Canada: NOC Proceedings (Intellectual Property Weekly Abstracts Bulletin (Week Of January 6th, 2014)

NOC Proceedings

Failure to Produce Evidence of Development Leads to Adverse Inference on Obviousness

Gilead Sciences Inc. v. Teva Canada Limited, 2013 FC 1270

Bristol-Myers Squibb v. Teva Canada Limited, 2013 FC 1271

Gilead Sciences Inc. v. Teva Canada Limited, 2013 FC 1272

Drug: tenofovir disoproxil

These proceedings, brought pursuant to the NOC Regulations, dealt with two patents. One set of reasons was issued. The application was granted in part.

With respect to the first patent, one claim was at issue, and its inventive concept was held to be the use of the carbonate promoiety disoproxil with the antiviral compound tenofovir. Infringement was admitted if the claim was valid. The Court held that the patent was not anticipated or obvious and the selection-related invalidity assertions were also held to fail. Thus, a prohibition order was granted with respect to this patent.

With respect to the second patent, the parties agreed that the inventive concept was the choice of the fumarate salt form of tenofovir dioproxil. The Court drew an adverse inference from the failure to produce the same sort of historical evidence it produced with respect to the other patent at issue. Thus, the Court held that in the face of an obviousness attack, the failure to produce such evidence leads to the conclusion that the development was routine. Thus, the obviousness challenge was successful.

Prothonotary's Decision Denying Sur-Reply Not Overturned on Appeal

Pfizer Canada Inc. v. Apotex Inc., 2013 FC 1249

Drug: celecoxib

Pfizer appealed an unreported Order mostly denying their request to file two affidavits in sur-reply. These affidavits would be the fifth wave of affidavits in the proceeding. The Court held that the Prothonotary's Order was discretionary, and could only be overturned if clearly wrong. Furthermore, the Court held that the case management Judge should be afforded "elbow room".

The Court held that the Prothonotary's analysis was persuasive, his reasons were cogent, and he did not apply the wrong principle or misapprehend the facts. Thus, the decision was not clearly wrong and the appeal was dismissed.

Reply Affidavits Allowed when New Documents Introduced in Responding Evidence

Allergan Inc. v. Apotex Inc. 2013 FC 1165

Drug: bimatoprost

In this case, there is a partial reversal of evidence. Apotex brought a motion for leave to file reply evidence. Allergan did not oppose parts of the proposed reply. However, this motion was with respect to those portions which were opposed. Allergan argued that the documents relied upon by its experts should have been known to Apotex, in particular due to the fact that Mylan and Cobalt referred to the documents in their NOAs. Apotex argued that there was a paucity of information about Allergan's case in the Notice of Application.

The Court held that it is not possible to know what the other side believes is relevant until it is put in play. "If the expectation is that if any piece of prior art or document is known to a party and they do not refer to it in their evidence then they cannot reply because they knew of it – this is an invitation for a party to include every single piece of known prior art and document so as not to be prevented from commenting on it." The Court held that the need to reply to documents raised for the first time in Allergan's expert affidavits is not case splitting. Thus the reply affidavits were allowed. However, the Court did caution that granting reply is not an invitation to do a further "document dump".


Infringement and Validity of Automatic Drilling System Patent Determined

Varco Canada Limited v. Pason Systems Corp., 2013 FC 750

This is a patent infringement action. The patent in issue relates to an automatic drilling system. The Court first addressed and rejected the attacks as to credibility made by the Defendants in respect of the inventor. After setting out the development of the invention, the Court construed the claims of the patent, and determined that the Defendants infringed the asserted claims. The Court also concluded that the Defendants are liable for inducing infringement by others. With respect to infringement by exportation, the Court concluded that the method claims are outside the Court's jurisdiction because the evidence established that the parts are manufactured in Canada but shipped in unassembled form, but the product claim is infringed because the sale of the infringing product occurs in Canada.

The Defendants asserted invalidity of the patent on the basis of anticipation, obviousness, inutility, overbreadth, and deemed abandonment/bad faith. The Court found that the prior art cited by the Defendants did not meet the test of either disclosure or enablement for the purposes of anticipation. The Defendants also alleged anticipation by prior use. In particular, the inventor had no ability to test the prototype developed and used a rig owned by a third party for testing. The Court noted that the Defendants have the burden to prove that there was disclosure of the invention that was sufficiently disclosing for the invention to be practiced. The Court found that the Defendants did not meet this burden. The Court noted that there was no evidence of an unconditional sale of the prototype and experimental use is not prior use. Furthermore, the Defendants' witnesses conceded that testing was necessary to determine if the invention would work. While there was no confidentiality agreement, and no evidence at the trial regarding industry practice, the actions of the inventor indicate an intention to keep the product confidential.

The Court found that the claims were not obvious or overly broad. In terms of inutility, the Court noted "[g]iven the evidence as to the operation of the Wildcat and the Pason AutoDriller, and the finding of infringement, the challenge of "inutility" has a false ring." Part of the inutility challenge relates to use of the terms "increase" and "decrease" in pressure in claims 9 and 10. In particular, "increased" was used when "decreased" should have been used, and vice versa. In response to an ex parte application to the Commissioner of Patents (the "Commissioner"), an amendment was permitted to these claims. The Court in a separate proceeding granted judicial review of the Commissioner's decision. In addressing the merits of the allegation of inutility, the Court in the within case concluded that a person skilled in the art would recognize the error and would not be confused or misled, and therefore the allegation of inutility failed. Finally, the Court concluded that the patent was not invalid on the basis of abandonment.

In terms of remedies, the Court noted that the Plaintiffs established a basis for the equitable relief of an accounting of profits, and no inequitable conduct on the part of the Plaintiffs that would prevent the award of this relief. The Court concluded that the remedy of disgorgement of profits is the appropriate remedy in the circumstances of the case, and awarded approximately $53 million to the Plaintiffs. The Court also calculated lost profits/reasonable royalty as an alternative, as well as a reasonable royalty amount as a further alternative. The Plaintiffs requested exemplary/punitive damages, which the Court indicated would have been awarded if damages had been awarded and not the disgorgement of profits remedy "because of the deliberate infringement carried out in the face of advice from Leier and recklessness as to the consequences." Costs were awarded pursuant to Column V of the Tariff.

Other Industry News

Health Canada has published a Guidance for Industry: Management of Drug Submissions.

Health Canada has published a Guidance Document for Industry and Practitioners - Special Access Programme for Drugs.

Health Canada has published a Guidance Document: Schedule A and Section 3 to the Food and Drugs Act.

Health Canada has published a Guidance Document on Post-Drug Identification Number (DIN) Changes.

Health Canada has published a List of Registrars Recognized by Health Canada under section 32.1 of the Medical Devices Regulations (MDR).

Health Canada has published a Guidance document on how to interact with the Natural Health Products Directorate electronically.

CIPO has published its PCT Schedule of Fees for Applications filed on or after January 1, 2014.

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