Eli Lilly Canada Inc v Apotex Inc, 2015 FC 1016
The Federal Court (“FC”) has discretion as to whether or not to stay a prohibition application under the Patented Medicines (Notice of Compliance) Regulations (“PM(NOC)”) where it is found to be an abuse of process. In this decision, the FC permitted the applicant to proceed with its prohibition application, despite a previous decision finding that the patent in question was invalid. In deciding whether or not to exercise its discretion to dismiss the case for an abuse for process, the FC in this case considered which party would be more severely prejudiced by a negative determination. The previous decision was being appealed by the applicant. The FC held that although allowing the prohibition application to proceed could result in unnecessary litigation, if the appeal was dismissed, this would result in less prejudice than if the prohibition application was dismissed and the appeal was successful.
Eli Lilly Canada Inc. (“Eli Lilly”) sells CIALIS for the treatment of erectile dysfunction, among other things, and ADCIRCA for the treatment of pulmonary arterial hypertension. Tadalafil is the active pharmaceutical ingredient in both CIALIS and ADCIRCA. The patent for tadalafil expired in 2015. Eli Lilly brought an application under the Patented Medicines (Notice of Compliance) Regulations, to prohibit Apotex Inc. (“Apotex”) from being issued a Notice of Compliance for the generic versions of CIALIS and ADCIRCA until after the expiration of Canadian Patent No. 2,379,948 (the “’948 patent”). The ’948 patent was a formulation patent for tadalafil that claimed formulations with a reduced particle size and certain excipients to address tadalafil’s poor water solubility.  At issue was whether Apotex’s products infringed the ‘948 Patent and whether the ‘948 Patent was invalid for obviousness or lack of utility.
PM(NOC) Prohibition Application Not an Abuse of Process
The ’948 patent was found to be invalid for obviousness in a previous proceeding, Eli Lilly Canada v Mylan Pharmaceuticals ULC, 2015 FC 178, which Eli Lilly has appealed. Apotex attempted, but was unsuccessful, in arguing that that Eli Lilly’s prohibition application was an abuse of process and should be dismissed. The decision on whether or not to dismiss an application as being abusive is discretionary.  The key issue for the FC in deciding whether to exercise its discretion was a determination of which party would be more severely prejudiced by a negative determination. The FC noted that although allowing Eli Lilly to proceed could result in unnecessary litigation – notably, in the event that Eli Lilly’s appeal in the Mylan litigation was dismissed – this would be preferable to the unfairness that would result to Eli Lilly if the dismissal request were granted. 
Non-infringement Allegation: Justified
The party bringing a prohibition application, in this case Eli Lilly, carries the burden of establishing that the Apotex products infringe the 948 Patent. The FC did not find that Eli Lilly has discharged this burden.  The FC found that the identity and amounts of excipients in Apotex’s formulations fell outside the claims of the ‘948 patent. 
Obviousness Allegation: Justified
Apotex alleged that the ‘948 patent was invalid for obviousness. The FC agreed and found that the formulations claimed in the ‘948 patent would have been obvious to try. The FC held that it would have been obvious for a person skilled in the art, that being a skilled pharmaceutical formulator, to use tadalafil in free drug form, reduce its particle size and formulate it with the excipients claimed in the ‘948 Patent in order to achieve a stable and more rapidly-dissolving formulation of tadalafil. 
Inutility Allegation: Not Justified
Eli Lilly relied only on demonstrated utility, not sound prediction, to uphold the ‘948 patent. The FC held that the testing done by Eli Lilly was sufficient to establish the promised utility – i.e. “the claimed utility of the rather self-evident promise that the formulations without an enteric coating would provide more rapid dissolution and enhanced bioavailability over the formulation of the Butler Patent, which contained an enteric coating.”  The FC noted that case law supports the proposition that “evidence of demonstrated utility need not be referenced in the patent for the patentee to rely on it.”  Data demonstrating utility was thus not required to be referenced in the ‘948 patent. The FC thus held that Apotex’ allegations of inutility were not justified.
The FC dismissed Eli Lilly’s prohibition application.