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August 2011 In this issue: Federal Court of Appeal significantly limits good faith requirement for patents in Canada » Supreme Court of Canada news » Patented Medicine Prices Review Board news » Ratiopharm's motion to set aside Order of prohibition for fraud dismissed » Federal Court of Appeal affirms STRATTERA impeachment decision » |
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Federal Court of Appeal significantly limits good faith requirement for patents in Canada The Federal Court of Appeal recently released an important decision on the good faith requirements for patents in Corlac v. Weatherford, 2011 FCA 228, in the context of a non-pharmaceutical patent. |
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Supreme Court of Canada news Supreme Court denies Apotex and CGPA leave in data protection cases. As reported in the March 2011 issue of Rx IP Update, Apotex and the Canadian Generic Pharmaceutical Association ("CGPA") filed for leave to appeal the Federal Court of Appeal's decision upholding the Federal Court's decision to dismiss their challenges to the validity of the data protection provisions of the Food and Drug Regulations (section C.08.004.1) and the Food and Drugs Act (section 30(3)). The leave applications were dismissed on July 14, 2011. Apotex Inc. v. Minister of Health, et al.; Canadian Generic Pharmaceutical Association v. Attorney General of Canada, et al. (SCC Case Nos. 34084, 34085). |
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Health Canada news 2010 statistical report for Regulations and data protection released. The Therapeutic Products Directorate has released its 2010 statistical report relating to the administration of the Patented Medicines (Notice of Compliance) Regulations and data protection. The report provides statistics relating to the maintenance of the Patent Register (including the number of patent lists filed by first persons, the number of patent lists accepted and rejected, and related litigation) and statistics relating to the number of notices of allegation served, prohibition applications initiated, and outcomes of the applications. The report also provides statistics on products added to the Register of Innovative Drugs by product type. (Therapeutic Products Directorate Statistical Report 2010, Patented Medicines (Notice of Compliance) Regulations and Data Protection). |
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Patented Medicine Prices Review Board news Compendium of Policies, Guidelines and Procedures updated. The Board released an updated version of its Compendium of Policies, Guidelines and Procedures on June 30, 2011. It incorporated clarifications made to the Guidelines over the past year. Further clarifications will be reflected in future updated versions, to be released each year in June. (Notice. Compendium.) Federal Court remits PENTACEL and QUADRACEL remedy back to Board for reconsideration. As reported in the February 2010 issue of Rx IP Update, on December 21, 2009, the Board found that sanofi pasteur ("sanofi")'s QUADRACEL and PENTACEL medicines were priced excessively. On March 16, 2010, the Board ordered sanofi to repay the excess revenues resulting from the sale of PENTACEL and QUADRACEL. Sanofi sought judicial review of the remedy part of the Board's decision. On July 8, 2011, Justice Gauthier set aside the Board's decision and ordered the matter remitted to the Board for reconsideration. The Court also ordered the return of sanofi's payment of $2.5 million, with interest. The Court reviewed the role and the workings of the Board, stating that "Parliament's intention in creating the Board was for it to control the market power of the monopoly created by the exclusivity of a patent." However, the Court also noted that the Board's role is that of a "watchdog" – its mandate is not to set prices for patented medicines in Canada, but to ensure that patented drugs are not sold at an excessive price, as deemed by the Board. If the price is excessive, the Board can order the patentee to reduce its price and/or offset the excessive revenues. At the hearing before the Board, the Board Staff argued for disgorgement of excess revenue. Sanofi's response was that any excess revenue earned between 2002 and 2006 were offset by a lowered price in 2007, that it is contrary to the Board's mandate for the Board to require a patentee to prove a price reduction for the purpose of complying with the Guidelines before considering a price reduction to address excessive revenues, and that sanofi acted on a legitimate expectation that it could offset excess revenue by reducing prices in 2007. The Court considered three issues: (i) whether the Board exceeded its jurisdiction by imposing a penalty pursuant to subsection 83(2) of the Patent Act ("Act"); (ii) whether the Board exceeded its jurisdiction by fettering its discretion; and (iii) whether the Board abused its power under subsection 83(2) of the Act by