Canada: Key Developments In Canadian Patent Law In 2011

The following article summarizes several developments in Canadian patent law, including a brief summary of amendments to the Patent Rules.


The growing rift in patent law principles between patents for most technologies and patents for pharmaceuticals is problematic. Practitioners face serious challenges in advising their clients as to the state of Canadian patent law and the validity of rights obtained from the Canadian Patent Office in light of the divergent evolution caused by pharmaceutical patent litigation.

The recent evolution of the doctrines of sound prediction, actual or "demonstrated" utility, false promise (which was an attack of fraud under Section 53 in Canada until recently) and disclosure/sufficiency has become problematic for numerous pharmaceutical patentees (for example, see the Strattera and Latanoprost cases below). As well, the jurisprudential changes emerging in these areas are difficult to reconcile with the principles of obviousness (see the Altace decision). In another development, the analysis applied to advantages in selection patent cases is no longer confined to issues of obviousness, given the Court's recent intensification of utility requirements.

There is some hope that the Supreme Court might assist on these issues in the upcoming Viagra appeal. However, the Supreme Court also had the opportunity to comment on the Strattera decision, yet declined to do so. Leave applications for Latanoprost and Altace have also been filed by the rights holders. Hopefully, the Court will look closely at the issues and take the opportunity to provide guidance in these increasingly complex and inconsistent areas of patent law. 

Subject Matter

On November 24, 2011, the Federal Court of Appeal ruled in Canada (Attorney General) v., Inc. that the Commissioner of Patents' practice of excluding business methods from patentability was incorrect. The Court agreed that no Canadian jurisprudence determines conclusively that a business method cannot be patentable subject matter. However, the Court refrained from ruling on whether the "one-click" patent at issue was patentable. Instead, the matter was remitted to the Commissioner for re-examination based on the Court's reasoning. On December 23, 2011, the Commissioner approved Amazon's application and issued a Notice of Allowance. On January 17, 2012, the patent issued.

It is anticipated that the Canadian Patent Office will issue revised examination guidelines in view of the Court of Appeal's decision. Until then, patent applicants ought to ensure a claimed invention is something more than just a programmed mathematical formula or algorithm that is implemented by a computer, and review the Amazon allowed claims as an example of what is meant by discernable effects or changes produced by an invention.


In Weatherford Canada Ltd. v. Corlac Inc. (Weatherford), the Federal Court of Appeal ruled that patents cannot be attacked after they have issued on the ground of lack of good faith in their prosecution. The Court held that s. 53(1) of the Patent Act pertains to issued patents, whereas s. 73(1)(a) applies solely to patent applications.

The decision states that the operation of s. 73(1)(a) of the Patent Act, which deems an application to be abandoned if an applicant does not reply in good faith to the examiner's requisitions, is extinguished once the patent issues. The purpose of s. 73 is to ensure that applicants answer all issues raised by the Patent Office in good faith during the prosecution stage. Section 73 was never intended to support a validity attack under a duty of candour or good faith after prosecution is complete and the patent has issued.

Justice Layden-Stevenson specifically stated that G.D. Searle & Co. v. Novopharm Limited and Lundbeck Canada Inc. v. Ratiopharm Inc. should not be followed with respect to s. 73(1)(a).

Promise of the Patent

In GlaxoSmithKline Inc. v. Pharmascience Inc. (Avandia) and Pfizer Canada Inc. v. Mylan Pharmaceuticals ULC (Donepezil), Justice Hughes confirmed that the promise of the patent is to come from the specification as a whole, through the eyes of a person skilled in the art, bearing in mind commercial realities, and that such construction is a question of law entirely within the domain of the Court. This construction can usefully be assisted by expert witnesses, however, in the case of Donepezil, Justice Hughes  explicitly cautioned judges from letting experts play advocate in construing the promise. He also noted that such construction is to take place without resort to technicalities. While these tenets of interpretation were, for the most part, followed in 2011, one decision by the FCA —Apotex Inc. v. Pfizer Canada Inc. (Latanoprost II) — construed the promise of the patent on a ­de novo basis, and without any reference to the disclosure. Latanoprost II remains an outlier among FCA cases in this regard, and thus its precedential basis for allowing future courts to perform similar acts is unclear.

