From a patentee’s perspective, the patent litigation landscape in 2010 and continuing into 2011 appears to have shifted to a more hospitable environment for innovators. This shift has occurred on two fronts. First, on the substantive issues of infringement and validity, the Court has begun to take a more balanced approach. Second, on procedural issues such as discovery motions, the Court has taken steps that show its commitment to allow litigants to get to trial effi ciently.  

Validity

Last year’s Life Sciences & Law Current Issues publication highlighted several trial decisions regarding the doctrine of sound prediction and suffi ciency that were less than favourable to patentees. Indeed, the 2009 decisions elevated the amount of information needed before fi ling and the amount of information needed to be included in the patent, putting Canada out of step with other countries with respect to patentability requirements. Fortunately, decisions from the Court of Appeal in 2010 — namely Eli Lilly v. Novopharm (olanzapine, 2010 FCA 197), Apotex et al. v. Lundbeck (escitalopram, 2010 FCA 320) and Novopharm v. Pfi zer (sildenafi l, 2010 FCA 242) — clarifi ed the law in these areas and demonstrate a slight favourable shift in Canadian patent law.

For example, in the olanzapine case, the Court of Appeal confi rmed that patentees need not include all data and information relating to a factual basis for sound prediction in the patent. The Court recognized not all data related to sound prediction would be in the patent. This may conclusively silence the oft-made argument made by generic competitors that only information in the patent can be considered when analyzing sound prediction. Additionally, the Court criticized arguments made by the defendant (which had been accepted by the trial judge) that the promised utility of the patent included treating humans because those arguments were inconsistent with the defendant’s additional argument that the data in the patent was not predictive of utility for human treatment. The Court noted a patent cannot be read to promise a utility that a person of ordinary skill in the art would not fi nd to be supported by the patent. Essentially, the Court required the same yard stick be used when considering the construction of the patent and utility, including sound prediction. This is an important point because it suggests previous decisions unreasonably elevated the standard of utility by interpreting each and every statement in the patent as the promised utility, regardless of the reasonableness of said interpretation in light of the patent’s disclosure as a whole.  

Similarly, in the escitalopram case, the Court of Appeal found that in some circumstances, animal data can support a sound prediction for treatment in humans. The case related to an appeal by the generic respondent to an application under the Patented Medicines (Notice of Compliance) Regulations. The Court of Appeal upheld the application judge’s decision that rat testing done by the day of the fi ling of the patent was reasonable and could support a sound prediction for human treatment because the same rat tests had been conducted with respect to citalopram (the racemate of escitalopram) and citalopram had been shown to be a useful anti-depressant in humans.  

In the sildenafi l case, the Court again confi rmed a determination of utility, by way of either demonstration or sound prediction of utility, can include evidence beyond that which is set out in the specifi cation, as normally, the information would not be expected to be in the specifi cation. Further, the Court confi rmed that the disclosure of requirements under section 27(3) of the Patent Act do not require the patentee to demonstrate utility.  

Infringement

The most recent pharma patent trial, Merck v. Apotex (lovastatin, 2010 FC 1265) is also encouraging to patentees. The Court found the patent valid and infringed, and discussed the application of the presumption of infringement in section 55.1 of the Patent Act at length. In addition, the Court refused to consider batch records of Apotex’s foreign supplier because the records were not reliable or trustworthy evidence of the manufacturing process that actually occurred and because it was “more likely than not” they were “fabricated” to a certain extent.  

Court Concern with Delay

Another notable trend that emerged in 2010: the courts are addressing the issue of litigation delay more aggressively. A good number of trials were set down in 2010. In addition, the Court issued strongly worded decisions that admonish behaviour designed to delay proceedings.  

For example, in Apotex v. Sanofi -Aventis (clopidogrel, 2010 FC 77), Prothonotary Tabib noted the Court’s awareness that “[a] new call is now increasingly being heard from some members of the intellectual property bar and their clients: the length of the trials must be controlled, and parties must be kept to the length of the trials as scheduled.” Prothonotary Tabib also remarked this goal cannot be achieved unless counsel adapt their litigation practice and strategies to the shorter time frames by avoiding unnecessary discovery “fi shing expeditions,” last-minute discovery and last-minute articulation of their respective theories of the case.

In Eli Lilly v. Apotex (cefaclor, 2010 FCA 240), Justice Evans for the Court of Appeal noted that while trial judges have the discretion to accept late-tendered documents, “it should, however, never be considered good practice for a party to fail to comply with the rules of discovery, and parties cannot expect that such conduct will always be excused at trial.”  

Finally, in Apotex Inc. v. Bristol-Myers Squibb Company (nefazodone, 2011 FCA 34), Justice Stratas for the Court of Appeal stressed that parties should be clear and candid at all times during litigation about what issues are fully in dispute, but especially at the pre-trial conference. Justice Stratas further stated that purposeful, strategic conduct involving non-disclosure, non-clarifi cation or inaction disrespects the rules of procedure and their aims, and that “those who disrespect the rules and their aims can hardly expect courts to smile upon them when they look for a favourable exercise of discretion under those rules.”

We are pleased to see positive trends emerging from the courts and will continue to monitor the impact of decisions on the industry over the coming months.