Date:
20090325
Docket: A-84-08
Citation: 2009 FCA 97
CORAM: DESJARDINS
J.A.
NOËL
J.A.
TRUDEL
J.A.
BETWEEN:
ELI LILLY CANADA INC.
Appellant
(Applicant)
and
APOTEX INC.,
THE MINISTER OF HEALTH
Respondents
(Respondents)
and
ELI LILLY AND COMPANY LIMITED
Respondent / Patentee
(Respondent / Patentee)
REASONS FOR JUDGMENT
NOËL J.A.
[1]
This is an appeal
from the decision of Justice Hughes (the Federal Court Judge) (2008 FC 142) dismissing
the application brought by Eli Lilly Canada Inc. (the appellant or Eli Lilly)
to prohibit the Minister of Health (the Minister) from issuing a Notice of
Compliance (NOC) to Apotex Inc. (the respondent or Apotex) pursuant to
subsection 6(1) of the Patented Medicines (Notice of Compliance) Regulations,
S.O.R./93-133 in respect of the respondent’s drug containing the active
ingredient known as raloxifene for use in the treatment and prevention of
osteoporosis, particularly in post-menopausal women, until after the expiration
of the appellant’s Canadian Patent No. 2,101,356 (the ‘356 Patent).
[2]
We were reminded
during the hearing of the appeal that time is of the essence insofar as the
disposition of this appeal is concerned given that the Minister could potentially grant the NOC to Apotex in respect
of its drug product raloxifene as soon as a related decision, presently
pending before the Federal Court, is released. At the conclusion of the
hearing, the Court undertook to deliver its decision as quickly as possible.
Hence, the short reasons which follow.
[3]
The Federal Court
Judge dismissed Eli Lilly’s application on the basis that Apotex’s allegation
in respect of lack of sound prediction was justified because the ‘356 Patent
lacks adequate disclosure. He further found that Apotex’s allegation that the
claims are broader than the invention disclosed was justified in respect of
Claims 1, 3, and 15, but not in respect of Claim 17 (Reasons, para. 182).
[4]
In support of its
appeal, the appellant contends that the Federal Court Judge committed legal and
factual errors in holding that the ‘356 Patent lacks adequate disclosure. It
adds that the Federal Court Judge breached the duty of procedural fairness in
disposing of the application on this ground as it was not alleged by the
respondent. At the hearing of the appeal, the appellant further argued, for the
first time, that the ‘356 Patent was not based on a prediction since the
utility of the invention had been conclusively established by the Canadian
filing date. According to the appellant, the Federal Court Judge erred in
conducting his analysis on the basis that the patented invention was based on a
prediction.
[5]
Dealing first with
this last argument, the finding by the Federal Court Judge that the invention
claimed in the ‘356 Patent was based on a prediction is one of fact.
[6]
In this respect, he first
determined that the claimed monopoly in the ‘356 Patent, as construed,
is that a group of benzothiophenes, specifically
raloxifene and raloxifene hydrochloride, are useful in treating or preventing
osteoporosis of any kind (Claim 1) or bone loss of any kind (Claim 3),
particularly in a post-menopausal female (Claim 15), or particularly without
eliciting significant estrogenic responses in primary sex tissues (Claim 17).
(Reasons, para. 76)
[7]
Having construed the
claims, the Federal Court Judge held that the question to be asked, with
respect to what the patent discloses, is whether the disclosure in the patent
was adequate to tell a person skilled in the art how to practice the invention
or whether it discloses enough information so that a person skilled in the art
could soundly predict that it would work (Reasons, para. 96).
[8]
The Federal Court
Judge then reviewed the disclosure made in the ‘356 Patent and found that what
the patentee discloses to the public for the purpose of securing the claimed
monopoly is:
i. Raloxifene
is a known compound having certain known medical uses in estrogen treatment,
and it is known how to make it (Reasons, para. 81).
ii. Studies
on seventy-five day old female Sprague Dawley rats which are fed raloxifene
show that bone loss is prevented in a dose dependent manner with minimal
increases in uterine weight (Reasons, para. 81).
iii. Studies
on post-menopausal female humans are contemplated which are expected to show an
inhibition of the markers associated with bone resorption in estrogen deficient
individuals as an indication that raloxifene is effective in inhibiting bone
loss (Reasons, para. 81).
[9]
In assessing the
evidence, the Federal Court Judge noted that the parallels between the prior
art, specifically Dr. Jordan’s paper entitled “Effects of
Anti-Estrogens on Bone in Castrated and Intact Female Rats”, and the
disclosure of the ‘356 Patent are readily apparent. He held that both studies
show that raloxifene used in Sprague Dawley ovariectomized rats demonstrates
positive effects in respect of bone loss and uterine weight. He noted that the Jordan paper concluded that a long term study on post-menopausal
women was warranted. The disclosure in the ’356 Patent suggests that such a
study on women was underway and that certain results were expected with a long
term study to follow (the results of the study are not part of the disclosure
of the ’356 Patent). The Federal Court Judge therefore, held that the Jordan paper and the ’356 Patent disclosure were at the same
point, the rat studies were positive, and human studies were warranted. He
noted that the ’356 Patent simply claimed that raloxifene is an appropriate
medicine for humans without any further supporting disclosure (Reasons, paras
105 and 106).
[10]
Based on the
foregoing, it is clear that the invention was based on a prediction. Although
the rat studies were positive, only a prediction could allow for the
proposition that raloxifene had the same effect on women, let alone estrogen
deficient post-menopausal women who suffered from bone loss. In other words,
the claimed utility required for patentability was not demonstrated but predicted
based on the information provided in the ‘356 Patent.