In construing the promise, three cases, Eli Lilly and Company v. Teva Canada Limited (Strattera), Latanoprost II and Eli Lilly Canada Inc. v. Novopharm Limited (Zyprexa), read in an extended implicit promise based on the nature of the disease that the drug intended to treat. In all three cases, the court inferred that a chronic disease must have a long-term treatment. Rather than endeavouring to interpret these promises with a view to supporting a useful patent, these cases held that testing done at the time of filing was insufficient to support a finding of utility because the testing was not done on a long-term basis, and thus it could not support the promise made of treatment of a chronic disease. At least one decision, Astrazeneca Canada Inc. v. Mylan Pharmaceuticals ULC (Anastrozole), approached this issue in a different manner, when Justice Rennie rejected an argument that the patent at issue promised therapeutic utility on the basis that such a promise was not explicit in the specification.

Anastrozole is also important as it affirmed the notion that not all statements of advantages in a patent rise to the level of a promise. While this principle has old roots, stretching back to the 1907 British case of Alsop's Patent, it had never been explicitly adopted by Canadian courts.

Until recently, false promise was an issue for s. 53(1) inquiries. Based loosely on AZT, the doctrine has been mutated to fall under the utility analysis based in part on its origins from British patent law. While the British Patent Act repealed provisions relating to false promise in 1977, the doctrine is now thriving in Canadian law despite the lack of a statutory basis.

Selection Patents

Zyprexa affirmed the significant burden that patentees face in proving utility in enforcing selection patents. After being remanded back to the Federal Court on the issues of utility and sufficiency, the patent was held invalid for lack of utility on the basis that no evidence was presented demonstrating that the advantages in question were particular to the drug at issue, particularly as compared with the class of compounds disclosed in the genus patent. In effect, Zyprexa now places a requirement on patentees to prove the advantages of the selected compound over a substantial portion of the genus, not merely the closest comparators or leading compounds of the genus.

Sound Prediction

Justice Hughes' 2008 Raloxifene decision (2008 FC 142) on the disclosure requirements for a sound prediction of utility was considered in various 2011 cases, such as Apotex Inc. v. Sanofi-Aventis (Plavix), Anastrozole, Zyprexa, Hoffmann-La Roche Limited v. Apotex Inc. (CellCept) and Avandia. All were unanimous in adopting Justice Hughes' maxim that the factual basis and sound line of reasoning must be present in the disclosure. This changes the disclosure requirement of s. 27 and of Consolboard to the "hard coinage" of AZT.

The FCA decision in Sanofi-Aventis Canada Inc. v. Apotex Inc. (Altace) made the novel statement that "the soundness of a prediction is a question of fact." Whether this statement will impact future jurisprudence has yet to be seen. It is difficult to reconcile this statement with the de novo fact finding inquiry undertaken by the FCA in Latanoprost II.

"Demonstrated" Utility (as Opposed to Actual Utility under Section 2)

The new heightened disclosure requirement for sound prediction has forced patentees to rely on demonstrated utility to satisfy the s. 2 utility requirement more since the AZT decision. The doctrine experienced little development in 2011, with satisfaction of the requirement being highly dependant on construction of the promise. For example, demonstrated utility was found in cases where the promise was interpreted relatively modestly, such as Latanoprost I, Rosiglitazone and CellCept. However, demonstrated utility universally failed in cases where more onerous promises were found to exist, such as Latanoprost II, Zyprexa and Plavix. Thus, while a single mouse test showing potential that the compound could work was enough to satisfy the standard in Rosiglitazone, animal tests both that were in vitro and in vivo, along with clinical testing in humans, were not enough to show utility in Zyprexa. The latter cases seem to require testing that approaches the regulatory standard, something which the Courts have rejected on multiple occasions, including AZT.


In Allergan Inc. v. Canada (Health) (Combigan), a legal question arose when determining the inventive concept. The generic argued that the inventive concept must be determined solely from the language in the claims, saying that the specification as a whole can be looked at only when the claims are confined to a bare chemical formula or to a selection patent. In rejecting this argument, Justice Crampton found it "both necessary and permissible" to look to the whole of the disclosure in determining the inventive concept in cases where the inventive concept is not readily discernible from the claims themselves.

