), 47 R.P.C. 289; Biogen Inc. v. Medeva PLC, [1997] R.P.C. 1; Mullard Radio Valve Co. v. Philco Radio and Television Corp. (1936), 53 R.P.C. 323; Burton Parsons Chemicals, Inc. v. Hewlett‑Packard (Canada) Ltd., [1976] 1 S.C.R. 555; Société des usines chimiques Rhône‑Poulenc v. Jules R. Gilbert Ltd., [1968] S.C.R. 950; Free World Trust v. Électro Santé Inc., [2000] 2 S.C.R. 1024, 2000 SCC 66; Genentech Inc.’s Patent, [1989] R.P.C. 147; Consolboard Inc. v. MacMillan Bloedel (Sask.) Ltd., [1981] 1 S.C.R. 504; May & Baker Ltd. v. Ciba Ltd. (1948), 65 R.P.C. 255; Henry Brothers (Magherafelt) Ltd. v. Ministry of Defence and the Northern Ireland Office, [1997] R.P.C. 693; Kellogg Co. v. Kellogg, [1942] Ex. C.R. 87;  Gerrard Wire Tying Machines Co. of Canada v. Cary Manufacturing Co., [1926] Ex. C.R. 170; Jules R. Gilbert Ltd. v. Sandoz Patents Ltd. (1970), 64 C.P.R. 14, rev’d sub nom. Sandoz Patents Ltd. v. Gilcross Ltd., [1974] S.C.R. 1336.

Statutes and Regulations Cited

Food and Drug Regulations, C.R.C. 1978, c. 870, s. C.08.002(2) [am. SOR/95‑411, s. 4(2)].

Patent Act, R.S.C. 1985, c. P‑4, ss. 2  “invention”, 27(1), (3), 34(1)(a), (b), (d), (e), 40, 42, 45,  53(1), (2).

Patents Act, 1949 (U.K.), 1949, c. 87, ss. 4(3), 32(1)(i).

Authors Cited

“Agency Wants to End AIDS Drug Monopoly”, The New York Times, May 29, 1991, p. A24.

Black’s Medical Dictionary, 39th ed. Lanham:  Madison Books, 1999, “prophylaxis”.

Butterworths Medical Dictionary, 2nd ed.  London: Butterworths, 1978, “Clinical prophylaxis”, “Drug prophylaxis” and “Gametocidal prophylaxis”.

Case Comment, “Patent Law — Pharmaceuticals — Federal Circuit Upholds Patents for AIDS Treatment Drug — Burroughs Wellcome Co. v. Barr Laboratories, Inc., 40 F.3d 1223 (Fed. Cir. 1994)” (1995), 108 Harv. L. Rev. 2053.

Dorland’s Illustrated Medical Dictionary, 27th ed.  Philadelphia: Saunders, 1988.

Fisher, Harold, and Russel S. Smart.  Canadian Patent Law and Practice.  Toronto:  Canada Law Book, 1914.

Fox, Harold G.  The Canadian Law and Practice Relating to Letters Patent for Inventions, 4th ed.  Toronto:  Carswell, 1969.

Godson, Richard.  A Practical Treatise on the Law of Patents for Inventions, and of Copyright, 2nd ed.  London:  William Benning & Co., 1851.

Mitsuya, Kiroaki, et al.  Letter to the editor, The New York Times, September 20, 1989.

Oxford English Dictionary, vol. XII, 2nd ed.  Prepared by J. A. Simpson and E. S. C. Weiner.  Oxford: Clarendon Press, 1989, “prophylaxis”.

Yardley, Jim.  “Industry Giant Owns Right to AIDS Drug?  N.C. Trial to Decide”, Atlanta Constitution, June 27, 1993, p. A4.

APPEALS from a judgment of the Federal Court of Appeal, [2001] 1 F.C. 495, (2000), 195 D.L.R. (4th) 641, 10 C.P.R. (4th) 65, 262 N.R. 137, allowing in part appeals and cross‑appeals from a judgment of Wetston J. (1998), 145 F.T.R. 161, 79 C.P.R. (3d) 193, [1998] F.C.J. No. 382 (QL).  Appeals dismissed.

Harry B. Radomski, Richard Naiberg and David M. Scrimger, for the appellant Apotex Inc.

Carol Hitchman, Warren Sprigings and Paula Bremner, for the appellant Novopharm Ltd.

Patrick E. Kierans, Kenneth E. Sharpe, Peter J. Stanford and Brian R. Daley, for the respondents Wellcome Foundation Ltd. and Glaxo Wellcome Inc.

The judgment of the Court was delivered by

1                                   Binnie J. — AIDS is one of the great health scourges of the modern world.  AZT was one of the earliest and is still one of the most effective drugs for its treatment.  The patent on the use of AZT for HIV/AIDS treatment and prophylaxis is held by the respondents, but the appellants, Apotex and Novopharm, two “generic” drug manufacturers, say that in fact the respondents (collectively referred to as “Glaxo/Wellcome”) did not invent anything.  In the alternative, if Glaxo/Wellcome can be said to have invented something, the appellants say it did so in collaboration with others whose work Glaxo/Wellcome wrongly appropriated for its own financial benefit.  Moreover, there was no basis at all disclosed in the patent to claim a “prophylactic” as well as a “treatment” benefit.  On any or all of these grounds, they say the patent should be declared invalid.

2                                   The appeals therefore require us to consider the statutory requirement for an invention in the context of a new use for an old chemical compound, and the related questions of who ought to have been included as inventors, and what is the appropriate remedy if someone who ought to have been included in the patent is left out.

3                                   In my view, for the reasons which follow, the inventive use of AZT was made by the five Glaxo/Wellcome scientists named in the patent on or before March 16, 1985, the priority date of the patent.  It was sufficient that at that time the Glaxo/Wellcome scientists disclosed in the patent a rational basis for making a sound prediction that AZT would prove useful in the treatment and prophylaxis of AIDS, which it did.  For the Commissioner of Patents to have allowed Glaxo/Wellcome a patent based on speculation would have been unfair to the public.  For him to have required Glaxo/Wellcome to demonstrate AZT’s efficacy through the clinical tests required by the Minister of Health for approval of a new drug for medical prescription would have been unfair to Glaxo/Wellcome.  The disclosure made in the patent was and is of real use and benefit to millions of HIV and AIDS sufferers around the world (irrespective of Glaxo/Wellcome’s pricing policy for AZT, which it must be acknowledged has generated serious controversy in some countries, particularly in the developing world).  The fact remains that Glaxo/Wellcome, by making the disclosure, has fulfilled its side of the bargain with the public, and is by law entitled to legal protection for what it has disclosed.

4                                   The claims that have survived the rigours of administrative and judicial scrutiny to date (19 out of 78 claims) do not overreach the invention disclosed.  The appellants had the onus of demonstrating the invalidity of the patent and their attack on the factual underpinnings of the trial judgment revealed no palpable and overriding error.  The legal outcome was correct.  I would affirm the validity of the patent and dismiss the appeals.

I.  Facts

5                                   During the early 1980s, a deadly disease, now known as AIDS, was identified.  It appeared to suppress the immune systems of those who became infected.  AIDS (Acquired Immune Deficiency Syndrome) was shown to be caused, in turn, by a retrovirus, now known as the human immunodeficiency virus (“HIV”), which was first isolated at the Institut Pasteur in 1983.  A virus is a type of subcellular parasite which is dependent on a cellular host to provide the machinery for its reproduction.  HIV infects T-cells, which play an important part in human immune response, hijacking the T-cells to produce copies of itself, eventually destroying the T-cell and degrading the body’s immune response.  At that point, HIV renders the body prone to infection, ultimately fatally, by opportunistic diseases that the diminished immune system is unable to combat.  The trial judge commented that AIDS quickly became “a world-wide health crisis referred to by many as an epidemic”:  (1998), 145 F.T.R. 161, at para. 8. 

6                                   Glaxo/Wellcome had considerable experience in researching retroviruses, and in late 1983 assembled a working group to harness that expertise to the search for an anti-AIDS drug.  The group included Dr. David Barry, head of the Department of Virology at Glaxo/Wellcome, Dr. Janet Rideout, who had been coordinating the various investigations involving the compound 509U81 (AZT) and the one who suggested that AZT be tested in the screens, Dr. Philip Furman, a research scientist with a Ph.D. in virology who had previously worked with anti-viral drugs, Dr. Sandra Nusinoff Lehrman, a physician with expertise in the areas of infectious disease and pediatrics, and Martha St. Clair, a virologist who worked with Dr. Furman and who had experience with retroviruses.

7                                   The fact that HIV attacks the T-cells, which are crucial to the functioning of the human immune system, was known in 1984.  It was also known that HIV infects the T-cell by insinuating and integrating a DNA copy of its RNA genome into the genome of the T-cell using reverse transcriptase, an enzyme common to all retroviruses.  As the host cell, with the viral DNA integrated into its own DNA, divides, it replicates and thereby provides a template for the further propagation of the virus.

