Canada: Pharmacapsules @ Gowlings: November 24, 2010

Last Updated: November 25 2010

Edited by Jennifer Wilkie and Isabel Raasch


  • Health Canada Releases 2009 Statistical Report On The Administration Of The Patented Medicines (Notice Of Compliance) Regulations
  • Canada's Venture Capital Market: An Update
  • Results of International Report On Access to Medicines Released
  • U.S. Government Now Anti-Gene Patents?
  • Recent Cases
  • Upcoming Trials and Appeals of Interest
  • Recent Resources of Interest on the Gowlings Website:

Health Canada Releases 2009 Statistical Report On The Administration Of The Patented Medicines (Notice Of Compliance) Regulations
By Isabel Raasch

The Therapeutic Products Directorate recently issued its report on the administration of the Patented Medicines (Notice of Compliance) Regulations for 2009. 

With respect to the Patent Register, the report shows an increase in the number of patent lists added to the Patent Register as well in the number of patents not previously listed, which went up from 68 in 2008 to 89 in 2009.  The report further indicates that the vast majority of products (by DIN and by medicinal ingredient) have only 1 or 2 patents listed on the Patent Register against them. 

With respect to enforcement proceedings under the Regulations, the report shows that although the number of submissions received has increased from previous years, the number of Notices of Allegation received has decreased.  Of the Prohibitions Applications commenced in 2009, 24 were discontinued, 1 was granted, 1 was dismissed, and 38 are pending resolution.  Of the Prohibitions Applications commended in 2008, 36 were discontinued, 7 were granted, 3 were dismissed and 27 are resolution.  The data for Prohibition Applications commenced in 2007 (which has no applications pending resolution) shows that the average resolution time was 19.1 months.

With respect to the Register of Innovative Drugs, the report indicates that a total of 21 such drugs (for use in humans) were added to the Register in 2009.

The full report can be viewed at:

Canada's Venture Capital Market: An Update
By Michael Herman

The global venture capital (VC) market has been in turmoil since 2008's financial crisis.  When capital markets seized up, investment activity dropped significantly and only recently has shown meaningful signs of recovery.  Fundraising is challenging as limited partners have reduced or eliminated their commitments to VC.  Many knowledgeable observers believe that the global venture capital market is undergoing a fundamental structural change involving a major consolidation in the number of funds and an increase in focus on investments in Asia and other emerging markets.

In Canada, the VC market was in big trouble before the financial crisis and was devastated by 2008's events.  VC investment had been dropping for a number of years prior to the economic downturn; the market had never fully recovered from the technology bust in 2001, funds had difficulty attracting institutional investment, retail investment through labour sponsored funds was being phased out in many provinces, including Ontario, and returns to investors were tepid at best.  By 2008, investment had fallen to levels not seen in 15 years.

Against this backdrop, venture capital market activity has shown improvement over the past 12 months. The U.S. market has stabilized, with biotechnology a major focus of investment activity.  According to Mark Hessen, President of the National Venture Capital Association, "the established software and life sciences sectors continue to benefit from a steady commitment of venture capital dollars being put to work within meaningful pockets of innovation" (emphasis added) (National Venture Capital Association, October 15, 2010 press release).

The Canadian market has recently exhibited a slight, but nonetheless positive, increase in activity.  In the third quarter of 2010, investment increased 20% compared to the same period in 2009 although it remains well below levels in years prior to 2008. (All financial and statistical data is derived from the CVCA – Canada's Venture Capital and Private Equity Association and Thomson Reuters).

Investment in biotechnology and other life sciences companies also increased slightly in Q3 and represent about 25% of all Canadian venture capital funding. However, the amount of VC financing in the Canadian life sciences sector falls woefully short of the industry's requirements.  To maintain a sustainable industry, it is estimated the Canadian life sciences sector requires a minimum of between $1 billion to $1.5 billion in annual funding. In 2009, VC investment was approximately $215 million. Other sources of funding, including government programs, angel investors and the public markets, do not come close to filling the gap, and while the market has improved slightly in 2010, it hardly begins to bridge the existing financial chasm.

As a result, industry participants have begun to explore bold initiatives which could increase the amount of capital invested in life sciences companies before it is too late. Possible solutions, such as enhanced tax credits for qualified investments, enhancements to the Scientific Research and Experimental Development tax credit program, capital gains tax exemptions for investments in life sciences companies and a flow-through share program for the industry, require careful analysis and consideration. The industry is too important to Canada's economic future and the country has invested too much time and money developing a global leadership position in its research capabilities, to squander our potential and advantages by failing to provide optimum conditions for the commercialization of these essential products and technologies.

For a copy of the CVCA's press release on venture capital investment in Q3 2010, please go to

Results of International Report On Access to Medicines Released
By Livia Aumand

On November 2, 2010, Rx&D published its  2009-2010 annual International Report on Access to Medicines (IRAM), which examines patient access to and public coverage of 150 new prescription drugs, including 33 oncology drugs and 117 medicines for other diseases.  The IRAM details both public coverage of new medicines within Canada and compares this to the state of affairs in other OECD countries.

