Photo Credits: healthline.com (https://www.healthline.com/health/cancer/cancer-ribbon-colors)

���󲹷ɲ���Dhue��is an��IPilogue��Writer and a 2L��JD Candidate at��Osgoode��Hall Law School.��

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Janssen Inc. (“Janssen”), a Canadian pharmaceutical company, sells ZYTIGA under Patent No. 2,661,422 (“422 Patent”). ZYTIGA, Janssen's abiraterone acetate (“AA”) product, can be combined with prednisone (“PN”) to treat prostate cancer together, rather than using the two drugs separately. In 2017, Apotex Inc. (“Apotex”), another leading Canadian pharmaceutical corporation, brought forward . Pursuant to section 5 of the (“PM(NOC) Regulations”), a notice of allegation is a submission that states a patent is invalid for one of many reasons.

Apotex was seeking approval to create a generic version of ZYTIGA called APO-ABIRATERONE, which uses therapeutically-effective amounts of AA and PN to treat prostate cancer. Their NOA alleged that if the 422 Patent was invalid, APO-ABIRATERONE could not infringe upon it, and that the combined use of the two medications was not patentable primarily due to a lack of evidence showing the benefits of combining AA and PN versus using them separately. Additionally, Apotex argued that their generic drug was not for the same use as ZYTIGA; APO-ABIRATERONE was intended to treat the adverse side effects of taxanes, a class of chemotherapy drugs.

In response to the NOA, Janssen brought an application under and prohibiting the Minister of Health from issuing Apotex a notice of compliance (NOC). An NOC, as defined under section C.08.004 of the under the PM(NOC) Regulations, essentially enables the Minister of Health to grant Apotex permission to create a generic version of ZYTIGA following a successful examination. Janssen submitted that Apotex’s allegations under the NOA were invalid and therefore they should not be issued an NOC until the 422 Patent expires. ��

In 2019, the ruled in Janssen’s favour, ordering the Minister of Health to not issue a notice of compliance to Apotex at least until the expiry of Janssen’s 422 Patent. Apotex appealed the decision to the who, on January 14, 2021, ruled to dismiss the appeal on all four of Apotex's arguments, ruling on: (1) patentable subject matter; (2) obviousness; (3) inutility; and (4) infringement.

(1) Patentable Subject Matter

Apotex stated that the lower court erred in finding that the 422 Patent amounted to a new patentable subject matter, compared to AA and PN independently. Apotex noted that the combined drug did not produce a better result, and the lack of evidence sufficiently supports this claim. Referring to the jurisprudence, the Court of Appeal stated that determining patentable subject matter depends on whether the patent provides the public with something previously unavailable within cancer treatment. It is not concerned with the efficacy of the combined drug. ��

(2) Obviousness

Apotex alleged that the lower court erred in issuing the test of obviousness to determine patentability: specifically, the “more or less self-evident that it ought to work” aspect. Assessing Apotex’s argument of lack of evidence, the Court of Appeal reaffirmed that the patent's applicant need not meet all aspects under the test. They agreed with the lower court’s decision that the test of obviousness was fulfilled because it was not self-evident to combine AA and PN to treat prostate cancer.

(3) Inutility

Apotex argued that the lower court erred in its reasoning because it could not prove that the combination of drugs was more effective than each drug separately. Apotex relied on Janssen’s results when applying the Supreme Court’s test for utility from . The Court ruled that the lower court did not err. A claimant for a patent must only establish suggestive utility, which Janssen successfully did in 2007 when establishing their 422 Patent.

(4) Infringement

Apotex's last argument, a defence, was that neither their Product Monograph nor their product’s marketing infringed Janssen’s product. They stated that their product did not infringe on the 422 Patent because it was marketed for alternative use. The Court of Appeal stated that the lower court did not err in their decision that the product still imposed an infringement. Although Apotex was not currently producing a direct infringement, the Court found that it would eventually lead to an infringement of the 422 Patent.

What’s to Come

The Federal Court of Appeal’s decision to uphold the lower court’s decision and dismiss the appeal broadens Canadian patent law's future at a very pivotal time. Janssen’s success for ZYTIGA allows them to monopolize on their effective prostate cancer treatment. Most importantly, the reaffirmation of the “obvious to try” test guidelines and the updated definition of “utility” greatly enhance patent law during the COVID-19 era . A patent does not have to meet every criterion for the “obvious to try” test and must only demonstrate suggestive utility results. With new corporations striving to be at the forefront of medical technology and produce effective treatments for the ever-mutating COVID-19 virus, this decision creates a less stringent threshold for obtaining and defending a patent.

The post A Win for Patent Law and a Loss for Prostate Cancer appeared first on IPOsgoode.

Although this decision primarily turned on the facts, there are some notable points of interest for infringement, claims construction and expert evidence.

The Invention

Omeprazole decreases gastric acid secretion by inhibiting proton pumps. Thus, omeprezole is useful to treat a variety of conditions associated with low stomach pH such as dyspepsia, peptic ulcer disease and gastroesophageal reflux disease.

The activity of omeprazole was known at the time of patent filing, however, the instability of the compound posed challenges to commercialization. Omeprazole had to be stable under two distinct conditions: (1) when exposed to gastric acid and (2) for storage. Unfortunately, traditional enteric coats, which would provide gastric acid resistance, would also react with the omeprazole core to cause degradation under storage conditions.

AstraZeneca solved the stability conundrum in the ‘693 patent through “an inert sublayer … disposed on said core region” (see e.g. ). By separating the omeprazole core from the enteric layer with a subcoat, degradation could be avoided, permitting stable storage.

The Issue

The Apotex omeprazole formulation also contained a subcoat between the omeprazole core and the enteric coat. However, this subcoat was the product of an in situ reaction between the omeprazole core and the enteric coat. This method for creating a subcoat was not contemplated by the patentee at the time of patent application.