8                                   The Glaxo/Wellcome scientists believed that the reverse transcription stage, unique to retroviruses, offered the best target for a drug.  The growing DNA chain could be terminated by adding on a “false” nucleoside, one of the chemical building blocks of DNA.  The nucleoside is said to be “false” because, while it appears to others in the chain to be a regular nucleoside, it lacks the OH group for coupling with the incoming nucleoside, which finds it has nothing to hook onto.  There being no hook, the chain terminates, thereby arresting the propagation of HIV.

9                                   The Glaxo/Wellcome scientists, in the spring of 1984, began to screen various compounds which, they believed, based on their chemical structure, might serve as chain terminators.  One of the hundreds of compounds screened eventually became known as AZT.

10                               It is important to note that the respondents did not “invent” AZT.  It was a known compound, synthesized and tested by Dr. Jerome Horwitz at the Detroit Institute of Cancer Research in 1964 as part of a project to find a cancer treatment for humans.  That project was abandoned.  Glaxo/Wellcome had more recently been researching the drug for use as an anti-bacterial treatment, though this was not its original purpose. 

11                               Once the Glaxo/Wellcome team had identified suitable compounds, its in-house screening methods were relatively simple.  Coating the bottom of a petri dish with murine (mouse) T-cells, the laboratory technician would introduce a retrovirus.  Glaxo/Wellcome used two retroviruses found in mice (not humans) because they were readily reproducible, predictable, reliable and easy to use.  Using staining techniques, the laboratory technician could see if the virus spread, destroying the mouse T-cells.  If the technician were then to add the candidate “remedial” compound, he or she could see whether the virus triumphed by continuing to kill the T-cells, or the compound triumphed by preserving the T-cells.  In November 1984, during Glaxo/Wellcome’s multiple tests of known compounds, the AZT compound produced surprisingly good results, appearing to eradicate completely the retrovirus in the mouse T-cells.  It proved more potent than any other compound tested.  In argument in this Court, counsel for Glaxo/Wellcome called this a “eureka moment”, but this seems to be something of an exaggeration.  There had been no testing in a human cell line (in vitro) or in humans (in vivo).  The object of the exercise was to eradicate HIV in humans, not a mouse virus in a petri dish. 

12                               It seems clear, and was found as a fact by the trial judge, that scientists at Glaxo/Wellcome and elsewhere recognized that the immune systems of humans and mice are sufficiently different that it is not possible to predict from studies in mouse cells how a drug would work, if at all, in humans.  Senior members of the Glaxo/Wellcome team readily acknowledged the problem of predictability:

Dr. David Barry:

. . . we [do not] wish to indicate that sensitivity testing in [murine retrovirus] is in any way predictive of sensitivity of the Human AIDS Virus.  We have generated a considerable amount of data to show that it is extremely unpredictive. 

Dr. Sandra Nusinoff Lehrman:

Recent data would indicate that human retroviruses are sufficiently different from the [murine retroviruses]. . . . [T]he use of this compound for AIDS could not be predicted.

13                               However, some of the Glaxo/Wellcome scientists testified that they believed as early as November 1984 that AZT would work in humans against the HIV retrovirus.  On December 5, 1984, Dr. Jane Rideout, the team member who had recommended testing AZT, sent a note to the Glaxo/Wellcome patent group stating:  “Ethically the MD’s at BW [Glaxo/Wellcome] cannot suppress the activity of such a compound for very long”.  By that, she meant that HIV/AIDS sufferers should not be deprived of potential relief through unnecessary delay, scientific timidity, or corporate dithering.  Work on a patent application began soon afterwards.

14                               Dr. Rideout shared the view that further work was essential.  She added, in her note to the Glaxo/Wellcome patent group, that a patent should only be pursued “if [AZT is] active against HIV” and “if all of this holds up [i.e., if activity is shown against HIV]” (emphasis added).

15                               Glaxo/Wellcome was not equipped to undertake the more sophisticated testing required, and, given the lethal nature of HIV/AIDS, may not have been anxious to do so.  It turned to a number of outside laboratories for screening compounds.  These included Duke University and the Sloan-Kettering Institute whose work Glaxo/Wellcome partly funded.  Testing of Glaxo/Wellcome candidate compounds was also done by the U.S. Food and Drug Administration and the National Cancer Institute of the U.S. National Institutes of Health (NIH).  It should be emphasized that both of these U.S. government funded agencies were working for the benefit of the public, not Glaxo/Wellcome, in the search for a drug to combat what was emerging as a national health crisis.

16                               The critical testing of the AZT compound was done by Drs. Samuel Broder and Hiroaki Mitsuya, both of the NIH, who were in the forefront of efforts to find medicines that could be used as treatments for AIDS.  Their mandate was to use the public funds of the NIH to make AIDS therapies available to the public on an emergency basis.  As Glaxo/Wellcome was using the NIH to test AZT, so NIH was using Glaxo/Wellcome and other pharmaceutical companies as suppliers of potentially useful compounds to be tested in the NIH program.  Although NIH signed confidentiality agreements with Glaxo/Wellcome, as had other outside laboratories, the NIH did not, as had the private institutions, make an assignment to Glaxo/Wellcome of any intellectual property rights generated by work on Glaxo/Wellcome-supplied compounds.

17                               The NIH screening was very sophisticated.  Drs. Broder and Mitsuya had developed a human cell line (ATH8) that could propagate in vitro, be infected with HIV in vitro, and provide information relevant to the ability of candidate compounds to inhibit the replication of HIV in the T-cells of living patients.  At the time, normal human T-cells were very difficult to grow in vitro.  This work itself required exceptional inventive ingenuity and was eventually patented by the NIH under U.S. patent number 4,704,357.

18                               By February 6, 1985, Glaxo/Wellcome had prepared a draft patent application.  At that point, however, AZT had not been tested against HIV in vitro (i.e., in a petri dish), let alone administered to a human being in the context of the AIDS research.

19                               In mid-February 1985, Drs. Broder and Mitsuya found that AZT did indeed inhibit HIV replication in their in vitro HIV assay system, thus vindicating Glaxo/Wellcome’s confidence (justified or not at the earlier date) in the potential benefits of AZT.  This result was reported to Glaxo/Wellcome on February 21, 1985.  At Dr. Broder’s request, the identity of the compound was disclosed to the NIH about March 1, 1985.  He was surprised.  He suspected the mystery compound was probably suramin, with which he was familiar.

20                               On March 16, 1985, Glaxo/Wellcome filed in the United Kingdom the patent application from which the Canadian patent claims priority.  The appellants contend that because AZT had not, at that time, been administered to patients with HIV or AIDS, crucial information regarding its bioavailability, pharmacokinetics, metabolic characteristics, activity and toxicity was not known.  Before it could be known whether AZT could be used as a treatment for HIV in humans, the appellants say, Glaxo/Wellcome needed to know if AZT would be absorbed into the human blood stream, make its way to the T-cells infected with HIV, enter the T-cells and inhibit the reproduction of the HIV infection without proving toxic to other cells, and demonstrate clinical improvement in the patient. 

21                               The argument in support of the patent’s validity is that at least by March 1, 1985, when Glaxo/Wellcome received the results from the NIH showing AZT activity in vitro against HIV-infected human T-cells, it had a sound basis to predict all of these matters, and did so predict, and has been proven correct in that prediction by subsequent clinical experience.  To have withheld disclosure of this new and very important use in a gathering international health crisis would have been, as Dr. Rideout noted back in December 1984, little short of irresponsible.

II.  Relevant Statutory Provisions

22                               Patent Act, R.S.C. 1985, c. P-4 

                                                     interpretation

. . .

“invention” means any new and useful art, process, machine, manufacture or composition of matter, or any new and useful improvement in any art, process, machine, manufacture or composition of matter;

                                           application for patents

27. (1)  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.

                                         specifications and claims

. . .

34. (1)  An applicant shall in the specification of his invention

(a) correctly and fully describe the invention and its operation or use as contemplated by the inventor;

(b) set out clearly the various steps in a process, or the method of constructing, making, compounding or using a machine, manufacture or composition of matter, in such full, clear, concise and exact terms as to enable any person skilled in the art or science to which it appertains, or with which it is most closely connected, to make, construct, compound or use it;

                                                                   . . .

(d) in the case of a process, explain the necessary sequence, if any, of the various steps, so as to distinguish the invention from other inventions; and

(e) particularly indicate and distinctly claim the part, improvement or combination that he claims as his invention.

                                                 refusal of patents

40.  Whenever the Commissioner is satisfied that an applicant is not by law entitled to be granted a patent, he shall refuse the application and, by registered letter addressed to the applicant or his registered agent, notify the applicant of the refusal and of the ground or reason therefor.

                                         form and term of patents

45.  Every patent granted under this Act shall be issued under the signature of the Commissioner and the seal of the Patent Office, shall bear on its face the date on which it is granted and issued and shall thereafter, in the absence of any evidence to the contrary, be valid and avail the grantee and his legal representatives for the term mentioned therein.

                                      legal proceedings in respect

                                                          of patents

53.  (1)  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.

(2)  Where it appears to a court that the omission or addition referred to in subsection (1) was an involuntary error and it is proved that the patentee is entitled to the remainder of his patent, the court shall render a judgment in accordance with the facts, and shall determine the costs, and the patent shall be held valid for that part of the invention described to which the patentee is so found to be entitled.