The IRAM reveals that Canada ranks 23rd out of 29 OECD countries in terms of public plan coverage of the 150 innovative medicines reviewed.  With respect to reimbursing First-in-Class drugs, Canada ranks 26th out of the 29 countries, compared to 21st out of 25 countries included last year.

The IRAM also investigated coverage with respect to particular diseases.  For public coverage of 33 oncology drugs introduced in Canada within the past 5 years, Canada is ranked 19th out of the 29 countries.  Canada is placed even lower when considering non-cancer drugs: 24th out of 29 countries.  With respect to new diabetes treatments specifically, Canada's public drug plans cover only 42% of these treatments, compared to an international average of 97%. 

The Report was prepared for Rx&D by Wyatt Health Management based on data collected from public sources and validated with public drug plan officials.

For more information, please see the following links:

U.S. Government Now Anti-Gene Patents?
By Michel O'Hara

The Justice Department of the United States government recently filed an amicus brief in an appeal of a U.S. Federal Court decision regarding the patentability of naturally-occurring DNA sequences, taking the position that that these are not patentable as "part of nature." While this position contradicts a long-standing policy of the U.S.P.T.O., it supports the basic holding of a recent U.S. District Court decision.  However, the Justice Department's brief did not rule out the patentability of genes entirely, and suggests that manipulated DNA, including cDNA, should be patentable. The brief also does not challenge patent claims related to methods of use of gene sequences.

Last March, the U.S. District Court in Manhattan in Association of Molecular Pathology et. al. v. U.S. Patent and Trademark Office et. al. (referred to popularly as the "Myriad decision") ruled that patents covering a naturally-occurring but isolated human gene sequence related to breast cancer were invalid. The Court held that it was not enough to merely isolate naturally-occurring gene sequences to make them patentable.

The case was immediately appealed by co-defendant Myriad Genetics, Inc. and the Plaintiffs filed a motion last June to have Federal Circuit Chief Judge Randall Rader recuse himself if he is picked for the panel that will decide the case on the basis of comments he made regarding this decision at the Biotechnology Industry Organization 2010 International Convention last May in Chicago.

Curiously, no U.S.P.T.O. attorneys were listed on the Department of Justice brief and David Kappos, undersecretary of commerce for intellectual property and director of the patent office, has said publically that the U.S.P.T.O. will continue to consider applications for gene patents until a binding court ruling is issued, contrary to the position of the Justice Department.

For more information, please see the following link:

Recent Cases
By Scott Foster

Eli Lilly v Apotex, PMNOC proceedings, Strattera, October 29, 2010
2010 FC 1065

Eli Lilly sought an order of prohibition against Apotex until expiry of its patent for atomoxetine (the '735 patent).  The '735 patent had previously been declared invalid by Mr. Justice Barnes in Novopharm v Eli Lilly in September 2010 for lack of utility (see the October edition of this newsletter).  In these proceedings, Mr. Justice Barnes rejected all of Apotex's allegations; including the lack of utility attack. 

The Judge distinguished his two decisions on the basis that in Novopharm v Eli Lilly the parties addressed the utility arguments on the basis of considerable evidence pertaining to the merits of an earlier study.  In this case, Apotex failed to address the study head on and instead attempted to have evidence in relation to the study excluded on evidentiary grounds.  Furthermore, Apotex framed its arguments on allegations of lack of sound prediction whereas Eli Lilly said that a sound prediction analysis was unnecessary as the patentee had demonstrated utility.  The Judge agreed with Eli Lilly. 

In any event, because the '735 patent had been declared invalid in Novopharm v Eli Lilly, Apotex was granted a NOC for its generic product.  The Judge thus dismissed Eli Lilly's application for an order of prohibition on the ground of mootness and in doing so refused to declare that such a dismissal precluded Apotex from recovering damages pursuant to section 8 of the PMNOC Regulations

The full text of the decision can be found at:

Janssen v Mylan, unsuccessful PMNOC proceedings, galantamine, November 11, 2010
2010 FC 1123

Janssen sought an order of prohibition until expiry of its '950 patent which claimed the use of an optimum dosing regimen of galantamine to treat Alzheimer's Disease.  The use of galantamine to treat Alzheimer's Disease was already known.  Mylan raised a number of allegations but Mr. Justice Barnes held that, at the very least, the claims in issue were invalid for being methods of medical treatment. 

The titration regimen for galantamine in the '950 patent interfered with the ability of a physician to exercise his or her judgement in the administration of generic versions of the drug and therefore the allegation of invalidity was justified.  Janssen cited the very recent and potentially important decision in, Inc. (on the patentability of business methods) but Mr. Justice Barnes indicated that he was not influenced by that decision because he said it was founded upon different public policy reasons to those in connection with methods of medical treatment. 

