Date: 20110705
Docket: A-387-10
Citation: 2011 FCA 220
CORAM: NOËL
J.A.
EVANS
J.A.
DAWSON J.A.
BETWEEN:
ELI LILLY AND COMPANY
Appellant
and
TEVA CANADA LIMITED
Respondent
REASONS FOR JUDGMENT
EVANS J.A.
Introduction
[1]
This is an
appeal by Eli Lilly and Company (Lilly) from a decision of the Federal Court
(2010 FC 915). In that decision, Justice Barnes (Judge) granted to Teva Canada
Limited (Teva) a declaration under subsection 60(1) of the Patent Act,
R.S.C. 1985, c. P-4, that Lilly’s Canadian Patent No. 2,209,735 (’735 patent)
was invalid for lack of utility. Teva was formerly Novopharm Limited and is referred
to in the Judge’s reasons as Novopharm.
[2]
The
subject of the patent is a new use for an old medicine that has long been in
the public domain: atomoxetine for the treatment of three of the manifestations
of attention deficit hyperactivity disorder (ADHD) for some people, regardless
of their age group (adults, adolescents or children). ADHD is a neurobehavioral
disorder, manifested by hyperactivity, inattention, and impulsiveness, and can
impair functioning at school, work and in social settings. It is a chronic
condition with no known cure, but its manifestations can be improved by
medication.
[3]
This
appeal raises three principal legal issues. Did the Judge err by: (i)
invalidating the ’735 patent for lack of demonstrated utility by misconstruing
its promise; (ii) requiring too high a standard of proof of utility; and (iii) deciding
that Lilly could not rely on the sound prediction of the utility of the
invention because it had not disclosed the factual foundation of the sound
prediction in the patent?
[4]
The Judge approached
the construction of the promise of the patent from the perspective of the
relevant persons of skill in the art (POSITA), and concluded that the POSITA
would understand the patent to promise clinically effective treatment of a
chronic disorder, AHD.
[5]
Having
made findings of credibility of the principal experts and examined the
documentary evidence, the Judge held that the study of the clinical trial on
which Lilly relied was insufficient to demonstrate that atomoxetine would
fulfil its promise. It was common ground that utility had to be demonstrated as
of the date that Lilly filed its application for the ’735 patent, January 4,
1996.
[6]
Finally,
the Judge decided that he was bound by a decision of this Court holding that a
claim of sound prediction can only succeed if the basis of the prediction is
disclosed in the patent.
[7]
In my
view, the Judge’s careful and thorough reasons reveal no reversible error.
[8]
The
principal dispute between the parties at trial was whether the single study on
which Lilly relied was sufficient to demonstrate that atomoxetine was an
effective treatment of ADHD for the purpose of establishing that it met the
usefulness criterion of patentability in section 2 of the Patent Act. This
is an essentially factual issue that turned on the Judge’s assessment of the
evidence which, in turn, depended in large part on his credibility findings. I am
not persuaded that the Judge made any palpable and overriding error in his
findings of fact or in his application of the law to the facts.
[9]
On appeal,
Lilly raised legal issues about the construction of the promise of the patent,
the standard of proof required to demonstrate utility, and whether the factual
basis for sound prediction must be disclosed in the patent. In my opinion,
Lilly has not established that the Judge was wrong in his identification or formulation
of the applicable law.
The MGH Study
[10]
Lilly
sponsored and funded a clinical trial that was conducted in 1995 at the Massachusetts General Hospital (MGH Study) on the
effectiveness of atomoxetine in the treatment of ADHD. The trial was described
by Dr Heiligenstein, the inventor and a Lilly employee, as a pilot study
designed to determine whether atomoxetine might be useful in treating ADHD.
[11]
Twenty-one
adult patients (half the number called for by the MGH study protocol)
participated in the double-blind, placebo-controlled cross-over human clinical
study. Half of the patients were given atomoxetine for three weeks, followed by
a “wash-out” week, and a placebo for three weeks. The order was reversed for
the other half of the patients. Neither the physicians nor the patients were
informed whether atomoxetine or the placebo was being administered.
[12]
Eleven of
the patients showed a 30% or greater reduction in ADHD symptoms, whereas only
two showed reduced symptoms after taking the placebo. These results met the
predetermined standards set by the study’s evaluators.
[13]
The
authors of a report on the MGH Study published in a prestigious medical journal
stated that the results “confirm the study hypothesis and suggest that
atomoxetine may be useful for the treatment of ADHD” (Appeal Book vol. 11, p. 4001).