Does the scope of the claims capture products that result from an unanticipated method of production?

Justice Barnes held that for novel product claims, the scope of the claims are not limited to the methods identified or contemplated by the patentee [182]. Furthermore, Justice Barnes rejected the notion that a patentee has any obligation to teach its competitors how to avoid infringement [185]. Therefore, infringement does not require either party to be able to anticipate the infringement prior to the act. Such a legal conclusion is well grounded in the strict liability nature of patent infringement.

Claim Construction

Given that the method of infringement need not be anticipated, infringement in this case hinged on the meaning of “inert” and “disposed upon”. Through the assistance of expert witnesses, Justice Barnes preferred the nuanced approach to construe “inert” to mean the absence of “reactions that adversely affect the functionality of the formulation” [194]. Expert witnesses, however, provided no assistance to the construction of “disposed upon”, as this was not a term of art in the world of the formulator [170]. Absent a clear meaning to a formulator, Justice Barnes held that “disposed upon” does not signify a process limitation [189].

Of general interest, Justice Barnes cautioned against “the danger of relying too heavily on the disclosure as an interpretive guide to claim language”. In the disclosure, the patentee contemplated direct application of the subcoat layer to the omeprazole core. However, this statement in the disclosure cannot be read into the claims as process limitation when there is no language in the claims to support such a limitation [179].

The ‘693 Patent was previously and similarly construed by Justice Rothstein for a unanimous Federal Court of Appeal in Apotex Inc v AB Hassle, , in the context of a PM(NOC) proceeding between the same parties. While PM(NOC) decisions are not binding for subsequent infringement actions, Justice Barnes held that the construction taken by FCA to “carry some persuasive weight”, especially where the issue of construction does not require specialized knowledge [175].

Patent Infringement

There was little dispute that the Apotex formulation contained a subcoat. Rather, the issue of infringement turned on whether that sublayer was continuous or inert. These issues were resolved largely through technical evidence produced by the expert witnesses.

Expert witnesses for both parties provided diametrically opposing opinions on whether there was structural continuity in the subcoat. Justice Barnes preferred the evidence offered by the AstraZeneca witness, suggesting that the subcoat was continuous [342]. Furthermore, given the fact that the subcoat swells in the presence of water, any gaps that appear when the capsule is dry may very well be sealed once the capsule gets wet [312]. AstraZeneca’s witness also produced data that ruled out the likelihood of significant quantities of omeprazole degradants or other reactive compounds in the Apotex subcoat [364].

Justice Barnes took particular note of the fact that Apotex’s experts chose to attack the experimental methodology and limitations of AstraZeneca’s expert, rather than conduct their own independent tests [298]. In particular, Justice Barnes noted that “[a]n argument that other tests or controls could have been used loses much of its strength where a party chooses not to employ those same suggested methods in its own responding analysis to see if the results differ” [361].

This approach to resolving conflicting expert opinion is consistent with the law of burdens of proof and general approach to ascribing weight to evidence. AstraZeneca had both the persuasive burden and evidentiary burden on the issue of infringement. By adducing evidence to the satisfaction of Justice Barnes, AstraZeneca had discharged its evidentiary burden to raise the issue of a continuous subcoat. Whether AstraZeneca had met its persuasive burden depended on the reliability of the evidence and the cogency of the interpretation of the data. Apotex’s decision to challenge the data meant that the scope of the dispute for infringement was on the reliability of the evidence. It is therefore logical that Apotex’s argument would lose considerable force because those attacking experimental methodologies and limitations “should not benefit from any uncertainty that could easily have been dispelled” [348].

Lou Chang is a JD Candidate at Osgoode Hall Law School and a fan of JRR Tolkien.

The post An Unexpected Infringement: There and Back Again appeared first on IPOsgoode.

PM(NOC)��proceedings

The litigation over atorvastatin, the active pharmaceutical ingredient in Lipitor, first began when Apotex served two Notices of Allegation (NOA) with respect to Pfizer’s patents relating to various polymorphic forms of atorvastatin. ��Apotex’s submission for its first atorvastatin product was placed on patent hold by the Minister of Health on May 15, 2007. Apotex’s submission in relation to its second atorvastatin product was placed on patent hold by the Minister of Health on February 22, 2010.�� Apotex was allowed market entry for both its atorvastatin products on May 19, 2010. As a result, Apotex claimed for damages pursuant to Section 8 of the��PM(NOC) Regulations. In response, Pfizer counterclaimed against Apotex for infringement.

Section 8 Damages

In the event that a generic pharmaceutical company is successful in��PM(NOC)��proceedings, Section 8 of the��Regulations��allows them to claim damages that result from the delay in market entry while the proceedings were pending. When Section 8 Damages are at issue, a “but for” world must be created. In this instance, Apotex has to show what would have happened in terms of market penetration for its atorvastatin product had there been no prohibition application by Pfizer. The period for which damages are awarded is defined by “(a) beginning on the date, as certified by the Minister, on which a notice of compliance would have been issued … and (b) ending on the date of the withdrawal, the discontinuance, the dismissal or reversal.”

