On February 23, 2015, the Federal Court released its judgment in
the latest of three PM(NOC) proceedings relating to Eli Lilly's
CIALIS (tadalafil) patents. The previous two decisions were
discussed in snIP/ITs posted on
January 26, 2015 and
March 30, 2015.
In the latest decision, Eli Lilly Canada Inc. v. Mylan
Pharmaceuticals ULC, 2015 FC 178, Justice de Montigny found that
Mylan's allegations of non-infringement and obviousness were
justified, and dismissed Lilly's application for an order
prohibiting the Minister of Health from issuing a Notice of
Compliance to Mylan until expiry of Canadian Patent No 2,379,948
(the "'948 Patent"). The '948 Patent claims a
tadalafil tablet formulation and its use to treat erectile
Justice de Montigny's decision emphasizes the critical role
experts and expert reports play in PM(NOC) proceedings. As counsel
for Lilly stated during his submissions, "a lot of it just
comes down to which expert the Court is going to go with".
Justice de Montigny ultimately preferred the evidence of
Mylan's experts, finding that Lilly's evidence on several
key issues was incomplete or speculative.
Infringement – Hydrophobic Binder
Lilly argued that while Mylan's formulation contains more
than the claimed amount of hydrophobic binder, the compound is
working as both a binder and solubilizer. Lilly's expert opined
that "one would expect" a proportion of this compound to
act as a solubilizer, with the remaining proportion acting as a
binder falling within the claimed amount.
Justice de Montigny rejected Lilly's argument, noting that
"[s]peculation, even by experts, is not evidence, and is
clearly not sufficient to meet the burden of proof in infringement
cases." He held that there is no evidence that the compound
acts as a solubilizer. Further, even if the compound did act as a
solubilizer when taken by the patient, all of the compound acts as
a binder during the production of the tablets.
Infringement – Particle Size
The parties disagreed regarding the moment at which particle
size should be measured. Lilly argued that the particles must be
measured after being pressed into tablets, since a purposive
construction requires measurement at the point where
bioavailability can be affected. Justice de Montigny rejected this
construction, observing that it is not supported by the language of
the patent or by the experts. He held that the patent's
language "clearly indicates that the particle size claimed is
of the tadalafil particles going into the formulation".
The Court accepted the evidence of one of Mylan's experts
that the analysis of particle size found in Mylan's ANDS is
"probably the most reliable measurement of the particle size
distribution of Mylan's drug substance". The analysis
placed Mylan's tadalafil particle size well outside that
claimed in the patent. Since Lilly did not submit pre-formulation
particle size test results, the Court held that Lilly had failed to
discharge its burden to establish that Mylan's allegations of
non-infringement are not justified.
The parties generally agreed that the inventive concept of the
'948 Patent is a formulation with improved dissolution and
stability of tadalafil achieved by reducing its particle size and
formulating it with specific excipients. Although Lilly argued that
there is an infinite number of excipient combinations available to
a formulator when formulating a new drug, the Court noted that a
leading treatise on the subject explained that the total number of
significant excipients in use is less than 25. As such, Justice de
Montigny held that the choice of excipients and their specific
amounts was well within the common general knowledge of the skilled
Justice de Montigny further held that the choice of excipients
would have been obvious to try because "a person skilled in
the art would have had a high expectation of success in using the
excipients and the surfactant of the '948 Patent in obtaining a
tadalafil formulation with the desirable bioavailability, and that
it was indeed more or less self-evident that such a strategy ought
A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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