Date: 20040329
Docket: T-462-02
Citation: 2004 FC 474
BETWEEN:
NOVARTIS PHARMACEUTICALS CANADA INC.
and NOVARTIS AG
Applicants
- and -
RHOXALPHARMA INC. and
THE MINISTER OF HEALTH
Respondents
INTRODUCTION
[1] Pursuant to the Patented Medicines (Notice of Compliance) Regulations (the "Regulations"), the applicants seek an order from this Court prohibiting the Minister of Health from issuing to RhoxalPharma ("Rhoxal") a Notice of Compliance ("NOC") under the Food and Drug Act in connection with its 25mg and 50mg capsules of the drug
cyclosporine for oral administration (the "Rhoxal capsule") until the expiry of a number of Canadian patents including patent 1,308,656 (the "656 Patent").
[2] At the hearing of the application, the parties agreed only the '656 Patent was in issue. Novartis AG is the owner of the '656 Patent and Novartis Pharmaceuticals Canada Inc. ("Novartis"), holds NOCs to market its cyclosporine drug products. Novartis covers both applicants in these reasons.
[3] The Novartis application was filed after Rhoxal had sent to Novartis, on January 31, 2002, a Notice of Allegation ("NOA") its Rhoxal capsule would not infringe the '656 Patent. Rhoxal stated the following:
This patent is directed to and claims pharmaceutical preparations containing a hydrosol, the particles of which comprise cyclosporine as the active agent, these particles having a diameter of from 1 to 10,000 nanometres, stabilized whereby the particle size distribution is maintained constant; or the freeze-dried form thereof. We have available cyclosporine soft gel capsules which will not contain a hydrosol and, more precisely, will not contain the hydrosol as described and claimed in this patent. Accordingly since at least one essential feature of each claim will not be found in our product, the patent will not be infringed. [emphasis mine]
[4] Claims 1 and 2 of the '656 Patent read:
1. A pharmaceutical preparation for intravenous administration the active agent of which comprises a cyclosporin, said preparation comprising either:
(a) a hydrosol, the particles of which comprises said active agent in solid form, have a diameter of from 1 to 10,000 nanometres, and which are stabilized whereby the particle size distribution of said particles is maintained constant; or
(b) the stabilized particulate phase of the above hydrosol in dry or isolated form
2. A pharmaceutical preparation the active agent of which comprises a cyclosporin said preparation comprising either:
(a) a hydrosol, the particles of which comprises said active agent in solid form, have a diameter of from 1 to 10,000 nanometres, and which are stabilized whereby the particle size distribution of said particles is maintained constant; or
(b) the stabilized particulate phase of the above hydrosol in dry or isolated form. [emphasis mine]
[5] Only the introductory lead to Claim 2 and its paragraph (a) are at issue. Claim 1 of the '656 Patent does not apply as it is limited textually to a pharmaceutical preparation for intravenous administration; the Rhoxal capsules are taken orally. Also, paragraph 2(b) is not in play because the Rhoxal capsule does not contain a dry or isolated form of the stabilized particulate phase of the hydrosol. It encapsulates a solution.
[6] The principal issue raised in this proceeding, relating to the scope of the claim, is whether claim 2(a) of the '656 Patent can be construed as covering a hydrosol, as described, is formed in situ, that is, in a human stomach since Novartis does not dispute the Rhoxal capsule, before ingestion, does not contain the described hydrosol. It only contains a solution (the "Rhoxal formulation"). What Novartis does say is the described hydrosol will necessarily be formed in the human stomach after ingestion of the Rhoxal capsule when it comes into contact with water or other liquids present in the human stomach. As a result, the patent would be infringed.
[7] Novartis also raises the issue whether the variant Rhoxal as substituted is in respect of a non-essential limitation and thus within the patent under the doctrine of equivalents.
[8] Rhoxal raised as a preliminary issue whether the doctrine of res judicata applied to the circumstances of this application because of a previous court proceeding involving the same parties, the same patent and the same Rhoxal cyclosporine capsules but with a different dosage form of 100mg.
THE PREVIOUS PROCEEDINGS
[9] It is useful, I think, to set out the circumstances of the previous NOC proceeding decided by Justice Tremblay-Lamer in 2001 FTC 137. She held Novartis failed to show that Rhoxal's 100mg cyclosporine capsules for oral administration would infringe the '656 Patent.
[10] She first identified the proper principles applicable to patent claim construction as stated by the Supreme Court of Canada in two recent cases, namely, Free World Trust v. Électro Santé Inc., [2000] 2 S.C.R. 1024, and Whirlpool Corp. v. Camco Inc., [2000] 2 S.C.R. 1067. She then applied those principles to the facts before her.
[11] She rejected Novartis' argument the term "pharmaceutical preparation" used in claim 2(a) covered a hydrosol formed in situ.
[12] She came to this conclusion by examining the wording of the patent claim, its disclosure and specification stating at paragraph 31 of her reasons:
¶ 31 Nowhere in the patent could I find any reference to a hydrosol that could be formed after ingestion in the body. The patent teaches variations of a process, requiring human intervention, for making an intravenous solution consisting of a hydrosol:
A solution of the active agent in a solvent which is miscible with water is mixed with a comparatively large amount of water. Mixing preferably is effected rapidly to promote formation of the particles at the same time and in a narrow distribution. Rapid mixing also produces large numbers of colloidal particles. Permanent fixing of the particle size is possible if the influence of the organic solvent is in minimalised and for that reason the solvent is preferably removed. Removal may take place by evaporation, e.g. in a rotary [page172] evaporator. Evaporation can be continued so that the water of the hydrosol is also evaporated. Preferably this is effected by lyophilisation, so as to facilitate redispersibility. Upon complete evaporation of the water, a dry lyophilisate may be formed, especially with Cyclosporin A, gelatin, mannitol and acid additive. [emphasis mine]
[13] She continued her analysis in paragraphs 32, 33 and 34:
¶ 32 The portion of the disclosure identifying stable, solid cyclosporin particles in a "dry and re-suspendable" form as falling within the scope of the invention clearly indicates that the inventor intended such particles to be re-suspended for use in an intravenous application.
¶ 33 The patent provides 12 examples illustrating the invention. In each example, the hydrosol forms by a series of mechanical operations involving dissolving the active agent in an alcohol, adding water and stirring. The resulting preparation is suitable for intravenous injection. The hydrosol never spontaneously generates, and never generates in situ. The examples do not contemplate oral administration.
¶ 34 Neither the disclosure nor the patent claims refer to a hydrosol formed in situ. The lack of such a reference in what is otherwise a complete description of the hydrosol, its advantages, uses and the process by which it is made, leads to the conclusion that an ingested pharmaceutical preparation which forms a hydrosol in situ is not covered by the patent. [emphasis mine]
[14] In the end, she construed claim 2 as follows:
¶ 35 Although Claim 2 is silent with regards to the route of administration and therefore may not be limited only to pharmaceutical preparations for intravenous use, I am satisfied that a contextual examination of the patent can only lead to the conclusion that it covers pre-ingestion solutions. [emphasis mine]
[15] She then addressed the House of Lords decision in Beecham Group Ltd. v. Bristol Laboratories Ltd., [1978] R.P.C. 153 (H.L.) which had been cited by Novartis and found:
¶ 36 The applicants cite Beecham Group Limited as determinative of the issue. In Beecham, the patent covered the medicine ampicillin. The defendant's [page173] drug, hetacillin, converted to ampicillin on ingestion. The House of Lords held that the pith and marrow of the plaintiff's patent had been taken since hetacillin had no antibacterial activity of its own. Its only value as an antibacterial agent arose by virtue of converting into ampicillin.
¶ 37 The present case differs in material respects. As pointed out by the respondent, it is not the value of cyclosporin which must be considered but that of the hydrosol. The purpose of the applicants' invention is to provide a hydrosol with small, stable pharmacologically active agent particles for intravenous use. Obviously, that is not the purpose of the respondent's product which is administered orally. Simply, the respondent's capsules do not perform "substantially the same function in substantially the same way to obtain substantially the same result" as the applicants' invention.
¶ 39 For the above reasons, the applicants have failed to show that the respondent's capsules would infringe the patent. The notice of compliance proceedings are therefore dismissed. [emphasis mine]
[16] Novartis appealed Justice Tremblay-Lamer's decision to the Federal Court of Appeal but before the appeal could be heard, the Minister of Health (the "Minister") issued to Rhoxal a NOC for its 100mg capsules.
[17] Rhoxal then brought a motion to the Federal Court of Appeal to have the Novartis appeal dismissed on the basis it was now moot having regard to the issuance of the NOC.