The full text of the decision can be found at:

Hospira v Eli Lilly, appeal of order for further and better production of documents, gemcitabine, October 26, 2010
2010 FCA 282

Eli Lilly alleged that gemcitabine made in China and imported into Canada by Hospira infringes Eli Lilly's patent for an intermediate process step in the manufacture of gemcitabine.  Prothonotary Tabib and Mr. Justice Lemieux had ordered Hospira to provide further and better production of documents including parts of Hospira's Drug Master File. 

At the Federal Court of Appeal ("FCA") hearing, Hospira challenged Justice Lemieux' decision upholding Prothonotary Tabib's Order because the Order was partially based on evidence of an "in-house" Lilly expert (which Prothonotary Tabib had found to be reliable and credible).  The FCA held, in dismissing Hospira's appeal, that lack of independence and lack of impartiality are different allegations.  That an expert is an employee of a party is not a sufficient ground alone to justify excluding his or her evidence unless it can be shown that the expert has failed to be impartial. 

The full text of the decision can be found at:

Merck v Apotex, PMNOC proceedings, dorzolamide, October 22, 2010
2010 FC 1042

This proceeding for an order of prohibition was a companion case to the case described below.  Apotex sought a NOC for its dorzolamide product.  Apotex alleged that the '211 patent was invalid for double patenting as Merck is the proprietor of another patent (the '262 patent) which also covers dorzolamide.   Notwithstanding that Merck had dedicated the '262 patent to the public in 2007, Mr. Justice O'Reilly found Apotex's allegations of double patenting justified.  Although the Judge acknowledged that a recent decision of the Federal Court of Appeal (Sandoz v Abbott, 2010) had decided that a dedication "may remove the evidentiary basis for the allegation of double patenting", he distinguished the present case.  In this case, the dedication by Merck of the '262 patent gave Merck 17 years and 28 days of monopoly for dorzolamide.  This was longer than the statutory period of 17 years provided under the "old" Patent Act and the dedication did not therefore, for policy reasons, defeat the allegations of double patenting.   

The full text of the decision can be found at:

Merck v Apotex, PMNOC proceedings, dorzolamide and timolol, October 22, 2010
2010 FC 1043

See the summary above. Merck's patent in this case (the '965 patent) covered the co-administration and co-formulation of dorzolamide and timolol (which was sold as COSOPT).   Mr. Justice O'Reilly found Apotex' allegations of anticipation with respect to the co-administration claims to be justified and the remainder was obvious. 

On the anticipation allegations, the Judge did not accept Merck's submissions that because the prior art only disclosed dorzolamide by reference to Merck's own internal code for it, the prior art did not disclose dorzolamide for the purposes of anticipation.  The evidence showed that the skilled person without much effort could have identified what product the code was referring to. The Judge, having concluded that co-administration was in the prior art, found that the co-formulation of dorzolamide and timolol was a routine step thereafter and was obvious to try.  The Judge drew support from similar proceedings in the English High Court in support of his findings. 

The full text of the decision can be found at:

Novopharm v Pfizer, motion for interim relief pending appeal, pregabalin, October 5, 2010
2010 FCA 258

See the earlier decisions in this case in the May 2010 and July 2010 editions of this newsletter.  Novopharm had sought to keep its Notice of Allegation ("NOA") confidential from third parties but the Prothonotary and Federal Court refused to grant such an order.  In its appeal to the Federal Court of Appeal ("FCA"), Novopharm sought two types of interim relief to keep the NOA confidential pending the appeal hearing. 

The FCA refused to order the requested stay of Mr. Justice Crampton's decision because it would not provide the relief that Novopharm wanted.  A stay only protects the status quo ante (i.e. the way things were before) and as Mr. Justice Crampton had refused to grant the order Novopharm sought, a stay would not protect the confidentiality of the information.  The FCA also refused to grant a confidentiality order per se because when applying the RJR-MacDonald criteria it was clear that Novopharm had not demonstrated with evidence that it would suffer irreparable harm if such an order was not made. 

The full text of the decision can be found at:

Upcoming Trials and Appeals of Interest

November 29, 2010, 4 days, Federal Court, Toronto:
     AstraZeneca Canada Inc. v. Cobalt Pharmaceuticals Inc. (T-780-09)
     Patented Medicines (Notice of Compliance) Regulations, rosuvastatin

December 6, 2010, 4 days, Federal Court, Ottawa:
     Hoffmann-LaRoche Limited v. Apotex Inc. (T-1165-09)
      Patented Medicines (Notice of Compliance) Regulations, mycophenolate mofetil

Recent Resources of Interest on the Gowlings Website:

Webinar – Canadian Patent Rules Amendments: What You Need to Know
October 18, 2010.  Presented by James Longwell (Gowlings), Konrad Sechley (Gowlings) and Jennifer Wilkie (Gowlings)
available at:

Past Issues of Pharmacapsules are available at:

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