Abbott Laboratories Ltd. v. Nu-Pharm Inc., docket A-84-98

Date: 19980928

Docket: A-84-98

CORAM:          DESJARDINS J.A.

LINDEN J.A.

LÉTOURNEAU J.A.

BETWEEN:

     NU-PHARM INC.

     Appellant

     (Respondent)

     - and -

     ABBOTT LABORATORIES, LIMITED

     ABBOTT LABORATORIES

     Respondents

     (Applicants)

     - and -

     THE MINISTER OF HEALTH CANADA

     Respondent

     (Respondent)

     REASONS FOR JUDGMENT

DESJARDINS J.A.

[1]      Nu-Pharm appeals a decision of the Trial Division¹ which granted an order prohibiting the Minister of National Health and Welfare from issuing a Notice of Compliance ("NOC") with regard to divalproex sodium. Divalproex sodium is a drug for the treatment of epileptic seizures, which Nu-Pharm submitted it made by a process which did not fall within the scope of the claims of Abbott"s patent 1,136,151 (the "151 patent).²

[2]      Nu-Pharm" s process to make divalproex sodium consists of taking 4.65 kg of valproic acid (a liquid), heating it to 120^oC and slowly adding 5.25 kg of sodium valproate (a solid), while maintaining the temperature at 120^oC. The resulting liquid is then allowed to cool and solidify. The mixture recovered is 100% dilvaproex sodium.

[3]      The trial judge felt Nu-Pharm"s Notice of Allegation ("NOA") was not justified and issued a prohibition order under section 6 of the Patented Medicine (Notice of Compliance) Regulations.³

[4]      Nu-Pharm submits that the trial judge incorrectly placed upon it the burden of proving that its process was not an obvious chemical equivalent ⁴ of the Abbott process described in patent "151. It adds that the trial judge erred in finding that the manner in which two reactants are combined is not an essential element of a patent for a process to produce a medicine. It says that the trial judge construed the "151 patent in a manner which disregarded the clear and unambiguous disclosure and claims in which the use of acetone was specified as the solvent in Abbott"s process for making divalproex sodium. Nu-Pharm says that the trial judge also erred in finding that the use of acetone as a solvent was not essential to Abbott"s patented process. It further claims that the trial judge erred in finding that Nu-Pharm"s process was not chemically distinct given that it deviated from the patented process in the same way as two other patents owed by Abbot, namely patent 1,135,272 (the "272 patent) and patent 1,144,558 (the "558 patent). Finally, Nu-Pharm says the trial judge erred in failing to draw an adverse finding against Abbott, given that Abbott improperly failed to disclose the existence of the "272 and "558 patents to its experts. These experts testified in support of Abbott"s position that acetone was not an essential element of patent "151 and that Nu-Pharm"s process was an obvious chemical equivalent. Nu-Pharm claims the respondent, in light of the disclosures in Abbott"s "272 and "558 patents, should have been estopped from claiming that the use of acetone was not an essential element of the patented process.

[5]      The respondent submits that the language of claim 1(a) of patent "151 is clear and calls for the use of acetone in the process of making divalproex sodium. However, it says, claim 1(a) is not at issue. It is claim 16 of patent "151, which encompasses obvious chemical equivalents to the process described in claim 1(a), which is at issue. The respondent argues that whether a substance is an "obvious chemical equivalent" is a question of fact and that the finding of the trial judge ought not to be disturbed.

[6]      The existence of Abbott"s two patents, "272 and "558, was raised by Nu-Pharm during the cross-examination of the respondent"s three affiants who testified they had not been made aware of them. Counsel for Abbott had not informed its affiants of the existence of these patents. When one reviews the contents of these two patents, it is not hard to understand why the respondent would not reveal them to its experts.

[7]      Patents "151, "272 and "558 describe alternative processes of producing the same medicine, namely divalproex sodium.

