The Federal Court of Canada recently dismissed an application made by Eli Lilly Canada Inc. (“Lilly”) against Novopharm Limited (“Novopharm”) asking for a prohibition of the issuance of a Notice of Compliance in respect of tablets containing olanzapine until the expiry of the olanzapine patent. The decision has dramatically altered Canadian patent disclosure requirements such that they now conflict with current global patent practice and Canada’s international treaty obligations. If left intact, this decision will invalidate hundreds, if not thousands, of Canadian improvement/selection patents resulting in significant concern that this decision will have a negative impact on Canadian innovators.

A separate proceeding had been initiated by a different generic company against Lilly regarding the patent for olanzapine prior to Novopharm filing its Notice of Allegation. In this earlier decision, the Court held the patent to be valid as the allegations made by the generic were not justified. In this case, the Court had only considered those allegations that were not considered or decided in the earlier decision or those allegations where “better evidence” or a “more appropriate legal argument’ was made by the generic in the present proceeding as to the validity of the patent.

The Court held that the evidence was similar with respect to the allegations of anticipation, obviousness and double patenting, and thus, the same conclusion should be reached in these proceedings as in the previous proceeding. The Court held that these allegations were not justified. On the issue of sufficiency, the Court held that the patent at issue was a selection patent but that the patent did not contain sufficient comparative data to prove the advantages disclosed in the patent, which are the basis for the improvement/selection. On this basis, the Court found that Lilly failed to demonstrate that Novopharm’s allegations in respect of sufficiency of disclosure were not justified, and therefore the Court appears to have created a new requirement for comparative data in a selection patent.

The Court also held that the Novopharm’s allegation in respect of section 53 of the Patent Act, as to the intent of Lilly to mislead, was not justified. The Court also determined that it was not necessary to make any findings as to utility of the patent in light of the findings of the Court with respect to the sufficiency of the patent, as no proper assessment can be made as to whether the utility promised for the results can be achieved as there has not been sufficient disclosure provided in the patent.