The Supreme Court of Canada (SCC) recently granted AstraZeneca Canada Inc. et al. (AstraZeneca) leave to appeal from the Federal Court of Appeal’s decision upholding the invalidity of AstraZeneca’s Nexium patent. This appeal will address a number of critical questions in Canadian patent law, and the SCC’s rulings on these questions will provide some much-needed clarity. In particular, the SCC’s position on the controversial “promise doctrine” (one of the many critical questions at stake in the appeal) will be of great interest as the validity of the promise doctrine is at the core of many cases that are presently before the Canadian courts. This doctrine is also the subject of Eli Lilly and Company’s C$500-million claim against the Government of Canada, which alleges, in part, that Canada’s adoption of the promise doctrine violates the intellectual property standards set out in the North American Free Trade Agreement.
BACKGROUND
The SCC’s decision to grant leave to appeal in the Nexium dispute was preceded by two prior Federal Court judicial decisions, namely:
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The trial judgment of Justice Rennie (Nexium FC), which held that the Nexium patent was invalid because it lacked utility
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The appeal judgment of Justice Dawson, with Justices Ryer and Webb concurring, (Nexium FCA), which upheld Justice Rennie’s holding that the Nexium patent lacked utility
Technically speaking, the outcome in Nexium FC turned solely on the issue of utility. Further, in its Memorandum of Argument seeking Leave to Appeal, AstraZeneca sought leave in respect of two issues, both relating to utility: (1) whether a “promise of the patent” utility doctrine properly exists and (2) what the correct applicable standard for patent utility in Canada is.
However, despite the above focus on utility, the Nexium FC reasons in their entirety engaged additional critical questions in patent law, which may also be addressed by the SCC on appeal if the SCC considers those questions worthy of appellate guidance.
CRITICAL QUESTIONS FOR SCC CONSIDERATION
Three critical questions may be considered by the SCC in the Nexium appeal:
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Whether a patent must be as useful as it promises (the controversial “promise doctrine”)
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Whether a patent’s promise (with respect to utility) and inventive concept (with respect to obviousness) should receive the same interpretation
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Whether the proper disclosure requirement for soundly predicted utility is limited to new use patents
Must a Patent Be as Useful as it Promises?
The first critical question the SCC may consider in the Nexium appeal is the validity of the “promise doctrine”, which provides that a patent can only satisfy the utility requirement if it is as useful as it promises to be in its specification. As this issue was central to Nexium FC and Nexium FCA, it is likely that it will, at a minimum, be explored by the SCC in the Nexium appeal.
The controversy surrounding the promise doctrine is not surprising. In effect, the promise doctrine can hold that a patent is not useful in law despite that patent being useful in fact. For example, in Nexium FC, Justice Rennie held that the Nexium patent was useful in fact because it was an effective proton pump inhibitor, but ultimately held that the Nexium patent was not useful in law because, in Justice Rennie’s view, it promised “an improved therapeutic profile such as a lower degree of interindividual variation” and failed to deliver on that promise. In other words, despite being useful for some purposes, Justice Rennie held that the Nexium patent lacked utility because the patented invention was not as useful as the patent promised it to be. To many, this places too onerous a burden on innovators, and improperly invalidates patents despite those patents meeting the statutory requirement of utility.
To others, the promise doctrine represents an important balance in patent law, which prevents innovators from “overpromising” about the utility of their patents. The lower court Nexium judgments reflect this perspective. According to Justice Rennie, the promise doctrine promotes the “policy objectives of patent law which serve to create consistency and clarity in the bargain struck between innovators and the public.” The Federal Court of Appeal upheld Justice Rennie’s utility analysis on appeal.
It will be interesting to see how the SCC resolves this important issue of patent law and policy.
Is a Patent’s Promise the Same as its Inventive Concept?
The second critical question that the SCC may consider in the Nexium appeal is whether a patent’s promise (a concept which, as discussed above, relates to the utility inquiry) is the same as a patent’s inventive concept (central to the obviousness inquiry). The relationship between these two concepts was not as critical to the Nexium trial judgment as the promise of the patent. Accordingly, the SCC may be less likely to explore this issue on appeal. However, this issue may nonetheless be considered by the SCC since the relationship between the promise of the patent and the inventive concept may materially influence the interpretation of the Nexium patent’s promise, and, in turn, the outcome on appeal.
The relationship between the promise of the patent and the inventive concept is ambiguous in the jurisprudence. In Nexium FC, Justice Rennie noted that the “stark contrast” in the construction of the patent’s promise and inventive concept between the parties — two “highly sophisticated litigants” — was “alarming”. In Nexium FCA, Justice Dawson held that a patent’s promise need not be “virtually coterminous” with its inventive concept, but provided no further guidance in respect of the interpretive principles underlying the construction of either concept. Accordingly, commentary from the SCC in this regard would be welcome.
Is Proper Disclosure of Sound Prediction Only Required for New Use Patents?
The third critical question that the SCC may consider in the Nexium appeal is whether proper disclosure for sound prediction of utility is only required in the context of new use patents, which Justice Rennie held in Nexium FC. This critical question is least likely to be considered by the SCC as this holding in Nexium FC was in the alternative, and as the Federal Court of Appeal did not comment on this issue in Nexium FCA. That being said, Justice Rennie’s view that the law regarding proper disclosure is “unsettled” and his thorough exploration of this topic in Nexium FC, may identify sufficient ambiguity in the jurisprudence such that appellate intervention is warranted. Indeed, the SCC in 2012 cast doubt on there being a requirement for proper disclosure in sound prediction cases (see Teva Canada Ltd. v. Pfizer Canada Inc.).
By way of background, the utility requirement for a patent can be satisfied in two different ways:
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By demonstrating (i.e. directly proving) the patent’s utility
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By soundly predicting (i.e. indirectly estimating) the patent’s utility
Courts have arguably sought to counterbalance the flexibility provided to innovators by the doctrine of sound prediction. An innovator is free to rely on studies and experiments not disclosed in its patent to prove that the patent’s utility was demonstrated. But some courts have held that, where an innovator relies on a sound prediction of utility — a lower threshold of proof — that innovator must disclose the evidence underlying that prediction in its patent specification, a higher threshold of disclosure.
As with the above critical questions, the issue of proper disclosure is ambiguous in the jurisprudence. Those ambiguities are canvassed by Justice Rennie in Nexium FC, where he refers to multiple authorities supporting the proper disclosure requirement in all cases of sound prediction and multiple authorities supporting the proper disclosure requirement only in “new use” cases, for example, where the innovator seeks to patent an old drug on the basis that they have uncovered a new use for it.
Despite the issue of proper disclosure being peripheral to the core ruling in Nexium FC, its resolution by the SCC would assist in clarifying the law.
Given the many critical questions outlined above, the SCC’s Nexium appeal will be watched closely and with great interest both within Canada and around the world.