[18] Novartis disputed that motion. One of the arguments it raised was the appeal was not moot because further NOCs for different dosage strengths could be applied for by Rhoxal who would rely on Justice Tremblay-Lamer's decision in support of possible future NOC proceedings.
[19] Rhoxal's written memorandum before the Court of Appeal addressed Novartis' contention about future NOCs in different dosage forms than the 100mg capsules and the evidentiary bases upon which the issue of whether Rhoxal's NOA could be justified should new NOC proceedings be launched. Rhoxal wrote:
7. . . . Each of these issues would obligatorily be submitted to judicial scrutiny of a court of law to which new evidence relevant to the issue would be presented. Thus, it is not appropriate in this forum to anticipate these cases.
. . .
15. In any event, if further NOC proceedings are filed, they will be decided on the evidence before the Court at the time they are filed. An appeal in this case, whether or nor Novartis is successful, would not bar RhoxalPharma from sending further NOA's or bar Novartis from responding to these NOA's with NOC proceedings. [emphasis mine]
[20] On November 28, 2001, the Federal Court of Appeal dismissed the Novartis appeal on the grounds it was moot.
[21] I mention two other proceedings between Novartis and Rhoxal involving Rhoxal's capsule.
[22] First, Rhoxal sought to dismiss this application on the grounds of res judicata, issue estoppel and abuse of process. Rhoxal, at the hearing, only argued the ground of abuse of process. I heard that motion and dismissed it in Novartis Pharmaceuticals Canada Inc. et al. v. RhoxalPharma Inc. et al. 2002 FCT 742, essentially for the following reasons:
¶ 35 I am of the view Novartis' application filed on March 18, 2002, is not an abuse of process and, as a result, should not be dismissed under subsection 6(5) of the Regulations.
¶ 36 The circumstances surrounding the application which Novartis filed are unique and arise when Rhoxal was successful in having the Novartis appeal from Justice Tremblay-Lamer's judgment dismissed for mootness.
¶ 37 As noted, in that proceeding before the Federal Court of Appeal, Rhoxal said if it filed new NOAs for different dosage strengths of its cyclosporine capsules, Novartis could respond with new evidence in NOC proceedings.
¶ 38 Novartis' application which Rhoxal seeks to strike, is in response to Rhoxal's new NOAs for its cyclosporine capsules in dosage strengths of 25 mg and 50 mg. In the circumstances, Novartis' application cannot vex Rhoxal, cannot be unfair to it and cannot bring the administration of justice into disrepute.
[23] That decision was not appealed by RhoxalPharma.
[24] Second, in another context, Novartis brought an action against RhoxalPharma for patent infringement claiming RhoxalPharma infringed its '656 Patent in marketing the 100mg Rhoxal capsules. Rhoxal moved for summary judgment on the basis of Justice Tremblay-Lamer's decision.
[25] That motion was dismissed by Justice Martineau, in part, on the ground whether the variant that Rhoxal had made was a non-essential limitation and thus within the patent on the doctrine of equivalents, raised a genuine issue for trial. (See, docket T-1158-01, September 19, 2002, FCTD.)
FACTUAL BACKGROUND
[26] There are certain facts not in substantial dispute.
[27] Cyclosporine is a drug that has utility as an immunosuppressant agent useful in treating patients who have undergone transplant surgery; the drug assists in preventing a rejection of the transplant.
[28] Cyclosporine has low solubility in water and thus is unstable and difficult to formulate in a manner that it can be optimally absorbed by the human body.
[29] The '656 Patent is a formulation patent; it claims a pharmaceutical preparation of cyclosporine in the form of a hydrosol. Its invention is in providing for the creation of a method of delivering the active ingredient, cyclosporine. That method of delivery is a hydrosol with specific characteristics: the suspension of a dispersion in an aqueous medium of fine, stabilized (from 1 to 10,000 nanometres) of solid particles of the active ingredient cyclosporine (hydro meaning water; sol meaning a solid).
[30] The fine sizes of the solid particles of cyclosporine improves its absorption into the human body providing for an overall increase in the efficacy of the drug.
[31] The predecessor to Novartis Canada, Sandoz Canada, brought to the marketplace, in 1984, its first oral dosage form of cyclosporine; it was in the form of an oral solution.
[32] Then, in 1987, SANDIMMUNE capsules were introduced.
[33] It is acknowledged by one of Novartis' deponents in this proceeding, Andreas Orfanos, that in spite of its great value in preventing transplant rejections, SANDIMMUNE's oral solution and capsules had serious drawbacks in terms of the low bioavailability of the cyclosporine delivered. In addition, patient variability of cyclosporine in a patient's bloodstream as well the variability within the same patient, was quite large.
[34] Mr. Orfanos informed in his affidavit, to address these problems, Novartis developed an improved formulation of cyclosporine consisting of a new formulation which formed a microemulsion when administered, i.e. when added to water or the contents of the stomach. This product was introduced in Canada in 1995 and sold under the name NEORAL. According to Mr. Orfanos, NEORAL was a significant improvement over SANDIMMUNE.
[35] The parties do not disagree how, at least theoretically, the hydrosol is formed.
[36] There are two basic steps to the preparation of the formulation which, when added to water, may create a hydrosol.
[37] The first step is the preparation of the solution. The solution consists of cyclosporine which is first dissolved in a solvent such as ethanol to which is added a surfactant, a stabilizer and a compound to help dissolve the capsule if that dosage form is used.
[38] The next step is the mixing of the solution with water and the result is a fine opalescent system, i.e. particles are formed and stay suspended in the liquid. The particles are stabilized in that they do not grow or change in distribution relative to one another. When the dosage form is a solution, the patient mixes the solution in a glass of water according to the drug manufacturer's instructions and drinks the microemulsion. In capsule form, water contact occurs in the stomach where the hydrosol is formed.
[39] The active ingredient is then released at a slow rate and absorbed into the bloodstream where the beneficial effect of the medicine is experienced.
THE EVIDENCE
[40] Both parties filed expert evidence serving fundamentally two different purposes. The first set of affidavits describes laboratory experiments conducted for the purpose of determining whether, after mixing with water, the Rhoxal formulation created a hydrosol with the precise characteristics identified in the '656 Patent. The second set of affidavits went to the issue of proper patent construction and to the doctrine of equivalents.
(a) Does the Rhoxal capsule create a hydrosol when ingested?
[41] As noted, the answer to this question was sought to be answered by both sides conducting laboratory experiments in vitro but not in vivo.
[42] Novartis led affidavit evidence from Michael Ambühl who holds a doctorate from the Federal Institute of Technology at Zurich, Switzerland. From April 1995 to February 1997, he was engaged as a post-doctoral student at Sandoz (now Novartis) in the drug delivery systems department. Since 1997, he has been a full-time employee with Novartis and is their laboratory head of the drug delivery systems department.
[43] The purpose of his affidavit, dated April 16, 2002, was to confirm a previous affidavit dated September 17, 1999, which he had sworn and had been filed in the proceeding before Justice Tremblay-Lamer. That affidavit described the tests he conducted. The second purpose of his affidavit was to answer certain criticisms levelled at his experiment by Dr. Louis Cartilier, who, on behalf of Rhoxal, also had filed expert evidence in the proceeding before Justice Tremblay-Lamer.
[44] To perform his experiment conducted in 1998, Dr. Ambühl had been provided with the exact specifications of the ingredients for the formulation of Rhoxal's solution which would be packaged into the Rhoxal capsule shell. Those specifications came from then Rhoxal's U.S. supplier EON. He formulated the solution, mixed it with water and observed the formation of the opalescent system which he determined, through examination by a laser light scattering instrument, to be particles in the aqueous medium.
[45] Because the emulsion had not settled, Dr. Ambühl placed some of it in a test tube centrifuge, obtained a settlement, dried it and subjected it to electron microscopy of a specific type. He stated he observed solid, spherical particles which were further tested and, after subsequent analysis, confirmed as solid particles of cyclosporine A. As a result of this experiment, he concluded the mixing of the Rhoxal formulation with results in the formation of a fine suspension of spherical cyclosporine A particles having an average diameter of about 200nm with the suspension being stable not readily sedimenting. He concluded the particles were hydrosol particles and was of the opinion that a hydrosol would form when the RhoxalPharma capsules were ingested.
[46] Rhoxal, to counter Dr. Ambühl, filed the affidavit of Dr. Harry Brittain, dated August 1, 2002. Dr. Brittain earned, in 1975, a Ph.D. in physical chemistry from the City University of New York. He is presently the Director of the Centre for Pharmaceutical Physics working in the area of pharmaceutical physics and physical pharmacy, especially pre-formulation, formulation design and product characterizations. From 1979 to 1985, he was then Associate Professor at Seton Hall University. From 1985 to 1994, he was employed at Bristol-Myers Squibb Pharmaceutical Research Institute and after that, until 1999, was Vice-President of Pharmaceutical and Chemical Development at Discovery Laboratories Inc. and was responsible for certain aspects of drug development and management of all analytical, pharmaceutical, and chemical development efforts.
