Date: 20060213
Docket: A-431-05
Citation: 2006 FCA 64
CORAM: RICHARD
C.J.
EVANS J.A.
PELLETIER
J.A.
BETWEEN:
AVENTIS PHARMA INC.
Appellant
(Applicant)
and
APOTEX INC.
THE MINISTER OF HEALTH
and SCHERING CORPORATION
Respondents
(Respondents)
REASONS FOR JUDGMENT
RICHARD C.J.
BACKGROUND
[1]
Aventis
Pharma Inc. (Aventis) appeals from the Order of Justice Mactavish of the
Federal Court, dated September 20, 2005 (2005 FC 1283) dismissing an
application for prohibition pursuant to the Patented Medicines (Notice of
Compliance) Regulations (Regulations) (the Prohibition Proceeding). In those
proceedings, Aventis sought an Order prohibiting the Respondent, the Minister
of Health (Minister), from issuing a Notice of Compliance (NOC) to the
Respondent, Apotex Inc. (Apotex), in respect of its drug product ramipril until
after the expiration of Canadian Letters Patent No. 1,341,206 (the ’206
Patent). Aventis is the licensee of the ’206 Patent from the owner of the ’206
Patent and the other party in this appeal, Schering Corporation. Schering
supports Aventis in this appeal.
[2]
In
dismissing the application for prohibition Justice Mactavish found that the
Notice of Allegation by Apotex in its letter dated June 20, 2003 was a valid
Notice of Allegation (NOA) as contemplated by the Regulations, and found that
the allegation of invalidity of the ’206 Patent grounded on a lack of sound
prediction was justified. In particular, Justice Mactavish found, as facts,
that:
(a)
Apotex’s
Notice of Allegation detailed statement contained sufficient information to
enable Aventis to knowledgeably initiate the prohibition proceeding and prepare
evidence; and
(b)
Schering
did not have a sound basis for predicting that the compounds covered by the
claims in issue in the ’206 Patent would be useful as angiotensin converting
enzyme (ACE) inhibitors and in the treatment of hypertension in humans.
[3]
In
addition, Apotex sought to challenge the validity of the ’206 Patent on the
basis that its further allegations of insufficiency of disclosure and double
patenting were justified. The allegation of double patenting was withdrawn by
Apotex at the hearing of the appeal. If the above findings of Justice
Mactavish are upheld there is no need to deal with the other issue.
[4]
Justice
Mactavish concluded, after weighing the evidence of the expert witnesses and
considering the extensive evidentiary record, that Apotex’s allegation as to
the absence of sound prediction was justified.
THE ’206 PATENT
[5]
The
application that resulted in the ’206 Patent was filed in Canada on October 20, 1981 and
issued on March 20, 2001. The patent claims priority from U.S. applications filed October 23, 1980 and
April 28, 1981.
[6]
The ’206 Patent
relates to compounds which are useful as ACE inhibitors and anti-hypertensive
agents. An ACE inhibitor inhibits angiotensin-converting enzyme (ACE) which
converts angiotensin I to angiotensin II. Angiotensin II increases blood
pressure such that inhibition of its production reduces blood pressure. A
compound that inhibits ACE is therefore useful as an anti-hypertensive agent.
NATURE OF THE PROCEEDINGS
[7]
Proceedings under the NOC Regulations are not
actions for the determination of patent invalidity or infringement. They are
judicial review proceedings to determine whether the Minister of Health is free
to issue the requested NOC under the Food and Drugs Act, R.S. 1985, c. F-27.
These proceedings do not deprive a patentee or licensee from asserting any
rights they may have with respect to the patent by means of an action and a
full trial of the issue.
BURDEN OF PROOF IN NOC PROCEEDINGS
[8]
The jurisprudence of the Federal Court of Appeal
clearly establishes that the onus of proof in NOC proceedings rests on the
applicant and is considered on a balance of probabilities, bearing in mind that
on allegations of invalidity, there is a statutory presumption of validity in
favour of the patentee.
[9]
Aventis
and Schering argue that an attack on the validity of a patent is a collateral
challenge to the Commissioner’s decision to issue the patent, and that the
standard of review of that decision is unreasonableness simpliciter,
where, as here, the question in dispute is one of mixed fact and law: (see Apotex
Inc. v. Wellcome Foundation Ltd., [2002] 4 S.C.R. 153 at paras. 42-44; Schmeiser
v. Monsanto Canada Inc., [2004] 1 S.C.R. 902 at para. 24.) This principle,
they say, is equally applicable to NOC proceedings when the NOA alleges, as
here, that the first person’s patent is invalid.