They also described them as “clinically and statistically significant”, even
though “the cross over design and the relatively short exposure may not have
been ideal.” They concluded:
Although preliminary, these
promising initial results provide support for further studies of tomoxetine [as
atomoxetine was previously known] in the treatment of ADHD.
In the abstract of the report, they indicated that the
further studies should be “over an extended period of time” (ibid. at p.
3999).
[14]
On the
basis of the MGH Study, Lilly set up a working group to examine three possible
compounds for treating ADHD, including atomoxetine. Lilly selected atomoxetine
for further development and obtained regulatory approval to market it in the United States in 2002 and in Canada in 2004.
Issues and analysis
(i) Standard of review
[15]
It was
common ground that the Court may only reverse a decision of the Judge on the
basis of his findings of fact or application of the law to the facts if he committed
a palpable and overriding error. On questions of law, however, the Court may intervene
if satisfied that the Judge was wrong.
[16]
Lilly
submitted that the Judge made four legal errors. First, he misconstrued the
patent by implying a promise that atomoxetine was an effective long term
treatment of ADHD. Second, he set the standard of proof of utility for
patentability too high by failing to ask whether there was a scintilla of
evidence of atomoxetine’s usefulness in treating ADHD. Third, he reversed the
onus of proof by requiring Lilly to prove utility, rather than putting the onus
on Teva to prove lack of utility. Fourth, he held that Lilly could not
establish utility on the basis of sound prediction because it had not disclosed
in the patent the factual foundation of the prediction.
[17]
Lilly
did not directly take issue with the Judge’s factual findings. However, counsel
argued that, because the Judge had misconstrued the patent, he had reached the
wrong conclusion on the basis of his findings of fact. He submitted that when
the Judge’s legal errors are corrected, it is clear from the Judge’s findings that
Lilly had sufficient evidence to meet the low threshold needed to establish
utility.
(ii) Construction of the
patent
(a) implied promise
[18]
The
utility of the ’735 patent must be determined by examining whether there was
sufficient evidence demonstrating that, at the date of filing, atomoxetine
would do what the patent promised or, if not, that its utility could be soundly
predicted. Lilly says that the Judge erred in law by going beyond the promise
expressly made in the patent and finding an implicit promise that atomoxetine
“will work in the longer term” (at para. 112).
[19]
I do not
agree with Lilly’s characterization of the Judge’s reasons. The Judge’s use of
the phrase “implicit in the promise” (para. 112) must be considered in the context
of the paragraph in which it appears.
ADHD is a chronic disorder
requiring sustained treatment. Only where experimental results are sufficiently
compelling to independently support the inventive promise (or to support a
sound prediction) is utility established. In the case of the ’735 Patent, the
inventors claimed a new use for atomoxetine to effectively treat humans with
ADHD. What is implicit in this promise is that atomoxetine will work in the
longer term. If the MGH Study was not adequate to demonstrate the clinical
usefulness of atomoxetine to treat ADHD the bare fact that some positive
experimental data emerged is not enough.
[20]
In my
view, Lilly’s interpretation of this passage as a finding by the Judge of a
second, implied promise in the patent is implausible. It assumes that the Judge
forgot that he had previously construed the patent as promising that
atomoxetine is an effective treatment for ADHD (at paras. 32, 79, and 93), a
construction with which Lilly finds no fault. Indeed, the Judge concludes
paragraph 112 by saying:
The evidence to demonstrate utility
must be sufficient to support the promise that atomoxetine works to treat ADHD
in some patients.
[21]
Only once does
the Judge refer to long term effectiveness as implicit in the promise of the patent.
In my view, when the Judge’s reasons are read as a whole, he was not construing
the patent as promising more than its explicit promise that it will treat ADHD
in some people. Rather, he was simply interpreting what “treatment” means in this
patent in the context of ADHD, a chronic disorder requiring sustained
treatment. He was not adding a promise above and beyond that already expressed
in the words of the patent, namely that atomoxetine is an effective treatment
of ADHD.
(b) the meaning of “treatment”
[22]
The
parties agree that the patent promises that atomoxetine will treat, or effectively
treat, some patients in all age groups by alleviating three manifestations of
ADHD. It is equally uncontroversial that the patent is to be construed by
examining it through the eyes of a POSITA and that the Judge was correct when
he stated (at para. 7, note 2):
The expert
witnesses agreed that such a person would have a thorough knowledge of ADHD and
its treatment and, in particular, the development, research or clinical use of
ADHD drug therapies. I accept that this could include a psychiatrist, a
paediatrician, doctorial pharmacist or a PhD in psychopharmacology.
