Update: On July 28, 2021, the Federal Court of Appeal dismissed Seedling's appeal from Justice Grammond's decision: Seedlings Life Science Ventures, LLC v Pfizer Canada ULC, 2021 FCA 154 (see article here).
On January 2, 2020, the Federal Court issued a decision by Justice Grammond finding certain claims of Patent No. 2,486,935 (935 Patent) invalid on the basis of anticipation, obviousness and overbreadth: Seedlings Life Science Ventures, LLC v Pfizer Canada ULC, 2020 FC 1. Had the relevant claims been valid, Justice Grammond would have found that they are not infringed by Pfizer's EpiPen.
The 935 Patent relates to an auto-injector known as the LifeCard, which is primarily intended for epinephrine injection to relieve symptoms of anaphylaxis. The LifeCard was the inventor's solution to problems encountered with the original EpiPen, such as bulkiness and an exposed needle after use. The LifeCard has a flat housing that is smaller and a needle shield that locks in place to protect the needle after the device has been activated.
Seedlings Life Science Ventures, LLC (Seedlings) alleged that Pfizer's improved next generation EpiPen (NGA EpiPen) infringes the 935 Patent. Pfizer denied infringement and sought a declaration that the asserted claims are invalid.
Prior to issuing its statement of claim, Seedlings entered into a litigation funding agreement (LFA) with a third party. As previously reported, the Federal Court dismissed Seedlings' motion seeking approval of the LFA, finding such approval was not required.
Before delving into issues of invalidity and infringement, Justice Grammond expressed his skepticism with respect to expert blinding.
Seedlings' experts were asked to provide their opinion on issues of claim construction with little knowledge of the actual dispute or the party retaining them. Justice Grammond rejected Seedlings' argument that their experts' opinions must be preferred because they were "blinded". When assessing expert testimony, he considers the logical character of the experts' reasoning to be much more important than the fact that some of them were blinded. Moreover, he did not find experts who were blinded early in the case to be more neutral or more objective in preparing their reports or when testifying at trial.
Before the filing date, Seedlings had tested a prototype auto-injector and fired it four times, although the syringe broke on the last trial. Pfizer therefore argued that Seedlings' invention was not useful because it was affected by design problems and was not sufficiently reliable.
Given the relatively low bar of a "scintilla of utility", Justice Grammond found that Seedlings' testing was sufficient to establish demonstrated utility. He emphasized that utility is demonstrated even if a device has not been perfected or needs improvements at the relevant date. Pfizer's argument that the prototype could not be used to inject epinephrine in an emergency situation was based on the "promise doctrine" abolished by the Supreme Court of Canada.
Justice Grammond found all asserted claims overbroad, as they failed to include essential elements of the invention.
As a preliminary matter, Justice Grammond emphasized that the doctrine of overbreadth is a necessary consequence of the bargain theory of patent law and that overbreadth is an independent ground of invalidity with statutory underpinning, specifically, subsection 27(4) of the Patent Act.
While acknowledging that claims are not necessarily limited to preferred embodiments, he held that there must be outer limits to the claims. Those outer limits flow from the fact that "the skilled person must not deploy inventiveness". Because making an auto-injector that lacks the essential elements would require a "substantial redesign" of what is disclosed in the specification, it would constitute a new invention. Further, Justice Grammond rejected Seedlings' argument that an element cannot be deemed essential for the purposes of overbreadth where it was not found to be so at the claim construction stage. If a claim fails to include an essential element, it could not be construed in the first place.
Anticipation, Obviousness, Insufficiency
Justice Grammond also found that some claims were anticipated by earlier auto-injector patents and that one of the claims was obvious.
The 935 Patent was not invalid because of insufficient disclosure, however, as Justice Grammond found that a skilled person could make the preferred embodiments based on the disclosure.
Infringement and Remedies
Had the asserted claims been valid, Justice Grammond would have found that they were not infringed, as the NGA EpiPen does not contain essential elements of the relevant claims. The NGA EpiPen is not "flat"; its needle cover is not "mounted to" the housing; the syringe and needle are not located closer to the rear of the housing when in storage position; and the needle shield is not "coupled to" the power source.
Had Seedlings succeeded, Justice Grammond would have found that Seedlings was entitled to damages based on a royalty rate of 2.05% of the net sales revenue of the NGA EpiPen.
However, he would not have allowed Seedlings to elect an accounting of profits, absent evidence of wilful infringement, considering that Seedlings never intended to manufacture, distribute or sell an auto-injector and would require an industry "partner" or licensee. Seedlings was therefore not entitled to profits that it would never have made in any case.
The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.