Bifurcation Order

While both parties agree that the end date of the damages period should be May 19, 2010, the start date became contentious.�� Pfizer alleges that Section 8 Damages should be limited to a three-month period, when the second patent hold letter was obtained on February 22, 2010. Pfizer’s argument rests on the fact that Apotex only came to the market with the second atorvastatin product and not the first. On the other hand, ��Apotex seeks Section 8 Damages for a three-year period that is marked by the start date of the first patent hold letter it received on May 15, 2007.�� Apotex alleges that in the "but for" world, had��it been allowed to enter the market as of the date of the first��patent hold letter,��it would have marketed the first atorvastatin product.��Apotex further��alleges that the��second atorvastatin product was just��an improved version of the first��product.��The difference between the two start dates would have a tremendous effect on the quanta of damages since Lipitor's yearly sales averaged at approximately . As a result,��Pfizer brought a ��seeking to separate the issue in relation to the start date from the rest of the proceedings. This bifurcation��order was considered to be novel and "engag[ed] not only factual issues but statutory interpretation of the Regulations". Ordinarily, bifurcation motions seek to separate liability and damage issues.���� Ultimately, the Federal Court granted Pfizer’s motion (“Bifurcation Order”) holding that the bifurcation would save judicial resources, costs, and time.

Amendments to Statement of Defence and Counterclaim

Just a few months after the Bifurcation Order was granted, the Court heard a motion brought by Pfizer to amend various paragraphs of its statement of defence and counterclaim. ��In considering whether to exercise its discretion, the Court held that the proposed amendments should be granted. However, since these amendments would significantly expand on the issue of the start date, the Bifurcation Order would be varied.�� Moreover, the Court outlined its concerns with the number of motions that were brought by both parties, as well as the lack of agreement on productions and scheduling dates. Ultimately the case management judge concluded that the combination of these factors could “jeopardize the actual trial dates”. Consequently, the Bifurcation Order was vacated and a new trial date on all issues was scheduled. The case management judge also set a schedule for all steps in the proceeding and prohibited refusals on discovery.

This decision may have been disappointing to some observers, as the start date issue has been contentious in several recent Section 8 cases (See ��and��). ��In fact, a start date bifurcation order could have set a new precedent. From a strategic point of view, this type of order can be quite beneficial to a party. In the instance of Pfizer, their liability has already been established; at issue is the time period. If the damage period is determined to be for the three months, then in Pfizer's view the case would be “relatively simple and there is a significant prospect that [it] would settl[e]”.��Moreover, ��if the three-month period is established early on this would mean that��settlement discussions would become more one sided. Keeping in mind that Pfizer is also counterclaiming for infringement, there would be quite the risk reallocation for Apotex. ��In light of recent decisions of the Federal Court of Appeal in��,��and��, PM(NOC)��litigation, particularly in the context of��Section 8 Damages, is still developing. As new proceedings arise, parties bring novel issues to the table. It would thus be interesting to see if this strategy will be implemented in the future or if other types of bifurcation orders will be sought.

Anastassia Trifonova is an IPilogue Editor and a JD candidate at Osgoode Hall Law School

The post In Proving Foresight May Be Vain: Federal Court Vacates Bifurcation Order Just a Few Months After Granting It appeared first on IPOsgoode.

Canadian patent no. (the 653 patent) claims esomeprazole with a specified level of optical purity, and its use in the treatment of these diseases.�� After a 32-day trial (, 2014 FC 638), Justice Rennie found the claimed invention to be new and inventive.�� However, he held the 653 patent was invalid because it failed to meet the third basic requirement for patentability – utility.�� Specifically, the Court found that the inventors could not have soundly predicted one of the utilities promised in the patent at the time of filing the application.

Justice Rennie’s detailed and comprehensive Reasons for Judgment will be of interest to not only litigators engaged in the drug wars in Canada, but also to patent practitioners generally.�� What follows is a summary of three key issues in that case, but readers of the Court’s Reasons will note that Justice Rennie dealt in detail with several other issues.

Ascertaining the “Promise” of the Patent

The Court began its utility analysis by noting that utility is a requirement for an “invention” under of the Patent Act.�� A patent will satisfy the requirement of utility if, from the perspective of the skilled person as of the filing date of the application for the patent, its utility was demonstrated, or in the alternative, its utility was soundly predicted. Prior to engaging in this utility analysis, it is necessary to first ask: “useful for what?”�� That is, a preliminary inquiry is to ascertain the “promise of the patent”, or in other words, determine what the patent says is the utility of the invention.

Justice Rennie recognized that a patent does not need to promise any particular level of utility, in which case the patent will be valid as long as there is a scintilla of utility (citing 2010 FCA 197). However, where a patent promises a specific result, utility will be measured against that promise so that the question becomes whether the invention does what the patent promises it will do.�� Identifying the promise of the patent requires a consideration of the patent as a whole construed through the eyes of the skilled person in relation to the science and information available at the time of filing.

Justice Rennie dealt with a number of issues regarding the promised utility of the 653 patent, however, two specific issues are of note: (1) is a property of a compound a promise of utility? and (2) what is the distinction between a promise of utility on the one hand and a goal or advantage on the other hand?�� With regard to the first issue, the Court found that esomeprazole’s stability against racemization (the single enantiomer does not convert back to the racemate) is a property of the compound – it is not related to the patent’s utility.�� Specifically, the Court held that the “patent in this case is not useful for possessing the chemical property of being stable against racemization; it is useful as a pharmaceutical drug in therapy. Stability against racemization merely enables that use and is not a use in itself” (at paragraph 97).�� Thus, stability against racemization is a property of esomeprazole that may lead to the ultimate utility of use in treating certain diseases.

As for the distinction between a promise and a goal/advantage, some recent cases (notably , 2013 FCA 186) have held that not all statements of goals or advantages set out in a patent rise to the level of a promise of utility.�� In particular, a “goal” is not necessarily a “promise”, thus it is necessary in some cases to distinguish between the two.�� In Justice Rennie’s view, “goals” describe “a hoped-for advantage of the invention” and “merely relate to potential uses for the patent”, whereas “promises are explicit and define guaranteed or anticipated results from the patent” (at paragraph 117, emphasis in original).�� In the context of the 653 patent, the Court held that the patent’s language (“will give an improved therapeutic profile such as a lower degree of interindividual variation”) clearly refers to a promise of utility. The use of the word “will”, although prospective, nevertheless conveys “a high threshold of probable or certain outcomes that will occur” (at paragraph 120, emphasis in original). Had the patent used language such as “may” or “could” then there would have been a more compelling argument that the statements referred to goals as opposed to promises.