III.  Case History

A.  Federal Court, Trial Division (1998), 145 F.T.R. 161

23                               Wetston J., in a detailed, comprehensive and thoughtful judgment, following 60 days of trial, began with the proposition that a patent is available for a new use for a known compound:  Shell Oil Co. v.  Commissioner of Patents, [1982] 2 S.C.R. 536.  Moreover, the patent in this case does not make a claim to a method of medical treatment, which would be invalid:  Tennessee Eastman Co. v. Commissioner of Patents, [1974] S.C.R. 111.  With respect to inventorship,  Wetston J. considered the degree and type of testing required to establish utility.  The “act of inventing may be different in different circumstances. . . .  The range of expertise required in the pharmaceutical field, the nuances between theoretical and clinical proof, and the underlying public policy concerns of the safe and effective development of medicines, all serve to make utility in the pharmaceutical area highly complex” (para. 84).

24                               Wetston J. found the insistence of Apotex and Novopharm on regulatory levels of safety to be “excessive” and “too high a standard” (para. 105).  On the other hand, he rejected the applicability of the doctrine of sound prediction, which he considered was limited to the situation where inventors claim a number of untested compounds based on the proven utility of one or more compounds. 

25                               He concluded that utility was not shown as of the February 6, 1985 draft application date.  At that time there was no more than a belief that AZT “might be useful” to treat AIDS, and the claims at that date exceeded the invention.  By March 16, 1985, however, the patent met the s. 2  requirements and did not exceed the invention claimed.  The Glaxo/Wellcome researchers had received the initial NIH data showing that AZT was active in arresting the HIV retrovirus in human cells.

26                               On the co-inventorship issue, Wetston J. cited Burroughs Wellcome Co. v. Barr Laboratories Inc., 32 U.S.P.Q. 2d 1915 (Fed. Cir. 1994), where it was observed that Drs. Broder and Mitsuya of the NIH were not a mere “pair of hands”.  They exercised “considerable skill” and were “uniquely qualified”.  They were given little instruction by Glaxo/Wellcome.  In fact, Glaxo/Wellcome did not have the expertise to be able to instruct the NIH researchers in this regard.  Wetston J. concluded that although all the five named Glaxo/Wellcome inventors were properly included, the NIH researchers were highly skilled “collaborators” and co-inventors on the utility aspect and should not have been omitted from the application:  “the utility as claimed was not established without the extensive and direct involvement of the NIH. . . .  In my opinion, the work of the NIH was not ancillary to the invention and this invention would not have been complete without their investigation, skill and research” (paras. 224 and 226).  Nevertheless, the failure to name co-inventors in this case was not “material” under s. 53(1)  of the Patent Act , and the omission therefore did not render the patent invalid.

27                               As to the claim for prophylaxis (as opposed to treatment), Wetston J. concluded that the claims were not broader than the invention or the disclosure, although the claim “for the treatment or prophylaxis of all human retroviral infections [was] overbroad” and speculative (para. 303 (emphasis added)).  Wetston J. adjudged several of the claims to be invalid, but the remaining valid claims were infringed by the appellants’ manufacture and sale of the generic version of AZT (para. 377).

B.              Federal Court of Appeal, [2001] 1 F.C. 495 (Rothstein, Sexton and Malone JJ.A. each writing part of a unitary set of reasons)

1.    Sexton J.A.

(a)   Co-Inventorship and Section 53 on Material Misrepresentation

28                               Sexton J.A. reversed the trial judge’s conclusion on NIH co-inventorship and found that the facts demonstrated that Drs. Broder and Mitsuya do not satisfy the legal definition of inventorship.  The subject matter of the invention was conceived without their assistance.  They agreed only to test an unknown substance on Glaxo/Wellcome’s behalf.  That people other than the inventors perform the tests does not make them “inventors”.

29                               Sexton J.A. concluded that February 6, 1985 may be the relevant date of invention, since by that point the draft patent application had been distinctly formulated; however, he declined to choose between February 6, 1985 (draft application) or March 16, 1985 (priority date) because in either event the patent was valid.

30                               Although he did not find it necessary to address s. 53 given the conclusions on co-inventorship, Sexton J.A. agreed that failure to name an inventor is not a violation of s. 53.

(b)   Utility and Date of Completion of Invention

31                               Sexton J.A. was of the view that the date of invention can, in effect, be backdated where speculation at the time of invention is subsequently confirmed by the time the patent is attacked.  Sexton J.A. offers an analogy with the Wright brothers, suggesting that it would be “illogical” if a hypothetical patent for a heavier-than-air flying machine, considered by critics at the time to be based on an unsound prediction, could not be upheld on the basis of post-patent evidence that the invention actually works.  Any other approach would require a court to close its eyes as to “continuing scientific advancements” (para. 52).  The attack on the validity of the patent on this ground, too, should be rejected.

2.    Malone J.A.

32                               Malone J.A. upheld the trial judge on obviousness, novelty, ambiguity, and sufficiency of disclosure.

3.    Rothstein J.A.

33                               Rothstein J.A. agreed with the trial judge that the invention here is a new use for a known compound and not a method of medical treatment.  However, only those claims relating to the use of the known compound are patentable and not those which purport to include the compound formulation itself.  Accordingly, claim No. 1 and those dependent on it were struck down.

34                               With respect to prophylaxis, Rothstein J.A. held that there was evidence that AZT could prevent fetal transmission of HIV from pregnant women and arrest infections received by health care workers and others stuck with contaminated needles.  This, in his view, demonstrated some prophylactic properties and the fact the information was not available until years after the patent was not relevant.  “[T]he time at which usefulness is to be established is when required by the Commissioner of Patents or in court proceedings when the validity of the patent is challenged on that ground.  There was such evidence before Wetston J. . . .” (para. 93).  Rothstein J.A. thus concluded that the claims for the prophylactic use of AZT against AIDS are valid.

IV.  Analysis

35                               AZT has earned for the respondents hundreds of millions of dollars in worldwide sales since its usefulness was discovered for the treatment of HIV and AIDS.  In the United States alone, it is estimated that AZT earned for the patent owner a profit of $592 million between 1987 and 1993:  J. Yardley, “Industry Giant Owns Right to AIDS Drug?  N.C. Trial to Decide”, Atlanta Constitution, June 27, 1993, at p. A4, quoted in Case Comment, “Patent Law — Pharmaceuticals — Federal Circuit Upholds Patents for AIDS Treatment Drug — Burroughs Wellcome Co. v. Barr Laboratories, Inc., 40 F.3d 1223 (Fed. Cir. 1994)” (1995), 108 Harv. L. Rev. 2053, at note 17.

36                               It is not surprising that the appellants, being generic drug manufacturers, would like to obtain at least a percentage of the AZT market in Canada.  To do so they must somehow have the patent declared invalid.  Yet their challenge, understandably motivated by the hope of private profit, raises broader issues of public interest.

37                               A patent, as has been said many times, is not intended as an accolade or civic award for ingenuity.  It is a method by which inventive solutions to practical problems are coaxed into the public domain by the promise of a limited monopoly for a limited time.  Disclosure is the quid pro quo for valuable proprietary rights to exclusivity which are entirely the statutory creature of the Patent Act .  Monopolies are associated in the public mind with higher prices.  The public should not be expected to pay an elevated price in exchange for speculation, or for the statement of “any mere scientific principle or abstract theorem” (s. 27(3) ), or for the “discovery” of things that already exist, or are obvious.  The patent monopoly should be purchased with the hard coinage of new, ingenious, useful and unobvious disclosures.  The appellants’ argument here is that the identification in March of 1985 of AZT as a treatment and prophylaxis for HIV/AIDS was a shot in the dark, a speculation based on inadequate information and testing, a lottery ticket for which the public in general and HIV and AIDS sufferers in particular have paid an exorbitant price.  AZT works, but for reasons both unknown and unknowable by Glaxo/Wellcome at the time it filed its patent application, the appellants argue.  A lucky guess is not, they say, patentable.

38                               Furthermore, if credit is to be given, the appellants argue, it should go to Drs. Broder and Mitsuya at the NIH who actually established the utility of AZT in human T-cells.  If the patent on AZT was owned by the NIH or even by a co-ownership of Glaxo/Wellcome and the NIH, they say, the commercial history of AZT would have been vastly more oriented to the public interest.

39                               The public interest arguments were not advanced in the U.S. just by advocates of rights for AIDS patients.  The NIH itself in 1991 granted a non-exclusive licence to Barr Laboratories to “exploit any patent rights” the NIH “might have” in Glaxo/Wellcome’s AZT patents.  See Case Comment, supra, at p. 2054.  See also “Agency Wants to End AIDS Drug Monopoly”, The New York Times, May 29, 1991, p. A24.  However, the U.S. patent owner successfully defeated this challenge in Burroughs Wellcome v. Barr Laboratories, supra, and see Case Comment, supra.

