Bayer Inc. v. Apotex Inc., 2016 FC 1013

This was a patent infringement action against Apotex and Cobalt, relating to a combination of drospirenone and ethinylestradiol for an effective oral contraceptive. The Court found that the asserted claims were not invalid and that Apotex's and Cobalt's products were formulated in a manner that fell within the scope of the claims and, therefore, infringed the claims of the '426 Patent.

In prior NOC proceedings concerning the ‘426 Patent, Bayer's application for prohibition against Cobalt was granted (see 2013 FC 1061, summarized the week of October 29, 2013; appeal dismissed 2015 FCA 116, summarized the week of May 18, 2015) and its application for prohibition against Apotex was dismissed on the basis that Bayer failed to establish that the allegations of non-infringement were unjustified (see 2014 FC 436, summarized the week of June 9, 2014).

On the issue of stare decisis and comity, the Court considered the Court of Appeal's prior construction in the NOC context to be prima facie binding, and would adhere to it unless a party provided good reasons not to. The Court also noted that it would do the same when defining the "inventive concept" of the patent and determining the "promise" of the patent, both of which are aspects of claim construction, and are therefore questions of law.

On the other hand, the Court noted that previous findings of fact and mixed fact and law in the NOC cases were potentially persuasive, but they must be approached with caution. These findings, including the definition of the person of skill in the art, and the issues of obviousness, ambiguity, overbreadth, utility and sufficiency must be determined again based upon evidence adduced in this proceeding. Informed by these findings in the NOC proceedings, the Court ultimately concluded in its analysis that the asserted claims were not invalid, notwithstanding new evidence adduced at trial.

With respect to infringement, Apotex's defence was that its tablets contain drospirenone in the form of a "molecular dispersion", which means that drospirenone is sufficiently dissolved in a medium so as to no longer be in the form of particles. Since the patent refers only to “particles”, Apotex tablets would therefore fall outside of the patent if this characterization was correct . The Court found Bayer's expert witnesses to be generally credible and its experimental tests were not refuted by the results of Apotex's tests. Bayer also pointed to the absence of documents relating to the development of Apotex's tablets that one would expect to find, as detracting from the overall credibility of Apotex's defence. The Court agreed that the absence of any documentary evidence to suggest that Apotex's suppliers intended to manufacture a molecularly dispersed form was one factor to consider when assessing credibility. Further, the available evidence regarding the development of the tablets, namely that the ANDS did not refer to molecular dispersions and that the tablets were produced in reference to the formulation of Bayer's tablets, reinforced the Court's conclusion that Apotex's tablets are formulated in the same manner as Bayer's tablets, and are therefore infringing.

The Court then went on to consider whether the Cobalt tablets infringed the '426 patent. Cobalt had previously tried and failed to amend its pleading to delete a paragraph and replace it with a statement that its product did not contain drospirenone. Cobalt had appealed the decision denying its request and brought a further motion to amend its pleading, but subsequently abandoned both the appeal and motion. The Court noted that it may make a finding of fact that differs from what was admitted by the defendant if the admission concerns a factual issue that ought to be tried in the interests of justice. However, in this case, Cobalt's decision to not pursue the appeal led the Court to conclude that the admission that its product contains at least some drospirenone particles must be taken as final. Although Cobalt could not present evidence that contradicted its admission, Cobalt was not precluded from presenting its defence to Bayer's allegation of infringement. Ultimately, Bayer's experiments and expert evidence demonstrated that Cobalt's tablets infringed the patent.

Bayer's entitlement to an accounting of profits and Bayer's election between Bayer's damages and Apotex's and Cobalt's profits will be addressed in the quantification phase.