There are two brief points of interest from Anastrozole. First, Justice Rennie found it sufficient to dismiss the obviousness attack on the sole basis that there was no obvious starting point that would lead to discovering the patented compound. Second, evidence of non-obviousness was found in the fact that Astrazeneca won what was a long-standing "race," in both academia and industry, to develop the next generation of breast cancer drug.

The Plavix decision contained a substantial obviousness inquiry, with the Federal Court coming to a different conclusion on the issue than the Supreme Court did in 2008. While Justice Boivin's analysis was fact-intensive, in assessing what constituted the common general knowledge at the date of invention, he did make an observation that a publication made available through an Internet search in 2011 was not necessarily available to a skilled person in the mid-1980s.

In Weatherford, the Federal Court of Appeal observed that Sanofi did not establish a compulsory legal test for obviousness. The Court stated that although Sanofi identifies and recommends the Pozzoli framework as a helpful tool, failure to explicitly follow the structure does not, in and of itself, constitute an error of law.

In Hoffman-La Roche Limited v. Apotex Inc. (MMF), Justice O'Reilly made a practically important point related to claim construction. He cautioned potential patent holders, when construing claims, not to "read up" on the invention for obviousness while "reading down" for utility.

Patent Rules

In March 2011, the Patent Rules were amended to add section 28(1)(b), which states that the Commissioner may expedite the prosecution of an application when the invention is related to green technology. Under the new Patent Rules, there is no governmental fee for expediting applications related to green technologies. The requirements of the rule state the application be laid open for public inspection, the submission must request an expedited examination and a declaration must be added stating that the application relates to commercial technology, which would help to resolve or mitigate environmental impacts and/or conserve natural resources.

Section 8 Claims Under the Patented Medicines (Notice of Compliance) Regulations

Generic pharmaceutical manufacturers continue to seek new ways to maximize s. 8 recovery under the PM(NOC) Regulations. As seen in Apotex Inc. v. Abbott Laboratories Limited (Lansoprazole), one potentially new way to do this is to bring the s. 8 claim to a provincial Superior Court, where the Court's inherent jurisdiction may allow for the granting of unjust enrichment, a remedy repeatedly denied to generics in the Federal Court system.

Lansoprazole was a R. 21.01(1)(b) motion to dismiss Apotex's unjust enrichment claim. The motion alleged that there was no way for Apotex to establish a lack of juristic reason for the enrichment, given that the PM(NOC) Regulations themselves provided the requisite reason. In dismissing the motion, Justice Whitaker noted that this was an unsettled area of law, and thus that Apotex's claim should not be struck.

However, a later decision of the Federal Court of Appeal in Apotex Inc. v. Eli Lilly Inc. appears to have shut the door on any unjust enrichment claims by a generic under s. 8 — absent of evidence of wrongdoing by the party seeking the prohibition. In this case, Apotex admitted that unjust enrichment was not permitted under s. 8, but argued that it was a separate cause of action independent of s. 8. Justice Noël said that the 2006 amendments to s. 8 "could not be any clearer" in their intent to preclude the disgorgement remedy, and he found that no facts existed that would allow Apotex's claim within the scope of the disgorgement remedy outside of the statutory basis provided by s. 8. Thus, as the law currently stands, a generic company is not entitled to unjust enrichment as a result of prohibition proceedings, unless an independent cause of action beyond s. 8 (such as abuse of process) is pled.

The equitable doctrine of election is discussed in Teva Canada Limited v. Wyeth LLC (Effexor), where Justice Hughes dismissed a s. 8 claim made against Wyeth following a merger of Ratiopharm with Teva. Wyeth held a patent covering its drug to which Wyeth licensed Teva. Ratiopharm sought to launch a generic copy of the Wyeth product and addressed the Wyeth patent. Under the terms of its agreement with Teva, Wyeth contested the Ratiopharm allegations, but was unsuccessful. Teva and Ratiopharm amalgamated pursuant to s. 186 of the Canada Business Corporations Act. Because amalgamation does not extinguish prior rights of a company, the Teva agreement was still in effect — as were the rights under s. 8. Summary judgment in the s. 8 case was sought, where Teva's entitlement to maintain the claim was raised. Justice Hughes applied the equitable doctrine of election to dismiss the claim. Teva, through the licence agreement, mandated the prohibition proceeding against Ratiopharm and was thus prohibited from pursuing the s. 8 claim.

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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