Canada: Gilead Has Successfully Obtained A Declaration Of Invalidity Of A Patent That It Reasonably Expected Would Be Asserted Against It (Intellectual Property Weekly Abstracts Bulletin - Week Of November 9, 2015)

Last Updated: November 19 2015
Article by Chantal Saunders, Beverley Moore and Adrian J. Howard

Most Read Contributor in Canada, September 2016

Patent Infringement

Gilead has successfully obtained a declaration of invalidity of a patent that it reasonably expected would be asserted against it
Gilead Sciences Inc. v. Idenix Pharmaceuticals Inc., 2015 FC 1156
Drug: sofosbuvir

The Federal Court has allowed Gilead's claim to invalidate Idenix's '191 patent on the grounds of insufficient disclosure and lack of demonstrated utility/sound prediction. Idenix's counterclaim that Gilead's '657 Patent is invalid for anticipation was dismissed.

Idenix admitted that it did not test any of the compounds falling within the scope of the claims, so utility was assessed as a sound prediction. The parties agreed that the patent contains a promise that the compounds are useful in the treatment of Flaviviridae infections, including HCV infections, in humans and other hosts. The Court held that "treatment for a host infected with Hepatitis C virus" as requiring effectiveness in combination with low toxicity as measured in accordance with the therapeutic index. However, the Court also found that the '191 Patent makes no promise of any specific result or level of treatment. Thus, Gilead needed to prove that Idenix has not soundly predicted a scintilla of utility in the compounds for the treatment of Flaviviridae.

Ultimately, the Court found that Gilead has demonstrated that Idenix could not demonstrate, nor soundly predict as an inferred fact or prima facie reasonable inference, the utility of the 2'-C-Me/F nucleoside on June 27, 2003 as an effective treatment of Hepatitis C.

The Court held that the patentee is not required to disclose the basis for its sound prediction, but it would have failed if required to do so. The reason was because the '191 Patent relates to a sound prediction of a new composition, thus there is no utility disclosure requirement. The Court assumed that this exemption from disclosure applies both to the factual basis and the line of reasoning.

As to the allegation of insufficiency, the Court held that Gilead has established that the '191 Patent as supplemented by the common general knowledge does not sufficiently disclose how to synthesize the 2'-C-Me/F compound.

The Court summarized Gilead's novel overbreadth allegation as follows:

  • At the time the patent application was filed and published, Idenix had been unsuccessful in making a compound within the scope of the claims; as they did not have a way of making the claimed compounds, they cannot be said to have completed the act of invention; and
  • Not having invented the compounds, any claim to any such compounds is by definition overbroad.

In disagreeing with this novel claim of invalidity, the Court held that if the claims are soundly predicted and there has been sufficient disclosure of how to make the invention, then there can be no overbreadth of claims.

Idenix counterclaimed that Gilead's '657 Patent was anticipated by the disclosure and enablement of their subject matter by the '191 Patent. The Court found that there was disclosure of the invention, but no enabling disclosure of how to synthesize the compounds in the '191 Patent.

Idenix's infringement allegation was evaluated by the Court for the purpose of an appeal, even though the patent was found to be invalid. The Court held that Gilead's intermediate compound falls within the scope of the '191 Patent.

Idenix had further alleged that Gilead's '657 Patent is invalid pursuant to section 53 for knowingly omitting the name of an inventor, Dr. Stuyver. The Court ultimately held that he was not a co-inventor of the compound, nor did he sign a declaration under duress acknowledging this fact in 2005.

Other Cases of Interest

FCA Reinstates PMPRB Jurisdiction over Generic Companies with Permission from Patentee to Sell Medicine as they Enjoyed a Benefit from the Patent
Canada (Attorney General) v. Sandoz Canada Inc., 2015 FCA 249

In these cases, the government appealed Federal Court decisions that allowed judicial reviews of multiple PMPRB decisions. The issue on appeal was whether the Federal Court Judge properly held that Sandoz and ratiopharm fell outside the jurisdiction of the PMPRB, as they were not "patentees". The appeal was granted, as the FCA concluded that the PMPRB had properly interpreted "patentees" to include anyone obtaining a benefit from the patent.

Ratiopharm was granted an exclusive licence in Canada by GSK to sell ratio-salbutamol HFA, and indicated on its forms to Health Canada that it had GSK's permission to sell the product. Ratiopharm also sold a number of other products with the consent of the owner of the patents in question. Sandoz is a subsidiary of Novartis Canada. It sells a number of medicines covered by patents owned by Novartis Canada or one of its parent companies.