[10]
I do not
agree. As I have already stated, NOC proceedings are summary and do not
determine the validity of a patent, but only whether the NOA is justified, and
an order of prohibition should issue. The fact that a NOA may call the
validity of a patent into question for the purpose of a NOC proceeding is not
sufficient to attract the more onerous standard of proof applicable when the validity
of the patent is determined in an infringement action. (See for example, Janssen
Ortho Inc. v. Novopharm Ltd. (2004), 35 C.P.R. (4th) 353, 2004
FC 1631 at para. 21 (FC)).
SUFFICIENCY
OF THE NOA
[11]
Aventis/Schering contend that Justice Mactavish
erred by finding that Apotex’s NOA, with respect to sound prediction, was
legally sufficient.
[12]
I am satisfied that Justice Mactavish properly
determined the claim of sufficiency of Apotex’s NOA, based on the jurisprudence
of this Court and on the evidentiary record.
[13]
A NOA
accompanied by a detailed statement is adjudged sufficient if it allows the
patentee to decide, in light of the scope of its patent and the alleged basis
of invalidity, whether to institute an application to prohibit the issue of an
NOC. Whether the detailed statement in the NOA is sufficient is a question of
mixed fact and law. As such, this Court may only interfere with the Judge’s
conclusion that the NOA was sufficiently detailed to comply with paragraph 5(3)(a)
if it is satisfied that the decision is vitiated by some palpable and
overriding error. (Pfizer Canada Inc. v. Apotex Inc, 38 C.P.R. (4th)
400 at para 25 (F.C.A.); AstraZeneca AB v. Apotex Inc., [2005] F.C.J. No. 842 at para. 9 (F.C.A.) (AstraZeneca AB)).
[14]
A detailed statement will meet the legal
requirement for adequacy if it provides the patent holder with sufficient
understanding of the case it has to meet. Justice Mactavish found that
Apotex’s NOA/detailed statement provided sufficient information upon which
Aventis could evaluate the allegation and commence this proceeding.
[15]
She specifically considered the sufficiency of
Apotex’s NOA as it relates to the issue of sound prediction. She applied the
test set out in Novopharm Ltd. v. Pfizer Canada Inc., [2005] F.C.J. No.
1318, and found as fact that Apotex’s NOA put Aventis on notice of the sound
prediction argument.
[16]
Aventis/Schering specifically focus on the words
“requisite level of activity” in the NOA. Justice Mactavish determined that
“level of activity” relates to the potency of the compounds in question and
therefore whether the compounds lacked any activity at all. In addition,
Justice Mactavish considered the lack of an affidavit filed on behalf of
Aventis with respect to the alleged lack of specificity in the Apotex NOA to be
telling, as per AstraZeneca AB.
[17]
The decision of Justice Mactavish was supported
by the evidentiary record. As Justice Mactavish made no palpable and
overriding error, her determination with respect to the sufficiency of Apotex’s
NOA should not be interfered with.
STANDARD OF
REVIEW
[18]
In Elders
Grain Co. v. M/V Ralph Misener (The), [2005] F.C.J. No. 612, I had
the opportunity to review the standard of review of an appellate court from a
decision made by a court of first instance and which are applicable in the
circumstance of this appeal:
[6] It is
settled law that an appeal is not a trial de novo. The role of an
appellate court is not to write a better judgment than the trial judge but to
review his or her reasons in light of the arguments of the parties and the
relevant evidence. Therefore, this Court must give consideration to the
standard of review applicable to the various issues which arise on this appeal: Housen v. Nikolaisen, [2002] 2 S.C.R. 235.
[7] In Housen, the Supreme Court of Canada set out the standards of
review to be used by an appellate court in regards to the following types of
questions: (1) questions of law; (2) questions of fact; (3) inferences of fact,
and (4) questions of mixed fact and law.
[8] The standard of review for
pure questions of law is correctness and an appellate court is therefore free to replace the opinion of
the trial judge with its own.
[9] The standard of review for findings of fact is that such
findings are not to be reversed unless it can be established that the trial
judge made a "palpable and overriding error".
