Canada: Pharmacapsules @ Gowlings November 15, 2011 - Volume 10, Number 7

Last Updated: November 21 2011

Edited by Jennifer L. Wilkie and Isabel Raasch

Recent Pharma Decisions:

Eli Lilly Canada Inc. et al v. Novopharm Limited, November 10, 2011, 2011 FC 1288, olanzapine (reconsideration by trial judge):

This decision relates the reconsideration of an earlier decision regarding Eli Lilly's action against Novopharm for infringement of Lilly's patent to the compound olanzapine.   In the initial judgement, Justice O'Reilly determined that the olanzapine patent was invalid on the basis that the utility of olanzapine was not soundly predicted, that the description of the invention set out in the patent was not sufficient and that therefore the patent was not a valid selection patent.  Lilly then appealed that decision and the Federal Court of Appeal determined that the trial judge had erred in applying the law with respect to utility and sufficiency and returned the matter to the trial judge for reconsideration.  In particular, the Court of Appeal found that the trial judge erred in considering whether the olanzapine patent was a "valid selection patent", as that is not a stand-alone ground to attack a patent, rather than evaluating the validity of the patent on the basis of the requirements for utility and sufficiency as set out in the Patent Act.  Hence, the Court of Appeal returned the question of what was the promised utility of the olanzapine patent (as opposed to what were the stated advantages) and whether that promised utility was demonstrated, or soundly predicted by way of a prima facie reasonable inference, as of the filing date.

After reconsideration the trial judge again found that the patent was invalid, this time for lack of sound prediction alone, and dismissed the action for infringement.  On the question of sufficiency, Justice O'Reilly found that the patent met the sufficiency requirements under the Patent Act.

In analyzing the issue of sound prediction, Justice O'Reilly held that, for a selection patent, the stated utility could not be simply that which was promised in the genus patent and must be greater than the promised utility of the genus patent.  Against this background, and based on the patent specification and the expert evidence, Justice O'Reilly held that the promise of the olanzapine patent was the treatment of schizophrenia in the clinic in a markedly superior fashion, with a better side-effect profile than other antipsychotics.  Justice O'Reilly then applied the promise to both the claims to the compound olanzapine and the claims for the therapeutic use of olanzapine.  

Justice O'Reilly also held that, as schizophrenia is a condition of a chronic nature, the promised utility of the olanzapine patent must be read to assert efficacy and safety over a reasonable timeframe.  In this regard, Justice O'Reilly relied upon the recent decision of the Court of Appeal in Pfizer Canada Inc. et al. v. Apotex Inc., 2011 FCA 236, with respect to the medicine latanaprost.  In that case, the Court of Appeal found that, where there is a prediction in respect of a chronic condition, the prediction must be supported by a factual basis and line of reasoning consistent with the use of the compound over a long term.  Justice O'Reilly held that, based on the work that was done, including in vitro animal tests, pre-clinical studies, animal studies and human clinical studies, the patentee had not demonstrated olanzapine's capacity to treat schizophrenia patients in the clinic in a superior fashion and with fewer side-effects than other known antipsychotics.  Justice O'Reilly thus concluded the patent's utility had not been demonstrated as of the Canadian filing date.  

Justice O'Reilly then found that although the olanzapine patent sets out a rational basis for making a sound prediction that olanzapine would be useful in the treatment of schizophrenia, it does not set out grounds for a sound prediction that olanzapine would treat schizophrenia in a "markedly superior fashion, with a better side-effects profile than other known antipsychotics".  Therefore, Justice O'Reilly concluded that the evidence did not support a prima facie reasonable inference in respect of the promised utility of the olanzapine patent.

With respect to the issue of sufficiency, Justice O'Reilly held that the invention was sufficiently described pursuant to the requirements of section 27(3) of the Patent Act in that the invention is olanzapine, an antipsychotic with particular advantages, and there was no evidence that persons skilled in the art would not be able to put the invention into practice.  As such, Novopharm's lack of sufficiency attack failed. 

