Canada: Clinical Studies Exempted from Public Use in Allegation of Anticipation (Intellectual Property Weekly Abstracts Bulletin – Week Of June 2, 2014)

Edited by Chantal Saunders and Beverley Moore , Adrian Howard and Ryan Steeves

NOC Cases

Clinical Studies Exempted from Public Use in Allegation of Anticipation

Drug: YAZ® drospirenone and ethinylestradiol

This is an application pursuant to the Patented Medicines (Notice of Compliance) Regulations. The Court began by noting that it had issued an Order of prohibition in a proceeding relating to the same patent with a different generic company, Cobalt. The parties agreed not to make submissions with respect to obviousness in light of the Cobalt decision.

After construing the asserted claims, the Court found that Apotex did not infringe the patent. The Court also considered eligibility for listing on the Patent Register. The Court found that section 6(5) of the Regulationscan allow for the early disposition of this issue, but does not prevent the issue from being raised at the hearing. Accordingly, the Court considered Apotex' allegation that the patent was not properly listed on the Patent Register because the medicinal ingredient is in the form of a clathrate, which is not claimed in the patent. The Court noted the burden with respect to this allegation lies with Apotex because it is not an allegation that Bayer must demonstrate was not justified as it does with allegations pursuant to section 5(1) or (2) of the Regulations. The Court found that the listing was not improper.

Apotex also alleged that the asserted claims are invalid for anticipation in light of clinical studies in Europe and the United States. Bayer submitted evidence with respect to the measures taken to ensure confidentiality was maintained. The Court found "that there has been established a "theoretical" possibility that a tablet could have been kept and analyzed, therefore the requirements of subsection 28.2(1)(a) of the PatentAct have been met." However, the Court then considered that the law allows experimental use in order to bring an invention to perfection, which does not constitute public use. The Court found that Bayer took reasonable steps and it is only a theoretical possibility that some tablets were retained and analyzed. "This theoretical possibility does not preclude the fact that the studies were experimental, and of necessity, conducted by the provision of tablets to members of the public. Thus these clinical studies are exempted from public use." The claims of anticipation were found not justified.

The application was dismissed.

Patent Cases

Claim Seeking Punitive and Exemplary Damages Denied as Part of Section 8 Proceeding

This is a case relating to the drug Viagra. This was an appeal from an order of the Federal Court which dismissed an appeal from an order of a Prothonotary. The Prothonotary had struck portions of Teva's Statement of Claim seeking punitive and exemplary damages, as well as quantification of Pfizer's profits, pursuant to an action under section 8 of the NOC Regulations.

The issue on this appeal was whether a claim for punitive and exemplary damages may be sustained under section 8 of the NOC Regulations. The Court of Appeal held that such a claim cannot be sustained, for similar reasons as those expressed by the Federal Court. The Court of Appeal added, however, that while punitive damages are not limited to certain categories of claims (i.e. they have been found to be available in all types of cases, notably in patent infringement cases), punitive and exemplary damages cannot be available where the statutory regime underlying the claim explicitly or implicitly precludes them. This is the case under the NOC Regulations, which set out a comprehensive scheme with respect to compensation resulting from the operation of the statutory stay it provides for. The Court of Appeal noted that section 8 of the NOC Regulations provides that the first person is liable for "any loss suffered" during the period; this wording allows compensation for losses actually incurred, not other types of relief, such as disgorgement of profits or punitive damages.

Teva also raised the application of subsection 8(5) of the NOC Regulations as a new justification for seeking punitive damages. The Court of Appeal clarified that this provision relates to the assessment of the losses suffered by the generic company, and that it allows the court to adjust the damages taking into account the conduct of the parties with respect to the prosecution of the prohibition application. However, it was held that subsection 8(5) cannot sustain a claim for punitive damages since, by their nature, punitive damages are not "compensation".

Teva's application was therefore dismissed.