[10] Justice Bastarache in Van
de Perre v. Edwards, [2001] 2 S.C.R. 1014 at paragraph 15 defined a palpable and overriding error as one "that
gives rise to the reasoned belief that the trial judge must have forgotten,
ignored or misconceived the evidence in a way that affected his
conclusion." In short, a palpable and overriding error is an obvious
deficiency in the trial judge's findings of fact that affects the outcome of
the trial.
[11] Accordingly, this Court
must review the trial judge's decision on a standard of correctness for pure
questions of law. Regarding findings of fact and inferences of fact, this Court
must exercise the utmost deference, disturbing the trial judge's decision only
in the presence of palpable and overriding error.
[12] A determination that involves the application of a
legal test to a set of facts is a question of mixed fact and law. That
determination is subject to a standard of palpable and overriding error unless
it is clear that the trial judge made some extricable error in principle with
respect to the characterization of the legal test or its application, in which
case the error may amount to an error of law: Housen,
supra at paragraph 37; R. v. Buhay, [2003] 1 S.C.R. 631 at paragraph
45.
[19]
In the later case of H.L. v. Canada (Attorney General), [2005] 1 S.C.R. 401, Chief Justice McLachlin, re-visited the Housen
decision and commented:
[9 ] […] this Court in Housen
was unanimous on the issue that concerns us here: All nine Justices agreed that
the standard of appellate review on questions of fact in Saskatchewan is review for error and not review
by rehearing. They agreed as well that findings of fact by the trial
judge will be disturbed on appeal only for errors that can properly be
characterized as palpable and overriding.
[10] It was not contended in Housen, either in the
Saskatchewan Court of Appeal or in this Court, that the standard of appellate
review in Saskatchewan differed significantly from the prevailing standard
elsewhere in Canada.
[20]
She added:
“Doubt as to the soundness of the trial judge’s findings of
fact, however, is not a recognized ground of appellate intervention.”
[21]
She noted:
[53] The standard of review for error has been variously
described. In recent years, the phrase “palpable and overriding error”
resonates throughout the cases. Its application to all findings of
fact — findings as to “what happened” — has been universally recognized; its
applicability has not been made to depend on whether the trial judge’s disputed
determination relates to credibility, to “primary” facts, to “inferred” facts
or to global assessments of the evidence.
[22]
In the absence of any statutory direction, it is not the
role of appellate courts to rehear or retry cases.
[23]
It is this standard of appellate review which
must be applied in this appeal.
SOUND
PREDICTION
[24]
To be patentable, an invention must be useful. However,
even if the utility of one or more elements in the claim was not demonstrated
or known at the time of claiming, such a claim may nevertheless be upheld if it
can be shown that the inventor could make a “sound prediction” that the
elements in question, if made, would prove to be useful for their stated
purpose.
[25]
While utility may be established through testing
an invention, it is well established that complete testing is not essential if
the utility of a patent claim can be soundly predicted based upon available
information and expertise (Apotex Inc. v. Wellcome Foundation Ltd.,
[2002] 4 S.C.R. 153 (Apotex)).
[26]
If it is shown that the inventor could not make
a sound prediction that something he claimed to have invented, but had not
actually made or shown to be useful, would be useful, the claim will be invalid.
[27]
The Supreme Court, in Apotex, supra, set
out a three part test to determine if a prediction is sound:
(a) First, there must be a factual basis for the
prediction. The factual basis may be established by supplying the tested
compounds (See Monsanto Canada Inc. v. Schmeiser, [2004] 1 S.C.R. 902); although
other factual findings may be adequate;
(b) Second, 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; and
(c) Third, there must be proper disclosure.
[28]
As noted by Justice Binnie at paragraph 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.”
[29]
The soundness of a prediction is a question of
fact and is to be assessed based upon information and expertise available at
the relevant time.
[30]
I am in agreement with Justice Mactavish that
the relevant date is the Canadian filing date, in this case, October 20, 1981.
It is the time which is most reasonable in achieving consistency in the
application of the three components of the Wellcome test.
[31]
Justice Mactavish applied the three components
of the legal test and found, on the basis of the record before her, that
Aventis/Schering could not rely on the doctrine of sound prediction to satisfy
the statutory test of “utility”.
[32]
She found that the Appellants could not satisfy
any of the three elements required by the Wellcome test concerning Claim
12 of the ’206 Patent and, given that the compounds included in Claim 12 were
also included in Claims 1,2,3 and 6 of the patent, the same conclusion applied
to those claims.
[33]
With respect to the first two parts of the Wellcome
test, Justice Mactavish found that Schering’s prediction was not supported by a
factual basis nor an articulable line of reasoning.