[8]      Patent "151 claims the use of valproic acid with sodium valproate, together with acetone as an organic solvent for the reaction to be used at a mild temperature of 50^oC. The product then needs to be recovered, i.e. separated from the acetone. Claim 16 of patent" 151 calls for the same compound "whenever prepared by the process of claim 1 or by an obvious chemical equivalent".⁴ Patent "272 does not use an organic solvent. The detailed description of the patent states that "[i]t has now been found that, against expectations and documented precedents, the above compound can be prepared without use of an organic solvent; i.e., by simply admixing an aqueous solution of sodium hydroxide of at least 10% concentration and valproic acid..." and removing the water from the reaction mixture by evaporation."⁵ The process claimed in patent "272 is described as a "new procedure".⁶ In the same vein, the "558 patent sets out what it claims as "a new method"⁷ for making divalproex sodium through a "new process"⁸ which substitutes acetonitrile for the acetone solvent used in the "151 patent.

[9]      With regard to the appellant"s first point, I am of the view that the trial judge misunderstood the purpose sought by Nu-Pharm in introducing evidence of patents "272 and "558. This is apparent from the following statement he made:⁹

"there is no evidence comparing the use of sodium hydroxide in the "272 patent with the use of valproate in claim 1(a) of the "151 patent and the Nu-Pharm process. There is no conclusive evidence comparing the use of sodium hydroxide in both the "272 patent and claim 1(b) of the "151    patent".

[10]      The evidence relating to patent "272, and indeed to patent "558 as well, was introduced not to challenge the validity of such patents, but merely to establish the state of the knowledge of a person skilled in the art at the time of the filing of patent "151. The inventor behind patent "272 disclosed to the world that divalproex sodium could be obtained by a new procedure which did not require the use of an organic solvent. This claim in patent "272 corroborated both the evidence given by Nu-Pharm"s expert and the fundamental difference claimed by Nu-Pharm between its process and the process claimed in patent "151. Nu-Pharm met its evidential burden when it introduced in evidence the existence of Abbott"s patents "272 and "558. It thereby raised a triable issue¹⁰ with regard to two presumed valid patents which claimed novelty in the preparation of divalproex sodium. One, in particular, patent "272, was for a process which, as in the Nu-Pharm process, contained no organic solvent. The other patent "558 was for a process which involved the presence of another type of organic solvent, i.e. acetonitrile.

[11]      Especially in the light of patent "272, the legal burden was then on Abbott to establish, on the balance of probabilities, in what way Nu-Pharm"s NOA represented a process which was an obvious chemical equivalent to that claimed in patent "151. The issue "at play" was the following: if the absence of an organic solvent such as acetone justified the issuance of a new patent "272, why was not the presence of acetone in patent "151 an essential element of the process claimed in such patent? Abbott was the owner of patents "272 and "558 and it was incumbent on it, as it had the legal burden of proving that Nu-Pharm"s allegation was not justified, to provide the trial judge with better information as to the state of the art associated with them at the time.

[12]      I agree with the appellant that the trial judge misplaced the evidential burden and the legal burden of proof established by this Court in Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare)¹¹ and in Hoffmann-La Roche Ltd. v. Minister of National Health and Welfare et al.¹²

[13]      The trial judge failed to appreciate the different burdens of proof and erred when he stated that "Abbott"s failure to disclose the patents does not relieve Nu-Pharm"s evidential burden on this issue".¹³ Nu-Pharm had, in fact, with respect to the state of knowledge of a person skilled in the art, introduced evidence of the patents "272 and "558 which, if not satisfactorily rebutted by the respondent who owned these patents, could reasonably lead to the inescapable conclusion that acetone, as an organic solvent, was a necessary element of patent "151. The trial judge misconstrued the legal principles applicable to the issue at bar and, in so doing, he misinterpreted the significance of the evidence adduced before him by the appellant with respect to patents "272 and "558.

[14]      The trial judge was further of the view, on the basis of the evidence before him, that "the essential features of the "151 invention are the two reactants and not the organic solvent".¹⁴

[15]      This could not be.

[16]      It was the process that was at issue. The claims in patent "151 were for a "process of preparing a compound..." the process comprising dissolving "the valproic acid with sodium valproate" in acetone at about 50^oC and recovering the product..."¹⁵ The trial judge could not simply consider the presence of the two initial substances without having some consideration for the process which led to the same compound. What he had to determine was whether the allegation made by Nu-Pharm, that its process of making divalproex sodium fell outside the scope of the claims of Abbott"s patent "151, was justified or not.

