Canada: Canadian Patent Law: 2014 Year In Review

This article summarizes noteworthy Canadian patent law decisions and developments from 2014.

1. Court of Appeal addresses patent utility in Celebrex

Canadian Courts have continued to address allegations that patents are invalid because they lack utility. A notable 2014 Court of Appeal decision in this regard is Celebrex (Apotex Inc v. Pfizer Canada Inc, 2014 FCA 250).

In Celebrex, the Court of Appeal addressed the "promise of the patent" doctrine and, in short, found that an inventor who explicitly promises a specific result will be held to that promise for establishing utility. 

Section 2 of Canada's Patent Act requires, among other things, that an invention be "useful", i.e., that it possess utility.  Courts have long held that it is not difficult to meet the requirement of utility.  In this regard, an inventor need not expressly set out the utility of the invention in the patent.  Rather, it is merely required that, where the inventor is called upon to prove the utility of the invention, utility can be shown to be demonstrated or soundly predicted as of the patent's filing date.  The threshold that must be proven to establish utility is generally quite low, described as being no more than a "scintilla of utility".

Notwithstanding the traditionally low threshold for utility, the Court of Appeal stated that the "promise doctrine represents an exception to the above minimum statutory requirements". In this regard, "[t]hough an inventor need not describe any particular utility for the invention, an inventor who explicitly promises a specific result will be held to that promise when called upon to prove utility... That the invention may well have satisfied the scintilla threshold is of no assistance in establishing utility where a promise, if it be made, cannot be met".

At issue in Celebrex was whether certain statements in the patent's disclosure rose to the level of explicit promises.  Ultimately, the Court of Appeal upheld the lower Court's findings that there were no explicit promises.  In particular, the patent did not contain an explicit and unequivocal promise regarding side effects or treatment in humans, but rather only a possibility of reduced side effects and claims that spoke only of the treatment of "subjects".  At most, reduced side effects were understood to be a goal or advantage, but not a promise that would implicate the promise doctrine.

Celebrex is consistent with the Court of Appeal's findings in Plavix (sanofi-aventis v. Apotex Inc, 2013 FCA 186) regarding the promise doctrine.  The Supreme Court of Canada was set to hear argument with respect to an appeal from the Court of Appeal's decision in Plavix in November 2014; however, the appeal to the Supreme Court was discontinued just prior to the hearing.  As a result of such discontinuance, the Supreme Court did not have an opportunity to provide any guidance regarding the requirement for utility.

2. Dow v. NOVA: patent covering ethylene polymer compositions found valid and infringed

In Dow Chemical Company v. NOVA Chemicals Corporation, 2014 FC 844, the Federal Court made a number of findings of general relevance to patent infringement actions in arriving at its conclusion that Dow's patent covering ethylene polymer compositions was valid and infringed.  These findings include the following:

  • Promised utility: consistent with the Court of Appeal in Celebrex, the Court held that for a statement in a patent specification to rise to the level of a promise, there must be a clear an unequivocal statement that it is part of the promised utility of the invention. Otherwise, the statement should not be taken as anything more than a mere statement of advantage. Moreover, one should particularly look to the claims of the patent for any elevated promise or claimed utility;
  • Test for anticipation: consistent with other patent cases addressing the issue of anticipation, the Court held that a prior art reference must disclose subject matter that if performed would "necessarily result in infringement of that patent."  In this case, it was possible to perform subject matter disclosed in a prior art reference and not arrive at the claimed invention. As such, the reference was not anticipatory;
  • Test for obviousness: it is well-accepted that the test for obviousness is largely concerned with how a skilled worker would have acted in the light of the prior art. In this case, the Court adopted reasoning from earlier case law regarding where the line is drawn between publicly-available documents and information that forms part of the skilled person's common general knowledge: "it is not sufficient to prove common general knowledge that a particular disclosure is made in an article, or series of articles, in a scientific journal, no matter how wide the circulation of that journal may be, in the absence of any evidence that the disclosure is accepted generally by those who are engaged in the art to which the disclosure relates... Such a piece of knowledge only becomes general knowledge when it is generally known and accepted without question by the bulk of those who are engaged in the particular art;" and
  • Legal tests applied by expert witnesses: the Court found that the defendant's expert applied the wrong standard for assessing obviousness when the expert acknowledged that the skilled person – who is by definition uninventive and unimaginative – would have had an imagination. This finding is a reminder to litigants of the importance of ensuring expert witnesses understand and properly apply legal tests when rendering opinions and being the subject of examination at trial.