[34]
With respect to the last part of the Wellcome
test, the requirement of proper disclosure, Justice Mactavish found that, based
on the state of the knowledge in October 1981, the disclosure with respect to
Claim 12 of the ’206 Patent was insufficient.
[35]
Even if this Court was to find that Justice
Mactavish erred in determining that Aventis/Schering did meet the third factor
of the Wellcome test on the disclosure requirement, the allegation that
the patent is invalid would still be justified because all three parts of the
test must be satisfied.
EVIDENCE OF
DR. MARSHALL
[36]
Justice Mactavish found that the inventors of
the ‘206 Patent did not have a sound basis for predicting that the eight
compounds covered by claim 12 would be useful as ACE inhibitors and as
anti-hypertensive agents, and on this basis dismissed the application.
[37]
Aventis and Schering argue that Justice
Mactavish erred in preferring the evidence of Dr. Marshall over the evidence
of their witnesses, Drs. Triggle and Silverman.
[38]
She considered Aventis and Schering’s submission
that Dr. Marshall set the bar
too high in relation to the test for sound prediction – that he was looking for
a certainty. However, she was satisfied from reviewing Dr. Marshall’s
evidence, in its entirety, that he properly understood the test in issue in
this regard.
[39]
She also accepted that in some places in his
evidence, Dr. Marshall was examining the issue of utility from the perspective
of whether the compounds created by the Schering scientists had potential use
as ACE inhibitors and anti-hypertensive agents in the commercial sense of the
word.
[40]
She did have some concerns with respect to Dr.
Marshall’s evidence regarding the need to test for things such as toxicity in
order to be able to make a sound prediction but did not view that as otherwise
undermining the weight to be attributed to his evidence.
[41]
She observed that the fact that Dr. Marshall may
have looked to commercial utility at some points in his evidence in no way
takes away from the validity of Dr. Marshall’s conclusion that there was simply
not enough known about the chirality or stereochemistry of the compounds tested
by Schering in the period leading up to the Canadian filing in October of 1981
so as to be able to predict whether the compounds coming within Claim 12 of the
’206 Patent would exhibit any activity. This conclusion was one entirely
within Dr. Marshall’s field of expertise, and for the three reasons she
articulated, she preferred Dr. Marshall’s evidence in this regard to that of
Drs. Triggle and Silverman.
[42]
First, she notes that Dr. Marshall was the only
witness to have devoted his entire academic career to the study of ACE
inhibitors, specifically, having been published and having received international
recognition for his work in this area.
[43]
Second, Justice Mactavish explains that the
affidavit of Dr. Marshall presented a much more detailed and complete
explanation and analysis of the issue at bar than was offered in the affidavits
of the two other witnesses.
[44]
Finally, Justice Mactavish indicates that she
preferred Dr. Marshall’s evidence over Dr. Triggle’s evidence as the
affidavit presented by Dr. Triggle in this case was almost identical to the one
sworn by him on behalf of Aventis in another proceeding involving the same
patent (Aventis Pharma Inc. v. Pharmascience Inc., [2005] F.C.J. No.
511,) (Aventis), except for one important material distinction.
[45]
Three paragraphs included in the affidavit filed
in Aventis had been deleted before his affidavit was filed in this case
and, according to Justice Mactavish, the three paragraphs were significant in
that they partially corroborated the evidence presented by Dr. Marshall
regarding the possibility to predict qualitatively or quantitatively biological
activity between different isomers.
[46]
Justice Mactavish considered all the evidence in
the record and made a factual determination with respect to what she considered
was the best evidence on which to found her decision based on the Wellcome
Test of sound prediction.
RESULT
[47]
In applying the proper standard of appellate
review to the decision under appeal, I have concluded that Justice Mactavish had an ample
evidentiary basis to support her decision that the inventors at Schering could
not, at the Canadian filing date, soundly predict the usefulness of the
compounds in claim 12 of the ’206 Patent for their stated purpose, nor could
they predict the usefulness of the members of the class of compounds claimed in
claims 1, 2, 3 and 6.
[48]
There was substantial evidentiary basis for her
findings. In making these findings, she made no overriding and palpable error.
[49]
Accordingly
the appeal will be dismissed with one set of costs to the Respondent Apotex.
“J.
Richard”
“I
agree
John
M. Evans J.A.”.
“I
agree
J.D.Denis Pelletier J.A.”.
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