40                               Under United States law, the Court of Appeals for the Federal Circuit said, it was irrelevant that Glaxo/Wellcome had no evidence of AZT’s effectiveness against the HIV/AIDS virus in humans and no reasonable basis for believing that the invention would work (Burroughs Wellcome v. Barr Laboratories, supra, at p. 1921) until it subsequently received the NIH results.  It was sufficient that on February 6, 1985, Glaxo/Wellcome scientists had a concept that was “definite and permanent” which could be applied by a person skilled in the art “without extensive research or experimentation” (p. 1919).  In order for there to be an invention in the United States, U.S. law requires “reduction to practice”.  “[C]onstructive reduction to practice” may occur when a patent application is filed in which an untested invention is adequately disclosed:  Travis v. Baker, 137 F.2d 109 (C.C.P.A. 1943), at p. 111.  This seems to have some affinity with our doctrine of “sound prediction” discussed below.  However, given the differences in our respective patent laws, the outcome of the U.S. litigation on this patent is of limited interest here.

A.  The Standard of Review

41                               The Commissioner of Patents in this case allowed 78 claims.  His decision in this respect is entitled to limited deference.  In fact, the courts below have struck out 59 of the 78 claims allowed by the Commissioner, and no cross-appeal has been taken against these rulings.

42                               Unlike the Harvard Mouse case (Harvard College v. Canada (Commissioner of Patents), [2002] 4 S.C.R. 45, 2002 SCC 76), released concurrently, these appeals are not limited to a question of law (i.e., the statutory limits of patentable subject matter).  On that issue, the standard is correctness.  The issue here is one of mixed fact and law, namely, was the Commissioner properly satisfied the claimed invention met the statutory test of utility?  Fact finding generally commands deference, but here Parliament has provided an unfettered right of appeal to the Federal Court (Patent Act, s. 42 ). 

43                               There is no privative clause and the statutory presumption of the patent’s validity in s. 45  of the Patent Act  is rather weakly worded.  It provides that after issuance a patent “in the absence of any evidence to the contrary” is presumed to be valid.  As Pratte J. (as he then was) said in Rubbermaid (Canada) Ltd. v. Tucker Plastic Products Ltd. (1972), 8 C.P.R. (2d) 6 (F.C.T.D.), at p. 14:

. . . once the party attacking the patent has introduced evidence, the Court, in considering this evidence and in determining whether it establishes the invalidity of the patent, must not take the presumption into account.  It cannot be said that the presumption created by [now s. 45 ] is, as a rule, either easy or difficult to overcome; in some cases, the circumstances may be such that the presumption will be easily rebutted, while, in other cases the same result may be very difficult or even impossible to obtain.

In other words, the statutory “presumption” adds little to the onus already resting, in the usual way, on the attacking party.  The Commissioner and his staff have considerable expertise in these matters but the trial judge heard 60 days of expert evidence and legal submissions that post-dated their review of the patent application.

44                               In the circumstances, I think the appropriate standard of review of these issues, which largely raise mixed questions of law and fact, is reasonableness simpliciter, i.e., that the Commissioner’s decision must withstand a somewhat probing examination  (Canada (Director of Investigation and Research) v. Southam Inc., [1997] 1 S.C.R. 748, at para. 56).

B.  Inventorship

45                               The role of the Commissioner in scrutinizing patent applications is extremely important.  The grant of a patent monopoly for 17 years (20 years after October 1, 1989) creates, and is intended to create, serious anti-competitive effects.  Once the subject matter of the patent is fenced in by the claims, others trespass (advertently or inadvertently) on the forbidden territory at their peril.  The boundary is defended by a considerable arsenal of remedies conferred by the Patent Act , including an accounting of the infringer’s profits in an appropriate case.  Patent litigation is usually protracted and costly.  (The present litigation commenced in 1990 and took 12 years to get here.)  There is in the meantime a chilling effect on other researchers.  They will tend to invest their talents in less litigious areas.  Parliament considered this chilling effect to be a worthwhile price for the disclosure of a “new and useful” invention, bringing into the public domain information that might otherwise remain a trade secret, but there is nothing in the Act to suggest that Parliament was prepared to accept the chilling effect in exchange for nothing but speculation.

46                               Glaxo/Wellcome argues that where the subject matter of the patent is a new use for an old chemical compound, it is enough that the invention is reduced to a definite and practical shape “by the formulation of a written or oral description”.  This cannot be correct.  The concept might be beautifully described but at the same time be quite wrong and misleading to people who consult it.  In such a case, the public would be spending its monopoly rights for misinformation, and in the process litter the patent registry with useless patents that might impede others in their search for a real solution to the same problem.  Nor, in my view, is it enough for a patent owner to be able to buttress speculation with post-patent proof, and thereby to turn dross into gold.  Utility is an essential part of the definition of an “invention” (Patent Act, s. 2 ).  A policy of patent first and litigate later unfairly puts the onus of proof on the attackers to prove invalidity, without the patent owner’s ever being put in a position to establish validity.  Unless the inventor is in a position to establish utility as of the time the patent is applied for, on the basis of either demonstration or sound prediction, the Commissioner “by law” is required to refuse the patent (Patent Act, s. 40 ).

47                               I propose now to deal with these propositions in more detail.

1.    Patentable Subject Matter

48                               There is no serious challenge in this case to subject matter patentability.  “[H]itherto unrecognized properties” can constitute a patentable new use for an old substance:  Shell Oil, supra, at p. 549, per Wilson J.  In that case, it was disclosed in the patent that known chemical compounds revealed a previously unrecognized use as plant growth regulators. 

49                               At trial, the present appellants argued that the patent was invalid as seeking to monopolize a method of medical treatment contrary to Tennessee Eastman, supra, but this was rightly rejected.  Tennessee Eastman was concerned with the patentability of a surgical method for joining incisions or wounds by applying certain compounds.  The decision was based on the former s. 41  of the Patent Act , now repealed.  The Court concluded that the method (apart from the compounds) was not patentable.  The policy rationale, as explained by Wilson J. in Shell Oil, supra, at p. 554, was that the unpatentable claim was

essentially non-economic and unrelated to trade, industry, or commerce.  It was related rather to the area of professional skills.

50                               The AZT patent does not seek to “fence in” an area of medical treatment.  It seeks the exclusive right to provide AZT as a commercial offering.  How and when, if at all, AZT is employed is left to the professional skill and judgment of the medical profession.

2.    Proof of Utility

51                               The Patent Act  defines an “invention” as, amongst other criteria, “new and useful” (s. 2 ).  If it is not useful, it is not an invention within the meaning of the Act.

52                               It is important to reiterate that the only contribution made by Glaxo/Wellcome in the case of AZT was to identify a new use.  The compound itself was not novel.  Its chemical composition had been described 20 years earlier by Dr. Jerome Horwitz.  Glaxo/Wellcome claimed a hitherto unrecognized utility but if it had not established such utility by tests or sound prediction at the time it applied for its patent, then it was offering nothing to the public but wishful thinking in exchange for locking up potentially valuable research turf for (then) 17 years.  As Jackett C.J. observed in Procter & Gamble Co. v. Bristol-Myers Canada Ltd. (1979), 42 C.P.R. (2d) 33 (F.C.A.), at p. 39:

By definition an “invention” includes a “new and useful process”.  A “new” process is not an invention unless it is “useful” in some practical sense.  Knowing a new process without knowing its utility is not in my view knowledge of an “invention”.

53                               Glaxo/Wellcome says the invention was complete when the draft patent application was circulated internally on February 6, 1985.  Its argument here, as in the United States, was that the written description identified the drug and its new use sufficiently to give the invention “definite and practical shape”.  It taught persons skilled in the art how the invention could be practised.  This, however, misses the point.  The question on February 6, 1985, was not whether or how the invention could be practised.  The question was whether AZT did the job against HIV that was claimed; in other words, whether on February 6, 1985, there was any invention at all within the meaning of s. 2  of the Patent Act . 

54                               Canadian case law dealing with inventorship has to be read keeping the particular factual context in mind.  In Christiani v. Rice, [1930] S.C.R. 443, this Court held, per Rinfret J. (as he then was), at p. 454:

. . . for the purpose of section 7 [now s. 27], “it is not enough for a man to say that an idea floated through his brain; he must at least have reduced it to a definite and practical shape before he can be said to have invented a process”.  [Emphasis added.]

The claimed invention in that case was a process for manufacturing porous cement.  The utility of porous cement was not in dispute.  The question was how to make it, and who was the first to invent the process.  In this case, Dr. Horwitz taught everyone how to make AZT.  The question was what could usefully be done with it.  In Ernest Scragg & Sons Ltd. v. Leesona Corp., [1964] Ex. C.R. 649, Thorson P. held that if the invention related to an apparatus or process, it was sufficient if  the apparatus had actually been built or the process used.  The invention in that case was for “Thermoplastic Yarns and Methods of Processing Them” (p. 659).  AZT had been compounded and used in 1964, but not by Glaxo/Wellcome, and not in relation to HIV/AIDS.  The invention claimed here related entirely to the new and hitherto unexpected use.  Glaxo/Wellcome also cites Koehring Canada Ltd. v. Owens-Illinois Inc. (1980), 52 C.P.R. (2d) 1 (F.C.A.) (leave to appeal refused, [1980] 2 S.C.R. ix), which dealt with an invention to harvest and process trees in the middle of a forest.  The utility was obvious.  The invention lay in the machine and its operation.  Glaxo/Wellcome also relied upon two Canadian appeals to the Privy Council for the proposition that “proof of utility is not required for there to be an invention” (factum, para. 45):  Permutit Co. v. Borrowman, [1926] 4 D.L.R. 285 (P.C.), and C.G.E. Co. v. Fada Radio Ltd., [1930] 1 D.L.R. 449 (P.C.).  In neither case was utility in doubt.  Permutit dealt with a process for softening water and Fada Radio dealt with a radio tuning device.  There may in such cases be some doubt about the commercial success of the invention, but utility in this context means useful for the purpose claimed, not commercial acceptance.

