On March 12, 2013, the Federal Court dismissed Apotex’s action to impeach the patent claiming escitalopram (Lundbeck’s CIPRALEX), declared the patent valid and infringed by Apotex and Apotex Pharmachem, and granted certain remedies to Lundbeck: Apotex Inc v H Lundbeck A/S, 2013 FC 192. Escitalopram is the S-enantiomer of citalopram, a previously known compound.

The patent was previously considered by the same judge of the Federal Court in applications under the Patented Medicines (Notice of Compliance) Regulations (“PMNOC Regulations”). In 2009, Lundbeck obtained Orders prohibiting the Minister of Health from issuing notices of compliance (NOCs) to Apotex, Mylan and Cobalt for their respective generic escitalopram products (2009 FC 146). The appeals of the generic manufacturers were dismissed by the Federal Court of Appeal (2010 FCA 320), and the Supreme Court denied leave to appeal.

The subject of the present decision was Apotex’s claim for impeachment against which Lundbeck counterclaimed for a declaration of validity and for infringement by Apotex and Apotex Pharmachem.

Validity

Obviousness. This was the primary ground of invalidity considered by the Court. The Court concluded that the inventive concept was the substance escitalopram, useful as an anti-depressant. As part of its analysis, the Court considered whether the skilled person was motivated to arrive at escitalopram and whether it was plain and obvious that the techniques used to resolve the racemate (citalopram) or synthesize escitalopram would have been successful.

While Lundbeck was motivated to resolve citalopram, the Court held that motivation was overall a neutral factor as “there is a balance to achieve. If motivation inspires one to try harder or to think of a wider range of approaches, at some point the experiments are no longer routine. Some inventiveness is involved.”

In the Court’s view, the case for obviousness “boils down to whether or not it was ’obvious to try’ certain techniques and whether at one point one might give up in frustration.” The Court considered a large amount of evidence about the various techniques that could potentially have been used to resolve or prepare the enantiomers of citalopram at the claim date, 1988. The evidence included tests conducted inter partes that were asserted to reproduce what would have been done in 1988. There was no particular obvious technique that would have been successful as the techniques had many factors and variables that had to be taken into account, and thus the Court concluded that “an assembly of literature which might, and I emphasize the word ’might’, have led to (+)-Citalopram involved a considerable degree of inventiveness.”

Anticipation. The Court held that the prior disclosure of citalopram did not teach how to resolve the enantiomers and did not disclose the therapeutic effects of escitalopram. Indeed, prior publications had predicted that the activity would be concentrated in the opposite R-enantiomer.

Inutility. Apotex relied on a statement by Lundbeck in a 2004 patent application that the pamoic salt of escitalopram was toxic and asserted that the claims therefore failed for lack of utility. Rather than considering whether the statement was a binding admission, the Court was concerned about whether the evidence showed that the pamoic salt was indeed toxic. As Apotex did not lead any other evidence about toxicity, the Court relied on Lundbeck’s evidence that the salt was not toxic in rats and dismissed this ground.

Insufficiency of the disclosure. The specification of the patent stated that “results upon administration to human beings have been very gratifying,” but this statement was untrue as the enantiomers had not been tested on human beings until after the patent application was filed. Relying on the recent Supreme Court decision (Teva Canada Ltd v Pfizer Canada Inc, 2012 SCC 60), Apotex argued that the patent was therefore void for insufficiency. The Court distinguished the Teva decision as the invention there was the use of sildenafil for the treatment of erectile dysfunction and such use was therefore what had to be disclosed, whereas in the patent at issue in the case at hand, the invention, escitalopram, was properly disclosed.

Sound prediction. The Court dismissed this ground as it disagreed with Apotex that the patent promised that escitalopram had greater therapeutic effect than the racemate. The Court found that there was no explicit statement to this effect, and Apotex’s experts did not explain why the skilled addressee would infer such a promise.

Infringement and remedies

In its counterclaim, Lundbeck sued Apotex and Apotex Pharmachem Inc. for infringement and sought various remedies. Apotex and Apotex Pharmachem conceded infringement if the patent was held valid. In anticipation of receiving an NOC, Apotex had stockpiled escitalopram, which it sold to foreign affiliates over a one-year span. Apotex Pharmachem had made one sale of escitalopram to Apotex.

Punitive damages. The Court held that the stockpiling and sale to foreign affiliates did not warrant punitive damages, reasoning in part that it was unlikely that Lundbeck would have received an interlocutory injunction had Apotex received an NOC.

Accounting of profits. The Court granted Lundbeck’s election of an accounting of profits. In so exercising its discretion, the Court held irrelevant (1) the fact that Lundbeck did not show that it had suffered any damages in the foreign markets to which Apotex sold, and (2) Apotex’s argument that it had acted in good faith in stockpiling as it considered the patent invalid. The Court reasoned that the accounting of profits was not a punishment but rather an appropriate remedy for Apotex’s use of Lundbeck’s intellectual property rights. The Federal Court stated that:

it would be completely unreasonable to hold that the only consequence of infringement over several years would be to declare the patent valid and to enjoin [Apotex and Apotex Pharmachem] from continuing what they should not have done in the first place.

The Court calculated Apotex’s profits to be approximately $1.4 million and Apotex Pharmachem’s profits to be approximately $300,000. In performing the calculation, the Court disallowed certain expenses that Apotex had sought to deduct from its sales, namely indirect overhead, indirect quality assurance, fixed overhead, depreciation and rent, holding that these were too remote to be referable to the manufacture of escitalopram.

Other remedies. The Court also granted a permanent injunction until the expiration of the patent in September 2014 and pre- and post-judgment interest. The parties were to work out parameters for delivery-up or destruction of the remaining escitalopram that Apotex had in its possession.

Apotex has appealed the judgment.