1. 1 Canada: The Statutory Basis for and Judicial Application of the Utility Requirement Steven B. Garland sbgarland@smart-biggar.ca Comparative Intellectual Property Law Symposium Utility Requirements: Converging and Diverging Approaches Ottawa, Canada April 4, 2012

2. 2 Utility – Statutory Basis Patent Act, Section 2: “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

3. 3 Utility A patent fails to meet the utility requirement and is therefore invalid if it encompasses inoperable embodiments. Monsanto Co. v. Canada (Commissioner of Patents), [1979] 2. S.C.R. 1108; Apotex Inc. v. Wellcome Foundation Ltd., 2002 SCC 77. An invention lacks utility if it either will not operate at all or, more broadly, if it will not do what the specification promises that it will do. Consolboard Inc. v. MacMillan Bloedel (Saskatchewan) Ltd., [1981[ 1 S.C.R. 504.

4. 4 Utility An applicant/patentee may be required to show that the promised utility for the full scope of subject matter claimed was demonstrated or soundly predicted at the application filing date. Issues: What is the “promise” of the patent? Demonstrated utility vs. sound prediction of utility

5. 5 Utility - Promise A “scintilla” of utility will suffice to satisfy Section 2 unless a specific utility is promised. Aventis Pharma Inc. v. Apotex Inc., 2005 FC 1283, aff’d 2006 FCA 64. The determination of promise is an aspect of patent construction and thus a question of law. Bristol-Myers Squibb Co. v. Apotex Inc., 2007 FCA 379. Not all advantages described in a patent specification will rise to the level of a promise. Eli Lilly Canada Inc. v. Novopharm Limited, 2010 FCA 197.

6. 6 Demonstrated Utility There is no obligation upon the patentee to establish the utility of the invention in the specification. Consolboard Inc. v. MacMillan Bloedel (Saskatchewan) Ltd., [1981] 1 S.C.R. 504. If the patentee asserts that utility, as construed, was demonstrated, then the patentee may rely upon data that was obtained before filing but not disclosed in the patent to prove utility. Pfizer Canada Inc. v. Novopharm Ltd., 2010 FCA 242, leave to appeal to the Supreme Court of Canada granted. Appeal to be heard on April 18, 2012

7. 7 Sound Prediction If utility, as construed, was not demonstrated at the application date, then the sound prediction test might apply. For a “sound prediction” there must be: 1.a factual basis for the prediction; 2.an articulable and sound line of reasoning from which the desired result can be inferred from the factual basis; and 3.proper disclosure Apotex Inc. v. Wellcome Foundation Ltd., 2002 SCC 77, at ¶76

8. 8 Sound Prediction: Disclosure If the patentee is relying upon a sound prediction of utility, then there is a heightened obligation to disclose the underlying facts and the line of reasoning in the patent. Eli Lilly Canada Inc. v. Apotex Inc., 2009 FCA 97, leave to appeal to Supreme Court of Canada refused; Eli Lilly and Company v. Teva Canada Limited, 2011 FCA 220.

9. 9 Utility Utility objections may arise with respect to any subject matter: Eurocopter v. Bell Helicopter, 2012 FC 113 Patent claimed landing gear for helicopters All but one claim held invalid for lack of demonstrated utility, sound prediction of utility and overbreadth

10. 10 Jurisprudence

11. 11 Monsanto Co. v. Commissioner of Patents (S.C.C.) [1979] 2 S.C.R. 1108. Appeal relating to Commissioner’s refusal of application for chemical compounds used to inhibit premature vulcanization of rubber where claim covered 126 compounds but specification only disclosed preparation of three of the compounds. Doctrine of Sound Prediction adopted by SCC applying U.K. jurisprudence including Olin Mathieson Chemical Corp. et al. v. Biorex Labotories Ltd. et al., [1970] R.P.C. 157 (Ch. Div.). The Court held that the architecture of chemical compounds was no longer a mystery but, within limit, soundly predictable. The Court also stated that sound prediction “cannot mean a certainty since it does not exclude all risk that some of the area covered may prove devoid of utility”.