55                               In the present case, by contrast, 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.

56                               Where the new use is the gravamen of the invention, the utility required for patentability (s. 2 ) must, as of the priority date, either be demonstrated or be a sound prediction based on the information and expertise then available.  If a patent sought to be supported on the basis of sound prediction is subsequently challenged, the challenge will succeed if, per Pigeon J. in Monsanto Co. v. Commissioner of Patents, [1979] 2 S.C.R. 1108, at p. 1117, the prediction at the date of application was not sound, or, irrespective of the soundness of the prediction, “[t]here is evidence of lack of utility in respect of some of the area covered”. 

3.  The Limits of Sound Prediction

57                               The evidence accepted by the trial judge showed that by March 16, 1985, Glaxo/Wellcome had sufficient information about AZT and its activity against HIV in human cells to make a sound prediction that AZT would be useful in the treatment and prophylaxis of HIV/AIDS in human beings.  To the extent its claims went beyond the limits within which the prediction remained sound (e.g., in claiming treatment for human retroviruses other than HIV), the Federal Court properly struck them out.

58                               Although the trial judge did not consider the doctrine of “sound prediction” to be applicable in this sort of case, he seems to have applied it nevertheless when he decided that the claims did not exceed the invention, starting at para. 108.  He also seems to have applied it when he upheld the patent claims for prophylaxis as well as treatment.  At para. 292 he pointed out, in that connection, that “demonstrated utility or reduction to practice is not a requirement under Canadian patent law” (emphasis added).  Lack of demonstrated utility does not obviate the need for sound prediction.

59                               The doctrine of sound prediction seems to have had its genesis in a comment by Lord MacDermott in May & Baker Ltd. v. Boots Pure Drug Co. (1950), 67 R.P.C. 23 (H.L.), at p. 50 (where, however, he rejected its application on the facts).  It was connected to the requirement that the claims be “fairly based” on the patent disclosure:  In re I. G. Farbenindustrie A. G.’s Patents (1930), 47 R.P.C. 289 (Ch. D.), at pp. 322-23.  The principle of “fair basis” was later explicitly incorporated into the British Patents Act, 1949 (U.K.), 1949, c. 87, ss. 4(3) and 32(1)(i).  While these specific provisions were repealed in 1977, the “fair basis” doctrine seems still to be a force in British patent law; see Lord Hoffmann in Biogen Inc. v. Medeva PLC, [1997] R.P.C. 1 (H.L.).

60                               The doctrine of “sound prediction” was given serious shape and substance by Graham J. in Olin Mathieson Chemical Corp. v. Biorex Laboratories Ltd., [1970] R.P.C. 157 (Ch. D.).  In that case the proposition was framed as follows, at p. 182:

If it is really possible, according to the evidence, to make a sound prediction about a certain area, then prima facie it would be reasonable that the patentee should have a claim accordingly . . . .

61                               The doctrine was explicitly received into our law in Monsanto, supra.  In that case, the Court was confronted with a patent that included claims to numerous chemical compounds to inhibit premature vulcanization of rubber, but only three of the claimed compounds had actually been prepared and tested before the date the application was filed.  The examiner rejected the claims to the untested compounds, holding that “broad product claims must be adequately supported by a sufficient number of [tested] examples” (p. 1111).  The rejection was upheld by the Patent Appeal Board and the Federal Court, but this Court reversed on the basis that the “architecture of chemical compounds” was no longer a mystery but, within limits, soundly predictable.  Pigeon J. thus wrote, at pp. 1118-19:

Although the report of the Board is quite lengthy, in the end with respect to claim 9 all it says after stating the principle with which I agree, is that a claim has to be restricted to the area of sound prediction and “we are not satisfied that three specific examples are adequate”.  As to why three is not enough nothing is said. In my view this is to give no reason at all in a matter which is not of speculation but of exact science.  We are no longer in the days when the architecture of chemical compounds was a mystery.  By means of modern techniques, chemists are now able to map out in detail the exact disposition of every atom in very complex molecules.  It, therefore, becomes possible to ascertain, as was done in Olin Mathieson, the exact position of a given radical and also to relate this position to a specific activity.  It thus becomes possible to predict the utility of a substance including such radical.  [Emphasis added.]

62                               Pigeon J. found persuasive a line of British patent cases including the decisions of the House of Lords in May & Baker, supra, and Mullard Radio Valve Co. v. Philco Radio and Television Corp. (1936), 53 R.P.C. 323, as well as the Chancery Division judgment in Olin Mathieson, supra.  Pigeon J. adopted a number of propositions stated by Graham J. in Olin Mathieson, a case dealing with claims to certain chemical derivatives for pharmaceutical use as tranquillizers, in their entirety, at pp. 1116-17:

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.  [Emphasis added.]

Adopting this admirably concise formulation, Pigeon J. drew the following conclusion at p. 1117:

I have quoted again the passage quoted by the [Patent Appeal] 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; [or]

2.  It is not a sound prediction.  [Emphasis added.]

63                               Our Federal Court of Appeal subsequently applied the doctrine of “sound prediction” in the context of a patent for a pharmaceutical product in Ciba-Geigy AG v. Commissioner of Patents (1982), 65 C.P.R. (2d) 73.  In that case, Thurlow C.J. upheld product and process claims in relation to certain “new amines” useful in cardiac treatment, but added the qualification that what is predictable chemically may not be predictable pharmacologically, at p. 77:

The predictability of a particular result seems to me to be essentially a question of fact, though in some situations it may be a matter of common knowledge.  With respect to chemical reactions it is apparent from the foregoing that knowledge in the chemical art as to the predictability of chemical reactions has advanced considerably in the 50 years since Chipman Chemicals Ltd. v. Fairview Chemical Co. Ltd., [1932] Ex. C.R. 107, was decided.  The predictability of chemical reactions should not, however, be confused with predictability of the pharmacological effects and thus of the pharmacological utility of new substances.  [Emphasis added.]

64                               Thurlow C.J. was not laying down as a matter of law that pharmacological utility cannot be predicted because, as he said, predictability is “essentially a question of fact”.  It will depend on the evidence.  In Beecham Group Ltd. v. Bristol Laboratories International S.A., [1978] R.P.C. 521 (H.L.), for example, claims in respect of a semi-synthetic penicillin were invalidated as being little more than an announcement of a research project (p. 570).  In that case, on the facts, Lord Diplock stated at p. 579:

The evidence in the instant case is overwhelming that it is not yet possible to predict in advance what, if any, special therapeutic advantages will be possessed by a penicillin made to a particular formula.  The only way to find out is to make it and discover what its therapeutic characteristics are by conducting extensive tests upon it in vitro and in vivo.

65                               However, where, as here, the trial judge accepts on the evidence that the inventors could in fact make a sound prediction that an old compound (AZT) offers a hitherto unexpected utility in the treatment and prophylaxis of HIV/AIDS, then (and only then) does their disclosure of “the invention” offer real consideration for the monopoly benefits they seek.

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. 

4.    The Trial Judge’s Rejection of “Sound Prediction” in This Case

67                               The trial judge concluded that the doctrine of sound prediction did not apply here because in his view the doctrine addresses the issue of testing rather than utility.  Thus the absence of tests confirming the suitability of certain compounds was held not to be fatal (because the results were soundly predictable) in Monsanto itself, and in Burton Parsons Chemicals, Inc. v. Hewlett-Packard (Canada) Ltd., [1976] 1 S.C.R. 555.  The doctrine was used in those cases to permit the inventors to extrapolate from the utility of a proven invention to the utility of equivalent chemical compounds.  “Accordingly”, the trial judge concluded at para. 99, “it would be inappropriate to rely on the doctrine of sound prediction where the true cause of invalidity is not inutility but insufficient testing”.

68                               The Court of Appeal, on the other hand, considered the doctrine of sound prediction to be unnecessarily strict.  Sexton J.A., with whom Rothstein J.A. specifically agreed on this point, stated at para. 50:

In my view, this Court’s decision in Ciba-Geigy stands for the proposition that even where an invention constitutes a speculation as of the priority date claimed in the patent, the patent will not be invalid if it turns out that the speculation is valid at the time the patent is attacked.