Two final notes of importance about the promised utility of the 653 patent.�� First, the Court found that the patent made three promises of utility (there has been some debate as to whether a patent can only make one promise), and second, the Court found that the three promises of utility applied to all the claims of the 653 patent (the claims included both compound claims and use claims).

The Disclosure Requirement in Sound Prediction Cases

Having ascertained the promised utility of the 653 patent, Justice Rennie then turned to the question of whether the inventors had demonstrated the promised utility prior to the filing of the patent application, and if not, whether the promised utility was soundly predicted as of that date.

Determining whether the promised utility was demonstrated is generally straightforward.�� The question is whether, as of the filing date, there was “evidence that establishes that the embodiment at issue does in fact work in a manner that gives rise to the advantages stated in the patent” (at paragraph 137, citing , 2013 FCA 219).�� In the case of the 653 patent, the promised utility had not been demonstrated. Thus, the issue became whether the promised utility could have been soundly predicted.

It was established by the Supreme Court in the so-called “AZT” case ( 2002 SCC 77, [2002] 4 SCR 153) that a three-part test must be satisfied for a patent to be valid based on sound prediction: (1) there must be a factual basis for the prediction, (2) the inventor must have at the date of the patent application an articulable and sound line of reasoning from which the desired result can be inferred from the factual basis, and (3) there must be proper disclosure.

The application of the AZT case has led to a significant debate in Canada as to whether the third step (“proper disclosure”) means that a patent based on sound prediction must satisfy a heightened disclosure requirement in order to be valid.�� That is, did the Supreme Court require that the patent must disclose both the factual basis and the sound line of reasoning that underlie the prediction of utility?�� Although the Supreme Court did not have to answer this question in the AZT case, Justice Rennie was not as fortunate.�� In formulating his answer, he reviewed the law on this point and held that only in the case of a new use patent must the patentee satisfy this heightened disclosure requirement; in the case of all other types of patents, no such requirement exists.�� His reasoning is as follows.

First, Justice Rennie noted that the AZT case dealt with a new use patent – the drug AZT was a known drug at the time and the inventors discovered and claimed its use in the treatment of HIV (a new use).�� Second, certain specific language used in the AZT case suggests that the disclosure requirement applies only to new use patents.�� Third, obiter dicta in the Supreme Court’s recent decision in , 2012 SCC 60 (the Viagra case) rejected the requirement for heightened disclosure and this obiter had the effect of overturning prior Federal Court of Appeal decisions where heightened disclosure was required.

Having decided that the factual basis and line of reasoning did not have to be disclosed in the 653 patent, Justice Rennie proceeded to look at all evidence adduced by AstraZeneca relating to the making of the invention, whether disclosed in the patent or not.�� The Court found, based on the evidence, that two of the three promised utilities had been demonstrated or soundly predicted as of the filing date.�� However, despite referring to information not disclosed in the 653 patent, Justice Rennie found that the third promised utility was not soundly predictable.�� As a result, the patent was invalid for failing the utility requirement.�� Thus, where a patent, properly construed, promises more than one utility, the inventors must have demonstrated and/or soundly predicted each of the promised utilities, failing which the patent is invalid.

One last point on utility.�� Justice Rennie began his analysis of the disclosure requirement by saying that the “law on proper disclosure with respect to utility is unsettled” (at paragraph 141).�� As a result of his decision, the law may now be more “unsettled” than it was previously.�� Is he correct in his interpretation of the AZT case and of the importance of the obiter statements in the Viagra case, or do the holdings in the prior Federal Court of Appeal decisions still apply?�� As well, how are Examiners in the Patent Office to determine whether the claimed invention was soundly predicted if the factual basis and sound line of reasoning need not be disclosed in the specification?

Ascertaining the Inventive Concept

A further construction issue faced by Justice Rennie was determining the “inventive concept”.�� As practitioners are well aware, the Supreme Court in , 2008 SCC 61, [2008] 3 SCR 265 has mandated a four-part test for assessing obviousness.�� The second step in the analysis is to “[i]dentify the inventive concept of the claim in question or, if that cannot readily be done, construe it.”

The issue faced by Justice Rennie was how to identify the inventive concept of the 653 patent.�� He began by noting that the Supreme Court expressly stated that it is the “inventive concept of the claims” that must be identified.�� Thus, according to Justice Rennie the analysis “begins with the claims, and only looks to the disclosure when necessary” (at paragraph 267).�� One of the examples given by the Supreme Court as to when the disclosure may be relied on to determine the inventive concept is in the case of a claim to a bare chemical formula.

Tying the inventive concept to the claims is significant because patentees will generally want to advocate for an inventive concept that includes as many features as possible (thus making it more difficult for a court to find the invention obvious).�� In some cases, patentees have been successful in convincing the Court that features disclosed in the patent, but not claimed, form part of the inventive concept (see, for example, , 2014 FC 566 at 25 where a claim to a formulation was characterized as a “bare list of ingredients”).�� That was precisely what AstraZeneca tried to argue with regard to the 653 patent.�� Justice Rennie, however, rejected this argument because the claims in issue related to esomeprazole having a specific degree of optical purity.�� Because of this claimed property, he held there was no need to look to the disclosure, and in particular, no need to import into the inventive concept properties of esomeprazole that were disclosed but not claimed.