[47] In separate experiments, Dr. Brittain dispersed the contents of a 100mg capsule of the Rhoxal formulation in either distilled water or other aqueous media such as 0.1 N HCL ("HCL") or simulated gastric fluid ("SGF"). Dr. Ambühl also had tested the Rhoxal formulation in HCL and SGF media.
[48] After mixing the Rhoxal formulation in either the water, HCL or SGF, a cloudy dispersion formed. He extracted a small quantity of that cloudy dispersement and examined it under a scanning optical microscope ("SEM"). He reached the following conclusions:
1. The cloudy substance did not disclose any solid particles. Rather, what he observed were not particles but liquid globules;
2. The cumulative particulate size distribution in his exhibit 11 [applicants' record, page 464] revealed the cloudy dispersion contained significant contribution from globules whose size exceeded 10 microns therefore exceeded the upper limit of the particle size specified in the '656 patent; and
3. The liquid globules were not stable; they grew in size over a period of observation of three hours.
[49] Dr. Brittain was cross-examined after he filed a rebuttal affidavit. The results of that cross-examination and rebuttal affidavit will be discussed later in these reasons.
[50] Rhoxal, in chief, also filed the reply affidavit of Dr. Louis Cartilier, who holds a Ph.D. degree in Pharmaceutical Science from the Institut de Pharmacie de l'Université Libre de Bruxelles. He teaches the science of pharmacy at the Faculty of Pharmacy of the University of Montreal. While the thrust of Dr. Cartilier's affidavit speaks to the issue of whether a hydrosol formed in situ is a pharmaceutical preparation within the meaning of the '656 Patent, he made a number of points on the issue of whether the Rhoxal formulation could lead to the creation of a hydrosol after the Rhoxal capsule was ingested.
[51] He criticized the Ambühl experiment because he said Dr. Ambühl did not follow the exact steps when manufacturing the Rhoxal formulation. Instead of dissolving the cyclosporine in the ethanol solvent prior to being mixed with the other ingredients, all ingredients were mixed together.
[52] He stated the results of an in vitro experiment were no proof of in vivo results.
[53] He expressed the opinion the Rhoxal formulation is an oil-based formulation similar to the formulation in the Novartis product sold under the trademark SANDIMMUNE. He then referred to research papers by researchers at Sandoz and other papers and concluded no in situ spontaneous generation of a hydrosol upon ingesting an oil-based formulation of cyclosporine was possible. He stated the experiments presented in the Ambühl affidavit indicate the existence of lipid droplets containing cyclosporine, i.e. a dispersed system oil-in-water or an emulsion and lacked a demonstration of the existence of a hydrosol or a suspension of solid particles in aqueous media. Dr. Cartilier was also cross-examined which I will address later.
[54] Novartis was permitted to file reply evidence. One of its two deponents in reply was Dr. David E. Bugay who holds a Ph.D. degree in Physical Chemistry from the University of Vermont in 1987. Prior to his current employment as Vice-President of Analytical Chemistry at SSCI Inc. which he joined in March of 1998, he had been employed at the Bristol-Myers Squibb Pharmaceutical Research Institute.
[55] Dr. Bugay's reply affidavit served two purposes: he commented on the Brittain and Ambühl affidavits. He also described experiments he conducted. Dr. Bugay was not cross-examined.
[56] On the first aspect of his reply affidavit and limiting himself to a review of the Ambühl and Brittain affidavits, Dr. Bugay concluded the results of the experiments they conducted were not contradictory simply because they were not examining the same set of particles which had formed after the Rhoxal formulation was mixed in water.
[57] Dr. Bugay stated that, although Dr. Brittain's experiments showed or disclosed, in his exhibit 11, the existence of particles in sizes between 100 to 500nm, he did not examine them.
[58] Dr. Bugay stated Dr. Brittain did not look for the particles Dr. Ambühl said were present in the opalescent system. Dr. Brittain did not find them because he did not look for them. Dr. Bugay was of the opinion Dr. Brittain's finding that no solid particles were formed was not supportable.
[59] Dr. Bugay expressed the opinion it would still be within the scope of claim 2 of the '656 Patent if some of the opalescent system was in the form of solid particles as described in the '656 Patent while others were not. In his view, all that Dr. Brittain had done was merely to say some of the opalescent system had not formed solid particles and therefore there was no hydrosol within the patent. He disagreed with that interpretation.
[60] The second aspect of Dr. Bugay's affidavit was to describe his two environmental scanning electron microscopy ("ESEM") experiments to determine whether the opalescent system contained solid particles. He stated he chose ESEM as it permitted one to obtain a picture of the small particles in the 200 to 500nm range if they existed.
[61] In his first experiment, Dr. Bugay placed the contents of a 100mg RhoxalPharma cyclosporine capsule into 200ml of HCL. The solution was agitated for approximately 10 minutes in water. A small aliquot was then placed into the scanning electron microscopy mount and images were obtained.
[62] For the second experiment conducted by Dr. Bugay, he placed the entire 100mg capsule, with its shell, in 200 ml of HCL and then performed the other steps described in respect of his first experiment.
[63] He concluded as follows at paragraphs 31 and 32 of his affidavit:
31. Scanning electron microscopy of both solutions revealed that the 0.1 N HCL solution contained small particles between 100 nm and 500 nm. Marked as Exhibit B and C are representative scanning electron microscopy pictures of the small particles obtained when the RhoxalPharma 100 mg cyclosporine capsule contents or capsule is added to 0.1 N HCL, respectively. These pictures establish that a solid particle is present in the particle size range investigated by Dr. Ambühl.
32. Based on all of the above, it is my opinion that when the Rhoxal Pharma capsules are added into 0.1 N HCL solution, solid particles of the hydrosols in the size range of between 100 to 500 nm that is of the type described in the '656 patent are formed.
[64] Again, as noted, he was not cross-examined on any of his affidavits.
[65] The other Novartis deponent to file a reply affidavit was Dr. McGinity whose qualifications I have yet to describe because the main thrust of his affidavit evidence was to speak to patent construction which will be discussed later. However, he touched upon certain aspects of hydrosol formation.
[66] Briefly put, Dr. McGinity disagreed with Dr. Cartilier that the use of SGF or HCL is not a fair representation of what would happen in vivo in the stomach. He stated it was standard in the pharmaceutical industry to use HCL or SGF to simulate in vitro what occurs to a pharmaceutical formulation in the human stomach in vivo. He stated the use of these fluids is recognized and accepted by regulatory authorities such as the USFDA and the United States Pharmacopoeia lists several monographs which contain HCL and SGF as dissolution and disintegration media for various drug producers.
[67] He disapproved of the suggestion made by Dr. Cartilier a real test should have been conducted in vivo on a human by extracting a sample of his/her stomach contents after ingestion of the Rhoxal capsule. According to him, such a procedure was unnecessary and would require a detailed test protocol which would not receive the approval of an ethics review board of a qualified institution.
[68] He tackled Dr. Cartilier's suggestion Rhoxal's formulation is an oil-based one. He stated none of Rhoxal's components is an oil. More importantly, however, he stated what appears to be occurring when the Rhoxal formulation is added to water is precisely what was taught at page 10 of the '656 Patent which reads:
The novel hydrosol forms may particularly be prepared as follows: a solution of the active agent in a solvent which is miscible in water, e.g. in alcohol, e.g. ethanol or isopropanol, or in acetone, is mixed with a comparatively large amount of water, under such conditions that a hydrosol is produced.
[69] From this teaching of the '656 Patent, he stated one way to make a hydrosol is to dissolve cyclosporine in an organic solvent or solvents and to add the solubilized cyclosporine to a large volume of water. He stated each of the Rhoxal formula ingredients, including the surfactant were soluble. In his reply affidavit, Dr. McGinity touched upon certain statements Dr. Brittain had made on the stability of particle size distribution in the opalescent system which I need not describe given what occurred on Dr. Brittain's cross-examination.
[70] RhoxalPharma obtained leave to file rebuttal affidavits from Drs. Brittain and Cartilier to the reply affidavits of Drs. Bugay and McGinity.
[71] Dr. Brittain commented on Dr. Bugay's affidavit. He made two concessions. First, he readily admitted that the smallest particle he could visualize with the microscopy he used would be around 1 micron in diameter but added "[H]owever, I saw large numbers of much larger liquid globules, and never saw anything that could be characterized as a solid particle". The second concession was his admission Dr. Bugay was correct in finding he had not addressed the question of whether the particle size present in his Exhibit 11 was solid or not. "However, my experiments would not be able to yield this information" and he added, "[O]f note, however, is that the Applicant did not perform any definitive experiments that answered this question either".