69                               With respect, I think Parliament intended to get something more than speculation in exchange for the grant of a patent monopoly (a point which is further discussed below).  On the other hand, I do not think, with respect, that the doctrine of sound prediction is limited to the narrow ambit ascribed to it by the trial judge.  Once it is accepted that in appropriate circumstances utility can be predicted in advance of complete testing (whether of untested chemical compounds or otherwise), there seems no reason in principle why the doctrine should not be applied more generally, depending, of course, on the expert evidence.  There is no doubt that care must be taken that the doctrine is not abused, and that sound prediction is not diluted to include a lucky guess or mere speculation.  The public is entitled to obtain a solid teaching in exchange for the patent rights. 

5.    The Requirements of the Doctrine of “Sound Prediction”

70                               The doctrine of sound prediction has three components.  Firstly, as here, there must be a factual basis for the prediction.  In Monsanto and Burton Parsons, the factual basis was supplied by the tested compounds, but other factual underpinnings, depending on the nature of the invention, may suffice.  Secondly, the inventor must have at the date of the patent application an articulable and “sound” line of reasoning from which the desired result can be inferred from the factual basis.  In Monsanto and Burton Parsons, the line of reasoning was grounded in the known “architecture of chemical compounds” (Monsanto, at p. 1119), but other lines of reasoning, again depending on the subject matter, may be legitimate.  Thirdly, there must be proper disclosure.  Normally, it is sufficient if the specification provides a full, clear and exact description of the nature of the invention and the manner in which it can be practised:  H. G. Fox, The Canadian Law and Practice Relating to Letters Patent for Inventions (4th ed. 1969), at p. 167.  It is generally not necessary for an inventor to provide a theory of why the invention works.  Practical readers merely want to know that it does work and how to work it.  In this sort of case, however, the sound prediction is to some extent the quid pro quo the applicant offers in exchange for the patent monopoly.  Precise disclosure requirements in this regard do not arise for decision in this case because both the underlying facts (the test data) and the line of reasoning (the chain terminator effect) were in fact disclosed, and disclosure in this respect did not become an issue between the parties.  I therefore say no more about it. 

71                               It bears repetition that the soundness (or otherwise) of the prediction is a question of fact.  Evidence must be led about what was known or not known at the priority date, as was done here.  Each case will turn on the particularities of the discipline to which it relates.  In this case, the findings of fact necessary for the application of “sound prediction” were made and the appellants have not, in my view, demonstrated any overriding or palpable error.

72                               On March 1, 1985, Glaxo/Wellcome received from the NIH the key results of the in vitro test of AZT against the HIV in a human cell line.  This, taken together with Glaxo/Wellcome’s own data on AZT, including the mouse tests, provided a factual foundation.  Glaxo/Wellcome’s knowledge of the mechanism by which a retrovirus reproduces, and the “chain terminator effect” of AZT, as disclosed in the patent, was found by the trial judge to provide a line of reasoning by which utility could be established as of the date of the U.K. patent application, March 16, 1985, which is also the priority date by which the invention must be evaluated for purposes of the Canadian patent.  Although “sound prediction” was not the precise approach followed by the trial judge, his reasoning as well as his ultimate ruling is entirely consistent with its application.

6.  The Trial Judge’s Key Findings

73                               The trial judge upheld the claim in suit on the following bases:

(i)    Glaxo/Wellcome had information regarding toxicity, pharmacokinetics and the pharmacology of AZT in an internal document called the “Wise-Burchall report” dated December 12, 1984 (paras. 116 and 177), as well as some preliminary testing on HeLa Alpha-DNA polymerase (para. 118).

(ii)   Glaxo/Wellcome’s experience with other nucleoside analogues suggested that it was likely that AZT would be absorbed by oral administration making it potentially suitable for prolonged therapy  (para. 177).

(iii) It was known by Glaxo/Wellcome in 1984 that:

1)  Compounds of the class of nucleoside analogues could act as chain terminators in reactions involving DNA polymerase;

2)  The inhibition of HIV-I reverse transcriptase would prevent the reverse transcription of the viral genome from RNA into DNA and would thus prevent integration of the viral genome into the genome of the host;

3)  Both MLV and HIV were retroviruses; and

4)  Glaxo knew that AZT would inhibit the replication of [two strains of retrovirus in mouse cells] in November-December 1984. [para. 249]

(iv)  On receipt of the in vitro data from the NIH in February 1985, Glaxo/Wellcome knew that AZT inhibits the replication of HIV in a human cell line, albeit through in vitro rather than through in vivo testing.  The trial judge found that “‘in vitro’ tests may be adequate when the art would accept this as appropriately correlated with ‘in vivo’ utility in humans.  As such, ‘in vitro’ tests involving human cells may be sufficient if coupled with other evidence, for example, success with other nucleoside analogues, studies or assays that allowed one to determine whether the drug produces little or no toxicity even in relatively high doses” (para. 179).

(v)   In the trial judge’s view, “these results, considered cumulatively, in conjunction with all of the evidence adduced and considered in this trial, moves the invention out of the sphere of belief and into the realm of the inventors having deduced the complete invention” (para. 185).

74                               At para. 186 of his judgment, the trial judge said that “[a]ccordingly, as of March 16, 1985, I find that the patent satisfied, subject to obviousness, the requirements of s. 2 of the Act and does not exceed the invention claimed.  The idea, hypothesis or theory had, at this time, been reduced to a definite and practical shape”.

75                               These conclusions support a finding of sound prediction.  The trial judge has found that the inventors possessed and disclosed in the patent both the factual data on which to base a prediction, and a line of reasoning (chain terminator effect) to enable them to make a sound prediction at the time they applied for the patent. 

76                               Not all predictions, even sound ones, turn out to be correct.  If the Glaxo/Wellcome prediction had subsequently been shown to be wrong, the patent would have been invalidated for want of utility.  But, as Pigeon J. remarked in Monsanto, supra, at p. 1116, commenting on Société des usines chimiques Rhône-Poulenc v. Jules R. Gilbert Ltd., [1968] S.C.R. 950, “while the substances without utility had not been tested, the true cause of the invalidity was the fact that they were without utility, not that they had not been tested before the patent was applied for”. 

77                               The appellants take issue with the trial judge’s conclusion.  In their factum (though not in oral argument), they argue that utility must be demonstrated by prior human clinical trials establishing toxicity, metabolic features, bioavailability and other factors.  These factors track the requirements of the Minister of Health when dealing with a new drug submission to assess its “safety” and “effectiveness”.  See now:  Food and Drug Regulations, C.R.C. 1978, c. 870, s. C.08.002(2), as amended by SOR/95-411, s. 4(2), which provides in part:

A new drug submission shall contain sufficient information and material to enable the Minister to assess the safety and effectiveness of the new drug . . . .

The prerequisites of proof for a manufacturer who wishes to market a new drug are directed to a different purpose than patent law.  The former deals with safety and effectiveness.  The latter looks at utility, but in the context of inventiveness.  The doctrine of sound prediction, in its nature, presupposes that further work remains to be done.

C.  Glaxo/Wellcome’s After-the-Fact Validation Theory

78                               Glaxo/Wellcome contends 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.  This argument presupposes that the critical date to establish utility is the state of knowledge when the patent is attacked, even though the attack may come years after its issuance, rather than as of the date the patent application is filed.  The patent in this case was applied for in 1986, and issued in 1988.  The trial did not occur until 1997, almost a decade after the grant of the AZT patent in Canada.

79                               The “after-the-fact” validation theory was accepted by the Federal Court of Appeal, at para. 51:

In other words, so long as an inventor can demonstrate utility or a sound prediction at the time a patent is attacked, the patent will not fail for lack of utility.  The time at which usefulness is to be established is when required by the Commissioner of Patents or in court proceedings when the validity of the patent is challenged on that ground.

80                               In my view, with respect, Glaxo/Wellcome’s proposition is consistent neither with the Act (which does not postpone the requirement of utility to the vagaries of when such proof might actually be demanded) nor with patent policy (which does not encourage the stockpiling of useless or misleading patent disclosures).  Were the law to be otherwise, major pharmaceutical corporations could (subject to cost considerations) patent whole stables of chemical compounds for all sorts of desirable but unrealized purposes in a shot-gun approach hoping that, as in a lottery, a certain percentage of compounds will serendipitously turn out to be useful for the purposes claimed.  Such a patent system would reward deep pockets and the ingenuity of patent agents rather than the ingenuity of true inventors.

81                               The Federal Court of Appeal was concerned that patents based on “instinct and intuition (and) gut reaction” might be invalidated in a case where the ignorance that passed at the time for “sound prediction” turned out to be wrong and the inventor eventually vindicated.  An example was given of a hypothetical patent on the Wright brothers’ airplane.  Perhaps all the “experts” thought it would not fly, but it did.  Would it not be illogical, it was asked, to invalidate a hypothetical patent for a heavier-than-air flying machine because scientific opinion in the pre-flight era was wrong?

82                               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.  (Of course, if the prediction turned out to be wrong, the patent would be struck down for inutility.  Leonardo da Vinci’s elegant drawings showed exactly how to make a “bird man” machine but it never could, would or did sustain a person in flight.)

