Canada: Pharmacapsules @ Gowlings - June, 2011

In this issue:

• Supreme Court Grants Leave in Pharma Patent Case
• Recent Cases
• Other News Items of Interest to the Pharma Community:
• Upcoming Trials, Judicial Reviews and Appeals of Interest

Supreme Court Grants Leave in Pharma Patent Case

Teva Canada Ltd. v. Pfizer Canada lnc.

On May 5, 2011, the Supreme Court of Canada granted Teva Canada leave to appeal the Court of Appeal's decision in a Patented Medicines (Notice of Compliance) Regulations proceeding involving a patent relating to the use of the compound sildenafil (Viagra).  The summary on the Supreme Court's website indicates that the issues revolve primarily around the question of the law of sufficiency of disclosure and utility. 

In particular, Teva is inviting the Court to revisit its 30 year old decision on sufficiency in the Consolboard case.  Currently, the law on sufficiency simply requires that a patent disclose how to make and use a claimed invention. A disclosure is not considered to be insufficient if experiments are needed to make and use the invention as long as those experiments are non-inventive.  In this case, Teva appears to be arguing that a patent which discloses quintillions of compounds (but does not specifically name sildenafil (in its disclosure)) is insufficient, even though the patent claims specifically refer to sildenafil.

No date for the hearing has been set as of yet. 

Recent Cases:

Pfizer Canada Inc. v. Mylan Pharmaceuticals ULC, 2011 FC 547, (May 12, 2011) – donezepil hydrochloride – PM(NOC) case

In this case, involving the medicine donezepil, Justice Hughes, for the Court, granted an order of prohibition in favour of the applicant and found that the allegation of lack of utility/sound prediction was not justified.

The patent relates to a new compound said to be useful in the treatment of senile dementia.  By the filing date, testing in humans had yet to be conducted.  The Court agreed that the threshold test for utility is low.

Further, the Court commented on claim construction and utility and noted that a compound claim does not have a utility requirement beyond the promise in the specification. The Court found that it was improper to cumulatively combine each statement in the specification relating to utility in construing the promise of the patent. With respect to utility of the use claim, the specific use set out in the claim would have to be shown to be useful or be a sound prediction. Thus, a claim by claim analysis ought to be done.

After reciting much law on (i) the promise of the patent, (ii) utility, (iii) the difference between compound and use claims, and (iv) the perils of expert testimony on the issue of construction, the Court appears to have accepted Pfizer's expert's position:  (1) the promise of the patent is that the compounds are AChE inhibitors in rats and mice - this is sufficient to satisfy the utility requirements for the compound claim; and (2) with respect to the claim for the use of the compound, the Court found that the 3 part test for a sound prediction of utility was met.

In terms of the 3 part test for sound prediction set out in AZT, the Court comments

1) factual basis -  on the issue of whether the factual basis for a prediction has to be in a patent, the Court finds, referencing the AZT case of the Supreme Court, that the factual basis has to be present in the patent. Here, the patent referred to having made and tested donezepil. 

2) articulable and sound line of reasoning - the Court reiterated the test set out by the Court of Appeal in the olanzapine case, namely, that there must be a prima facie reasonable inference and confirmed also that this may be met by a reasonable theory of the day (para 244).

3) proper disclosure - if a patent states that a useful result has been achieved then there is no requirement to demonstrate utility in the specification (para. 225).

Also, of interest is that the Court once again reiterated that notices of allegation cannot be amended and suggested that it may be preferable to proceed in these matters by way of action.

The full text of the decision can be found at:

http://decisions.fct-cf.gc.ca/en/2011/2011fc547/2011fc547.html

Teva Canada Limited v. Sanofi-Aventis Canada Inc., 2011 FCA 149, (May 2, 2011) – ramipril – s.8 case, interlocutory

The Federal Court of Appeal has upheld a decision to strike a claim by a generic for the "permanent loss of market share" caused as a result of being delayed entry into the market by proceedings that were commenced by the innovator under the Patented Medicines (Notice of Compliance) Regulations. 

The Court relied upon their earlier decision in Apotex Inc. v. Merck & Co., 2009 FCA 187 where the same type of claim was struck. The Court agreed that a generic may claim damages resulting from loss of market share, but only for losses actually incurred within the period of liability defined in s. 8(1) of the Regulations.

In dissent, Justice Sharlow stated that she would have reconsidered the interpretation of s. 8 adopted in Merck, and felt that generics should not be barred from asserting the claim merely because the quantification of the loss necessarily takes into account an estimate of sales that would be made after the end of the period of liability. 