[72] Throughout his affidavit, Dr. Brittain disagrees with Dr. Bugay when Dr. Bugay stated Dr. Ambühl found solid particles. In his view, Dr. Ambühl never proved the existence of any solid suspended colloidal particles.
[73] The final major point Dr. Brittain made was to criticize SEM which he found inappropriate because SEM requires extensive sample preparation which prevents discovery of what really existed in the original dispersions of the Rhoxal formulation.
[74] Dr. Cartilier challenged Dr. McGinity's reply affidavit. He did not criticise Dr. Bugay's rebuttal affidavit. His major point was Dr. McGinity's reluctance to accept his characterization of the Rhoxal formulation as an oil-based formulation. He stated what makes that formulation an "oil-based formulation" is the presence of an ingredient, the surfactant, which is derived from vegetable oil, a solubilizer and emulsifier which comprises hydrophobic and hydrophilic components and is commonly used to stabilize micellar systems of poorly water soluble drugs such as cyclosporine. He refers to learned articles. He disagreed that the ingredient was an organic solvent and he disagreed 0.1 N HCL or SGF is used to simulate any change in physical structure (e.g. formation of a hydrosol) which might occur in the stomach.
(b) Evidence relating to patent construction
[75] Novartis led extensive evidence, through Drs. Ambühl and McGinity, how claim 2(a) of the '656 Patent should be construed, evidence which the applicants said was not put before Justice Tremblay-Lamer because of the way the proceeding before her unfolded where, on this point, she apparently only had the evidence of Dr. Cartilier. I summarize Dr. Ambühl's evidence.
(i) Dr. Ambühl's affidavit evidence
[76] As noted, the purpose of Dr. Ambühl's affidavit was also to answer some of Dr. Cartilier's criticism about the way he conducted his experiment in 1998.
[77] First, Dr. Ambühl stated Dr. Cartilier, in the affidavit put before Justice Tremblay-Lamer, indicated, because a hydrosol could form in plain water, it was in no way proof of actual in vivo results. Dr. Ambühl answered based on his experience and his laboratory work with cyclosporine "that it is fair to say that demonstration that a hydrosol forms in plain water would mimic what occurs to the capsule in the stomach". (applicant's application record, volume 1, page 164). He added he also conducted similar experiments not only in water but in UPS simulated gastric fluid and in another acidic environment, i.e. HCL and the results were substantially the same.
[78] Dr. Cartilier criticised the manner in which Dr. Ambühl carried out his experiment and, in particular, he did not follow EON's detailed instructions for dissolving the cyclosporine in ethanol before mixing with the other agents to form the Rhoxal formulation. Dr. Ambühl stated the formulation was prepared by mixing the ingredients and stirring thoroughly. With respect to two agents, he said they were warmed to liquefy them prior to mixing them with the other components of the Rhoxal formulation. He concluded there was nothing inconsistent with RhoxalPharma's instructions.
[79] Dr. Ambühl stated Dr. Cartilier indicated, in the affidavit he filed before Justice Tremblay-Lamer, claim 2 of the '656 Patent purported to claim only pharmaceutical preparations which are completed at the time of manufacturing and, once ingested by the patient, what occurs is delivery of the active agent, as opposed to ongoing preparation. For these reasons, Dr. Cartilier disagreed with the very concept the '656 Patent could be infringed by what happens to a capsule once ingested by the patient (applicant's application record, volume 1, page 164, para. 7).
[80] Dr. Ambühl disagreed with those comments stating as follows (applicant's application record, volume 1, page 165):
8. . . . A pharmaceutical preparation means a number of things to a person skilled in the art. One aspect of a pharmaceutical preparation refers to what is completed at the time of manufacturing and shipped out the door. However, there are a number of other pharmaceutical preparations which exist. For example, one pharmaceutical preparation may be transformed into a second pharmaceutical preparation, and perhaps even a third, by virtue of further actions taken by persons other than the manufacturer.
[81] Dr. Ambühl gave the example of a pharmaceutical preparation such as amoxicillin sold by a manufacturer as a powder. He noted this product was not yet in the form which may be taken by the patient which typically occurs when the pharmacist makes up a further pharmaceutical preparation by adding an appropriate amount of water to the powder and shaking up the product so that the product forms a suspension. According to Dr. Ambühl, this is the product which is sold to the patient by the pharmacist and it constitutes a different form of the pharmaceutical preparation than that which was shipped by the manufacturer. He added, when the patient goes to take the product, the product may have settled and therefore is no longer in the form of a suspension but in the form of a solution with some of the particles aggregated at the bottom of the bottle. The patient, he says, creates a further pharmaceutical preparation by shaking, thereby recreating the suspension.
[82] As another example, Dr. Ambühl cited Neo-Citran, a Novartis product, which is shipped in powder form in a foil package. The product is not intended to be taken in powder form which is considered a pharmaceutical preparation. A further pharmaceutical preparation is prepared by the consumer by adding a relatively large amount of boiling water.
[83] He also mentioned Novartis' NEORAL product which comes in the form of an oral liquid as well as capsule and stated:
13. . . . In respect of the oral liquid, the product which is sold by Novartis is not intended to be taken in that form. Thus, while as sold by Novartis, the product is a pharmaceutical preparation, the product is not yet in the form to be administered and absorbed by the patient. In particular, the directions which accompany NEORAL® oral solution indicate that it should be taken with orange juice or water or other such beverage. The cyclosporine formulation, upon addition of orange juice or water, takes a different form from that which it was as packaged. In particular, as packaged, the cyclosporine formulation is in the form of a microemulsion pre-concentrate and, like the RhoxalPharma product, is a solution in a capsule. Upon addition of the orange juice, the product spontaneously forms a microemulsion entirely analogously to the transformation of the RhoxalPharma product to a hydrosol. It is in the form of the microemulsion preparation which is then swallowed by the patient which permits the absorption of the active ingredient cyclosporine into the blood stream.
[84] At paragraphs 14 and 15 of his affidavit, he stated NEORAL cyclosporine oral capsules work in a similar manner but with some slight modification. He continued: (applicants' record, page 166)
14. . . . In particular, while the oral capsules themselves are a pharmaceutical preparation however, this preparation is not in the final form which will permit the absorption of the cyclosporine. It is only after ingestion of the oral liquid capsules, wherein the liquid inside the capsules has contact with the relatively large amount of fluids of the stomach and forms the microemulsion in the stomach, that it is in the form of a preparation which may allow the absorption of the cyclosporine into the blood stream.
15. This is entirely analogous to administration of the RhoxalPharma formulation.
[85] He concluded (applicants' record, volume 1, page 167):
17. Therefore, in my opinion, the RhoxalPharma product is within claim 2 of the '656 patent by virtue of the action of the product to form hydrosols in the stomach. Further, as I understand them, the words "pharmaceutical preparation" in claim 2 are not limited to the pharmaceutical preparation which is sold by the manufacturer, but include steps taken by a pharmacist or consumer to put the product into the final form of the pharmaceutical preparation for administration. I see no reason why a product in the oral liquid capsule form should not be covered by the claim when the oral liquid solution form would be covered.
(2) The affidavit evidence of Dr. James McGinity
[86] As mentioned, Dr. McGinity provided affidavit evidence on the construction of claim 2 of the '656 Patent which also included his observations on Dr. Cartilier's affidavit before Justice Tremblay-Lamer. Dr. McGinity was not cross-examined. He is a tenured professor of pharmacy at the College of Pharmacy, the University of Texas, at Austin, and, since 1985, has held the Johnson & Johnson Centennial Chair of Pharmacy. He holds his Ph.D. degree in Physical Pharmacy from the University of Iowa in 1972. He has been a university professor since 1973. He is also the Division Head of Pharmaceutics and the Director of the Drug Dynamics Institute. His areas of research include oral drug dosage forms, material science, pharmaceutical processing and topical and emulsion technologies. He is currently President of PharmaForm L.L.C. in Austin, Texas, which is a research and development company that works with both innovative and generic pharmaceutical companies.
[87] He makes the following points in his affidavit:
(1) He noted the '656 Patent is entitled "Hydrosols of Pharmacologically Active Agents and their Pharmaceutical Compositions Comprising Them". This patent concerns formulations of cyclosporine related to hydrosols of cyclosporine suspended or resuspendable in an aqueous medium. He quotes from page 2 of the patent specification which states "after administration as a suspension, the pharmacologically active agent is released from the nanoparticles at a slow rate". (applicant's record, page 333)
(2) The preferred embodiment of the invention as noted from the abstract of the disclosure is a pharmaceutical preparation of cyclosporine hydrosols for intravenous administration.