83                               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.  It goes back to the same point.  The public is entitled to accurate and meaningful teaching in exchange for suffering the patent monopoly.  The patent claims must be supported by the disclosure.  Speculation, even if it afterwards proves justified, does not provide valid consideration.  As Lord Mustill pointed out in Genentech Inc.’s Patent, [1989] R.P.C. 147 (Eng. C.A.), at p. 275:

Many years ago, an inventor could not have patented a heavier-than-air flying machine simply by writing down the concept, but equally the fact that the concept was capable of being written down in advance could not, in itself, exclude the rights of a person who had actually made one fly.

84                               The Federal Court of Appeal claimed support for its position in a statement by Thurlow C.J. in Ciba-Geigy, supra, at p. 77:

. . . if indeed what is in the patent specification was mere speculation or prediction, the speculation or prediction having turned out to be true, ought to be considered to have been well founded at the time it was made.  Even at the time it was made it is not improbable that it would have been considered well founded.

It is unfortunate that Thurlow C.J. speaks of “speculation or prediction” in the same breath without distinguishing between the two concepts.  The two sentences, standing alone, give some support to the position taken in this case by the Federal Court of Appeal.  However, the two sentences do not stand alone.  Thurlow C.J. purported to be applying Monsanto, supra, and in the passage from Monsanto that he quotes Pigeon J. says (at p. 1119) it is central to the analysis that he is dealing with

a matter which is not of speculation but of exact science.  We are no longer in the days when the architecture of chemical compounds was a mystery.  [Emphasis added.]

The point of Pigeon J.’s reasons is that a wide gulf separates speculation from “exact science” and it is the latter that may (or may not, depending on the expert evidence) permit sound prediction.  Moreover, on the facts of Ciba-Geigy itself, Thurlow C.J. says, as quoted above, that “[e]ven at the time it was made it is not improbable [i.e., it is probable] that it [the invention] would have been considered well founded [i.e., a sound prediction]”.  In the broader context of the Patent Act , as well, there is good reason to reject the proposition that bare speculation, even if it afterwards turns out to be correct, is sufficient.  An applicant does not merit a patent on an almost-invention, where the public receives only a promise that a hypothesis might later prove useful; this would permit, and encourage, applicants to put placeholders on intriguing ideas to wait for the science to catch up and make it so.  The patentee would enjoy the property right of excluding others from making, selling, using or improving that idea without the public’s having derived anything useful in return.

85                               Accordingly, to the extent Ciba-Geigy stands for a contrary position, I do not think it should be followed.

D.  Did Glaxo/Wellcome Claim More Than It Had Invented?

86                               The appellants argue that even if Glaxo/Wellcome can squeeze over the inventorship hurdle with respect to the treatment properties of AZT, there is nothing in the record on which to base a prediction, sound or otherwise, that AZT possessed prophylactic properties.  The appellants point out that, generally speaking, treatment deals with an infection already acquired, whereas prophylaxis refers to prevention of getting the disease in the first instance.

87                               Glaxo/Wellcome claims that not only was its prediction sound at the time it was made, but also that it has since been demonstrated in practice.  Specifically, as stated, it was established some years after issuance of the patent that AZT can be effective in preventing the transmission of HIV from a pregnant woman to her foetus (and is thus arguably prophylactic for the foetus), and that health care workers who have been pricked by infected needles (“needle-stick”) acquire a measure of protection against HIV infection.  These particular applications were not disclosed in the patent and were, it appears, unknown to Glaxo/Wellcome on March 16, 1985.  (The appellants deny that these are instances of “prophylaxis”.  They say these are both instances of post-infection treatment.)  Interestingly, while the U.K. patent for AZT claimed both treatment and prophylactic properties, the U.S. AZT patent, which was the focus of the  U.S. litigation on which Glaxo/Wellcome relies to support the validity of its patent, refers only to treatment.

88                               While the appellants’ argument has some linguistic attraction, it puts too much weight on a supposed “bright line” distinction between treatment and prophylaxis.  Dictionaries tend to include prophylaxis as an aspect of treatment:

Oxford English Dictionary (2nd ed. 1989), vol. XII, at p. 644

Med. The preventive treatment of disease. . . .

Black’s Medical Dictionary (39th ed. 1999), at p. 446

Treatment or action adopted with the view of warding off disease.

In Butterworths Medical Dictionary (2nd ed. 1978), at p. 1385, the following definitions (amongst others) are given:

Clinical prophylaxis.  The prevention of the development of signs and symptoms of the disease without necessarily eradicating the causal factor, e.g. in malaria, by schizonticidal drugs.

Drug prophylaxis.  The administration of drugs as protection against infection, in particular malarial infection.

Gametocidal prophylaxis.  The administration of drugs in order to kill malarial gametocytes in individuals.

See also Dorland’s Illustrated Medical Dictionary (27th ed. 1988), at p. 1365.

89                               If “prophylactic” treatment of malaria may post-date the initial infection, it would seem appropriate that prophylaxis can also include “prevention of the development of signs and symptoms of the disease [AIDS] without necessarily eradicating the causal factor [HIV]”.

90                               The patent itself includes some information described as “Preventing Infection by AIDV”, which refers to an experiment which showed “decreased infection” of cells in the presence of AZT.  The patent then discloses (as earlier mentioned) the mechanism by which AZT prevents “the development of signs and symptoms” of AIDS (and is thus prophylactic to AIDS), namely as a “chain terminator” which inhibits HIV reverse transcriptase:

. . . it is the triphosphate form of 3’-azido-3’-deoxythymidine which is believed to be the effective chain terminator in the reverse transcription of AIDV, as evidenced by its effect on avian myeloblastosis virus and Moloney murine leukaemia virus.  This form also inhibits AIDV reverse transcriptase in vitro whilst having a negligible effect on human DNA polymerase activity.  [Emphasis added.]

91                               HIV offers an incubation period in which the virus is present but vulnerable to attack.  It is this specific feature that was targeted by the “chain termination” effect known and disclosed by Glaxo/Wellcome at the time of the patent application, and which afforded the basis for its prediction that AZT had prophylactic properties.  In these circumstances, I do not think the appellants have demonstrated any palpable and overriding error with respect to this finding by the trial judge.

92                               There is another reason why I think we should not be too quick to overrule the conclusion that prophylactic benefits were soundly predicted.  The appellants seek to place Glaxo/Wellcome in a “catch-22” situation.  If Glaxo/Wellcome had not specifically claimed prophylactic properties, the appellants could have sought to obtain their own patent on the basis of claiming “hitherto unrecognized [prophylactic] properties” (relying on Shell Oil, supra, at p. 549), thereby undercutting Glaxo/Wellcome’s market for treatment, and leaving Glaxo/Wellcome to try to salvage their patent position by arguing that the prophylactic properties were already implicit (or “obvious”) in their own patent as aspects of treatment.  If the appellants could lawfully get their AZT to market allegedly for prophylaxis, with or without their own patent, the generic version of AZT would likely be used by cost-conscious health providers in place of the more expensive Glaxo/Wellcome AZT for all aspects of HIV/AIDS treatment at all stages, thus undercutting the commercial value of the Glaxo/Wellcome patent.  On the other hand, Glaxo/Wellcome having sought to protect itself from this scenario by claiming prophylactic benefits, the appellants now adopt the opposite strategy and seek to invalidate the entire patent on the ground that the claim to prophylaxis is invalid because it exceeds the invention, and its “covetousness” wipes out all of the combined “treatment and prophylaxis” claims, thereby wiping out the commercial value of the patent.  As long ago as Consolboard Inc. v. MacMillan Bloedel (Sask.) Ltd., [1981] 1 S.C.R. 504, Dickson J. (as he then was) subscribed to the view, at p. 521, that a “patent should be approached ‘with a judicial anxiety to support a really useful invention’”.

93                               In the particular circumstances of this case, I think Glaxo/Wellcome’s prediction that the “chain terminator” effect disclosed in the patent specification had prophylactic as well as post-infection treatment application was sound.  The Commissioner so ruled, and his decision to allow both treatment and prophylaxis was upheld in the courts below.  The onus was on the appellants to show that the patent is invalid, not on Glaxo/Wellcome to show that it is valid.  I agree with the trial judge and the Federal Court of Appeal that the appellants have not discharged this onus.

E.  Did Glaxo/Wellcome Wrongly Exclude the NIH from Co-inventorship?

94                               The appellants contend that Drs. Broder and Mitsuya were “co-inventors” and ought to have been so identified in the patent.  For this argument to benefit the appellants (as opposed to Drs. Broder and Mitsuya), they must further establish that this omission was a “material” misstatement that was “wilfully made for the purpose of misleading”.  If so, the patent would be void pursuant to s. 53(1)  of the Patent Act .

95                               Inventors come in all shapes and sizes.  As long ago as 1831, the London Journal of Arts and Sciences commented (with gender assumptions no doubt common at the time):

Useful inventors are of three classes; the first are men of genius, capable of producing important inventions that involve the entire projecting of new machines, or remodelling of existing ones, and the organization of new or complicated processes and systems of working.  These are very few.

The second are men who have not so extensive a scope of imagination and intellect as to project new systems or great changes, and to organize the means of effecting them, but who are capable of making marked improvements upon existing systems and machinery, or partial changes in them.  This class is considerable.