Justice Rennie’s conclusion on when to venture outside the claims to ascertain the inventive concept is consistent with the provisions of of the Patent Act, which provides that “[t]he subject-matter defined by a claim in an application for a patent in Canada must be subject-matter that would not have been obvious on the claim date …” (emphasis added)).

Dino Clarizio is a partner at the Toronto office of Goodmans LLP, and also a registered patent and trade-mark agent.�� His work includes all types of intellectual property litigation and, in particular, patent litigation in the chemical and pharmaceutical area. Mr. Clarizio received an LLB from Osgoode Hall Law School (’89) and a Bachelors of Engineering from McGill University (’86).

The post Apotex Successfully Invalidates Patent on Nexium appeared first on IPOsgoode.

Telmisartan is a pharmaceutical used in the management of hypertension. It is marketed under the trade name Micardis, but several generic versions are also available. In an effort to obtain a Notice of Compliance and market its generic version of Micardis, Apo-Telmisartan, Apotex submitted an Abbreviated New Drug Submission (ANDS) on December 16, 2010. The main requirement of an ANDS is that the manufacturer of the drug demonstrate that the new drug is the "pharmaceutical equivalent" of a Canadian Reference Product (CRP) which is usually a brand-name drug, in this case Micardis (). "Pharmaceutical equivalent" is defined as a new drug that, in comparison with another drug, contains identical amounts of the "identical medicinal ingredients", in comparable dosage forms, but does not necessarily contain the same non-medicinal ingredients ().

However, over a series of correspondences and meetings between Apotex and the TPD, a decision to reject the ANDS was finalized on April 12, 2012. The reasoning of the TPD was that Micardis and Apo-Telmisartan did not contain "identical medicinal ingredients" and were therefore not "pharmaceutically equivalent".

The only medical input ingredient in Micardis is telmisartan, a carboxylic acid. However, Micardis also contains the non-medical ingredient sodium hydroxide. During the wet granulation process employed during manufacturing, an acid-base reaction occurs between telmisartan and sodium hydroxide. As a result, the form found in the final drug product is, in fact, the salt telmisartan-sodium.

Similar to Micardis, Apo-Telmisartan contains telmisartan as the sole medical input ingredient and makes use of a wet granulation process during manufacturing. However, Apo-Telmisartan employs potassium hydroxide as an excipient (non-medical ingredient). Apotex claimed that no acid-base reaction occurs between telmisartan and potassium hydroxide and the form found in the final drug product is telmisartan and not the salt telmisartan-potassium. The TPD concluded it was unclear from the data whether the final product contained the free acid form of telmisartan or a mixture of the potassium salt and the free carboxylic acid.

Although the Health Canada Policy on "" clearly provides that different complexes, esters, or salts of the same active moiety are considered non-identical, it does not indicate at what time (input or final product) the issue of identicalness should be addressed.

The TPD took the position that "identical medicinal ingredient" refers to the active substances as they appear in the final product and not the input ingredients. Therefore, the finished product in Apo-Telmisartan is either telmisartan or telmisartan-potassium, neither of which is identical to the CRP Micardis (telmisartan-sodium).

Apotex asserted that "identical medicinal ingredient" should assess whether the input ingredients were the same. Under this interpretation, as the input ingredient is telmisartan in both cases, Micardis and Apo-Telmisartan would be "pharmaceutically equivalent".

Ruling in favour of Apotex's position, Justice Kane relied on several fundamental principles of statutory interpretation to resolve the issue. Looking at the ordinary interpretation of the word "ingredients", the original ingredients remain ingredients and are not referred to as the possible mixtures they might become. The judge uses a baking analogy where egg whites and sugar are used to create a meringue for a pie. If someone was asked what the ingredients were in the pie, the answer would not be meringue, but would be sugar and egg whites. In addition, of the FDR requires the manufacturer to provide samples of the ingredients of the new drug and samples of the new drug in dosage form. This suggests that "ingredients" refers to something other than the final dosage form as they are listed separately.

Although I agree that there is a lack of clarity in the definition of the term "identical medicinal ingredients", I was at first concerned that interpreting "identical medicinal ingredient" as the input ingredient and not the final dosage form could lead to some safety issues. As the neutral form and salt form of a compound can often have different properties, finding an input ingredient "pharmaceutically equivalent" to a CRP only to have that ingredient converted to a different compound during manufacturing could lead to a compound for which the safety and efficacy has not yet been verified. However, in this case Apotex supplied evidence that there was no safety concern involving the use of potassium hydroxide as an excipient and furthermore, the Director General of the TPD��could assess the safety and effectiveness of the final product��during the next stages of approval. After Justice Kane's judicial review of the matter, it appears as though "identical medicinal ingredient" refers to the input ingredient and not the final product. For now, that's how this cookie has crumbled.

Corey McClary is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.

The post "Meringue" is not an Ingredient in Lemon Meringue Pie: Defining "Identical Medicinal Ingredient" appeared first on IPOsgoode.

How Do Intellectual Property Lawyers Interact Within a Larger Company?

During my time at Apotex, I had the opportunity to learn how the Global Intellectual Properties (GIP) group interfaced with some of Apotex’s other departments. Sometimes these interactions were in the form of regularly scheduled meetings, where a lawyer and representatives from other departments would meet to discuss the progress that is being made on Apotex products. Whether the interactions were more or less formal, scheduled or spontaneous, one thing was clear: in-house lawyers work hard to support every area of the company that requires their assistance.��

What is the Role of In-House Counsel?

Prior to beginning my Apotex internship, I was a bit unclear on what work was performed by in-house lawyers, rather than by external counsel. Throughout my internship, I was able to learn how various legal tasks were delegated.