3. Noteworthy decisions regarding pharmaceutical patent cases

In 2014, there were several noteworthy decisions dealing specifically with pharmaceutical patent cases:

  1. Biologic patent infringement action: in Abbvie Corporation v. Janssen Inc., 2014 FC 55, the Federal Court found Abbvie's patent related to human antibodies to be valid and infringed.  It was the first biologics patent decision of the Court in fifteen years.  Notwithstanding that Abbvie itself did not practice its patented invention, the Court in 2014 FC 489 granted Abbvie a permanent injunction prohibiting Janssen from engaging in certain activities. Eventually, the decisions at the trial level were considered by the Court of Appeal and set aside such that a new trial was ordered.  See 2014 FCA 242 and 2014 FCA 241 in this regard. The basis for setting aside the trial-level decisions was that the trial judge erred in not allowing Janssen to rely upon certain prior art alleged for the first time just prior to trial. In particular, the Court of Appeal held that it was in the interests of justice to have all relevant prior art before the trial judge even if it meant increased delays and costs in having the matter decided. Following these decisions, the matter settled;
  1. Punitive damages are not available to generics in section 8 damages cases: in Teva Canada Limited v. Pfizer Canada Inc, 2014 FCA 138, the Court of Appeal considered whether punitive damages should be available in the context of section 8 damages cases, which are cases designed to compensate generic companies for losses sustained due to delayed market entry resulting from the statutory stay that applies when an innovator applies to the Court to prevent such market entry. The Court of Appeal ultimately held that claims for punitive or exemplary damages are not available in a section 8 proceeding. That is, generics are limited to claims for compensatory damages, not other monetary claims such as punitive damages or disgorgement of profits as had been claimed in earlier cases;
  1. Law is "unsettled" with respect to disclosure requirement for cases involving sound prediction of utility: in AstraZeneca Canada v. Apotex Inc, 2014 FC 638, the Court commented on the doctrine of sound prediction of utility. Since the Supreme Court's decision in the AZT case in 2002 (see 2002 SCC 77), Courts have been requiring that patents include a heightened degree of disclosure in cases where utility was not demonstrated, but rather soundly predicted.  In this case, the Court stated that the requirement for proper disclosure of utility is limited to the context of 'new use' patents. That is, it is not a requirement for all cases of sound prediction. The rationale in this regard is that in a new use case, there may be an enhanced disclosure requirement because utility is the only thing being offered in exchange for the patent monopoly; and
  1. Experimental use not enough for proving anticipation: in Bayer Inc v Apotex Inc, 2014 FC 436, the generic argued that clinical trials conducted pre-patent filing constituted anticipatory disclosures. The Court disagreed. In particular, the Court found that experimental use in order to bring the invention to perfection does not constitute public use. While there was a theoretical possibility that a tablet could have been taken and reverse engineered, the evidence demonstrated that the patentee had taken steps to preserve the confidentiality of relevant information and to have tablets not used in the trials returned to it.

4. Changes coming to Canada's Patent Act and Industrial Design Act

Notable changes are coming to Canada's Patent Act, including the following:

  • Reinstatement of abandoned applications: reinstating abandoned Canadian applications is about to become more complex for applicants. Under the current regime, applicants can easily reinstate abandoned applications within 12 months of abandonment by making a request, paying a fee and completing whatever step was not completed at the time of abandonment. Under the new regime, applicants will be additionally required to provide "reasons" for why the applicant failed to take steps to avoid the abandonment. The Patent Office will then evaluate whether the applicant exercised "due care" notwithstanding the abandonment. As a result of these changes, applicants will need to act with much greater care when it comes to maintaining and prudently prosecuting applications;
  • Reference to priority application: Canadian practice prohibits "incorporation by reference" statements in patent disclosures. However, under amendments to the Patent Act, applicants will now be permitted to reference a priority application. By including such a reference, an applicant will be allowed to add subject matter to an application that otherwise may have been considered to be impermissibly new;
  • Notices from the Patent Office: where a deadline for a fee payment has been missed, the Patent Office will now notify an applicant of the missed payment, and payment (including a late fee) must be made within 2 months of the notice or 6 months of the original deadline date (whichever is later); and
  • Requests for priority: where a request for priority based on an earlier priority application was unintentionally not made at the time of filing, an applicant will have until 14 months from the date of the priority application to make the request for priority.

More detail regarding the above and other changes is available here.

In addition, Canada's Industrial Design Act will be subject to a number of changes, including changes related to a new "novelty" requirement, new priority claims and term of protection, all of which are discussed in more detail here.

The above-noted changes to the Patent Act and Industrial Design Act have been announced, but are not yet in force.

5. New guidelines issued for experimental testing in patent actions

In 2014, the Federal Court issued a Notice to the Profession requiring a litigant to give an opposing party notice of experimental testing to be conducted for the purpose of litigation in a patent infringement (or impeachment) action. The notice must include:

  • the facts to be proven by such testing;
  • the nature of the experimental procedure to be performed;
  • when and where the adverse parties' counsel and representative(s) can attend to watch the experiment(s); and
  • when and in what format the data and test results from such experiment(s) will be shared with the adverse parties.

This notice must be provided two months before the scheduled service of the expert report(s) in chief. Any disputes about the required notice may be resolved at a case management conference. Failure to abide by the notice requirements precludes a party from adducing experimental testing evidence, subject to leave of the Court.

Further discussion regarding this Notice, including background related thereto and questions that it raises, is available here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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