The third class is made up of men of small imagination, who are not capable of any great originality of thought, but who have a certain ingenuity which they can apply to the things that come within the range of their observation, and possess a tact for correctly and accurately executing that which they conceive. 

. . . Happily this class is immense, being spread thickly over the whole body of mechanics, from the manufacturer and engineer down to the lowest workman.  Such men constitute expert mechanicians, who are never at a loss for expedients for overcoming the practical difficulties of detail that occur in their business, and are perpetually making trifling inventions which they require for immediate application.

(Quoted in Godson on Patents (2nd ed. 1851), at pp. 33-34.)

96                               Inventorship is not defined in the Act, and it must therefore be inferred from various sections.  From the definition of “invention” in s. 2 , for example, we infer that the inventor is the person or persons who conceived of the “new and useful” art, process, machine, manufacture or composition of matter, or any “new and useful” improvement thereto.  The ultimate question must therefore be:  who is responsible for the inventive concept?

97                               Section 34(1) requires that at least at the time the patent application is filed, the specification “correctly and fully describe the invention . . . to enable any person skilled in the art or science to which it appertains . . . to . . . use it”.  It is therefore not enough to have a good idea (or, as was said in Christiani, supra, at p. 454, “for a man to say that an idea floated through his brain”); the ingenious idea must be “reduced . . . to a definite and practical shape” (ibid.).  Of course, in the steps leading from conception to patentability, the inventor(s) may utilize the services of others, who may be highly skilled, but those others will not be co-inventors unless they participated in the conception as opposed to its verification.  As Jenkins J. notes in May & Baker Ltd. v. Ciba Ltd. (1948), 65 R.P.C. 255 (Ch. D.), at p. 281, the requisite “useful qualities” of an invention, “must be the inventor’s own discovery as opposed to mere verification by him of previous predictions”.

98                               More recently, in Henry Brothers (Magherafelt) Ltd. v. Ministry of Defence and the Northern Ireland Office, [1997] R.P.C. 693 (Pat. Ct.), in response to a submission that an invention could be divided into contributed elements and patents awarded accordingly, Jacob J. stated, at p. 706:

I do not think it is right to divide up the claim for an invention which consists of a combination of elements and then to seek to identify who contributed which element.  I think the inquiry is more fundamental than that.  One must seek to identify who in substance made the combination.  Who was responsible for the inventive concept, namely the combination?  [Emphasis added.]

99                               The distinction between conception and verification is consistent with the Canadian authorities, including Fox, supra, at p. 225; Kellogg Co. v. Kellogg, [1942] Ex. C.R. 87, at p. 97; Ernest Scragg & Sons Ltd., supra, at pp. 676-77; H. Fisher and R. S. Smart, Canadian Patent Law and Practice (1914), at pp. 27-29.  The line is perhaps blurred in  Gerrard Wire Tying Machines Co. of Canada v. Cary Manufacturing Co., [1926] Ex. C.R. 170, where the U.S. text Walker on Patents is quoted at p. 186:

Nor is a patent to joint inventors invalidated by the fact that one of them only first perceived the crude form of the elements and the possibility of their adaptation to complete the result desired.  In fact the conception of the entire device may be attributed to one, but if the other makes suggestions of practical value, which assist in working out the main idea and making it operative, or contributes an independent part of the entire invention which helps to create the whole, he is a joint inventor even though his contribution be of minor importance.

To the extent this suggests that an individual who contributes to the inventive concept may be a co-inventor without being the prime originator, I agree with it.  To the extent, however, that it can be read to include as inventors those who help the invention to completion, but whose ingenuity is directed to verification rather than the original inventive concept, I respectfully, for the reasons already given, disagree.

100                           Wetston J. concluded at para. 224 that “the utility as claimed was not established without the extensive and direct involvement of the NIH.”  This is true, but it is not, with respect, the test.  If Glaxo/Wellcome had soundly predicted that AZT could cure nausea in the weightlessness of space, it might require NASA and all its rocket ship expertise to “establish” the utility, but NASA would not on that account become a co-inventor.

101                           It is clear that Drs. Broder and Mitsuya at the NIH were instrumental in providing crucial evidence on which the “sound prediction” of AZT’s utility depended, but they were not responsible for the inventive concept.  They carried out their investigation using extraordinary skill and expertise but, in my view, their blind test of a chemical compound whose existence they had not identified, and with which (unlike Glaxo/Wellcome) they apparently had no prior experience, did not require them to be listed as co-inventors.

102                           There is no question that the ATH8 cell line developed by Drs. Broder and Mitsuya at NIH was original and offered a testing environment that Glaxo/Wellcome could not duplicate in-house.  For this achievement they obtained a patent, as mentioned earlier.  But the patentees of an invention for testing do not, by virtue of executing tests using that invention, become co-inventors of every sound idea that is so tested. 

103                           Drs. Broder and Mitsuya did not conceive of the utility of AZT for the treatment and prophylaxis of HIV, although they were engaged in a massive search for such a drug.  As stated earlier, they initially thought that the coded drug sent by Glaxo/Wellcome was suramin, a compound of longstanding interest to the NIH in its HIV research, but a drug that performed poorly in humans.  The trial judge said that “[t]he work that Dr. Broder and Dr. Mitsuya were doing with suramin, at the NIH, situated them uniquely to this research” (para. 202), but that, it seems to me, shows the weakness of their claim.  The NIH had one of the best testing facilities in the world but they had not been able, to that point, to identify an effective chemical compound to counter HIV.  Their five-star candidate, suramin, turned out to be a disappointment.

104                           The Court of Appeal referred specifically to Dr. Mitsuya’s testimony that in 1984 and 1985, he thought that dideoxynucleosides, of which AZT is a member, “was likely to be harmful to human cells” (para. 38, note 33) and thus “too toxic to be used in the treatment of human diseases” (para. 38).  The success of AZT, accordingly, must have come as a surprise.

105                           It is easy to sympathize with the frustration felt by Drs. Broder and Mitsuya, who felt it necessary, together with NIH colleagues, to send a rather bitter letter to The New York Times on September 20, 1989, complaining about what they took to be Glaxo/Wellcome’s ingratitude for the immense NIH contribution:

In a number of specific ways, government scientists made it possible to take a drug already in the public domain with no medical use and make it a practical reality as a new therapy for AIDS.  It is unlikely that any drug company could have found a better partner than the government in the development of a new product.  We believe that the development of this drug in the record time of two years, start to finish, would have been impossible without the substantive commitment of government scientists and government technology.

106                           In the circumstances, however, I agree with the Federal Court of Appeal that great though the contribution of Drs. Broder and Mitsuya was to the advancement of science, they were not co-inventors of the patent-in-suit.

F.  Materiality of Co-inventorship

107                           The trial judge concluded that Drs. Broder and Mitsuya were co-inventors, but that failure to include them in the patent was not a material misrepresentation that would invalidate the patent.  In reaching this conclusion, he referred to the observation of Addy J. in Procter & Gamble Co. v. Bristol-Myers Canada Ltd. (1978), 39 C.P.R. (2d) 145 (F.C.T.D.), at p. 157, that “it is really immaterial to the public whether the applicant is the inventor or one of two joint inventors as this does not got [sic] to the term or to the substance of the invention nor even to the entitlement” (aff’d (1979), 42 C.P.R. (2d) 33 (F.C.A.)).  At an earlier date, Thurlow J. had suggested in Jules R. Gilbert Ltd. v. Sandoz Patents Ltd. (1970), 64 C.P.R. 14 (Ex. Ct.), at p. 74, rev’d (on other grounds) [1974] S.C.R. 1336 (sub nom. Sandoz Patents Ltd. v. Gilcross Ltd.), that “allegations in the petition respecting anything other than the subject-matter of the claims in the patent as granted are not material”.

108                           The appellants argue that, while as Addy J. says, it may be that the identity of the inventor is immaterial to the public in most instances, this is not necessarily true in all cases.  Here, for example, the issue of “entitlement” to the rewards of the AZT patent has created a significant public controversy.  There were arguably important public policy ramifications to the issue of co-inventorship because of the contrasting mandates, objectives and funding sources of the institutions involved, in particular the NIH and the Glaxo/Wellcome corporate group.  If indeed the NIH researchers had been “co-inventors”, and the NIH or the U.S. government had therefore held an ownership interest in the patent, there potentially could have been a significant effect on both the access to and the cost of the drug AZT across the world.

109                           There is no need to consider the issue of materiality further in this case however, not only because of the conclusion that Drs. Broder and Mitsuya were not in fact co-inventors in this case, but also because there is no evidence whatsoever that the omission to name them was “wilfully made for the purpose of misleading”, as required by the concluding words of s. 53(1) .

V.  Conclusion

110                           I would dismiss the appeals with one set of costs to the respondents on a party and party basis, payable jointly and severally by the appellants.

Appeals dismissed with costs.

Solicitors for the appellant Apotex Inc.:  Goodmans, Toronto.

Solicitors for the appellant Novopharm Ltd.:  Hitchman & Sprigings, Toronto.  

Solicitors for the respondents Wellcome Foundation Ltd. and Glaxo Wellcome Inc.:  Ogilvy, Renault, Ottawa.