[17]      By concluding that acetone was not an essential requirement of patent "151, the trial judge misconstrued the patent and, in effect, rewrote it in a way which not only deleted the use of an organic solvent, i.e. acetone, but also rendered obsolete the temperature of 50^oC required for the process to work and the recovery process. To use the words of Pratte J.A. in Eli Lilly & Co. v. O"Hara Manufacturing Ltd.:¹⁶

... as the court, in interpreting the claims, is merely trying to find out what was the intention of the inventor, it cannot conclude that strict compliance with a word or phrase used in a claim is not an essential requirement of the invention unless it be obvious that the inventor knew that a failure to comply with that requirement would have no material effect upon the way the invention worked".

[18]      Finally, the appellant contends, rightly so in my view, that the trial judge erred in finding that the Nu-Pharm process was an obvious chemical equivalent of the process claimed in patent "151. His conclusion once again was induced by his mistaken construction of the requirements of patent "151 with respect to the use of acetone as an organic solvent. Under patent "151, acetone was used as a medium to favour the reaction between the two substances at a temperature of 50^oC. Nu-Pharm"s process, as previously mentioned, abandons altogether the use of an organic solvent. It is not obvious that the inventor behind patent "151 realized that divalproex sodium could be produced without the use of an organic solvent.¹⁷ Therefore, since the Nu-Pharm process abandons an essential requirement of patent "151, Nu-Pharm"s process cannot be an obvious chemical equivalent of patent "151. Nor can it be said that the increase in temperature in Nu-Pharm"s process required by the absence of an organic solvent is so insignificant that the Nu-Pharm process is nonetheless an obvious chemical equivalent. Moreover, Nu-Pharm"s process also differs substantially from the process of patent "151 in that there is no need to separate the solvent from the medicine.

[19]      When patent "151 is properly construed, I am satisfied in light of patents "272 and "558 that the process claimed by the appellant is not an obvious chemical equivalent of the process described in patent "151.

[20]      This appeal should, therefore, be allowed with costs and the order of the trial judge prohibiting the minister from issuing a NOC to Nu-Pharm for its formulation of divalproex sodium tablets until the expiration of the "151 patent should be set aside.

     "Alice Desjardins"

     J.A.

"I agree

A.M. Linden J.A."

"I agree

Gilles Létourneau J.A."

__________________

¹This case is reported as Abbott Laboratories Ltd. v. Nu-Pharm Inc. (1998), 78 C.P.R. (3d) 38.

²Abbott" s patent "151was issued 23 November 1982, and expires 23 November 1999.

³SOR/93-133.

     Prior to January 1, 1994, subsection 41(1) of the Patent Act, R.S.C. 1985, c. P-4, prohibited the issuance of a patent for substances prepared by a chemical process and intended for use as a medicine. A patent could only claim such a substance itself when prepared or produced by a method or process of manufacture "particularly described and claimed" or its "obvious chemical equivalents". Subsection 41(1) of the Patent Act stated:                                     

41(1) In the case of inventions relating to substances prepared or produced by chemical processes and intended for food or medicine, the specification shall not include claims for the substance itself, except when prepared or produced by the methods of processes of manufacture particularly described and claimed or by their obvious chemical equivalents.      [My emphasis]

41.(1) Lorsqu"il s"agit d"inventions portant sur des substances préparées ou produites par des procédés chimiques et destinées à l"alimentation ou à la médication, le mémoire descriptif ne peut comprendre les revendications pour la substance même, sauf lorsque la substance est préparée ou produite par les modes ou procédés de fabrications décrits en détail et revendiqués , ou par leurs équivalents chimiques manifestes.      [Je souligne]

    

⁴A.B., vol. I at 60.

⁵A.B., vol. II at 296(c).

⁶Ibid.

⁷A.B., vol. II at 305.

⁸Ibid. at 296(d).

⁹Abbott Laboratories Ltd., supra.

¹⁰J. Sopinka et al., The Law of Evidence in Canada, (Toronto: Butterworths, 1992) at 65.

¹¹(1994), 55 C.P.R. (3d) 302 at 319 (F.C.A.).

¹²(1996), 70 C.P.R. (3d) 206 at 210-11 (F.C.A.).

¹³Abbott Laboratories Ltd., supra, at 51.

¹⁴Ibid.

¹⁵A.B., vol. I at 59.

¹⁶(1989), 26 C.P.R. (3d) 1 at 7.

¹⁷See Eli Lilly & Co., supra, at 7.