The in-house legal team is tasked with advising the company, helping to make decisions about the best way to proceed in certain situations, and managing the tasks assigned to external counsel. In-house lawyers are also involved with drafting documents and revising external lawyers’ work. As in-house lawyers understand the specific nature and quality of work that is required and the needs of their company, they are best-equipped to critically review incoming work and act as a liaison between the organization and the external law firm.

What Did I Do?

At Apotex, I completed tasks for a number of lawyers and experienced a wide range of work as a result. My largest project was to draft a Notice of Allegation; the originating document for proceedings under the . I completed various research tasks, including determining the litigation status of relevant cases. I learned how to critically review a patent, its file-wrapper, and prior art documents to determine what invalidity and/or non-infringement arguments might plausibly be made. This type of assignment provides an opportunity for in-house counsel to assist in drafting legal documents and to critically review work done by external firms.

My work was not limited to patents.�� I also gained exposure to trade-mark matters and corporate/commercial work. For the latter, one of my tasks was to draft a corporate policy from existing documents and memorandum. I then reviewed the current documents to determine whether they were compliant with the draft policy, and to note any ways in which their compliance could be enhanced.

What About the Employees?

I have left the best for last – everyone with whom I interacted at Apotex was great. My supervisor was very helpful, glad to answer all of my questions, and ensured I was exposed to as much of the company and its work as possible. Our daily meetings provided an opportunity to discuss my progress, and his door was always open for any unscheduled meetings, as well. Everyone else who worked in the department was friendly, and happy to help in my learning experience. I was grateful for the experience, and, at the same time, felt I was able to contribute to the department.

Would I Recommend the IP Intensive Generally, and Working at Apotex in Particular?

Absolutely! The IP Intensive is a great way to become exposed to the IP community, and begin to learn some of the tasks that IP lawyers seek to accomplish. Working in an in-house environment will certainly provide a different perspective from working in a firm, as each has different responsibilities and focuses.

For anyone interested in completing an internship at Apotex, my experience was fantastic and I was able to learn a lot in my short time with the company. If you are interested in patent (and perhaps some trade-mark and corporate) law, this might be the right experience for you!

Amanda Legeny is a JD Candidate at Osgoode Hall Law School and is enrolled in Osgoode’s Intellectual Property Law Intensive Program. As part of the program requirements, students were asked to write a reflective blog about their internship experience.

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We have a wonderful array of��,��from government agencies to media organizations, hi-tech companies, and innovation centres. For the Fall 2013 term, we have partnered with three brand new placement organizations: Apotex, Cobalt Pharmaceuticals Company (the Canadian subsidy of Actavis, Inc.) and CBC/Radio-Canada. We are also pleased to welcome the return of TVO from our inaugural year. Other IP intensive placement organizations include: Canadian Heritage, the Canadian Intellectual Property Office, Industry Canada (Copyright and International IP Policy Branch), the Society of Composers, Authors and Music Publishers of Canada (SOCAN), Stanford Centre for Legal Informatics (CodeX), The Globe and Mail, and VentureLAB.

The IP Intensive is a unique program that gives students practical, experiential education in a workplace setting for an entire term in lieu of being in the classroom.��Our students gain valuable practical experience which will assist them in obtaining employment after law school, and some of our students' research in the program has been published in the (IPJ).

The IP Intensive begins with��, led by IP Intensive Students currently enrolled in the IP Intensive, which will feature presentations and workshops by experts prominent in the IP community. The seminars will cover a wide variety of topics, from “Trade-mark Prosecution” to “Intellectual Property Reform Process”, from “Biotechnology Focus: Pharma” to “Digital Media, Journalism, Freedom of Expression”. ��Our IP Intensive students will be interacting and engaging in stimulating discussions with the Chair of the Trade-marks Opposition Board, a senior policy analyst from Canadian Heritage (Copyright Policy Branch), counsel from the Ontario Information and Privacy Commissioner’s Office, in-house counsel and top executives from a broad range of industries, practitioners from the major Canadian law firms, academics and members of the judiciary.��Then IP Intensive Student Interns will participate in an 11-week internship with one of our placement partners.

The program director for 2013 will be Professor David Vaver. Throughout the term, the students will be meeting with him periodically to discuss topics relating to intellectual property law, to share their experiences in the work environment, and to participate in a cross-pollination of ideas. The students will also be maintaining a reflective journal and blog on the . They are also responsible to lead their own seminar presentations, which will occupy the wrap-up week of the course.

If you are interested in attending any of our sessions or participating as a placement, please do not hesitate to get in touch with me directly.

Giuseppina D’Agostino is the Founder and Director of IP Osgoode, an Associate Professor at Osgoode Hall Law School, and the Founder of the IP Intensive.

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In Canada, virtually all patent cases are heard by the Federal Court, and it is rare for that Court to render decisions regarding damages.�� This is because there is a common practice in Canada for parties to bifurcate the issue of liability (i.e., patent infringement and validity) from the issue of compensation (i.e., quantum of damages or accounting of an infringer’s profits).�� Bifurcation is often seen as an attractive approach because it saves the parties from spending time and money on compensation-related issues in the event that the patent is found either not infringed or invalid.�� Even where a case is bifurcated and an accused infringer is liable for patent infringement, parties are often able to settle the compensation aspect of a case without the need for a second trial to determine quantum of damages or profits.�� Accordingly, decisions such as Merck do not come along very often, especially decisions where such a large quantum of damages is involved.

During the earlier liability trial, the Court decided that Merck would only be able to claim compensation in the form of damages, not an accounting of the infringer’s profits.�� Damages in Canada can take a number of forms, but the most common forms in patent infringement actions are (i) lost profits on sales a plaintiff patentee would have made but for the presence of the infringing product in the market, and (ii) for those sales made by the defendant that the plaintiff patentee would not have made or cannot persuade the Court it would have made but for the presence of the infringing product, the plaintiff is entitled to a reasonable royalty.