12. 12 Apotex Inc. v. Wellcome Foundation Ltd. (S.C.C.) 2002 SCC 77 (“AZT”). The patent claimed new formulations and products comprising AZT for use in the treatment and prophylaxis of AIDS and HIV in humans. The Court sets out the tripartite test for sound prediction (¶70) and concludes the new use of AZT was soundly predicted. The Court did not define what it meant by “proper disclosure”. Disclosure was not at issue in the case. Both the factual basis and line of reasoning were found to have been disclosed in the patent.

13. 13 Eli Lilly Canada Inc. v. Apotex Inc. (F.C.A.) 2009 FCA 97 Appeal affirming the decision of Justice Hughes (2008 FC 142) dismissing Eli Lilly’s application to prohibit the Minister from issuing an NOC to Apotex. The patent claimed raloxifene (EVISTA) for use in the prevention and treatment of osteoporosis, particularly in postmenopausal women.

14. 14 Eli Lilly Canada Inc. v. Apotex Inc. (F.C.A.) FCA interpreted the SCC decision in AZT requiring “proper disclosure” element of doctrine of sound prediction as a “heightened obligation” to disclose in the patent the underlying facts and the line of reasoning (¶14). Hong Kong Study conducted on 251 post-menopausal women was considered as the factual basis for sound prediction, but not disclosed in patent and therefore patent invalid. Leave to appeal to S.C.C. refused.

15. 15 Eli Lilly and Company v. Teva Canada Limited (F.C.A.) 2011 FCA 220 Appeal affirming decision of Justice Barnes (2010 FC 915), that patent in issue invalid for lack of utility. Patent claimed the use of atomoxetine (STRATTERA) for treatment of attention deficit hyperactivity disorder (ADHD) – a chronic condition.

16. 16 Eli Lilly and Company v. Teva Canada Limited (F.C.A.) Barnes J. construed the “promise” as being the fact that the drug would be clinically effective in treating ADHD, and that this implied that the drug will work in the long term given the chronic nature of the condition. Lilly had conducted one clinical trial of 21 people over three weeks that provided “statistically significant” results that the drug may be useful in treating ADHD. Barnes J. concluded that the trial was too small and of too short a duration to demonstrate or prove utility as of the filing date. He also concluded that Lilly could not rely upon the doctrine of sound prediction as the study was not disclosed in the patent and therefore there was no disclosed factual basis for prediction. Leave to appeal to SCC dismissed December 8, 2011.

17. 17 Apotex Inc. v. Pfizer Canada Inc. (F.C.A.) 2011 FCA 236 Appeal from the decision of Justice Heneghan (2010 FC 447) granting Pfizer an order prohibiting the Minister of Health from issuing a Notice of Compliance to Apotex. Patent claimed latanoprost (XALATAN) and its use in treating glaucoma or ocular hypertension.

18. 18 Apotex Inc. v. Pfizer Canada Inc. (F.C.A.) Justice Heneghan applied the same construction that had been given to the patent in a previous NOC matter, and which had been affirmed by the FCA, to the effect that the promise of the patent was to the use of the compound to treat glaucoma or ocular hypertension per se. Nevertheless, the FCA held that Justice Heneghan erred in her construction of the claims and the promise of the patent. FCA: “Like claim construction, the promise of the patent is also a question of law” (¶17)

19. 19 Apotex Inc. v. Pfizer Canada Inc. (F.C.A.) The Federal Court of Appeal agreed with Apotex that when the patent was properly construed, the promise of the patent was the use of the drug to treat glaucoma and avoid side effects on a chronic basis. Accordingly, the FCA held that “utility would be demonstrated if the patent disclosed studies showing that latanoprost, when administered on a chronic basis, reduced intraocular pressure without causing substantial side effects”. However, at time of filing, Pfizer had only performed “single dose” studies on animals and healthy humans.

20. 20 Apotex Inc. v. Pfizer Canada Inc. (F.C.A.) Therefore, the FCA was not persuaded that at the time of filing, Pfizer had a factual basis to conclude that the drug would be effective for chronic use without side effects. Also, no disclosure in the patent of the reasoning. Therefore, patent invalid for lack of sound prediction. Note: Leave to appeal to the Supreme Court of Canada refused.

21. 21 Eli Lilly v. Novopharm (F.C.) Decision of O’Reilly, J., November 10, 2011(2011 FC 1288) Follow-up to the decision that was overturned by the Federal Court of Appeal (2010 FCA 197) and sent back to the Federal Court for reconsideration. The judge at first instance held the patent invalid as being an improper selection patent for not meeting the 3-part description of the same provided by SCC in Sanofi, [2008] 3 S.C.R. 265. Patent claimed olanzapine (ZYPREXA) and its use in the treatment of schizophrenia.

