On 3 July 2019 Eli Lilly was granted leave to amend its pleadings to introduce a new cause of action for the direct infringement of claims relating to a new use without including an allegation that the product had been directly infringed.(1) However, the court ordered that all issues relating to the new cause of action must be bifurcated and tried at the quantification phase, after all other issues have been determined.
The underlying actions were brought by Eli Lilly against Apotex, Teva, Pharmascience/Riva and Mylan (collectively, the defendants) for the infringement of four patents relating to the drug tadalafil (Eli Lilly's Cialis). The generic manufacturers – apart from Apotex, which had received approval earlier – received notices of compliance (NOCs) to sell tadalafil immediately after the expiration of Eli Lilly's Patent 2,226,784 (the '784 patent), claiming use for the treatment of erectile dysfunction. Their product monographs included treatment for erectile dysfunction in the indication statements. Each of the defendants counterclaimed for a declaration of invalidity of each asserted patent.
The construction and invalidity issues will be tried together, whereas infringement and compensation issues will be tried subsequently, in separate trials.
Just under nine months before the joint construction and invalidity trial, Eli Lilly sought leave to amend its pleadings to introduce new allegations against all of the defendants for infringement of its '784 patent by manufacturing, importing and stockpiling tadalafil for erectile dysfunction and for springboard damages.
Proposed amendments disclosed reasonable cause of action
The defendants argued that there was no reasonable cause of action, as infringement of a use claim requires satisfaction of the tripartite test for inducing infringement, which requires a finding of direct infringement (eg, by patients). Here, Eli Lilly could not establish such direct infringement while the patent was still extant, as the defendants did not receive their NOCs until the '784 patent had expired. The court noted that such defence had not previously been recognised in the jurisprudence on similar facts and thus it was not plain and obvious that Eli Lilly's new claim would fail. Instead, the court found that the jurisprudence recognised that claims for "a composition for use in the treatment of" can be construed as claiming a specific product and are therefore susceptible to direct infringement by manufacture for the purpose of the claimed use. Accordingly, as a claim for a vendible product can be directly infringed by making, importing or stockpiling the product, even if there has been no direct infringing use of the product, Eli Lilly's new claim was reasonably arguable.
Sufficient material facts were alleged
The court found that it was reasonable that the allegations of importing and possessing for commercial sales, to the extent based on the inference drawn from the date of first sales and from commercial practices gleaned through discovery, were sufficient to support direct infringement.
Prejudice addressed by bifurcation of new cause of action
The court acknowledged that requiring the defendants to prepare for trial on a new cause of action in less than nine months would be unprecedented and that the amendments had not been brought in a timely fashion. To avoid prejudice to the defendants, discoveries and determination of the new issues were ordered bifurcated, to proceed along with the issues of quantification after the first phase of the action.
(1) Eli Lilly Canada v Apotex, 2019 FC 884.
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