Canada's laws provide a one-year grace period for public disclosures by the applicant (or by a person who obtained knowledge of an invention from the applicant) calculated from the Canadian filing date. The particulars of Canada's grace period are detailed in our October 28, 2013 IP Update. In the recent decision in Bayer Inc v Apotex Inc ("YAZ"), 2014 FC 436, the Federal Court confirmed that a further exception exists under Canadian law for disclosures outside the grace period that are made for the purpose of bona fide experimentation.

Bayer is the owner of Canadian Patent No. 2,382,426 (the "'426 Patent") relating to pharmaceutical compositions comprising drospirenone and ethinylestradiol sold in Canada under the brand name "YAZ". Bayer brought an application to the Federal Court to prohibit the Minister of Health from issuing a Notice of Compliance to Apotex Inc. under the NOC Regulations in respect of Apotex's proposed distribution of birth control tablets including drospirenone and ethinylestradiol as active ingredients.

Apotex raised several issues regarding the validity of the '426 Patent, including an allegation that certain claims of the '426 Patent were anticipated because, more than one year before the filing date of the application for the '426 Patent, Bayer conducted certain clinical studies in Europe and the United States in which what was claimed in the '426 Patent was both disclosed and enabled.

Justice Hughes confirmed that public use of an invention does not constitute an anticipatory disclosure under Canadian law if the disclosure is carried out for the purpose of bona fide experimentation, particularly where the experimental use must, of necessity, be conducted in public.

Such experimentation must be reasonable and necessary but may be carried out with a view to either perfecting the invention or testing its merits or practical utility (Conway v Ottawa Electric Railway Co. (1904), 8 ExCR 432 at 442). If a profit or gain is realized or a benefit is derived by the inventor or by another person in the course of such experimentation, the use may still be considered experimental if the main purpose remains experimentation throughout. From the moment the use in public ceases to be principally and fundamentally for experimental purposes or the experimentation ceases to be reasonable and necessary, then the use becomes a public use as contemplated under the Patent Act (Canadian Patent Scaffolding Co Ltd v Delzotto Enterprises Ltd. (1978), 42 C.P.R. (2d) 7 at 24).

Once a party alleging anticipation has established that the invention has been disclosed to the public more than one year before the Canadian filing date of the application for the patent, to avoid invalidity, the patentee must then establish that the use was for bona fide experimentation purposes. This analysis is considered on a case by case basis. Evidence to support experimental use can include, for example, restrictions on the recipient's use of the invention or requirements that the recipient is to keep the invention confidential.

In YAZ, Justice Hughes found that although none of the participants in the trials were told what the precise ingredients of the tablets were, and none of the participants actually tested any of the tablets in order to determine their ingredients or passed the tablets on to any other third person for testing, there remained a "theoretical possibility" that such an analysis could have been conducted. Thus, this disclosure more than one year before the Canadian filing date met the requirements for a finding of anticipation.

However, Justice Hughes also found that such disclosure fell within the ambit of the experimental use exemption. Bayer had taken reasonable precautions so as to keep relevant information confidential and to require participants to return any unused tablets. No person connected with the clinical studies received sufficient information so as to know exactly what the ingredients were in the tablets. The clinical studies were necessary to prove that the drug was safe and effective in order to obtain government approval for sale. Without these studies, no commercial sale of the drug could be made. The theoretical possibility that some tablets could have been retained and analyzed could not preclude the fact that the clinical trials were experimental, and of necessity, conducted by the provision of tablets to the participants. As a result, the clinical trials satisfied the requirements of an exemption to a finding of anticipation as the disclosure of the drug was for experimental use.

The Federal Court decision in YAZ is consistent with the corresponding decision in the United States, where it was also held that Bayer's studies were experimental and were not public within the meaning of the relevant statutory provision. However, the Canadian and U.S. decisions contrast starkly with the decision of the Technical Board of Appeal of the European Patent Office, which found that, under its relevant law, the information is public if only a single member of the public, not under any obligation of secrecy, had the theoretical possibility of access to particular information. Accordingly, the safest procedure may be to bind participants under written obligations of confidentiality in situations where some experimentation with the invention is unavoidable.

For further information, please contact a member of our firm's Patents group.

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.