Canada: Patent Found Valid And Infringed - Accounting Of Profits Awarded (Intellectual Property Weekly Abstracts Bulletin: Week Of March 18, 2013)

Last Updated: March 23 2013

Edited by Chantal Saunders , Beverley Moore and Adrian Howard

Patent Actions

Patent Found Valid and Infringed - Accounting of Profits Awarded
Apotex v. H. Lundbeck.
Drug: escitalopram

Apotex sued for impeachment of Lundbeck's patent. Lundbeck counterclaimed for infringement. The Court held that the patent was valid and infringed. The patent claimed, inter alia, the escitalopram enantiomer.

The Court held that the previous disclosure of citalopram was not anticipatory. In considering obviousness, the Court held that the issue is not which techniques would have been used, but rather, "whether those techniques would have been successful, given the wide range of chemicals and other variables which might be used in the reactions." According to the Court, it boiled down to whether it was obvious to try certain techniques, or whether one would give up in frustration. (para 93). The Court recognized, in this analysis, that a different skill set is required to create a recipe, than to follow it. Regarding motivation, the Court recognized that "wishing does not make something come true" or make it easier. Motivation may make one try harder to make something work, but at some point, the experiments are no longer routine.

Regarding inutility, Apotex tried to rely on a statement about the toxicity of a particular salt made in another patent application as a binding admission. The Court held that what was said was not important, but rather, whether the salt was actually toxic. As Apotex filed no evidence on the issue, the Court accepted Lundbeck's evidence and dismissed the allegation of inutility.

Apotex argued that a misstatement in the patent should lead to the patent being declared void for insufficiency. The Court held that the sentence in question was not essential, and thus, the patent should survive. The Court also held that testing done with the patent in hand for the purposes of determining which compound is escitalopram is different than testing done in order to find the invention. Thus, the patent does not fall for insufficiency.

Regarding sound prediction, the Court held that the patent did not promise that escitalopram would be more potent than racemic citalopram. Most of the inhibition was found in escitalopram as compared to racemic citalopram, but the comparison in the data could not be taken as a promise. In this case, the inventive concept was the two enantiomers and methods to obtain them. The patent was not invalid for a lack of sound prediction.

The Court then considered infringement and remedies. Infringement was admitted if validity was found. Apotex had stockpiled escitalopram in advance of both the NOC decision and the Appeal. It then sold some of that stockpile. The Court held that both of these activities were infringing, but did not warrant an award of punitive damages. However, Apotex did make a profit on those sales and the Court held they must account for it. "It would be completely unreasonable to hold that the only consequence of infringement over several years would be to declare the patent valid and to enjoin them from continuing to do what they should not have done in the first place." (para 272). In considering the approach to accounting for profits, the Court distinguished other jurisprudence and held that because the only active ingredient in Apotex' product was escitalopram, it must turn over all profits less legitimate expenses incurred. The Court also granted a permanent injunction.

Copyright Cases

Appeal Granted with respect to Summary Judgment re Standing to Sue for Infringement
Nautical Data International v. C-Map USA

The Court granted a motion for summary judgment relating to standing to sue for copyright infringement in two actions, resulting in dismissal of the two actions. The Court of Appeal found that the defendants did not meet their burden of proving that there is no genuine issue for trial, and that the motion for summary judgment should have been dismissed.

Other Cases of Interest

Liability for Section 8 Damages Upheld
Astrazeneca Canada v. Apotex
Drug: ompeprazole

AstraZeneca appealed the decision of the Trial Judge with respect to liability for damages pursuant to s. 8 of the NOC Regulations (decision here, our summary here). Two factual questions were at issue on appeal: whether it was relevant that Astrazeneca had sued Apotex for infringement and that trial had not yet been completed; and whether it was relevant that Apotex intended to manufacture its product at a site other than the one mentioned in its pending regulatory submission.

The Trial Judge held that at the time the infringement case was heard, the Court could then craft an appropriate remedy taking into account any compensation award in these proceedings. Furthermore, Apotex could have manufactured its product at either of the two facilities, so the change in location was not relevant. The Court of Appeal upheld these findings.

The Trial Judge held that at the time the infringement case was heard, the Court could then craft an appropriate remedy taking into account any compensation award in these proceedings. Furthermore, Apotex could have manufactured its product at either of the two facilities, so the change in location was not relevant. The Court of Appeal upheld these findings.

Decisions in Leave to Appeal to the Supreme Court

The Supreme Court is releasing their judgment for two leave decisions this Thursday. The first, Gilead Science Canada Inc. v. Minister of Health Limited, relates to when a patentee may list a patent claiming the medicinal ingredient of a commercial product on the Patent Register. Our summary of the Court of Appeal decision was reported October 15, 2012.

The second leave application, Phillips Morris Products S.A., Rothmans, Benson & Hedges Inc. v. Marlboro Canada Limited, Imperial Tobacco Canada Limited, relates to trade-marks used in association with cigarettes. Our summary of the Court of Appeal decision was reported July 9, 2012.

Other Industry News

Health Canada has published a notice that it has updated its fees for the Administration of Drug Master Files. It has also published a two new forms: Drug Master File (DMF) Fee Form and Drug Submission/Application Fee Form. In addition, it has published a number of Guidance Documents: Fees for the Review of Drug Submissions and Applications, Fees for the Review of Medical Device Licence Applications, Medical Device Licence Renewal and Fees for the Right to Sell Licensed Medical Devices, and Fees for the Right to Sell Drugs.

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