[23]
In my
view, this definition of the qualifications of the POSITA relevant to this
patent, and especially the inclusion of a psychiatrist and a paediatrician, indicates
that he or she would interpret the promise from the perspective of a person
involved in the clinical treatment of ADHD. A POSITA would thus understand the
promise to mean that atomoxetine will alleviate the symptoms of the disorder in
some patients to a clinically meaningful extent. This is not to say that the
promise means that clinicians will necessarily prescribe atomoxetine for their patients,
because there may be more effective medicines available on the market. The
promise does mean, however, that atomoxetine would be regarded by a physician
as a realistic option for the treatment of ADHD.
[24]
This
conclusion is supported by the following exchange between counsel for Teva and
Dr Kutcher, a psychiatrist, one of Teva’s expert witnesses (Appeal Book,
vol. 13, p. 4798):
Q. When you read these claims what do they
tell you, what are they talking about, the first, the use of tomoxetine [the previous
name of atomoxetine] for treating ADHD disorder in a patient?
A. That tells me that tomoxetine is
something that could be used for treating a person that has ADHD.
[25]
Similarly,
when asked what he understood the promise of the patent to be, Dr Virani, a
pharmacist specializing in psychopharmacology, the Teva expert witness
whom the Judge found most credible, said (Appeal Book, vol. 14, p. 5025):
… the promise here is that
atomoxetine at reasonable and appropriate doses, would be a reasonable treatment
strategy for alleviating the symptoms of ADHD, … in children, adolescents and
adults.
[26]
Lilly says
that the Judge erred by interpreting the effective treatment promised in the
patent as treatment that will continue to be effective in the long term. In my
view, when his reasons are read as a whole, the Judge was not saying that,
because ADHD has no known cure, the promise of effective treatment must mean
that it will be effective as long as a patient is taking it, which could extend
over a lifetime.
[27]
On the
other hand, when reading the promise a POSITA would have regard to the chronic
nature of the disorder which the patent promises to treat effectively. For this
reason, the Judge found as a fact that the clinical effectiveness of
atomoxetine as a treatment must be “sustained” (at para. 112). This, in my
view, is no more than a simple recognition of the fact that ADHD is not like a common
headache, which can normally be effectively treated by one or two doses of a
suitable medicine.
[28]
Counsel
for Lilly suggested that the manifestations of ADHD in some patients are
sufficiently manageable that they only need medication for short periods at a
time: to improve their level of concentration while preparing for and writing examinations,
for example. Longer term effectiveness, it is argued, is not necessary to
effectively treat these patients.
[29]
In my
view, this argument does not assist Lilly. The better reading of the Judge’s
reasons is that he found that the evidence was insufficient to demonstrate that
atomoxetine was an effective clinical treatment, regardless of the length of
time for which it was taken, and I see no basis for disturbing this
conclusion. In any event, although
the patent only promises that atomoxetine will treat some ADHD patients,
there is no evidence that a POSITA would interpret the patent as limiting its
promise of effective treatment to the relatively few ADHD patients who only
need medication on a short term basis.
[30]
Consequently,
I am not persuaded that the Judge’s interpretation of the patent was erroneous
in law and undermined the conclusions that he drew from his findings of fact. In
my view, the Judge examined the evidence in light of the right question: when
Lilly filed its application in 1996 for the ’735 patent, had it established
that atomoxetine was a clinically effective treatment for ADHD for some
patients?
(iii) Did Lilly have
sufficient evidence that atomoxetine would effectively treat ADHD?
[31]
Counsel
for Lilly argued that only a low level or scintilla of utility is required for
the purpose of patentability: Consolboard Inc. v. MacMillan Bloedel (Sask.) Ltd., [1981] 1 S.C.R. 504 at 525,
and Aventis Pharma Inc. v. Apotex Inc., 2005 FC 1283, 43 C.P.R. (4th)
161 at para. 271. The Judge erred in law, he submitted, by requiring evidence
that is “sufficiently compelling to independently support the [patent’s]
inventive promise” (at para. 112). This, counsel said, was a standard of proof
more appropriate for obtaining regulatory approval which, as already noted, Lilly
obtained in Canada on December 24, 2004, after extensive
clinical trials.
[32]
In my
view, this argument cannot succeed in this case, because the patent
specifically promised that atomoxetine is a clinically effective treatment of
ADHD. The utility of the patent is thus determined by examining whether
atomoxetine will do what Lilly promised that it would do. As the Judge put it
(at para.112 ):
I do not accept the point that
utility in this case should be measured against a hypothetical or theoretical
standard that is lower than the inventive promise of the patent.