(3) However, the patent is not limited to intravenous administration and points to page 7 of the specification which states that cyclosporine is especially useful in the field of transplant surgery and auto-immune diseases where it is administered orally.
(4) At page 10 of the patent, it is indicated the novel hydrosol forms may particularly be prepared by taking a solution of the active agent (cyclosporine) in a solvent which is miscible in water, e.g. in alcohol or ethanol is mixed with a comparatively large amount of water under which conditions a hydrosol is produced.
(5) At paragraph 5 of page 11 of the '656 Patent, the inventors further teach that hydrosol formulations may be lyophilized or (freeze-dried) into a powder. The powder may then subsequently be redispersed with water to reform the hydrosol formulation.
(6) Claim 2 refers to preparations irrespective of route of administration. He states claim 2, unlike claim 1, is not limited to intravenous preparations and, as such, includes oral dosage forms which can be a capsule or a liquid.
(7) Thus, the '656 Patent provides for preparations which are either in the form of hydrosols or can be made into hydrosols by the addition of water.
[88] Dr. McGinity then refers to Rhoxal's NOA. For the reasons he sets out, his view is that claim 2 of the '656 Patent is infringed directly or indirectly by Rhoxal. He states Rhoxal's assertion of non-infringement cannot be correct because Rhoxal's product will form a hydrosol when taken by patients, a conclusion he reaches after reviewing the Rhoxal formulation and Dr. Ambühl's affidavit. The Rhoxal formulation contains cyclosporine and a solvent. The Ambühl affidavit had described how he made the Rhoxal formulation and finding a hydrosol after mixing it with water. The same result will occur when a patient swallows the Rhoxal capsule. He states the Rhoxal soft gel capsule will be swallowed by patients and will form a hydrosol upon contact with the water in the stomach.
[89] At paragraph 22 of his affidavit he writes: (applicants' record, page 335):
22. This is what the patent teaches at page 10. The sole purpose of Rhoxal's capsule is to be ingested so that its shell can be dissolved and the contents of the capsule mixed with water to form the hydrosol which is the form in which the cyclosporine is available to be absorbed in the intestine. Indeed, a skilled formulator readily understands that part of the purpose of a capsule is to ensure that the required actions occur in the stomach or intestine for delivery of the active ingredient into the bloodstream. Thus, frequently, products as sold are intended to be transformed in the stomach or intestine to enable to active ingredient to be absorbed in the bloodstream. [emphasis mine]
[90] Dr. McGinity gives the example of NEOROL and states that either as an oral liquid or as a soft gel capsule neither of these products as sold are yet in the functional form of a drug delivery system; each is transformed, in situ, in order to be able to deliver the active ingredient.
[91] He then discusses the oral liquid NEOROL and states the instructions provided by Novartis indicate it should be dropped into water or in juices and it is at this point the product is transformed from one pharmaceutical preparation, a solution which is a microemulsion preconcentrate into a different form of the pharmaceutical preparation namely, a microemulsion. The microemulsion is composed of small droplets of cyclosporine which permit the product to be absorbed through the GI mucosa of the stomach and the bloodstream.
[92] He then discusses the NEOROL oral liquid capsules stating they contain the same microemulsion preconcentrate and the whole purpose of these capsules is to provide an alternative to the cyclosporine solution for oral administration. The same microemulsion is made however upon swallowing of the capsules which are introduced to the aqueous environment of the stomach where the capsule shell starts to dissolve and the liquid is mixed with the preconcentrate to create the microemulsion.
[93] He considered the formation of the microemulsion in the stomach, after ingestion of a capsule, to be the same or analogous to a microemulsion made in the glass of water from the oral liquid. The two microemulsion pharmaceutical preparations are equivalent.
[94] At paragraph 27 of his affidavit, he states the contents of the Rhoxal capsule could either be swallowed and turned into a hydrosol in the stomach or, alternatively, could have been broken open and added to a glass of water outside of the body, a situation where the hydrosol would be formed outside of the body and then consumed by a patient. In his opinion, there is absolutely no difference whether the pharmaceutical preparation is made outside of the body or is made in the stomach, both of which would be the same formulation.
[95] This is what he deposed at paragraph 28 considering the issue of bioequivalency:
28. Furthermore, even though Rhoxal has not currently sought approval of an oral liquid, I am aware that their product must be considered to be bioequivalent to the Novartis capsules of a similar strength which in turn, I understand, are bioequivalent to Novartis' oral solution product. As such, it would also be clear that the Rhoxal soft gel capsules are thereby an obvious variant to an oral liquid formulation. [emphasis mine]
[96] He then cites the textbook Modern Pharmaceutics for the proposition that it is contemplated by formulators skilled in the art that dosage forms that are formed and deliver the drug in the stomach are available to formulators in the same way as tablets, capsules, etc.
[97] He was shown Dr. Cartilier's affidavit before Justice Tremblay-Lamer where Dr. Cartilier stated, according to Dr. McGinity, that a pharmaceutical preparation is limited only to the product which is shipped by the manufacturer. In his view, Dr. Cartilier failed to consider when a hydrosol is formed in situ and that the soft gel capsule when added to the stomach, will precipitate as a hydrosol containing cyclosporine such that cyclosporine is presented for absorption.
[98] Dr. McGinity then referred to examples previously mentioned in his affidavit and said there were many products which require further steps taken by either the patient or perhaps a pharmacist to transform the product into functional pharmaceutical preparations which are in a form to deliver the cyclosporine to the patient.
[99] He also said Dr. Cartilier conceded the point on cross-examination and ultimately, while Dr. Cartilier agreed that something done to a product pre-ingestion may be considered a pharmaceutical preparation, he disagreed that changes that occur after ingestion would qualify. Dr. McGinity did not agree this point of distinction was valid and expressed this view: (applicants' record, volume II, page 337)
31. . . .If a pharmaceutical scientist knows that a specific product needs to be mixed with an aqueous media to form the dosage form required for the delivery of the active ingredient, this scientist has two clear choices, namely prepare the hydrosol and then encapsulate the material, or encapsulate a pre-concentrate of the hydrosol knowing that it will form the hydrosol in the stomach. [emphasis mine]
[100] At paragraph 32 of his affidavit Dr. McGinity said this: (applicants' record, volume II, page 338)
32. Indeed, Dr. Cartilier, after being presented with a number of examples of products which are transformed before they are absorbed in the body, including examples of amoxicillin being suspended and NeoCitran being mixed with water before taken, agreed that the essence of a pharmaceutical preparation is to get the drug to the right spot in the body to be effective. Whether the preparation is ready in the capsule or when the capsule opens in the stomach does not change this. [emphasis mine]
[101] In his affidavit he next set out numerous examples of dosage forms which are sold in one form but are intended by the manufacturer to react with either water or the gastrointestinal fluids in order to transform the product into its functional form and he expressed the view each of these cases is analogous to the case of Rhoxal's capsules containing the Rhoxal formulation which is intended to mix with the fluids of the stomach upon the capsule being swallowed and the shell dissolving in the stomach. The active ingredient which is inside of the capsule can only function, once it has been mixed with the fluids of the stomach in order to make a hydrosol, thus permitting the absorption of the cyclosporine into the bloodstream.
[102] Effervescent tablets work in a similar manner. The effervescence occurs in vivo.
[103] He enumerated six examples of products sold which only function in the body and not the container in which they are sold. Many of the examples identified have been known for many years, and certainly before the '656 Patent, according to Dr. McGinity.
[104] Dr. McGinity addressed the question of whether forming the final dosage form (the hydrosol) in the body is an equivalent under the doctrine of equivalence to a product which forms a hydrosol prior to ingestion. He was asked to consider three questions.
[105] Question 1 was:
(page 341, applicants' record, volume 2)
Does forming the hydrosol in the aqueous fluids of the GI tract of the body rather than having it formed pre-ingestion have a material effect upon the way the invention works ?
He answered the question "No".
[106] Question 2 was:
If the answer to the first question is no, would the forming of the hydrosol in the body in substitution for pre-ingestion perform substantially the same function, in substantially the same way, to obtain substantially the same result?
He answered this question "Yes".
[107] Question 3 was:
Finally, if the answer to the second question is yes, would the reader skilled in the art of formulation nevertheless have understood from the language of the claim that the patentee intended that strict compliance with the primary meaning was an essential requirement of the invention ? [emphasis mine]
He answered this question "No".
[108] Dr. McGinity answered the first question "No" because the invention is a formation of a formulation comprising a hydrosol of cyclosporine in order to permit the cyclosporine to be of a size that would permit it to be absorbed into the bloodstream. He stated whether this hydrosol is formed in the body rather than in the capsule or a glass of water, the result is the same. The formation of the hydrosol is what permits the cyclosporine to enter the bloodstream.