[11]
The
appellant further argues that the Federal Court Judge erred in holding that the
‘356 Patent lacks adequate disclosure. In this respect, the appellant
essentially alleges that there is no requirement that the underlying data
supporting a sound prediction be disclosed in the patent. It contends that the
Federal Court Judge misconstrued recent judicial pronouncements on the issue of
sound prediction.
[12]
In
making this argument, the appellant at the hearing accepted for purposes of the
appeal the conclusion reached by the Federal Court Judge at paragraphs 155 and
156 of his reasons that the Hong Kong study was required in order to turn the
prediction on which the ‘356 Patent was predicated into a sound one. According to the Federal Court Judge, the
Hong Kong abstract of the study conducted by the appellant on 251
post-menopausal women which concluded that “raloxifene show[ed] promise as a
skeletal anti-resorptive” would have been a sufficient factual basis upon which
a sound prediction of utility for raloxifene could have been made as of the
filing date. However, this study was not disclosed in the ‘356 Patent with the
result that the underlying factual basis for the prediction and the sound line
of reasoning that grounded the inventors’ prediction were not disclosed.
[13]
The
importance of the disclosure obligation in applying for a patent has been
emphasized by the Supreme Court of Canada on a number of occasions in recent
years (Pioneer Hi Bred Ltd. v. Canada (Commissioner of Patents), [1989]
1 S.C.R. 1623 at paragraph 23; Cadbury Schweppes Inc. v. FBI Foods Ltd.,
[1999] 1 S.C.R. 142 at paragraph 46; Free World Trust v. Électro Santé Inc.
2000 SCC 66, [2000] 2 S.C.R. 1024 at paragraph 13; Apotex
Inc. v. Wellcome Foundation Ltd., 2002 SCC 77, [2002] 4 S.C.R. 153 at paragraph 37 (commonly
referred to as AZT and hereinafter referred to as such)).
[14]
The decision of the
Supreme Court in AZT is particularly significant to the disposition of
this appeal. According to AZT, the requirements of sound prediction are
three-fold: there must be a factual basis for the prediction; the inventor must
have at the date of the patent application an articulable and sound line of
reasoning from which the derived result can be inferred from the factual basis;
and third, there must be proper disclosure (AZT, supra, at
paragraph 70). As was said in that case (para. 70): “the sound prediction is to
some extent the quid pro quo the applicant offers in exchange for the
patent monopoly”. In sound prediction cases there is a heightened obligation to
disclose the underlying facts and the line of reasoning for inventions that
comprise the prediction.
[15]
In my respectful view,
the Federal Court Judge proceeded on proper principle when he held, relying on AZT,
that when a patent is based on a sound prediction, the disclosure must include
the prediction. As the prediction was made sound by the Hong Kong study, this study had to be disclosed.
[16]
Absent a legal error,
a decision as to whether or not a prediction is sound gives rise to a question
of fact which cannot be overturned in the absence of a palpable and overriding
error.
[17]
In this respect, the
appellant properly accepted that the Hong Kong study was required in order to
make the prediction underlying the ‘356 Patent sound. After taking all of the
relevant evidence into consideration, it was open to the Federal Court Judge to
find that as of the priority date the prior art Jordan article and the
disclosure of the ‘356 Patent were at the same point given that both studies
demonstrated positive effects in respect of bone loss in rats and both
concluded that human studies were warranted. In particular, the ‘356 Patent did
not disclose any more than the Jordan article did, and as such, the person
skilled in the art was given, by way of disclosure, no more than such a person
already had available in the prior art.
[18]
The appellant argues
that in requiring the complete disclosure of the factual basis underlying the
sound prediction (i.e. requiring data to substantiate the invention), the
Federal Court Judge has changed the disclosure requirements as set out in
subsection 27(3) of the Patent Act, R.S.C. 1985,
c. P-4. I respectfully
disagree. In AZT, the Supreme Court, with obvious reference to subsection
34(1) of the Patent Act (the predecessor to subsection 27(3)), held that
where the claimed invention had not yet actually been reduced to practice, the
patent must provide a disclosure such that a person skilled in the art, given
that disclosure, could have as the inventors did, soundly predicted that the
invention would work once reduced to practice. Significantly, in AZT,
the Court went on to state that the disclosure requirements had been met given
that both the underlying facts (the test data) and the sound line of reasoning
(the chain terminator effect) were in fact disclosed (AZT, para. 70).
[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,
1970, 28 U.F.T. 7647 (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.
[20]
Finally, the
appellant contends that the respondent did not allege that there had been a
failure to properly disclose the facts underlying the sound prediction within
the ‘356 Patent specification and that the Federal Court Judge breached the
duty of procedural fairness in disposing of the application on that basis.
However, a review of the Notice of Allegation (NOA) shows that the respondent
did in fact allege that the ‘356 Patent was invalid on the basis of lack of
sound prediction. More specifically, the respondent alleged that the inventors’
rat studies did not provide a factual basis for a sound prediction i.e. it
could not be soundly predicted that the results obtained from in vivo
testing in rats would demonstrate utility in humans. Further, the respondent
alleged that by the Canadian filing date, the inventors had not demonstrated
that raloxifene hydrochloride could be used as a treatment for the prevention
of osteoporosis and/or bone loss in humans. In its NOA, the respondent notes
that while the disclosure of the ‘356 Patent indicates that a clinical trial in
healthy post-menopausal women was underway to compare the effects of conjugated
estrogen and raloxifene, the results of the study were not reported in the
patent. When regard is had to the NOA, the lack of sound prediction,
specifically the lack of disclosure of any human data in the ‘356 Patent as a
ground of invalidity, was clearly in issue.
[21]
I would dismiss the
appeal with costs to Apotex.
“Marc Noël”
“I concur
Alice
Desjardins J.A.”
“I
agree
Johanne
Trudel J.A.”
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