Case: Pharmascience Inc. v AstraZeneca
Canada Inc. et al 2014 FCA 133
Nature of case: Appeal of a s.6 prohibition order pursuant to the PM(NOC) Regulations
Date of decision: May 22, 2014 (public reasons available as of June 10, 2014)
Pharmascience Inc. (Pharmascience) appealed from the decision of Justice O'Keefe of the Federal Court (reported as AstraZeneca Canada Inc. v. Pharmascience Inc., 2012 FC 1189) prohibiting the Minister of Health from issuing a Notice of Compliance to Pharmascience for its version of the drug omeprazole formulated using low viscosity hydroxypropylmethylcellulose (HPMC).
The appeal was allowed and the application for a prohibition order was dismissed. This decision is notable in that it specifies that evidence going beyond the mere fact of detailing an allegation of invalidity in a notice of allegation has to be adduced by a respondent to properly put this allegation "into play". The decision further defines that the legal standard that has to be met by an applicant in response to an allegation of lack of utility is "proof on the balance of probabilities" that the invention is useful.
By way of background, AstraZeneca Canada Inc. (AstraZeneca) brought an application for prohibition in response to Pharmascience's notice of allegation which claimed that Canadian Patent No. 2,290,531 ('531 Patent) was invalid on a number of grounds including lack of utility and obviousness. The Federal Court of Appeal held that the application judge erred in law with respect to both the legal standard to be met by Pharmascience in order to "put its allegations into play", and the legal standard AstraZeneca was required to meet to prove that its invention was useful. Upon review of the evidence, the Court of Appeal concluded that the evidence adduced by Pharmascience was sufficient to put its allegation of lack of utility into play and that in response, AstraZeneca had not satisfied its onus of showing on a balance of probabilities that the allegation of invalidity of the '531 Patent was not justified.
At trial, Pharmascience submitted that the '531 Patent did not indicate that any tests were performed to demonstrate that low viscosity HPMC actually possessed the claimed utility, and no substantive data was provided to demonstrate the promised utility. In this regard, the application judge found that since the allegation of lack of utility was raised in its Notice of Allegation, Pharmascience has met its evidentiary burden of putting this allegation "into play" and therefore that the burden of proof rested on AstraZeneca to establish that it was not justified.
AstraZeneca for its part pointed to the statement in the patent that "results from a number of experiments with different batches of HPMC indicate that HPMC with a cloud point of at least 45.6° C is desirable in fulfilling the regulatory requirements on rate of release of omeprazole." The Federal Court found that such a statement was sufficient to meet its burden for proving utility. Even though this evidence was recognized by the application judge as being "relatively non-descriptive", it was nonetheless held that AstraZeneca should not have to meet a higher burden.
As a result, the application judge found that Pharmascience had failed to demonstrate that the invention did not work at all or did not do what the specification promised it would do. It was thus concluded that AstraZeneca had shown that Pharmascience's allegations of lack of utility were not justified.
Court of Appeal decision
The Court of Appeal limited its discussion to the issue of utility. The Court began its analysis with the note that "due to the peculiar nature of notice of compliance proceedings, the issue of the onus of proof has been the subject of considerable discussion in the jurisprudence." According to the Court of Appeal, such peculiarity is due to the fact that the applicant for an order of prohibition must necessarily respond to the respondent's notice of allegation, and therefore show that the allegations therein are not justified. However, because of the presumption of validity set out at subsection 43(2) of the Patent Act, the jurisprudence has held that the respondent still has the onus of putting these allegations "into play".
The Court of Appeal reviewed some of the jurisprudence on that issue which has held that the respondent must prove its allegations on a "balance of probabilities" standard, while other cases have held that the respondent must simply lead sufficient evidence to give its allegations "an air of reality". It then confirmed that Pharmascience, as the respondent in prohibition proceedings, had the onus of leading evidence sufficient to put its allegations of invalidity "into play" which contrary to the view of the application judge, cannot be satisfied by the mere fact of detailing its allegation of invalidity of the patent for lack of utility in its notice of allegation.
Furthermore, the Court of Appeal held that for AstraZeneca to meet its burden of proving utility, it has to adduce evidence at a "higher burden", which corresponds to proof on the balance of probabilities. This burden cannot be met by reference in the patent to a relatively non-descriptive statement, as was accepted by the trial judge.
In its assessment, the Court of Appeal held that the application judge erred in law with respect to the type of evidence that had to be adduced by Pharmascience in order to put its allegations into play, and the legal standard AstraZeneca was required to meet to prove that its invention was useful.
Due to these errors, the Court of Appeal found that the application judge did not properly construe the evidence that Pharmascience had to put forward to put its allegation of lack of utility into play and further failed to assess whether AstraZeneca showed, on the correct standard of "balance of probabilities", that Pharmascience's allegations of lack of utility were not justified. The Court of Appeal accordingly undertook to do this analysis as at first instance.
Pharmascience's expert criticized AstraZeneca's test results aimed at proving utility of the invention in the '531 Patent, given that the applicable protocol did not indicate the number of samples tested and the number of studies conducted for each type of HPMC were not known. He also criticized the validity of the statistical test results as being insufficient, in and of themselves, to prove that the release of omeprazole is directly and consistently related to the cloud point of the batch of low viscosity HPMC used in the formulation of an oral dosage form of omeprazole. The Court considered these comments as sufficient to put the allegation of lack of utility "into play".
AstraZeneca's expert's evidence was considered by the Court of Appeal as non-responsive to the real issue raised by Pharmascience's expert. The expert was unable to state how many samples were tested and what the individual results were. It was therefore impossible for the Court to assess the significance of these results. Without being able to assess the results, the Court held it was impossible to determine whether the experiments actually proved that which the inventors claimed they proved.
Since the patent did not provide that information and no expert supplied it, the Court concluded that there was no evidence before the Court capable of establishing that low viscosity HPMC with a cloud point equal to or higher than that described in the '531 patent will consistently result in release rates in excess of the regulatory standard, as promised by the invention. The Court of Appeal thus concluded that AstraZeneca had not satisfied the onus of showing on a balance of probabilities that Pharmascience's allegations of invalidity were not justified.
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