Canada: Intellectual Property Weekly Abstracts Alert - Week Of January 3, 2012

Last Updated: January 10 2012
Most Read Contributor in Canada, September 2016

Edited by Chantal Saunders and Beverley Moore

Patent Found Invalid on Basis of Lack of Utility, Sound Prediction and Obviousness

Apotex Inc. v. Sanofi-Aventis; Sanofi-Aventis and Bristol-Myers Squibb Sanofi Pharmaceuticals Holdings Partnership v. Apotex Inc.

Drug: PLAVIX clopidogrel bisulfate

This decision relates to an impeachment action and an infringement action that were consolidated. As a preliminary issue, the Court first considered whether the Partnership has standing to bring the action, and concluded that it does as a person claiming under the patentee pursuant to the Patent Act. The Court construed the claims of the patent, as well as the promise of the patent. The promise of the patent was found to be a promise of use in humans.

The Court found that Apotex infringed the claims of the patent. However, as the patent was found to be invalid, there was no need for the Court to assess damages. The Court rejected Apotex' allegations of overbreadth, insufficiency, anticipation and double patenting.

However, the Court held that the utility in humans had not been demonstrated. In considering the issue of sound prediction of utility, the Court found that there was a factual basis for the prediction that the invention would have a use in the treatment of humans and that there was a sound line of reasoning. However, with respect to disclosure, "the Court is of the opinion that upon reading the '777 Patent, it does not instruct the POSITA that there was a factual basis and a line of reasoning for the prediction that the animal studies conducted on rat models could be extrapolated to the prediction that the compound – clopidogrel – had a use in humans. The disclosure in the '777 Patent is insufficient." The Court further found that the invention was "obvious to try" and therefore invalid for obviousness.

Amendments Alleging Contributory Infringement Not Allowed

Apotex Inc. v. Nycomed Canada Inc.

Drug: pantoprazole

Nycomed appealed the decision of the Prothonotary, refusing to allow amendments to its Counterclaim that Apotex and Novopharm are liable for contributory infringement, and that they knew or ought to have known that their generic version would be used in an infringing manner.

The Court undertook a de novo review on the basis that the matter was vital to the final issue. The Court held that the test for inducing infringement makes it clear that it is plain and obvious that the allegation of contributory infringement is not a reasonable cause of action. In particular, the Court found that, by pleading contributory infringement, Nycomed implicitly admits that Apotex and Novopharm are only partially responsible for the infringement. Accordingly, Nycomed is unable to meet the second part of the test for inducing infringement, namely that direct infringement would not take place but for the actions of the inducer. The Court therefore upheld the decision of the Prothonotary with respect to both proposed amendments.

Appeal of Motion to Compel Answers Dismissed

Sanofi-Aventis Canada Inc. v. Laboratoire Riva Inc. and Pharmascience Inc.

Drug: ramipril

This is an appeal by Sanofi of a decision of the Prothonotary relating to compelling answers on discovery. The Court found that the questions were properly refused by the Prothonotary and dismissed the appeal.

Disgorgement of Profits Allegation Struck when Tied to NOC Regulations

Apotex Inv. v. Eli Lilly Canada Inc.; Apotex Inc. v. Nycomed Canada Inc.

Drug: raloxifene and pantoprazole

This decision relates to two appeals heard together but not consolidated. The Court of Appeal was considering the decisions of a Prothonotary and the Federal Court to strike claims by Apotex for disgorgement of profits in pleadings that also included claims to section 8 damages pursuant to the NOC Regulations.

While acknowledging that section 8 of the NOC Regulations does not allow for a remedy other than damages as set out in that section, Apotex argued that it was entitled to the disgorgement of profits based on an independent cause of action pursuant to section 20(2) of the Federal Courts Act. The Court of Appeal found that this claim is tied to the NOC Regulations because it is based on the ultimate dismissal of the application brought pursuant to these Regulations. The Court of Appeal further held that Parliament clearly limited the remedy available to generic companies and section 20(2) cannot be used to grant a remedy that the NOC Regulations intended to exclude unless a separate cause of action is asserted, which is not the case in these pleadings.

Motion to Add New Parties to Damages Phase of Action Dismissed

Janssen Inc. v. Teva Canada Limited

The underlying action for patent infringement resulted in a judgement that the patent was valid and infringed. This was upheld by the Court of Appeal. The case was bifurcated and the parties are now in the damages phase. Previously, the Defendants had sought particulars of the other companies for which damages were sought; that motion was adjourned sine die. The Plaintiffs had brought a previous motion to add more parties; that motion was dismissed without prejudice to a further motion on better evidence. The Plaintiffs have renewed that motion. The Court again dismissed the motion.

The Court considered adding a party in the same manner as amendments to pleadings. The Court held that although the parties could bring a separate action where their standing as persons claiming under the patentee would be determined, it was not appropriate to add them to the within action. Furthermore, the 6 year limitation period should not be extended. The Court refused to consider whether the entities were persons claiming under the patentee, leaving it for determination in a separate action, given the disposition of the motion.

Other Cases of Interest

Association Not Directly Affected by Listing on Register of Innovative Drugs

Canadian Generic Pharmaceutical Association v. Minister of Health and GlaxoSmithKline Inc.

Drug: fluticasone furoate

This is an appeal from a decision of the Federal Court, upholding the decision of the Prothonotary striking the Notice of Application on the basis that the Applicant lacked standing.

The Court of Appeal found no error of law made by either the Federal Court or the Prothonotary, and agreed that the Appellant is not directly affected by the decision of the Minister of Health refusing to remove the drug from the Register of Innovative Drugs. Further, the Court of Appeal agreed that the Appellant lacks public interest standing.

Trade-mark Expunged

Melena Produce, Inc. v. Agricola San Isidro de Culliacan, S.P.R. de R.I.

The Applicant sought to expunge the Respondent's trade-marks (Marks). The Respondent did not oppose the application. The Court considered the evidence filed in support of the application, and held that the Applicant is a person interested, the Marks do not define the Respondent's existing rights because the Respondent has never used these Marks in Canada, and the Marks do not distinguish the Respondent's wares from those of the Applicant. Accordingly, the Marks were expunged.

Pharmacies Not Permitted to sell "Private Label" Generic Drugs

Shoppers Drug Mart v. Ontario (Health and Long-Term Care)

The Government of Ontario appealed from two Orders of the Divisional Court declaring that sections of provincial regulations banning pharmacies from selling "private label" generic drugs are ultra vires and of no force and effect. The Court of Appeal overturned the decision, in a 2:1 holding.

The majority of the Court of Appeal held that the Ontario Drug Benefits Act (ODBA) and the Drug Interchangeability and Dispensing Fee Act (DIDFA) authorize regulations that impose conditions on generic drugs. Under these regulations, Shoppers Drug Mart and Katz Group/Pharmx Rexall are entitled to participate in most, but not all, of the components of the Ontario drug supply chain. The Court of Appeal held that the "private label" model would allow pharmacies to generate revenues indirectly by the resale of generic drugs through related companies, in a way that the legislation now prohibits directly. The statutes and regulations focus on lowering the price of generic pharmaceuticals and in doing so indirectly regulate the compensation model of pharmacies by ensuring that pharmacists are compensated as professional service providers, not from the profit in dispensing drugs.

Other Industry News

The National Prescription Drug Utilization System (NPDUIS) released a report entitled: Wholesale Up-charge Policies of Canada's Public Drug Plans, December 11, 2011.

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