22. 22 Eli Lilly v. Novopharm (F.C.) Utility of a Selection Patent The promise of the selection patent must be greater than what is promised in the genus patent. “It is simply not enough for a selected compound to achieve what was promised in the genus patent” (¶111) To be valid, a selection patent must contain an explicit promise of a substantial and particular advantage over the compounds of the genus patent, and the alleged invention must meet that promise.

23. 23 Eli Lilly v. Novopharm (F.C.) Utility of a Selection Patent Court concludes that patent invalid for failure to meet the test for sound prediction in view of the promise of the patent, namely that olanzapine would treat schizophrenia in a “markedly superior manner with a better side effects profile than other antipsychotics”. (¶258 - 260) Decision appears to be based, in part, on conclusion that human trials would be needed to determine long term efficacy of the drug.

24. 24 Eli Lilly v. Novopharm (F.C.) Sufficiency (s. 27(3)) ·Justice O’Reilly finds that the patent is not invalid for lack of sufficiency. ·To meet the requirement of s. 27(3) the patent must simply state what the invention is and how it works. ·For a selection patent, the specification must “set out clearly what is better and different about the selected compound as compared to the genus from which it derives. The patent must give enough detail that a person skilled in the art would know what the advantages are.” ·However, for purposes of s. 27(3), the patent is not required to set out the factual basis and line of reasoning supporting the prediction of efficacy.

25. 25 Apotex Inc. v. Sanofi-Aventis (F.C.) Decision of Boivin, J., December 6, 2011 (2011 FC 1486) Patent impeachment/infringement action pertaining to drug clopidogrel bisulfate (Brand name PLAVIX) for use as an anticoagulant. Patent was the subject of the SCC decision in Sanofi, [2008] 3 S.C.R. 265, a NOC decision. Selection patent (‘777 patent) claimed the “dextro- rotatory isomer” of the racemate disclosed in the genus patent (‘875 patent). In NOC case, SCC affirmed issuance of prohibition order.

26. 26 Apotex Inc. v. Sanofi-Aventis (F.C.) Justice Boivin: Promise of the selection patent cannot be same as the genus patent For the selection patent, promise was use of drug in humans where efficacy greater, and toxicity less, than compounds disclosed in genus patent Utility not proven as of filing date Factual basis and sound line of reasoning existed but not disclosed in patent and therefore patent invalid Claims also invalid as “obvious to try” in view of the fact that PLAVIX is enantiomer of compound disclosed in genus patent.

27. 27 AstraZeneca Canada v. Mylan Pharmaceuticals (F.C.) Decision of Rennie, J., August 29, 2011 (2011 FC 1023) Drug at issue is anastrozole (brand name ARIMIDEX) for use in the treatment of breast cancer. Claims to the compound per se (as a novel compound) and to its use in inhibiting enzyme aromatase. NOC case – Prohibition order granted.

28. 28 AstraZeneca Canada v. Mylan Pharmaceuticals (F.C.) Court notes that given the compound is novel, while the utility must be disclosed in the disclosure, it need not be included in a claim to the compound per se. To assess utility, the Court had to first consider what was promised, if anything, by the patent, and this includes a review of the disclosure and the claims. Mylan argued the patent made three promises, including therapeutic utility in treating cancer and fewer side effects. Court concludes only promise was aromatase inhibition.

29. 29 AstraZeneca Canada v. Mylan Pharmaceuticals (F.C.) Using this construction, and considering the two studies mentioned in the patent (in vitro human tissue test and in vivo rat tests), the Court concludes on the evidence that utility had been demonstrated as of the filing date of the patent. Standard of proof is not equivalent to regulatory standard required by Minister of Health, or standard required for publication in a peer reviewed journal. Standard of proof for utility is low. Test results that are “strongly suggestive” of utility are sufficient. Court also notes that pursuant to Pfizer v. Novopharm “the disclosure requirement [where utility is proven] can be satisfied by simply making reference to a test or study that demonstrates utility”.

30. Thank You Steven B. Garland sbgarland@smart-biggar.ca