Canada: Pharma In Brief: Federal Court Declares Omeprazole Formulation Patent Valid And Infringed

Case: AstraZeneca Canada Inc. v. Apotex Inc., 2015 FC 322

Drug: LOSEC® (omeprazole)

Nature of case: Validity and infringement action

Successful parties: AstraZeneca Canada Inc., Aktiebolaget Hässle, AstraZeneca AB

Date of decision: March 16, 2015


On March 16, 2015, Justice Barnes of the Federal Court issued his decision in AstraZeneca Canada Inc. et al v. Apotex Inc., 2015 FC 322, declaring the asserted claims of Canadian Patent No. 1,292,693 ("'693 Patent"), a formulation patent, to be valid and infringed by Apotex's manufacture, sale, and promotion of Apo-Omeprazole capsules. This decision arises in the context of an extensive litigation history between the same parties relating to LOSEC® under the Patented Medicines (Notice of Compliance) Regulations ("Regulations").

'693 Patent valid and infringed

According to Barnes J., the object of the patented invention is the development of an omeprazole formulation which provides acceptable gastric acid resistance that dissolves rapidly in neutral to alkaline media and has good stability during long term storage. The object is achieved with the claimed dosage form, which includes an "inert subcoating" layer between the formulation's inner omeprazole core and outer enteric coating.

Claim construction

The case turned on claims construction, and in particular on the construction of the inert subcoating in Claim 1:

An oral pharmaceutical preparation composition inert subcoating which is soluble or rapidly disintegrating in water disposed on said core region, said subcoating comprising one or more layers of material selected from among tablet excipients and polymeric film forming compounds...

Apotex argued that Claim 1 should be construed to claim only subcoatings physically applied to the core and free of holes, gaps or structural anomalies, and that "inert" should be construed to mean that the subcoating must be wholly unreactive with any of the other constituents of the formulation.

In construing the '693 Patent, Barnes J. considered the Federal Court of Appeal's ("FCA") prior findings on the same patent in Apotex Inc. v. AB Hassle, 2003 FCA 409, a decision between the same parties under the Regulations. Although he accepted that the FCA's findings under the Regulations did not bind him in the present action, he nevertheless found that in this case they carried persuasive weight, and he adopted a similar construction.

Barnes J. rejected Apotex's construction that Claim 1 is limited to subcoatings physically applied to the core, and held that the "patentee is entitled to protect the product regardless of the means of its creation". He found that it was irrelevant that there are other methods available to produce the essential elements of the novel formulation; all that is required is the disclosure of one viable method of manufacture in the patent. He also cautioned against relying too heavily on the patent disclosure to interpret its claims.


In finding the '693 to be valid, the Court rejected Apotex's asserted grounds of invalidity: anticipation, obviousness, overbreadth, inutility and ambiguity.

With respect to anticipation, Barnes J. held that there was no evidence that a subcoating layer would be the inevitable result of practicing the teachings of Apotex's asserted prior art.

Barnes J. held the patent to be non-obvious because, although the various components of the invention were known, the skilled person would not have been drawn immediately and without difficulty to combine those elements into the particular arrangement in the patent. He also found that a claim is not overbroad or ambiguous because the skilled person is left to avoid known unsuitable choices, or because some routine testing would be required to know whether a formulation with the structural features of the claim actually worked.

On utility, Barnes J. found that the patent does not contain a promise that every omeprazole formulation with the structural features of Claim 1 will fulfill the objectives of the patent. Rather, the patent teaches the skilled person that by following its instructions and by applying common general knowledge, a useful formulation will be the expected — not the inevitable — result. With routine testing and some adjustments, if necessary, the skilled person is able to obtain a useful formulation. He was satisfied that utility had been demonstrated.


The Apo-Omeprazole product contains a subcoating that is formed in situ by a chemical reaction between its core and enteric coating, rather than applied directly to the core. Apotex also asserted that its subcoating was "replete with holes and gaps" and could not be considered inert. Therefore, Apotex's argued, its in situ sublayer is not an "inert subcoating" "disposed on" the core, as described by Claim 1.

Barnes J. held that Apo-Omeprazole works because its formulation matches the formulation described in Claim 1. Apo-Omeprazole had all of the essential elements of Claim 1 and was therefore infringing. He also criticized Apotex's decision to focus its experts' efforts on challenging the tests performed by AstraZeneca's expert as opposed to its own independent testing.

Apotex was also held to have induced infringement by its customers and end-users throughout Canada by actively promoting Apo-Omeprazole and directly comparing it to LOSEC®.

Additional points of interest

  • Expert evidence: In his obviousness analysis, Barnes J. faulted Apotex's expert for relying only on prior art determined by counsel rather than conducting his own search. Barnes J. warned that such an approach can lead to problematic opinions rendered in hindsight with the patent in mind.
  • Foreign issue estoppel: AstraZeneca asked the Court to apply issue estoppel to avoid relitigation and instead adopt a number of findings of fact from an earlier U.S. decision. The Court acknowledged the theoretical appeal of the idea, but found that there were too many practical problems in applying estoppel in a way that will actually protect judicial resources.
  • Deception: AstraZeneca sought punitive damages and/or solicitor-client costs due to misrepresentations made by Apotex in an earlier settlement agreement between the parties under the Regulations. Barnes J. noted the need for scrupulous accuracy and fair dealing under the Regulations, but dismissed the claim for punitive damages on the basis that Apotex's misrepresentation was not a material factor in the settlement of the earlier proceeding, and was not done deliberately with an intent to deceive. He did, however, hold that this may be a relevant consideration in the award of costs to be subsequently determined.
  • Limitation period: Apotex had argued that certain provincial limitation periods, such as the two year period prescribed in Ontario, should apply to sales in those provinces. Barnes J. disagreed, and held that the six year limitation period under the Federal Courts Rules was applicable, regardless of the province where the infringing activity took place.
  • Accounting of profits: Barnes J. held that AstraZeneca was entitled to elect an accounting of profits for various reasons, including that the company did not abandon the market after generic entry, that it made efforts to mitigate damages through a licence agreement with an authorized generic, that there was no evidence it unduly delayed the litigation, and that Apotex did not alter course when its position did not find favour in earlier proceedings.

Link to decision:

2015 FC 322 may be found here.

Norton Rose Fulbright Canada LLP

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