Federal Court Of Appeal Underscores The Importance Of Patent Terms In Invalidating Claims To "Physiologically Acceptable" Salts

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On April 26, 2024, the Federal Court of Appeal released its decision in Eli Lilly Canada Inc. v. Apotex Inc.1 affirming the decision of the Federal Court in which Justice St-Louis, following a summary trial.
Canada Intellectual Property

On April 26, 2024, the Federal Court of Appeal released its decision in Eli Lilly Canada Inc. v. Apotex Inc.1 affirming the decision of the Federal Court in which Justice St-Louis, following a summary trial, invalidated a patent for the successful erectile dysfunction medication CIALIS® on the basis of overbreadth and insufficiency2. At issue was whether patent claims that recited "physiologically acceptable" salts of tadalafil within their ambit could be valid when the evidence suggested that a "physiologically acceptable" salt of tadalafil could not be made.

What you need to know

  • The Federal Court of Appeal affirmed the deference owed to mixed questions of fact and law and affirmed a claim construction that is tied to the assessment of the expert testimony. The case is another in a long line of cases demonstrating the reluctance of the Federal Court of Appeal to intervene in alleged errors of fact and mixed questions of fact and law, such as relying on expert evidence in the process of construing patent claims.
  • "Physiologically acceptable," in the context of salts and this decision, was held to mean non-toxic (causing no harm) and stable, pure, and not degraded.
  • Interpreting patent terms is context-dependent, and drafters should ensure that they pay close attention to the potential interpretation of all terms, even those that are considered commonplace and routinely included. Because of the unpredictable nature of salt formation, the practice of claiming, along with the active moiety, "physiologically acceptable" salts (when none had been made, and where it is not clear that salts could be made) should undergo a heightened level of scrutiny to substantiate the justification for those claims.
  • "Physiologically acceptable" was considered to be synonymous with "pharmaceutically acceptable" because of the agreement of the experts on this point. Given the prevalence of the term "pharmaceutically acceptable" in patent claim drafting, this decision may have troubling ramifications.

Claim construction is a mixed question of fact and law

Decision of the Federal Court

The Federal Court was faced with patent claims that included within their ambit the "physiologically acceptable salts" of the active compounds claimed. Very little description was provided in the patent disclosure to clarify the meaning of that term. The Court noted that the terms "physiologically acceptable" and "pharmaceutically acceptable" had both been used, which suggested that each term should have a distinct meaning; however, it accepted, on the basis of the evidence, that the two terms should be considered synonymous. Also, based on the expert evidence, Justice St-Louis construed the term "physiologically acceptable salts" to mean those that are non-toxic and cause no harm to the patient, and that the salt needed to be stable, pure and not degraded.

The factual backdrop to the case is that there was evidence before the Federal Court that salts of tadalafil had not been made before the priority date. Moreover, a witness in a prior proceeding had testified that it was not possible to make a salt of tadalafil. Eli Lilly led evidence that it might have been possible to make a salt (perhaps as a cocrystal) by using stronger acids and other approaches, but the defendants led evidence that a "physiologically acceptable" salt could not be made because stronger acids and other systems might degrade the molecule, rendering it physiologically unacceptable.

On the basis of those facts, the Federal Court held that the patent claims to "physiologically acceptable" salts were broader than any invention made, because the inventors hadn't made a salt and the expert evidence suggested that it was not possible to do so without impacting the stability of the underlying active moiety. Justice St-Louis also held that the patent was insufficient because it didn't teach the skilled reader how to work around this problem.

The Court refused to rule on whether the patent lacked utility given its conclusions on the other two heads of invalidity.

Decision of the Federal Court of Appeal

Before the Federal Court of Appeal, the appellants argued that the Federal Court's patent construction was wrong as a question of law, not as a question of fact. Questions of law are reviewed on a standard of correctness, whereas questions of fact—or mixed fact and law from which no question of law is extricable—are reviewed on the more deferential standard of palpable and overriding error. The Court of Appeal noted that although claim construction is indeed a question of law, the applicable standard of review is complicated by the fact that patent claims are interpreted from the point of view of a person of ordinary skill in the art, and expert evidence is considered in determining how such a person would have understood certain terms in a claim at the relevant date. The weighing of expert evidence is a question of mixed fact and law.

In an effort to shoe-horn its case into the standard of correctness, the appellants argued that the complications that would ordinarily arise as a result of expert evidence did not arise because the Federal Court's conclusions regarding claim construction were not based on any of the expert evidence. Rather they were the Federal Court's own decision, untethered from the patent document. Deference, therefore, was not owed to the Federal Court on its conclusions regarding claim construction. The Federal Court of Appeal gave short shrift to these arguments, concluding that the Federal Court based its claim construction on expert evidence, and in that regard its factual conclusions are entitled to deference. Because the appeal on overbreadth turned solely on this claim construction issue, the Federal Court of Appeal dismissed the appeal.

On the matter of sufficiency, the Federal Court of Appeal noted that the appellants' arguments depended on the success of its claim construction arguments. As such, it was not necessary to say more. However, it took the opportunity to comment on the Federal Court's discussion on sufficiency, where the Federal Court noted that putting the invention of the patent into practice would require a minor research project. The Federal Court had suggested that this was the reason for concluding that the claims at issue were invalid for insufficiency. However, the need to conduct a minor research project was not the determining factor for insufficiency of a patent disclosure in the present context. The Federal Court of Appeal noted that the reference to a "minor research project" emanated from a decision of the Supreme Court of Canada in Teva Canada Ltd. v. Pfizer Canada Inc.3, where the Supreme Court found a patent invalid for insufficiency because a skilled reader would not be able, without undertaking a minor research project, to determine which of two compounds was favoured by the inventors. A strong overtone in that case was a sense that the patent in question failed to meet the requirement to teach the public the same successful use of the invention as the inventor could at the time of the application.

However, the Federal Court of Appeal noted that, in this case, the appeal was not about the patentee's decision to withhold information. Rather, the appeal engaged the issue of sufficiency more generally. The general view has always been that a patent specification may be sufficient even if some amount of non-inventive trial and error experimentation is required, so long as it is not undue4. Accordingly, a patent may be sufficient even if it requires a minor research project, provided that no inventiveness or undue experimentation is involved. In effect, the Federal Court of Appeal was ensuring that the decision of the Supreme Court of Canada in Teva was set in its proper context. Unfortunately for the patentee, the Federal Court of Appeal was able to point to evidence from one of the patentee's experts that salt formation is unpredictable and "the search for salt requires a lot of experimental work and requires a skilled person to exercise some degree of inventiveness"5.

Next steps

The appellants have sixty days from April 16 to file an application for leave to appeal to the Supreme Court of Canada.

Footnotes

1 2024 FCA 72.

2 See 2022 FC 1398.

3 Teva Canada Ltd. v. Pfizer Canada Inc., 2012 SCC 60, [2012] 3 S.C.R. 625 (Teva).

4 See Teva Canada Limited v. Leo Pharma Inc., 2017 FCA 50, 145 C.P.R. (4th) 350 at para. 56; Bombardier Recreational Products Inc. v. Arctic Cat, Inc., 2018 FCA 172, 159 C.P.R. (4th) 319 at para. 78; Western Oilfield Equipment Rentals Ltd. v. M-I LLC, 2021 FCA 24, 331 A.C.W.S. (3d) 743 at para. 114; Seedlings Life Science Ventures, LLC v. Pfizer Canada ULC, 2021 FCA 154, 339 A.C.W.S. (3d) 69 at para. 68.

5 See 2024 FCA 72, at para. 46.

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