In Merck, the plaintiffs claimed lost profits with respect to lost tablet sales that Merck Canada would have made within Canada, lost tablet sales that Merck US would have made to Merck Canada, and lost tablet sales within Canada after patent expiry but during a hypothetical ramp-up period of Apotex.�� Merck also claimed a royalty with respect to sales it would not have made, namely, tablets sold onto the export market (pre and post-patent expiry) and tablets sold within Canada post-expiry.�� Based on these various claims, Merck was asking the Court to grant it over $156 million in damages, plus interest.

Apotex opposed Merck’s claims and argued for a nominal (approximately $9 million) damages quantification.�� One of Apotex’s key arguments for a drastically lower damages total was that it had a “non-infringing alternative”.�� The rationale behind the argument is that when performing a “but for” analysis to determine what position the plaintiff would have been in had the defendant not infringed the patent, the Court must take into account whether the defendant had available to it a non-infringing alternative that would have allowed it to continue competing legally.�� The effect of the argument, if successful, would have been to limit any damages to a reasonable royalty with respect to sales where the non-infringing alternative could have been used to prevent the plaintiff patentee from otherwise capturing the sales under the “but for” analysis.

In rejecting Apotex’s “non-infringing alternative” argument, the Court reiterated the fundamental difference between a claim for damages and a claim for an accounting of an infringer’s profits.�� Damages are to address a plaintiff’s loss suffered from the unauthorized use of its invention. ��An accounting of profits looks at the benefit or advantage that a defendant derived from the use of the invention relative to what was otherwise available but non-infringing.�� Notwithstanding that in the United States there was found to be some law endorsing the “non-infringing alternative” argument for damages quantification, Justice Snider concluded that there was no basis in Canadian law for such an argument.�� The argument, if allowed, would incentivize infringers to infringe because they would in effect be taking a compulsory license and their liability would, at most, be limited to a reasonable royalty.�� To allow the “non-infringing alternative” argument in a damages context would result in inadequate compensation for injured plaintiffs and the infringer escaping responsibility for its infringement. ��Accordingly, Merck makes it clear that the “non-infringing alternative” argument can only be made in accounting of profits cases.

With respect to determining a reasonable royalty, the Court acknowledged the “hypothetical negotiation” approach endorsed in Jay-Lor International Inc v Penta Farm Systems Ltd, (“Jay-Lor”).�� In Jay-Lor, the Court found that one uses a percentage of the defendant’s anticipated profits to form the basis of a royalty.�� However, in Merck, only one expert (called by Merck) gave evidence on the subject of a reasonable royalty.�� That expert used a different methodology that focused on two end points in a bargaining range: the highest royalty that would leave the defendant better off by taking a licence (i.e., the “maximum willingness to pay” amount); and, the lowest royalty that leaves the plaintiff better off by granting a licence (i.e., the “minimum willingness to accept” amount).

A problem arises in cases where there is no overlap between the “maximum willingness to pay” and the “minimum willingness to accept” amounts.�� In such cases, Merck’s expert opined that the ultimate royalty from a hypothetical negotiation must adequately compensate the patentee for the infringement.�� Therefore, and as accepted by the Court, the royalty would be based on the patentee’s “minimum willingness to accept” amount.�� Significantly, the Court held that an infringer’s net profit margin does not constitute the ceiling at which a reasonable royalty is capped.

As a result of the Court’s findings with respect to the above and the evidence before it, Merck was awarded approximately $114 million in lost profits for Merck Canada’s lost sales in Canada and Merck US’s lost sales to Merck Canada, but not for lost sales post-patent expiry.�� With respect to lost sales post-patent expiry during the hypothetical ramp-up or “springboarding” period where the generic has yet to fully capture the market, the Patent Act does not preclude recovery of damages for such lost sales.�� However, in this case, as insufficient notice was provided to Apotex that Merck was claiming such damages, and there was an inadequate evidentiary record to support Merck’s claim, the Court declined to award such springboard damages.�� With respect to all other infringing sales, Merck was therefore compensated by way of a reasonable royalty totalling approximately $5 million.

On top of the amounts for lost profits and reasonable royalty, the Court exercised its discretion and awarded Merck prejudgment interest at 1% above the 1997 Bank of Canada rate.�� As a result, Merck’s total recovery will be tens of millions of dollars in excess of the base award of $119 million, as the litigation dates back to the mid-1990s.

is a partner in Gowlings’ Ottawa office. Michael practices exclusively in the area of intellectual property with an emphasis on patent, trade secret and copyright litigation matters.

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To read the report’s section on Canada, click .

Results of the Report: A Commendation with Qualification

In the report, the USTR commends Canada for its recent legislative reform. The two initiatives cited in the report were Canada’s passage of the in June 2012 - legislation that represents Canada’s implementation of the WIPO Internet Treaties - and the introduction of the in March 2013 - which attempts to target commercial-scale trafficking of counterfeit products. Both of these initiatives were endorsed by the USTR, ��who went on to suggest in the report a further expansion of this type of legislation in order to give more power to border officials to seize goods in-transit.

The report was not universally complimentary, however, with the USTR expressing serious concerns regarding Canada’s pharmaceutical industry. One concern that was mentioned was the absence of a right of appeal in the administrative process of Canadian regulatory pharmaceutical approval. In addition, the USTR expressed apprehension regarding the impact of the heightened utility requirements for Canadian pharmaceutical patents. This statement likely refers to the that has taken place over the last decade regarding what constitutes the “utility” required for pharmaceutical patents in Canada; originating from the landmark SCC case .