[109] He answered the question 2 as "Yes" because:
40. . . . A person being presented with the '656 patent and the Rhoxal formulation and asked whether having essentially a capsule which is a preconcentrate which forms a hydrosol in the stomach rather than a capsule encapsulating a hydrosol would work in the same manner, I would have said yes. Either performs substantially the same function in substantially the same way to obtain the same result, namely, a hydrosol of cyclosporin in the stomach where the cyclosporin is available to be introduced to the bloodstream. In the case of the capsule containing the hydrosol, the hydrosol if formed before the capsule is filled by adding the cyclosporin, alcohol and other ingredients to water. In the case of the Rhoxal variant, the preconcentrate is encapsulated and is added to water when the capsule shell dissolves in the stomach. [emphasis mine]
[110] He answered question 3 "No" because claim 2 of patent '656 sets out a pharmaceutical preparation containing a hydrosol. He added: (applicants' application record 342)
41. . . . Even if this does not literally include preparations made in the stomach I can see no reason why the variant of the preparation being made in the stomach should be excluded. There is nothing in the disclosure that indicates that the inventors intended to exclude this variant. Indeed, at page 10 it is specifically described that the hydrosols are formed by adding what is in essence a preconcentrate of cyclosporin and alcohol to water. This is exactly what occurs when the Rhoxal capsule hits the stomach. [emphasis mine]
[111] He concluded his affidavit by expressing the opinion the use of the Rhoxal product will result in infringement of at least claim 2 of the '656 Patent. The Rhoxal product added to water when used will, therefore, form a hydrosol within the meaning ascribed to the patent. He did not believe the invention only covered preparations that are in the form of hydrosols when sold but not those which are transformed into such upon ingestion.
(3) Dr. Brittain's affidavit evidence
[112] While the thrust of Dr. Brittain's affidavit was to describe his experiment, he spoke in his affidavit to certain issues which are relevant to properly construing the scope of the '656 Patent.
[113] At paragraph 18 of his affidavit, under the heading, "The Purpose of the '656 Patent", Dr. Brittain deposed it is directed to hydrosols of the pharmacologically active ingredient, suspended or re-suspendable in aqueous media. In particular, the patent is directed to a hydrosol of a pharmacologically active agent for intravenous injection, characterized in that the hydrosol comprises solid particles of the active substance having a particle size of about 1 to 10,000 nanometres i.e. small enough to flow through blood vessels.
[114] One purpose of the '656 Patent is to use the pharmacologically active agent particles in an aqueous hydrosol form for intravenous injection. Another purpose is to provide a hydrosol comprising solid particles of a cyclosporine in a stabilized, pharmaceutically acceptable form, which form is suspended or is dry and re-suspendable in an aqueous medium.
[115] According to him, the '656 Patent alleges to distinguish itself over the prior art by forming solid particles of active agent as opposed to colloidal nanoparticles formed by binding molecules of active agent with a carrier.
[116] The formulation of the '656 Patent is suitable for injection in that it does not contain alcohol and/or salt in an unacceptable amount.
[117] He defined or explained a number of words used in claim 2 according to the teachings of the '656 Patent specification and the knowledge of a person skilled in the art (paragraph 30).
[118] It was apparent to him the active agent is cyclosporine.
[119] As for "particles", he stated the term is defined as being "solid and of the active substance . . ." and "are either suspended in aqueous media or are dry and re-suspendable in aqueous media". The particles in suspension are sufficiently small to flow through blood vessels. Colloidal sized liquid droplets suspended in an aqueous medium or forming an emulsion are not particles and their dispersion do not constitute a hydrosol.
[120] "Solid Form" refers to particles of the active ingredient that is not dissolved in a true solution and is in accordance with the size of the particles as provided in claim 2.
[121] In terms of the diameter of the particles, in his view, it was apparent the inventor intended the hydrosol to be limited to one where the size of the particles falls within the specified range and to go beyond those ranges would, in many cases, defeat the purpose of the invention "which was to provide a preparation suitable for injection, i.e. with a particle size small enough to travel inside blood vessels" [emphasis mine] (paragraph 35 at applicants' application record, page 385).
[122] To Dr. Brittain, in terms of stability, it is apparent that stability referred to the size of the particles. The particles are stabilized to avoid aggregation and the stabilizer inhibits an increase in the size of the particles of the active agent in water thereby maintaining constant the size distribution of the active hydrosol particles in dispersion. He also was of the view maintenance of the size distribution also implied that the stabilizing agent prevents a decrease in the size of the particles as well.
[123] In term of particle size distribution, preference is given to a narrow size distribution because this inhibits a redistribution of particle sizes. The particle size distribution must remain constant as well as individual particle sizes.
[124] He stated the following to be the essential elements of the invention claimed in claim 2: a hydrosol, the presence of the particles of an active agent, such particles must be in solid form, the active agent must be cyclosporine. The particles must have a diameter of between 1 and 10,000 nanometres, particles whose size are stabilized and there be the presence of a size distribution of the particles which is maintained constant.
[125] At paragraph 48 of his affidavit, his understanding of the composition of the Rhoxal formulation is the same as that outlined in Dr. Ambülh's affidavit.
(4) Dr. Cartilier's affidavit evidence
[126] Dr. Cartilier's first response affidavit is dated August 2, 2002.
[127] After setting out the wording of claim 2, he wrote at paragraph 10 (applicants' application record, volume II, page 523):
10. Immediately apparent is that claim 2 of the '656 Patent begins with "A pharmaceutical preparation...". In my opinion, in light of the disclosures made in the '656 Patent, it would have been apparent to a person of ordinary skill in the art that all the steps in preparing the claimed pharmaceutical preparation would be completed prior to its administration to a patient. Indeed, all the examples provided point to methods of preparing the claimed pharmaceutical preparation prior to administration, including re-suspending a freeze-dried variant, which would obviously fall into the same category. [emphasis mine]
[128] In the case of a capsule destined for oral administration such as the Rhoxal capsule containing cyclosporine, according to Dr. Cartilier, any preparation is completed at the factory. Neither medical personnel nor patients are required to undertake any actions, such as mixing, prior to administering the capsule. As a result: (applicants' application record, page 524):
... even if claim 2 was found to cover oral preparations, the preparation of the RhoxalPharma Capsule is completed at the time of manufacturing. In my opinion, ingestion of the RhoxalPharma Capsule by a patient is the delivery of the active ingredient and not a step in the preparation of the drug as it would be understood to the person of ordinary skill in the art. Thus, I am of the opinion that on this ground alone the '656 Patent cannot be infringed when a RhoxalPharma Capsule is ingested by a patient. [emphasis mine]
[129] In any event, his opinion is that claim 2, when read in the context of the '656 Patent, does not cover a post-ingestion spontaneously generated product. Nowhere does the patent disclosure envisage such an occurrence. To a person of ordinary skill in the art, the '656 Patent teaches a pharmaceutical preparation of cyclosporinefor intravenous administration.
[130] Dr. Cartilier then made reference to the previous proceeding before Justice Tremblay-Lamer. He referred to her decision. He noted Rhoxal's NOA of January 31, 2002 and concluded at paragraph 16 (applicants' application record, page 525):
16. I do not see, therefore, how in light of my previous testimony, the decision of Judge Danièle Tremblay-Lamer and the composition of the RhoxalPharma Capsule that the Applicant could allege that RhoxalPharma Capsule infringes the '656 Patent.
[131] He commented on the Ambühl and McGinity affidavits and says those affidavits, when read together, apparently teach that the '656 Patent is infringed once the Rhoxal capsule is ingested by a patient. He observed Dr. McGinity did not perform any tests himself but instead relied on the Ambühl affidavit for data in support of his statements. He added that Dr. Ambühl is a Novartis company employee and is not an independent expert.
[132] He took the reader to the reference Dr. McGinity made to Modern Pharmaceutics to support the theory of a spontaneous generation of a hydrosol.
[133] In his opinion, that excerpt is not in any way related to the case before me. He failed to see why cyclosporine, a highly lipophilic molecule, would leave en masse oil droplets, a favourable lipophilic environment, to enter in the aqueous medium, where it is not soluble, in order to precipitate. In his opinion, this is against the basic laws of thermodynamics and of equilibrium and, as such, goes against science which would have been apparent to one of ordinary skill in the art (applicants' application record, page 526).
[134] The Rhoxal capsule is an oil based formulation, he says, and he referred to SANDIMMUNE as a similar oil-based formulation of cyclosporine for oral administration. He referred to various research papers on the properties of SANDIMMUNE following oral administration. One of those papers found that "the market oral formulations of SANDIMMUNE form a crude oil-in-water emulsion in aqueous fluids" (applicants' application record, page 526, paragraph 23).