The full text of the decision can be found at:

http://decisions.fca-caf.gc.ca/en/2011/2011fca149/2011fca149.html

Teva Canada Limited v. Canada (Health), 2011 FC 507, (May 2, 2011) - ELOXATIN® - innovative drug listing case

This decision relates to Teva's listing challenge of the drug Eloxatin on the innovative drug register.  Over three years after Eloxatin was approved and listed, Teva wrote to the Minister seeking to have the drug de-listed on the basis that it was not an "innovative drug" as the drug had been sold pursuant to the Special Access Program (SAP) for several years prior to obtaining its NOC in 2007. The Court upheld the decision of the Minister and affirmed that it was correctly on the register. 

The Court first made findings on two preliminary issues raised in the application. First, the Court held that, contrary to arguments by Sanofi, the Minister did have authority to make a further decision list/delist after having added the drug to the innovative drug register, especially considering that the Regulations speak of the Minister "maintaining" the register. In this regard, the Court rejected that Sanofi's argument that at a minimum new facts would be required in order to reopen the review of the listing. Second, the Court held that Teva had standing to bring the application, once it had attempted to file an ANDS, and that ANDS was rejected.

On the issue of what is meant by "approval" in the definition of the term innovative drug , the Court agreed with the Minister, who took the view that SAP, while authorizing certain sales in certain circumstances did not qualify as "approval" because drugs sold under the SAP program have not undergone a full regulatory review and therefore, have not received market authorization by the Minister.

The Court found that approval does not solely mean the granting of an NOC, but refers to a two-step decision making process: (1) a finding by the Minister that the drug is safe and effective and (2) the formal granting of marketing approval. The Court held that there was no evidence of such a factual finding by the Minister that the drug was safe and effective as the SAP sales record proves nothing about the safety and efficacy. The Court concluded the Minister was correct in determining the meaning of "approved" and as a result the Minister's decision was not a reviewable error.

The full text of the decision can be found at:

http://decisions.fct-cf.gc.ca/en/2011/2011fc507/2011fc507.html

Apotex Inc. v. Eli Lilly Canada Inc. T-656-09 (April 18, 2011) – s. 8 case, interlocutory motion

In this action under section 8, Apotex claimed for, inter alia, disgorgement of revenues realized by Eli Lilly Canada Inc. ("Lilly") and characterized the claim as one for unjust enrichment.  In 2009, Lilly successfully moved to strike that claim and the Prothonotary ruled that, as a matter of law, the remedy of disgorgement is not available under s. 8 of the Regulations.  The Prothonotary also ruled that the Federal Court does not have jurisdiction to entertain a cause of action for unjust enrichment. 

Apotex appealed that decision to a Judge of the Federal Court and argued that its claim for unjust enrichment is not based upon s. 8 of the Regulations.  Instead, Apotex argued that its claim was independent of its cause of action under s. 8.  Justice Heneghan reviewed section 20 of the Federal Courts Act and related cases regarding jurisdiction and ruled that there is no statutory grant of jurisdiction to award equitable remedies, such as unjust enrichment, in this case.  The Court therefore rejected Apotex's argument that it could bring a claim for unjust enrichment independent of s. 8 of the Regulations.  The Court relied upon the Federal Court of Appeal decision in Apotex Inc. v. Merck & Co., Inc.  [2010] 2 F.C.R. 389 (F.C.A.) to conclude that it is plain and obvious that section 8 does not include a claim for unjust enrichment, or provide the Court with jurisdiction to grant the remedy of disgorgement for s. 8 claims.

The full text of the decision can be found at:

http://www.gowlings.com/knowledgeCentre/enewsletters/pharmacapsules/pdfs/T-656-09 - April 18, 2011.pdf

Canadian Generic Pharmaceutical Association v. The Minister of Health and GlaxoSmithKline Inc. T-152-10, April 15, 2011 – fluticasone furoate – innovative drug listing case

The Court dismissed the CGPA's appeal of a Prothonotary's decision to strike out its judicial review application.  In this case, the CGPA was disputing the listing of a drug on the innovative drug register, fluticasone furoate, where fluticasone propionate had been previously approved. The question was whether it was within the definition of "innovative drugs" which excluded drugs that are merely "a variation of a previously approved medicinal ingredient". The Minister's decision had stated it was not as it was a different ester, and not fluticasone propionate, which was previously approved. 