Reaction to the Report

The movement of Canada from the “Priority Watch List’” to the ‘”Watch List” has been met with some criticism; with some American entities publicly voicing their displeasure with Canada’s new position. The most scathing reaction to the report comes from the Pharmaceutical Research and Manufacturers of America (PhRMA), who stating that they were very “disappointed” with Canada’s changing designation. In the report, PhRMA claims that “Canadian policies and judicial opinions continue to harm international innovators to the benefit of domestic industries” and that the “heightened standard for patentable utility for pharmaceutical patents is inconsistent with Canada’s trade treaty obligations.” The PhRMA statement also contains a critique of India’s pharmaceutical IPR regime - a country that is notorious for their pharmaceutical IP protection. Including these statements side-by-side might reflect the view that the American biopharmaceutical industry has of Canada's pharmaceutical intellectual property laws and policy.

A Precarious Political Climate

Although there have been concerns raised about the legitimacy of the USTR “Special 301 Report” from both and , an evaluation of Canada’s IP regime by its is undoubtedly an important diplomatic and economic concern. Indeed, Canada’s actions over the last few years seem to indicate their intention to conform to the wishes of their American counterparts, with the recent legislative reform that is responsible for Canada’s improvement on the watch list seemingly being a direct response to .

What makes the most recent report particularly interesting is the fact that it has been released at a complex political time period for Canada. The pharmaceutical company Eli Lilly recently launched a , and the (CETA), a free trade agreement between the Canada and the European Union (EU), is bound to be completed in the next few months. The recent legislative changes made by Canada could be viewed as political posturing for the impending CETA, which purportedly has the EU calling for increased . This agreement also allegedly includes an increase in patent protection for innovative pharmaceuticals in Canada at the request of the EU, which for its potential to greatly increase drug costs. However, with drug and health care costs being a sensitive political topic and being significantly in Canada over the next few decades, that the strengthening of IP pharmaceutical protection may not ultimately make it into the final draft of the CETA despite the EU's wishes.

It could be the case that the recent Canadian legislative reform is an effort by Canada to please its biggest trading partners without making drastic changes to its domestic pharmaceutical industry. The issue of rising health care costs is undoubtedly an important domestic political issue, and perhaps the seemingly “Jekyll and Hyde” approach to pharmaceutical and non-pharmaceutical IPR�� is a necessary compromise that Canada has to make in order to function diplomatically with its trading partners while maintaining what it views as a healthy domestic state. It would be hard to name many things that are more complex than trying to adequately fit domestic IP policies within international free trade agreements, but Canada must continue to strive to achieve that seemingly impossible balance. At the end of the day, like in most matters in life (and politics), you certainly can’t please everyone.

Adam Falconi is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.

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is a topical ophthalmic product used to treat intraocular pressure for people suffering from chronic glaucoma and has been patented (hereafter “’764 patent”) by Allergan since April 2003 (granted October 2005).�� A generic version, developed by Apotex (known as APO-BRIMONIDINE-TIMOP), could only receive a NOC from the Minister of Health before April 2023 if Apotex could invalidate the ‘764 patent.�� A finding by Justice Hughes that the ‘764 patent was obvious (and therefore invalid) conflicted with the final order Apotex from obtaining the NOC for their product.

The ruling, according to Justice Hughes, was made in order to preserve comity.�� There was a in the federal court where a different generic competitor (Sandoz) also attempted to invalidate the ‘764 patent on the basis of obviousness, and lost.�� Justice Crampton, in making that decision, relied on expert testimony to come to the conclusion that the ‘764 patent was not obvious.�� In the current decision, Justice Hughes, relying on different expert witnesses who represented Apotex and slightly different testimony by Allergan’s expert, decided that the ‘764 patent was obvious.�� Justice Hughes recognized the similarity between the two cases and the fact that both judges were relying on similar evidence to reach their conclusions.

“Is the evidence and argument before me “different” from or “better” than the evidence and argument before Crampton J in Sandoz? There is no real way to measure “different” or “better”. The evidence and argument is of the same kind. In some cases evidence and argument is more one of quality to the best that can be discerned from the record that I have, and this Court not having the record as to what was before Crampton J” (at ).

In order to acknowledge this difficulty in the law, Justice Hughes was forced to admit that he might not be in the best position to rule on the obviousness of the ‘764 patent and left the matter for an appellate court. ��“The only practical way to get the matter before the Court of Appeal is for me to grant the Order for prohibition in the likely expectation that Apotex will appeal” said , which explains his order for prohibition. ��At the same time however, Justice Hughes stated his own conclusion that the ‘764 patent was obvious in order to demonstrate to an appeal court that he had reached a separate and opposite conclusion to that of Justice Crampton.�� Given the fact that both judges were relying heavily on expert testimony, Justice Hughes correctly identified the real possibility of conflicting judgments within the same level of court, despite having nearly identical facts and arguments.

When it comes to patent law, judges rely on being able to access expert witnesses that can explain the current state of the art and whether or not a current patent was obvious to those skilled in the art.�� Judges simply do not have the technical skill for coming to their own conclusions about obviousness. ��Therefore, these findings of obviousness are mainly based on the expert evidence that is before a judge.�� It follows that, given different evidence of a similar kind, judges from the same level of court might reasonably disagree on the findings of obviousness depending solely on the type of expert evidence they hear. ��Justice Hughes finds that result unacceptable and therefore deferred the matter to a higher court.

By making the judgment that he did, Justice Hughes has created an opportunity for a higher level court to make the final decision regarding obviousness, while at the same time expressing his own opinion on the evidence and giving deference to comity.�� Since he prohibited Apotex from obtaining the necessary NOC for their product, he anticipates an appeal might give Apotex the result he feels they deserve, and also allow the court to offer guidance regarding similar NOC proceedings.�� It was a practical if somewhat confusing way to address the problems in this case and I commend him for it.

��

Adam Stevenson is a��JD Candidate at Western University faculty of law

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