In a unanimous decision released November 8, 2012, the Supreme
Court of Canada has reversed the judgments of the Federal Court and
the Federal Court of Appeal and cleared the way for an affordable
generic version of Pfizer's Viagra to be sold in Canada by Teva
Canada Ltd. Teva was represented by Osler's David
Aitken and Marcus Klee and Teva's Vice
President & General Counsel, Ildiko Mehes.
This is the first time since 1981 that the Supreme Court has
comprehensively addressed the statutory requirement to fully and
correctly disclose the invention in a patent. This disclosure
requirement has previously been described by the Supreme Court as
the heart of the patent bargain and the quid pro quo of the patent
monopoly. The decision provides much needed guidance on this
central tenet of patent law.
Teva's success before the Supreme Court of Canada will
promote transparency in the patent system and dissuade patent
owners from "gaming" the patent system by securing a
monopoly while simultaneously maintaining the invention as a trade
Sildenafil, the active ingredient in Viagra, was originally
developed by Pfizer for use in treating angina and hypertension.
Pfizer obtained a patent covering sildenafil and its use in
treating angina and hypertension in 1998. When testing sildenafil
on patients suffering from angina, Pfizer observed that some people
experienced spontaneous erections. Pfizer carried out a small
clinical study to test the effects of sildenafil on patients with
erectile dysfunction (ED) and then applied to obtain a second
patent covering the use of sildenafil in the treatment of ED.
Although sildenafil was the only compound that Pfizer
had tested and observed to induce erections, Pfizer chose to draft
the patent to cover many other compounds that it had neither made
nor tested. Pfizer artfully worded the patent to conceal the
fact that sildenafil was the test compound.
In 2007, Teva filed a submission for regulatory approval to sell
its generic version of Viagra. Pfizer responded by bringing a
proceeding in the Federal Court for order prohibiting the Minister
of Health from granting approval to Teva until expiry of the
patent. Teva resisted Pfizer's application on the basis that
the patent was invalid on numerous grounds, including failure to
satisfy the disclosure requirements set out in s. 27(3) of the
Pfizer's application was granted and prohibition was ordered
by the Federal Court and upheld by the Federal Court of Appeal.
The Supreme Court Decision
The Supreme Court agreed with Teva's submission that in
failing to disclose the identity of sildenafil as the compound, the
patent failed to fully and correctly disclose the invention and
imposed on the reader "a minor research project" to
identify the true invention.
Justice Le Bel, writing for the Court, stated that
"the public's right to proper disclosure was denied in
this case" and that the patent obscured the true invention. He
concluded "Pfizer gained a benefit from the Act —
exclusive monopoly rights — while withholding disclosure in
spite of its disclosure obligations under the Act. As a matter of
policy and sound statutory interpretation, patentees cannot be
allowed to 'game' the system in this way."
Implications of the Decision
The Supreme Court's decision paves the way for the
introduction of lower cost generic Viagra into the Canadian market.
Perhaps more importantly, the decision reaffirms and clarifies the
disclosure obligations required of a patentee as the quid pro
quo for the state granted patent monopoly. The Supreme Court
has provided a clear signal that the patent system is founded on
disclosure as the engine of innovation as an essential element of
the patent bargain. Sophisticated companies who 'game' the
patent system do so at their peril. This decision re-establishes a
balance between the interest of patent owners and the interest of
the Canadian public.
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A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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