[33]
This issue
was recently considered in Novopharm Limited v. Pfizer Canada Inc., 2010
FCA 242 (Pfizer), where Nadon J.A., writing for the Court concluded (at
para. 100) that the judge
… may have misapplied the “mere
scintilla” test because in the present matter, there had been a specific
promise that sildenafil would work to treat [erectile dysfunction].
However, he said, since the
judge had found that there was more than a scintilla of utility, “his error
does not attract our intervention.”
[34]
The
question is whether Lilly had sufficient evidence in 1996 to establish that
atomoxetine would deliver on the promise of the patent. The Judge concluded
that Teva had established that the answer to this question was, no. I see no
reversible error in his determination of this essentially factual question.
[35]
The Judge
specifically stated (at para. 93) that the proof required to demonstrate
utility for the purpose of obtaining a patent is less than that required to
satisfy the Minister of Health of the efficacy of a medicine for a specified
use in order to obtain permission to market it. Rather, on the basis of the
testimony of the expert witness whom he found most credible, the Judge
concluded that the clinical trial had serious methodological limitations,
particularly its short duration and small sample, shortcomings that were also
acknowledged by the authors of the MGH Study.
[36]
The Judge
agreed that the data from this pilot study were promising, and “indicated a
clinically and statistically significantly response rate for atomoxetine over
placebo” (at para. 20). Nonetheless, the patent promised that atomoxetine was
an effective treatment of ADHD, that is, it would alleviate manifestations of
the disorder in some patients to such a degree that a doctor would consider
prescribing it. The Judge was not prepared to infer from the limited
experimental data and the nuanced conclusions of the authors of the reports of
the MGH Study that there was sufficient evidence that atomoxetine was a
clinically effective treatment of ADHD.
[37]
The
fundamental question in dispute at the trial was whether the MGH Study - the
only study conducted prior to the issue of the patent - demonstrated that, as
promised in the patent, atomoxetine was a clinically effective treatment of
ADHD. The Judge clearly set out the opposing views (at para. 9) as follows:
Dr. Virani described the MGH
Study as a pilot with so many methodological limitations that its data were
only preliminary and, at best, interesting. According to Dr. Virani, a far more
exacting clinical trial would have been needed to establish atomoxetine’s
effectiveness as an ADHD drug. Dr. McGough’s contrary view was essentially that
the MGH Study data were proof of atomoxetine’s efficacy because they showed, in
a statistically significant way, that atomoxetine had worked to treat several
of the patients studied for at least the duration of the trial.
[38]
Having
examined the evidence, the Judge concluded (at para. 113):
For the most part, I accept
Dr. Virani’s evidence about the limitations of the MGH Study and find that its
reported results do not demonstrate the clinical utility of atomoxetine to
treat ADHD in adults let alone in children and adolescents. This was a clinical
trial that was too small in size and too short in duration to provide anything
more than interesting but inconclusive data. With a patient sample of this
uniformity and size, an exposure to atomoxetine of only three weeks and a
degree of subjectivity in the testing, one can only conclude, as the
researchers themselves stated, that the study had “limitations” and the results
were promising but only preliminary.
[39]
It is also
relevant that, on the basis of the MGH Study, Lilly did not immediately proceed
with the development of atomoxetine. Rather, atomoxetine was one of three
compounds which Lilly considered as possible treatments of ADHD, before finally
selecting atomoxetine. Lilly’s contemporaneous conduct does not suggest that it
viewed the MGH Study as demonstrating that atomoxetine was an effective treatment
of ADHD.
[40]
In
reaching his conclusion that utility had not been demonstrated, the Judge also
took into account Lilly’s previous experience with atomoxetine for treating depression.
Early clinical trials with human subjects had indicated very positive results
for this use, as had subsequent studies that were more elaborate than the MGH
Study in the present case. Nonetheless, Lilly abandoned this project in 1991 when
researchers were unable to replicate these results. After that, Lilly
considered the possibility that atomoxetine might be useful in the treatment of
ADHD.
[41]
Counsel
for Lilly relied on the decision of this Court in Pfizer, which was released
shortly after the decision of the Judge in the present case. He argued that
this Court had upheld the trial judge’s finding that a clinical study had
demonstrated that the medicine in question, VIAGRA, was an effective treatment for
erectile dysfunction. He noted that the study in that case was also described as
a pilot study and involved only sixteen patients, and that its results did not
reach statistical significance.
[42]
However,
utility is largely a question of fact that is decided in each case on the basis
of the evidence and the judge’s assessment of it. That a judge in one case
concluded that utility was shown on the basis of the evidence before her is of
little value in persuading an appellate court that a judge in another case,
where the evidence was somewhat similar, must have applied too high a standard
of proof or committed a palpable and overriding error because he reached the
opposite result.
