On January 24, 2007, the Federal Court in G.D. Searle & Co. and Pfizer Canada Inc. v. Novopharm Limited and the Minister of Health dismissed an application by Searle to prohibit the Minister of Health from issuing regulatory approval to Novopharm, a generic company, to produce a medicine known as celecoxib.

However, in so doing, the court found Searle’s patent to have been abandoned because of a lack of good faith with respect to a response filed in the Patent Office. The court also found the patent invalid based on obviousness.

McCarthy Tétrault Notes:

The case is perhaps the inevitable result of Dutch Industries v. Canada (Commissioner of Patents), a decision that has produced wrenching results in the area of maintenance fees. Upheld in the Federal Court of Appeal (sub nom Barton No-Till Disk v. Dutch Industries Ltd.), Dutch Industries stands for the proposition that deemed abandonment of a patent application prior to the issuance of a patent is not rectified or overcome by the grant of the patent itself.

This brought into play the possibility that applications issued long ago by the Patent Office could be held abandoned because of some defect in the prosecution of the application.

Dutch Industries interpreted Section 73 of the Patent Act which had been added effective October 1, 1996. That section deemed abandonment of a patent application for, among other things, failing to reply "in good faith to any requisition made by the Examiner in connection with an Examination within six months after the requisition is made or within any shorter period established by the Commissioner."

That section also created a number of other possible abandonment scenarios, including failure to comply with completion requirements, failure to pay the proper maintenance fees and failure to pay other prescribed fees set out in the Act.

Dutch Industries established that, notwithstanding the Patent Office’s acceptance of the applicant’s actions, the court’s ultimate determination that the actions were inadequate would lead to an abandonment of an application already issued to patent and therefore the nullity or invalidity of that patent.

In the case of the "good faith" obligation, this is particularly harsh for the applicant because the application was filed November 14, 1994. The provision requiring a good faith response was not inserted until October 1, 1996. The transition provisions at the time provided that the post-1996 Act applied to applications filed before October 1, 1996 but the pre-1996 Act applied to issued patents filed in the period October 1, 1989 to October 1, 1996.

While citing the transition provisions, it is not clear that the court considered this obvious problem.

However, returning to the fundamental point, Mr. Justice Hughes considered that G.D. Searle had not responded in good faith to an examiner’s report in its characterization of an earlier Matsuo reference. Searle characterized the reference by saying that "on its face" it does not disclose a compound that is effective against inflammation and did not cause gastric problems. The court found as a fact that Searle had already published information about Matsuo compounds and had found that at least some of them were useful in treating inflammation and did not cause gastric problems, notwithstanding what was said on the face of the reference itself. The court found that Searle’s reply lacked "good faith" because of Searle’s failure to advise the Patent Office that it had already found that at least one of the Matsuo compounds had similar properties to the compounds described in the Searle application, and that Searle had disclosed this fact about the Matsuo compounds to the public before the application for the Canadian patent was filed.

The applicant’s failure was in not disclosing the information it had previously published about the Matsuo compounds. Mr. Justice Hughes stated that if Searle had not made a public disclosure about the Matsuo compounds, then perhaps the duty to disclose its internal information about the Matsuo compounds might be different.

Interestingly enough, the court did not seem to distinguish between a requisition by Section 73 (the section says simply that it is a failure to reply in good faith "to any requisition made by an Examiner") and an obligation of disclosure in a patent application as filed. The court found that "good faith" was not shown in submitting the application as filed with the Canadian Patent Office without full disclosure of the information concerning the Matsuo reference, nor was good faith shown subsequently in response to the Patent Office Examiner’s questions concerning Matsuo. If failure to adequately disclose extrinsic information concerning a reference in an application as filed could result in invalidity, this would put an even greater burden on persons prosecuting applications in Canada.

Equally disturbing is the court’s discussion about "good faith." The court referred to an earlier case from 1947, Noranda Mines Ltd. v. Mineral Separation, and equated good faith with the standard of "uberrimae fide." Such a standard would be interpreted as an extremely difficult and high standard to meet. Later Mr. Justice Hughes referred to this standard as requiring "full, frank and fair disclosure." Certainly, this standard applied to Canadian prosecution would lead to increased litigation and greater time spent on collateral issues relating to the applicant’s behaviour in the Patent Office rather than on the fundamental issues of patent validity arising from novelty, inventiveness and utility.

On the issue of inventiveness, the court also concluded that the application did not disclose an invention that was non-obvious in light of the Matsuo compounds.