[135] He referred to another paper entitled "Improved Oral Absorption of Cyclosporine by Using Neoral, a Microemulsion Formulation". He points out that Sandoz' own researchers again state "... that a crude oil-in-water microemulsion forms in aqueous gastrointestinal fluids, with Cyclosporin mainly distributed in the lipid droplets..." (applicants' application record, page 526, paragraph 24).
[136] He wrote at paragraph 25:
25. Contrary to what is being proposed in the Ambühl and McGinity Affidavits, the above statements are in agreement with the basic laws of science and clearly indicate the absence of an in situ spontaneous generation of a hydrosol upon ingesting an oil-based formulation of Cyclosporin. Indeed, the experiments presented in the Ambühl Affidavit indicate the existence of lipid droplets containing Cyclosporin, i.e. a dispersed system oil-in-water or an emulsion, but in no way demonstrate the existence of a hydrosol or a suspension of solid particles in aqueous media.
[137] He challenged a statement Dr. Ambühl made that the contents of the Rhoxal capsule forms a hydrosol in plain water or in SGF or hydrochloride and his statement that it logically follows it would also form a hydrosol in the stomach of a patient once the capsule is ingested. Dr. Cartilier responded (applicants' application record, volume II, page 527):
27. I most strongly disagree with this reasoning. In the science of pharmacy it is perhaps trite to say that achieving in vitro results are in no way proof of actual in vivo results. This is especially true, as in this case, when the in vitro environment and conditions are not even the same as the in vivo environment and conditions.
28. The human digestive apparatus is a complex environment of varying composition, volume, pH(acidity) and other physical and chemical properties. This complex environment will vary depending on individuals and their diet.
29. It is my opinion that in no way can a demonstration of hydrosol formation in aqueous media be equated to or predict what would occur in the human body.
[138] Dr. Cartilier then pointed to the fact Dr. Ambühl failed to follow the detailed manufacturing instructions provided by Rhoxal for the preparation of the Rhoxal capsule. He disagreed with Dr. Ambühl's statement that there was nothing inconsistent in the way he prepared the Rhoxal formulation for his experiment.
[139] He stated it would be well-known to one of ordinary skill in the art that in order to prepare a formulation matching the Rhoxal capsule, it is necessary to follow exactly the steps as put forth in the product flow sheets and would know that by not following the flow sheets exactly, inconclusive results would be achieved, would also know that mixing a highly insoluble molecule such as cyclosporine with a viscous liquid would not provide adequate results as the viscous character of the liquid does not favour dissolution.
[140] In any case, he stated the basic rule of good manufacturing practices in the pharmaceutical industry in order to ensure consistent product quality is to never deviate from the product flow sheets. He states that Health Canada, prior to issuing a NOC approves the manufacturing instructions and no deviations from these instructions are permitted without prior approval by Health Canada.
[141] He states it is clear from Dr. Ambühl's affidavit all ingredients were mixed together prior to mixing without the cyclosporine being first dissolved in ethanol. He expressed the opinion that, as the test specimens analysed by Dr. Ambühl were not manufactured in accordance with even the most basic good practices "the results of the subsequent experiments performed on the specimens cannot be considered in any way determinative of results which would be achieved with an actual RhoxalPharma Capsule" (applicants' application record, Volume II, page 528, paragraph 35).
[142] Finally, Dr. Cartilier, speaking of Dr. Ambühl's affidavit, states it is "merely an attempt to show that the contents of the RhoxalPharma Capsule could form a hydrosol when placed in aqueous media" (applicants' application record, page 528, paragraph 36). He continues for the reasons already identified, Dr. Ambühl completely failed to establish a hydrosol forms within the human body after the RhoxalPharma capsule is administered to a patient. He concludes as follows (applicants' application record, page 528):
36. . . . If the Applicants wished to show evidence that a hydrosol is formed within the human body, they had ample opportunity to conduct the simple test of administering the RhoxalPharma Capsule to patients, followed by sampling and analysis of the gastric content. Instead, the Applicants are presenting artificial in vitro data and are arguing that such data is proof of what happens in the human body. In my opinion one can only conclude that the in vivo experiments would not support the Applicants' claims.
[143] I need not summarize the rebuttal affidavits of Drs. Brittain and Cartilier because, in my view, those affidavits do not speak to evidence which has not already been identified or which will be discussed during the analysis on cross-examination.
THE CROSS-EXAMINATIONS
[144] As previously noted, the only Novartis deponent who was cross-examined was Dr. Ambühl.
[145] On the other hand, Drs. Brittain and Cartilier were cross-examined by counsel representing Novartis.
(a) The Ambühl cross-examination
[146] Counsel for Rhoxal cross-examined Dr. Ambühl on December 18, 2002, covering essentially three areas: pertinent technical definitions; the scope of the '656 Patent and the several tests he performed on the Rhoxal formulation created by the Sandoz Laboratory.
[147] In my view, Dr. Ambühl stood up very well during cross-examination; his affidavit evidence was not impeached.
[148] In terms of the '656 Patent, he acknowledged the first focus of the inventors was on developing a solution for intravenous administration but those inventors did not exclude hydrosols for other routes of administration (applicants' record, volume V, page 1146). He maintained the ten examples of how to form a hydrosol produced results suitable for use in all routes of administration and such examples were not limited to any specific route of administration (applicants' record, volume V, pages 1147 to 1163).
[149] Counsel for Rhoxal explored with Dr. Ambühl step by step the various tests undertaken to determine the particle size, particle size distribution, whether the particles were solid or liquid and whether the solid particles contained cyclosporine.
[150] Dr. Ambühl's evidence confirmed his use of a very powerful electronic microscope for his light scattering tests. That microscope could identify micelles as small as two nanometres and had an upper limit of identifying particles at five microns.
[151] He performed his light scattering test on the opalescent system which was produced by mixing the Rhoxal formulation in water; the other light scattering test was on the sediment obtained after centrifugation and filtration. The particle range of both tests was consistent in the range of 100 nanometres to one micron. He performed other tests to determine whether the solid particles contained cyclosporine. He reported positive results.
[152] Dr. Ambühl acknowledged in preparing the Rhoxal formulation, a slightly different procedure was used than that recommended by the supplier: the cyclosporine was not dissolved separately in ethanol; the cyclosporine was dissolved together with all ingredients making up the Rhoxal formulation. Both in cross-examination and in re-examination, Dr. Ambühl's evidence was that based on his experience and that of his company, the result of using a different procedure was the same as if he had followed the procedure recommended by the supplier. I accept, in its entirety, Dr. Ambühl's evidence.
(b) The cross-examination of Dr. Brittain
[153] Dr. Brittain, in cross-examination, confirmed what he had stated in his rebuttal affidavit produced after Dr. Bugay had commented critically on the range of particle sizes he could picture from the optical microscope he used in conducting his experiment. His microscope could not identify particle sizes below one micron.
[154] However, he did a particle size analysis (see for example his exhibit 11, applicants' record, volume II, page 463) which disclosed the presence of matter below one micron. He answered "there is certainly something there" (applicants' record, volume III, page 771).
[155] He did not investigate what that something was but stated his observation was consistent with his filtration experiments and with light gathering experiments. He confirmed Dr. Ambühl "probably saw something smaller than one micron" but could not say whether Dr. Ambühl's observation was consistent with the presence of the matter disclosed in his particle scattering experiment. As for consistency with Dr. Bugay's observation, he answered "after he did whatever he did to the sample to make the measurement, he certainly saw something smaller than a micron, yes" (see applicants' record, volume II, pages 771 and 772).
[156] Dr. Brittain, in his rebuttal affidavit, was very critical of how Dr. Bugay allegedly prepared his sample for observation under SEM microscopy. He thought the sample preparation had sheared larger particles into the smaller particles Dr. Bugay had observed.
[157] During cross-examination, Dr. Brittain had to retract his criticism when confronted with the fact Dr. Bugay did not use SEM microscopy but environmental scanning electron microscopy ("ESEM"). The advantage of ESEM is that it minimizes sample preparation. Dr. Bugay could study the opalescent system in its natural liquid state; neither dehydration nor coating the sample was necessary (see applicants' record, volume III, pages 796 to 807).
[158] Dr. Brittain, in his reply affidavit, was of the view the particles in the system he observed were unstable, i.e. they grew.
[159] The method he chose to make this determination was to compare the median particle sizes in two particle population as determined initially after the opalescent system was formed (exhibit 11 to his reply affidavit, applicants' record, volume II, page 464) with the medium population after three hours of elapsed time (exhibit 15 to his reply affidavit, applicants' record, volume II, page 472).
[160] In cross-examination, he confirmed for population A which revealed matter below one micron he had used a wrong parameter which had the effect of increasing the median size in exhibit 15 (see exhibit 3 to the transcript of Dr. Brittain's cross-examination, applicants' record, volume III, page 824).