After a lengthy review of the law, the Court confirmed that the prothonotary was correct in dismissing the application as the CGPA did not have standing as a person directly affected or based on any other kind of public interest standing. The Court noted that the possibility  that a person filing a submission for fluticasone furoate could have standing to dispute the listing.

The CGPA has appealed from this decision.

The full text of the decision can be found at:

http://www.gowlings.com/knowledgeCentre/enewsletters/pharmacapsules/pdfs/T-152-10.pdf

Varco Canada Limited v. Pason Systems Corp., 2011 FC 467, (April 15, 2011) – motion to reopen trial to admit new evidence.

On April 15, 2011, Justice Phelan granted a motion to re-open the trial of a patent infringement action in Varco Canada Limited v. Pason Systems Corp. 2011 FC 467 in order to admit new evidence.  The trial of the action had already been concluded, but no reasons or judgment had issued.  The motion was filed by Pason Systems after the Plaintiffs' counsel had notified the Court that it led inaccurate evidence, and that one of its key witnesses now had a different recollection of events.

In deciding whether to grant the motion, the Court reviewed the jurisprudence for re-opening trial and considered several factors: relevance, necessity, reliability, due diligence and prejudice.  The Court commented that when all of the various factors, tests and considerations are taken together, the importance of the integrity of the trial process – the search for the truth through evidence – was an overarching consideration.

Thus, the motion to reopen the trial was granted. In its conclusion, the Court stated that it cannot turn a blind eye to the admission that the evidence at trial, in some material aspects, was inaccurate and then go on to make findings on that evidence; particularly where it has not yet issued reasons or entered judgment.

The full text of the decision can be found at:

http://decisions.fct-cf.gc.ca/en/2011/2011fc467/2011fc467.html

Apotex Inc. v. Allergan, Inc., 2011 FCA 134, (April 14, 2011) – gatifloxacin – interlocutory appeal re. order dismissing request to strike out statement of claim.

The Defendants appealed from an interlocutory order of a judge of the Federal Court which dismissed a request to strike out the statement of claim because it contained speculative pleas of patent infringement and it did not meet the requirements for quia timet action.  The Court of Appeal dismissed the appeal.  The Court of Appeal noted that while the mere fact that a defendant pharmaceutical company has sought regulatory approval to market a medicine does not by itself support an action for patent infringement.  Allegations that a defendant has stockpiled bulk and finished product for both commercial and regulatory purposes and has offered to sell the product to customers are sufficient to support a patent infringement action.  The Court also found that claims of past and continuing infringement can support a claim of future continuing infringement.  Finally, the Court held that the existence of even a strong defence to a claim (e.g., experimental use) does not justify an order striking the claim.

The full text of the decision can be found at:

http://decisions.fca-caf.gc.ca/en/2011/2011fca134/2011fca134.html

Purdue Pharma v. Canada (Attorney General), 2011 FCA 132, (April 14, 2011) – oxycodone + naloxone – patent listing case

The Court of Appeal upheld the trial decision, finding that the patent at issue was not eligible for listing.  The patent claims were to dosage forms that "comprise" oxycodone.  The drug Targin® is a combination dosage form of oxycodone and naloxone.  The Court rejected arguments that s. 4(2)(c) of the Patented Medicines (Notice of Compliance) Regulations should be interpreted differently than section 4(2)(b), which includes the words "medicinal ingredient".  These terms have been interpreted to essentially require that the medicinal ingredients in the claim be the same as in the product. The Court found that the patent should be construed to only cover oxycodone and commented that while "comprising" is an open ended term, it cannot be interpreted to cover an unlimited number of unnamed medicinal ingredients and there must be some justification for including an additional element.

The full text of the decision can be found at:

http://decisions.fca-caf.gc.ca/en/2011/2011fca132/2011fca132.html

Other News Items of Interest to the Pharma Community:

• Pfizer Canada Inc. President Calls for Patent Term Restoration in Canada – May 18, 2011
• US NIH Researchers Create Comprehensive Collection Of Approved Drugs To Identify New Therapies – April 27, 2011
• C.D. Howe Institute Calls for "Pre-Funding" of Ontario Drug Benefit Program – April 14, 2011
• Ontario Pharmacists Welcome Expanded Services To Improve Patient Care And Increase Access – May 4, 2011
• Saskatchewan Provincial Drug Plan To Lower Generic Drug Prices – May 4, 2011
• Canadian Healthcare Product Registry Launch Plans Finalized – May 2, 2011 (see also Canadian HealthCare Product Registry)

Upcoming Trials, Judicial Reviews and Appeals of Interest

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