ignoring the evidence and the particular circumstances of its case and making findings based on pure speculation. The Court considered all three issues on a standard of reasonableness, and concluded that "the decision did not meet the transparency, intelligibility and justification criteria included in the reasonableness standard." On the first issue, sanofi argued that the imposition of payment or further price reduction by the Board was punitive. Sanofi relied on the use of the word "sanction" in the Board's reasons and the Federal Court decision in Leo Pharma Inc v. Canada (Attorney General), 2007 FC 306. The Court rejected sanofi's arguments. As to whether the Board fettered its discretion by "blindly following its Guidelines and past Board decisions," the Court again disagreed with sanofi. The Court found that the Board "clearly appreciated" that the Guidelines were not binding, as the Board rejected arguments from the Board Staff, made findings that departed from the Guidelines and noted that it finds the approach taken in the Guidelines appropriate. The Court further found that the Board stated it concurs with the reasoning and not just the conclusions of two prior panels in proceedings. Finally, the Court reframed the third issue as whether the decision made was reasonable. The Court stated that it "simply cannot decipher on what basis the Board discarded, in the unique circumstances of this case, Sanofi's argument that it had, either totally, if not at least in part, compensated for its excessive revenues" and that it was "simply not in a position to exercise its duty to review the legality of the Board's decision and to determine if it was within the range of possible and acceptable outcomes" as "the decision does not meet the applicable standard." Accordingly, the Court set the decision aside and remitted the matter for reconsideration. sanofi pasteur Limited v. Canada (Attorney General), 2011 FC 859. |
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Recent Court decisions Patented Medicines (Notice of Compliance) Regulations Ratiopharm's motion to set aside Order of prohibition for fraud dismissed. Ratiopharm sought an Order setting aside a 2006 Order of the Court of Appeal (2006 FCA 214), prohibiting the Minister of Health from issuing a Notice of Compliance ("NOC") to ratiopharm for amlodipine besylate (Pfizer's NORVASC) until the expiry of Pfizer's ’393 patent. Subsequent to that Order, ratiopharm brought an impeachment action. In a 2009 judgment (2009 FC 711) affirmed by the Court of Appeal (2010 FCA 204), Justice Hughes declared the ’393 patent invalid, including pursuant to section 53 of the Patent Act. In particular, Justice Hughes found that Pfizer intentionally made three misstatements in its petition in respect of the patent. Ratiopharm submitted that the 2006 Order of prohibition should be set aside by reason of a matter that was discovered subsequent to the Order and because the Order was obtained by fraud. Ratiopharm indicated that upon the setting aside of the 2006 Order it would be entitled to seek compensation pursuant to section 8 of the Regulations. Ratiopharm's motion was dismissed. The Court determined that the declaration of invalidity of the patent is a fact discovered after the 2006 Order but is not a new matter that would warrant setting it aside. As for the second basis for the motion, the Court determined that ratiopharm was required to establish that fraud was committed in the course of the NOC proceedings and that were it not for the fraud, the Court of Appeal would not have issued the 2006 Order. The Court concluded that it could not be said that the 2006 Order was induced by and resulted from the misrepresentation later found in the impeachment proceedings made to obtain the patent. Pfizer Canada Inc. and Pfizer Ltd. v. ratiopharm Inc., June 28, 2011. Federal Court grants Order of prohibition for Hoffmann-La Roche's mycophenolate mofetil against Apotex. On July 13, 2011, the Federal Court granted an Order of prohibition, finding that Apotex's allegation of invalidity of the patent claiming mycophenolate mofetil ("MMF") (Hoffmann-La Roche's CELLCEPT) was not justified. The patent includes a claim to the compound MMF, a prodrug of a previously known compound mycophenolic acid ("MPA") and describes certain advantages of MMF and related compounds. Apotex alleged that the patent was invalid on the grounds of lack of utility (either demonstrated utility or sound prediction) and obviousness. Justice O'Reilly construed the promise to be the enhancement of MPA's bioavailability through a prodrug, specifically, a mofetil ester of MPA such as MMF "that has advantageous pharmacokinetic properties and improved activity over MPA, making it useful for the treatment of a variety of conditions, and as an immunosuppressive agent, in mammals, including humans." Justice O'Reilly found that the in vivo and in vitro study data disclosed in the patent was sufficient to demonstrate the stated utility as of the filing