[43]
In my
opinion, the Judge made no palpable and overriding error in concluding that the
evidence was insufficient, for patentability purposes, to demonstrate the effectiveness
of atomoxetine as a clinical treatment for ADHD.
(iv) Burden of proof
[44]
The
parties agree that the party challenging the validity of a patent has the
burden of proving that it is invalid, and the Judge so held (at paras. 28 and
31). Thus, Teva had the burden of proving that, when the ’735 patent was filed,
the evidence was insufficient to demonstrate that atomoxetine would treat ADHD.
[45]
Lilly
submitted in its memorandum of fact and law that, although the Judge correctly
stated the law, in fact he reversed the burden by requiring Lilly to prove the
utility of the patent. I see nothing in the Judge’s reasons to support this
allegation. Indeed, in oral argument counsel seemed not to press this point.
(v) Prediction of utility
and the need for disclosure
[46]
After
concluding that Teva had established that atomoxetine was not useful because it
had not been demonstrated to be an effective treatment for ADHD, the Judge
considered whether a POSITA would be able soundly to predict the claimed
utility. He held that Lilly could not rely on the principle of sound prediction
because it had not disclosed in the patent the MGH Study which was the
factual basis of the prediction.
[47]
Lilly
submits that neither the Patent Act nor the Supreme Court’s jurisprudence
requires disclosure of this kind in the patent as a condition precedent to successfully
invoking sound prediction as the basis of the utility of the claimed invention.
However, while Justice Binnie may not have definitively decided this question in
Apotex Inc. v. Wellcome Foundation Ltd., 2002 SCC 77, [2002] 4 S.C.R.
153 at para. 70, it has been held in the Federal Court, and affirmed by this
Court, that a patentee must disclose in the patent a study that provides the
factual basis of the sound prediction: Eli Lilly Canada Inc. v. Apotex Inc.,
2008 FC 142, 63 C.P.R. (4th) 406, aff’d. 2009 FCA 97, 78 C.P.R. (4th)
388 (Eli Lilly Canada).
[48]
Counsel
argued that Lilly had made an international application for the ’735 patent. He
relied on Article 27(4) of the Patent Cooperation Treaty, 1970, 28 U.F.T
7647 (Treaty), which provides that in matters of form or contents required for
national patent applications, an applicant can insist that the relevant
provision of the Treaty and Regulations be applied to the international
application.
[49]
In my
view, this argument does not assist Lilly. Article 27(5) of the Treaty provides
that nothing in the Treaty or the Regulations shall be construed as limiting
Contracting States’ freedom to prescribe substantive conditions of patentability.
Writing for this Court in Eli Lilly Canada, Justice Noël stated (at para.
19):
The appellant further argues
that requiring the complete disclosure of the factual basis underlying the
sound prediction is inconsistent with the Patent Cooperation Treaty… However,
this Treaty specifically contemplates the supremacy of national law in
setting the rules for substantive conditions of patentability (see article
27(5) of the Treaty). We are concerned here with substantive conditions of
patentability.
[Emphasis added]
[50]
I see no
basis in the present case for departing from the normal practice of this Court
to follow its own decisions. The decision in Eli Lilly Canada was far
from being “manifestly wrong” in any of the senses contemplated by Miller v.
Canada (Attorney General), 2002 FCA 370, 220 D.L.R. (4th) 149 at para. 10.
In view of his ruling on the applicability of Article 27(5), it is immaterial
that Justice Noël did not refer in his reasons to Article 27(4).
[51]
Indeed, if
disclosure in the patent of the factual basis of the prediction of utility was not
required for sound prediction, it would be difficult to see what Lilly could be
said to have given to the public, in exchange for the grant of the monopoly, that
it did not already have. When utility is based on sound prediction, disclosure
of its factual foundation goes to the essence of the bargain with the public
underlying patentability.
(v) Costs
[52]
In
supplementary reasons for judgment (2010 FC 1154), the Judge awarded elevated
costs to Teva at the upper end of Column IV of Tariff B. While deploring the
unusual level of acrimony in this litigation, and the delays caused by tactical
manoeuvrings, the Judge concluded that both parties were to blame, and therefore
did not take their conduct into account in the award of costs. He did, however,
provide guidance on the assessment of costs and disbursements.
[53]
Lilly
argues that if its appeal is dismissed on the substantive issues, the Judge’s award
of costs should be set aside. The Judge erred, it submits, in failing to reduce
the costs and allowable
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