Final injunction permits existing patients to continue to receive

infringing  medicine
AbbVie Corporation v. Janssen Inc., 2014 FC 489
Drug: ustekinumab (STELARA®)

This decision relates to the crafting of a final injunction for the sale of STELARA following a finding of infringement. In an earlier trial decision reported as 2014 FC 55, Janssen was found to be infringing AbbVie's Canadian Patent No. 2,365,281 by selling in Canada its product known as STELARA. (Currently under appeal, docket A-95-14) The Court of Appeal earlier refused to grant a stay of the hearing of arguments on this injunction pending the outcome of the appeal, due to a lack of finding of irreparable harm (2014 FCA 112, summarized here).

The Court refused to grant an injunction stopping all sales of STELARA, as existing patients may continue to receive the medicine. New patients may also be able to take the medicine, if the physician determines it is necessary to treat the patient. However, Janssen is barred from using sales representatives to promote the use of their product to doctors. Janssen was also prohibited from conducting Phase IV trials, unless they are required by law. The Court refused to stay the injunction pending the appeal.

Copyright Cases

Decision Granting Request for Case Management of IP Litigation Upheld on Appeal

This was an appeal by the Defendants of the order of a Prothonotary granting the Plaintiffs' request for special management of this action, an action in which the Plaintiffs claim, among other things, copyright infringement and passing off. At the time of the hearing of this motion, the parties were at the close of the pleadings stage of the action.

The Plaintiffs filed a letter with the Federal Court requesting that the action be case managed for essentially two reasons: (1) to obtain a trial date at the earliest availability and avoid further delay; and
(2) to have in place a scheduling order, which will streamline all pre-trial matters. The Defendants did not consent on the ground that the request was premature. With respect to the Prothonotary's decision granting the Plaintiff's initial request, the Defendants submitted that it should be set aside because: (i) they did not consent; (ii) they were not permitted to be heard, which constituted a denial of natural justice; (iii) the request for case management was treated as an ex parte motion without any evidence filed; (iv) it was an error to grant the Plaintiff's order since the action is not complex litigation; and (v) the Prothonotary erred in law by automatically granting case management on request.

The Court could see no ground upon which it could find that the exercise of discretion by the Prothonotary was clearly wrong. What remained was the issue of whether the decision to issue the order was  based upon a wrong principle. The Court denied the Defendants' argument that it was denied natural justice, since no rights were being disposed of. While the Court conceded that the Prothonotary's decision is "open to criticism that he acted precipitously" and that he "could have waited" to issue the order, the Court did not accept the argument that the Prothonotary

was wrong in concluding that case management was appropriate in this case. It was a reasonable decision. While the Defendants argued that case management would be prejudicial to their interests (i.e. they would be foreclosed from bringing a motion for summary judgment, based on a reading of Rule 213(1) of the Federal Court Rules (the "Rules"), the draft Scheduling Order was crafted so as to limit the application and effect of Rule 213. In the Court's view, this was a complete answer to the Defendants' claim that they would suffer prejudice, since it is also consistent with the general principle in Rule 3 of the Rules. The Court also added that there is no requirement to show some form of delay by the parties prior to the issuance of such an order. In fact, it was noted that the relevant Practice Notice (May 2009) states that it should be made as early as possible. Therefore, the Defendants' appeal was dismissed.

The Plaintiffs sought and were awarded solicitor and client costs based on the fact that this appeal should not have been brought. The Court held that a less costly resolution could have been sought by a motion in writing to the Prothonotary to reconsider his Order.

Joint ownership in copyright ordered on basis of a memorandum assigning rights

Kennedy v. Ruminski, 2014 FC 526

The applicant moved under subsection 57(4) of the Copyright Act to correct the name of the holder of three copyright certificates, by naming the Applicant as the holder. The certificates are currently in the name of a programmer who either worked for or with the applicant. The main issue was whether the works were created during the course of employment, or whether they were partners.

The Court found that the applicant established an interest in the certificates. However, subsection 13(3) of the Copyright Act, which vests copyright in the employer, was found not to apply due to a memorandum between the two parties. The memorandum provides 80% ownership to the applicant, 20% to the respondent. In the result, the Court ordered that the registration certificates reflect joint ownership over the works.

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