date. He further found that while the patent does not disclose any tests on humans, because "MMF's sole mission is to deliver MPA, and MPA was well-known to be useful in the treatment of a number of conditions in humans, "the disclosed study done on monkeys demonstrated the stated utility. Justice O'Reilly added that even if the stated utility of MMF had not been demonstrated, it was soundly predicted based on the data in the patent. Finally, Justice O'Reilly concluded that MMF was not obvious to try; nor was it more or less self-evident that it would work. Hoffmann-La Roche v. Apotex, July 13, 2011. Other decisions Abbott and Takeda denied leave to appeal Ontario Court decision that Apotex's claim for unjust enrichment may proceed. Apotex commenced an action in the Ontario Superior Court for section 8 damages, disgorgement of revenues or profits, unjust enrichment and breach of contract regarding lansoprazole (Abbott's PREVACID). The defendants' (Abbott and Takeda) motion to strike the unjust enrichment claim was dismissed on December 15, 2010. The defendants sought leave to appeal; leave was denied on July 4, 2011. The Court held that there are no cases that have been decided on the precise point in issue, namely whether the decision of a patentee to commence a proceeding under the NOC Regulations that is unmeritorious might give rise to a cause of action in unjust enrichment by the generic manufacturer. Further, the law is not settled as to the circumstances in which a statute will provide a juristic reason for enrichment. Here, it is not settled that the Regulations are a complete code. Nor is it clear that the defendants' decision to invoke the prohibition proceeding will provide a juristic reason for the benefit, if it is proven that the plaintiff did not infringe any of the defendants' patents. Apotex Inc. v. Abbott Laboratories, Limited.Ontario Superior Court decision (motion to strike), December 15, 2010 – 2010 ONSC 6909. Ontario Superior Court decision (leave to appeal), July 4, 2011 – 2011 ONSC 3988. Federal Court of Appeal affirms STRATTERA impeachment decision. On July 5, 2011, the Federal Court of Appeal affirmed Justice Barnes's judgment (reported in the October 2010 issue of Rx IP Update) holding that Eli Lilly's patent claiming the use of atomoxetine (Eli Lilly's STRATTERA) to treat attention deficit hyperactivity disorder ("ADHD") was invalid for inutility. Eli Lilly asserted three grounds for the appeal: (i) the Judge misconstrued the promise of the patent to find an implicit promise that atomoxetine "will work in the longer term"; (2) the Judge required an elevated standard of proof for demonstrated utility; and (3) the Judge erred by requiring disclosure of the factual foundation for sound prediction in the patent for there to be a sound prediction of utility. With respect to the promise of the patent, the Court was not persuaded that the Judge went beyond the promise expressly made in the patent, namely that atomoxetine is clinically effective to treat ADHD. With respect to demonstrated utility, the Court noted that "utility is largely a question of fact that is decided in each case on the basis of the evidence and the judge's assessment of it." The Court concluded that the Judge made no palpable and overriding error in concluding that the evidence was insufficient, for patentability purposes, to demonstrate the effectiveness of atomoxetine as a clinical treatment for ADHD. Finally, with respect to sound prediction, the Court noted that jurisprudence has established that "a patentee must disclose in the patent a study that provides the factual basis of the sound prediction." It affirmed that Eli Lilly could not rely on sound prediction of utility because it had not disclosed the factual basis of the prediction, i.e., the clinical study, in the patent. Eli Lilly and Company v. Teva, September 14, 2010. |
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New Court proceedings Patented Medicines (Notice of Compliance) Regulations
Other proceedings
To check the status of Federal Court cases, please click here. |
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Our pharmaceutical practice group Smart & Biggar/Fetherstonhaugh's pharmaceutical practice group calls upon decades of extensive and in-depth experience to keep your pharmaceutical IP rights where they belong — in your hands. For more information on our group and a full list of its members, please click here. Disclaimer The preceding is intended as a timely update on Canadian intellectual property and regulatory law of interest to the pharmaceutical industry. The contents of this newsletter are informational only and do not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly. To join the Rx IP Update mailing list, be removed from the mailing list or make changes to contact information, please send an e-mail to rxip.update@smart-biggar.ca. smart-biggar.ca | Ottawa | Toronto | Montreal | Vancouver |
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