The full text of this decision can be accessed at:

Teva Canada Limited v. Wyeth LLC et al, October 17, 2011, 2011 FC 1169, venlafaxine (motion for summary judgment):

In response to a motion brought by Teva for summary judgment of the issue of whether Teva can continue a s. 8 claim initially brought by ratiopharm, Justice Hughes found that this case met the criteria for being brought in a summary nature and proceeded to find that in the circumstances Teva could not pursue the s.8 action and dismissed the action. 

As a first point, Justice Hughes noted that the summary trial provisions of the Federal Court Rules should be used where possible to secure a just, expeditious and least expensive determination of the issue.  The issues in this case met the criteria:  the issues were well defined, the facts were set out clearly in the evidence, the evidence was not controversial and there were no issues of credibility and the questions of law, although novel, can be dealt with as easily now as they would have otherwise been after a full trial.

This decision is an interesting contrast to the many early motions for summary judgment under s.8 proceedings, whereby, in virtually every case, the Court tended to defer novel issues to the trial judge.

The principal issue before the Court was whether Teva, which had merged with ratiopharm, could maintain the s.8 damages claim initiated by ratiopharm. After commenting that Teva, in the absence of arguments raised by Wyeth, could carry on the s.8 claim. The main question was whether there was an effect upon the ability to maintain the action due to the presence of a Novopharm license with Wyeth which had been ongoing prior to the merger.  The Court found that the dispositive argument in Wyeth's favour was that respecting the equitable doctrine of election.  The doctrine of election holds that a person is precluded from exercising the right that, if inconsistent with another right, if that person has consciously and unequivocally exercised the latter. 

To establish an election in equity, it is unnecessary to show that the electing party made a conscious choice between inconsistent rights at the time when the original decision was made.  Equitable election is not concerned about whether a choice was made but rather involves accepting the consequences of a decision already made.  In this case, by reason of the Novopharm license agreement which included a term that Wyeth would undertake to make commercially reasonable efforts to address infringement, and due to Novopharm's subsequent actions of taking a deliberate course of action to encourage Wyeth to start proceedings against ratiopharm, Novopharm had benefitted from the licence agreement.

Thus, when the merger occurred, ratiopharm, and thus Teva, were now precluded by virtue of the equitable doctrine of election by virtue of the actions of Teva with respect to the licence. Further, section 186(c) of the Canada Business Corporations Act provides that an amalgamated company is liable for the obligations of the amalgamating corporation (Novopharm's equitable election).  Hence, the Court found not only that the motion could proceed as a summary trial, but that summary judgment would be given.  It should be noted that Teva has filed an appeal from this decision.

The full text of this decision can be accessed at:

Sanofi et al v. Apotex and Teva et al, November 2, 2011, 2011 FCA 300, ramipril (appeal of decision on validity of patent):

The Court of Appeal dismissed an appeal brought by Sanofi and Schering of the trial judge's findings on sound prediction. The principal issue appealed from the trial decision was the holding that that the inventors could not have soundly predicted as of the Canadian filing date that all compounds of the claim in issue would have the utility promised by the patent.  The Court, in dismissing the appeal, commented that soundness of prediction is a question of fact. The Court did not agree with the appellant that the Court below had incorrectly applied the test for sound prediction by focusing on the inventor's work.  Instead, the Court of Appeal noted that the trial judge considered both the state of the art and common general knowledge as applied to inventors' investigations.

The Court of Appeal also considered arguments that the trial judge mischaracterized certain test results.  However, the Court found that in the absence of an overriding and palpable error, there is no basis for the Court to intervene.  Finally, in view of the affirmation of the finding on sound prediction, the Court did not need to review the obiter findings on obviousness.

The full text of this decision can be accessed at:

Upcoming Trials, Judicial Reviews and Appeals of Interest:


Celgene v. Minister of Health

judicial review

Nov. 21, 2011 (3hr)


Apotex Inc. v. Ferring Inc.

s. 8 action

Nov. 28, 2011 (7d)


Allergan v. Minister of Health

NOC proceeding

Nov. 28, 2011 (4d)

A-9-11;A-10-11; A-11-11

Apotex v. Merck

appeal: infringement, validity and s. 8

Nov. 28, 2011 (2.5d)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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