The Supreme Court of Canada denied leave to appeal today from
the Federal Court of Appeal ("FCA") decision in Eli
Lilly Canada Inc v Novopharm Ltd., 2012 FCA 232. This proceeding concerned the
standard of utility and, specifically, the "promise of the
patent doctrine". Under this doctrine, if "...the
specification sets out an explicit 'promise', utility will
be measured against that promise" (2010 FCA 197, at 76). This is distinct from
the usual requirement that "the patent holder need only show a
scintilla of utility for the patent to be valid" (2011 FC 1288, at 84).
Eli Lilly brought an action against Novopharm alleging that
Novopharm had infringed Eli Lilly's patent for olanzapine, a
medicine marketed for the treatment of schizophrenia. Olanzapine
was first patented as one of more than 15 trillion
structurally-related compounds included in a genus patent granted
in 1980 (Canadian Patent No. 1,075,687). It was later the subject
of a selection patent granted in 1998 (Canadian Patent No.
2,041,113). It is this latter patent that Eli Lilly alleges has
At trial (2009 FC 1018), Justice O'Reilly dismissed
the infringement action finding that the 1998 patent was an invalid
selection patent as it did not represent an invention over and
above the compounds disclosed in the earlier patent. In addition,
he found that it was invalid for non-utility, insufficiency,
anticipation, and double patenting.
On appeal (2010 FCA 197), the trial judge was held to
have erred in viewing the conditions of a selection patent as an
independent basis upon which to attack the validity of the patent.
Further the FCA held that the 1998 patent was not anticipated or
obvious, nor was it invalid for double patenting. The issues of
utility and sufficiency were referred back to the trial judge.
On remand (2011 FC 1288), Justice O'Reilly held that
the disclosure was sufficient, but found the patent invalid for
lack of utility. He construed the "promise of the patent"
to be that olanzapine was "...substantially better
('marked superiority') in the clinical treatment of
schizophrenia (and related conditions) than other known
antipsychotics..." (at 124) and found that, at the time of
filing, there was "...no sound and articulable line of
reasoning, or a prima facie reasonable inference, that
would have led the inventors from the evidence available at the
relevant time to the explicit promise" (at 267). Eli
Lily's appeal to the FCA was dismissed (2012 FCA 232).
The "promise of the patent doctrine" has also
attracted criticism outside of the courts. In November 2012 Eli
Lilly served a Notice of Intent to Submit a Claim to
Arbitration under Chapter 11 of the NAFTA. The notice
states that Canadian Judge-made law on utility is not in compliance
with Canada's treaty obligations. It also noted that
"[t]his non-statutory 'promise doctrine' is not
applied in any other jurisdiction in the world" (at 37). In
May 2013 the "Special 301 Report" of the Office of the
United States Trade Representative expressed "...serious
concerns about the heightened utility requirements for patents that
Canadian courts have been adopting recently" (at page 46).
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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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