The FCA held that the PMPRB's decisions should be reviewed on the standard of reasonableness. In this case, the Federal Court judge had substituted his view of the legislation without considering whether the PMPRB's characterization met the threshold of acceptability and defensibility that separates reasonable and unreasonable decisions. Thus, the standard was misapplied. In this case, the FCA held the PMPRB's determination was a defensible interpretation of the Patent Act. The Federal Court judge focused on those in a position to cause excessive pricing rather than whether that mischief could be caused without the patent owner itself.

The FCA also held that it was not open to the Federal Court Judge to construe subsection 79(1) of the Patent Act narrowly on the basis that the PMPRB's construction might be unconstitutional. Furthermore, the PMPRB's adaption of its "ex-factory price" definition to include the situations with ratiopharm and Sandoz were not unreasonable. The FCA also held that the French text of subsection 79(1) does not give a different answer than the English text as to whether a "patentee" must also have the right to exclude others. The definition includes persons who exercise any rights in relation to a patent. The FCA rejected the concept that generic companies should be treated differently, as the term 'generic company' does not appear in the Patent Act. The FCA also dismissed the argument that s. 79(1) is unconstitutional.

Data Protection Regulations Apply When Comparison Added After NDS Filed
Hospira Healthcare Corporation v. Canada (Health), 2015 FC 1205
Drug: oxaliplatin

In this case, Hospira applied for judicial review of a decision of the Minister of Health, refusing to issue it a Notice of Compliance (NOC) for its drug oxaliplatin. The Minister had found that Hospira compared to Sanofi's innovative drug ELOXATIN oxaliplatin, and thus the data protection provisions of the Food and Drug Regulations applied. The Federal Court dismissed the application.

Oxaliplatin has been available in Canada through the special access program (SAP) since 1999. Hospira worked on a way to file a NDS from 2004-2006. However, it did not have clinical trial data, and could no longer ethically perform clinical trials, as it was already recognized by oncologists around the world as a 'standard of care' drug for colorectal cancer. After a number of unsatisfactory meetings with the Minister, Hospira filed a NDS on October 27, 2006. Sanofi also filed a NDS for oxaliplatin on November 20, 2006. The Sanofi NDS was given priority status.

Hospira's NDS was rejected at the screening stage as it only contained literature references; no pre-clinical or clinical data. Hospira judicially reviewed that decision, and it was sent back to the Minister for redetermination. Meanwhile, Sanofi obtained its NOC. It was granted data protection, and a 6-month paediatric extension. Hospira's NDS was deemed acceptable for examination in June 2011. However, a notice of non-compliance was issued in 2012. Hospira responded to the Minister's concerns, and was told that a DIN number would be assigned in October 2013. The executive summary recommending approval of the NOC did not contain a data protection assessment. When this was performed, Hospira was told that it could not receive its NOC due to Sanofi's data protection.

The Court held that the standard of correctness applies to the review of the Minister's decision. However, in this case, the decision was held to be both reasonable and correct. In answering the question of whether the Minister breached procedural fairness by failing to inform the applicant earlier in the approval process that the data protection provisions would apply, the Court held that this regulatory process is more akin to an administrative process, and, as such, the degree of procedural fairness owed is low. The question is whether the applicant knew the case it had to meet and was afforded an opportunity to respond. As Hospira waived its right to make written submissions in response to a letter from Health Canada, the Court rejected this ground of judicial review.

Hospira argued that Health Canada required addition of the comparisons to ELOXATIN oxaliplatin, and as such the original NDS did not seek an NOC on the basis of comparison. However, the Court held there was no basis for such a distinction in the Regulations. Post-filing amendments to the NDS are subject to the data protection provisions. Furthermore, this conclusion is confirmed by the purpose behind the data protection provisions, and to interpret the Regulations otherwise would run contrary to NAFTA and TRIPS.

Trademark Decisions

Dismissal of action relating to the alleged infringement of SPIRIT BEAR official marks upheld on appeal
Kitasoo First Nation v. Urban Distillers Inc., 2015 FCA 233

The Federal Court of Appeal has dismissed the appeal brought by the Kitasoo Band Council relating to a summary judgment motion brought in an action for infringement of their official mark SPIRIT BEAR. We previously summarized the Federal Court decision (2014 FC 833) that found the official marks were unenforceable and allowed the counterclaim by Urban Distillers. That holding essentially turned on a finding that the official marks were not shown to have been adopted and used as of the date of publication.

The Court of Appeal upheld the dismissal of the action, but overturned the holding relating to Urban Distillers' counterclaim because the counterclaim was not a part of the original summary judgment motion.

Other Industry News

Health Canada has published a Notice: Updates to the Guidance Document: Fees for the Review of Drug Submissions and Applications.

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