[161] Moreover, Dr. Brittain admitted on cross-examination that the question is not whether population B is stable but whether population A is stable (for the relevant portions of Dr. Brittain's cross-examination, see applicants' record, volume III, pages 713 to 717).
[162] My review of Dr. Brittain's cross-examination concerning his filtration studies evidenced problems. I specifically note the problem related to the weight of the contents of three capsules containing Rhoxal's formulations. Dr. Brittain could not explain certain discrepancies and agreed that his results were mysterious (applicants' record, volume III, page 789). In addition, his evidence of clogging in some filters caused concern.
[163] For these reasons, I place no reliance on Dr. Brittain's experiments.
(c) The cross-examination of Dr. Cartilier
[164] The cross-examination of Dr. Cartilier by counsel for Novartis was lengthy and far-ranging. It covers areas such as proper terminology, the scope of the '656 Patent, transformations which can occur to drugs after leaving the drug manufacturer's door, and the impact which such transformation might have on what a pharmaceutical preparation is, a review of Novartis' products, his views that a pharmaceutical preparation must be completed prior to its administration, a review of the Rhoxal product and his statement in his first affidavit at paragraph 20:
Indeed, I fail to see why cyclosporine, a highly lipophilic molecule, would leave en masse oil droplets, a favourable lipophilic environment, to enter into the aqueous medium (where it is not soluble) in order to precipitate. In my opinion, this is against the basic laws of thermo dynamics and equilibrium. As such, it goes against science which, in my opinion, would have been apparent to one of ordinary skill in the art.
[165] I do not intend to summarize all of the cross-examination but I draw the following points.
[166] First, Dr. Cartilier acknowledged he had not conducted any experiments to support the views expressed in his affidavits.
[167] He defined pharmaceutical preparation as "a system composed of a drug of various ingredients which has been prepared to make it acceptable as a drug (applicants' record, volume IV, page 888) and he defined delivery systems at page 889 as "pharmaceutical compositions or preparations which have been designed with the idea of controlling the delivery of the drug to the body".
[168] He confirmed his knowledge about routes of administration, the most common being the oral route; other routes of administration included the parenteral route of administration which includes intravenous and the rectal route of administration. He also confirmed that for cyclosporine, the routes of administration which were known at the time of the '656 Patent included intravenous and oral (applicants' record, volume IV, pages 891 and 892).
[169] He interpreted claim 2 of the '656 Patent to mean intramuscular administration. He conceded the patent mentioned cyclosporine can be administered orally but was of the view it was not related to the invention because he did not see any example related to oral administration. However, on further questioning, he conceded a patent can include things that are not specifically set out in the examples but he said if this was the case the patent had to mention clearly those matters in other paragraphs, i.e. in the claims or in the description of the invention (applicants' record, volume IV, pages 893 to 895).
[170] Counsel for Novartis drew Dr. Cartilier's attention to the second paragraph on page 7 of the '656 patent which reads:
The invention also provides a hydrosol comprising solid particles of a cyclosporine or of a ... in a stabilized, pharmaceutically acceptable form, which form is suspended or is dry and re-suspendable in an aqueous medium.
Dr. Cartilier acknowledged there was no indication in this paragraph that the comments there were solely related to intravenous (applicants' record, volume IV, page 896).
[171] Counsel for Novartis then drew Dr. Cartilier's attention to the last paragraph at page 10 of the '656 Patent which described how the hydrosols of the patent can be prepared. That paragraph reads:
The novel hydrosol forms may particularly be prepared as follows: a solution of the active agent in a solvent which is miscible with water, i.e. in alcohol, e.g. ethanol or isopropanol or in acetone, is mixed with a comparatively large amount of water, under such conditions that a hydrosol is produced.
[172] Dr. Cartilier agreed this was what the patent taught but said it described a rather complex way of preparing the hydrosol. He agreed if in fact a hydrosol is produced, those conditions have been met (applicants' record, volume IV, page 897).
[173] Counsel for Novartis put several examples of transformations to Dr. Cartilier. He agreed a pharmacist who diluted a syrup at the instructions of a drug manufacturer produced another pharmaceutical preparation. However, he maintained steadfastly throughout his cross-examination that a pharmaceutical preparation ceased to exist once ingested by the patient. The reason he said this was because "we are no more in the territory of the pharmacist" and that "the corporation of pharmacists does not agree with the idea that when a patient prepares a drug it is a fully prepared pharmaceutical drug". He was responding to counsel's questions on Neo-Citran where the patient dissolves the powder with hot water and drinks it (applicants' record, volume IV, pages 902 to 907).
[174] He confirmed it was always his view a pharmaceutical preparation is completed prior to its administration to a patient and had never said anything to the contrary. He said at page 948-49: "It goes even to common sense. Once it goes inside the body, in the case of an ingestion, it is no more the job of the pharmacist". He agreed it was a dosage form but one which had been transformed and that it could be a pharmaceutical preparation which has been transformed. He added at page 949: "It goes to, I would say, logical - - common sense. I don't see myself going home and having a dinner that has been prepared by my wife and telling her that because I swallowed it, I prepared the dinner".
[175] Throughout his cross-examination, Dr. Cartilier held on to this view. When counsel for Novartis put to him passages from the text Modern Pharmaceutics stating "[When] an oral dosage form is swallowed by the patient, it will travel through the gastrointestinal tract" and "the dosage form reaches the absorption site", Dr. Cartilier stated that what was travelling to the tract is no longer the original dosage form but a dosage form which is swallowed. The oral dosage form travelling through the tract was not the oral dosage form because it was not as it was before. To the statement the dosage form reaches the absorption site, he stated it was a well-known fact that any drug is submitted to transformation and the author simply called it the dosage form (applicants' record, volume IV, pages 955 and 956).
[176] Discussing the NEORAL solution which the patient takes with water and swallows a microemulsion compared to the NEORAL capsule which encapsulates the solution which the patient ingests creating a microemulsion after ingestion, Dr. Cartilier acknowledged at page 944 that the oral solution and the capsule were of the same composition and he agreed there was no material difference in terms of how the product ended up in the stomach.
[177] At page 961 of the transcript records, he was shown a US patent he held for slow release tablets. He stated after ingestion the tablet was still within the claim and once you put this tablet in vivo "you still have the oral dosage form with some slight modifications".
[178] There was a lengthy cross-examination on paragraph 20 of Dr. Cartilier's reply affidavit. The cross-examination, starting at page 987, focussed on the extent the cyclosporine would dissolve completely in a medium which contained only cyclosporine, ethanol and a small quantity of oil in the surfactant.
[179] I think a fair reading of the cross-examination reveals Dr. Cartilier saw there were many possibilities which existed depending on whether the oil was completely dissolved in the ethanol and that would impact upon the extent the cyclosporine was completely dissolved in the medium.
[180] He acknowledged he had done no experiments to verify the truth of the statements in paragraph 20 and said he need not do so because his view was founded on basic elementary theory of solubility. A discussion then followed on the assumption behind Dr. Cartilier's theory and the role played by the oil in the surfactant and whether the surfactant could surround a solid particle.
[181] There are a number of reasons why I place limited weight on Dr. Cartilier's direct evidence after reviewing the results of his cross-examination.
[182] First, my reading of that cross-examination tells me Dr. Cartilier was not completely forthcoming and seemed to be playing word games with counsel for Novartis. He would make qualifications which, when assessed against the totality of the evidence in this case, did not appear to me to be significant, e.g. a pharmaceutical preparation which has been swallowed is not a pharmaceutical preparation; a solution yes, but not a true solution; soluble yet not soluble; the Rhoxal surfactant was not an oil but was oil-based.
[183] Second, he had a theory but never subjected that theory to an experiment. He relied on laws of science and sometimes his common sense but those laws and his common sense, when weighed against the undisputed evidence of Drs. Ambühl and Bugay do not ring true.
[184] He constantly sparred with counsel and he did not deny the concession which Dr. McGinity said he made during the cross-examination of his affidavit before Justice Tremblay-Lamer.
[185] Third and most important, it is clear he provided his evidence from the perspective of a dispensing pharmacist and not one skilled in the art of a drug formulator.
ANALYSIS
(a) Rhoxal's preliminary issue
[186] Rhoxal raises a preliminary point; it says Novartis' application before the Court should be dismissed on the ground the doctrines of res judicata and issue estoppel apply. Rhoxal says Novartis is attempting to relitigate an issue already decided by Justice Tremblay-Lamer; it also points to US litigation and the judgment of the US District Court of Delaware in the US cyclosporine proceedings between Novartis and EON.
[187] I dispose of the US decision immediately. It has no application because the US patent is differently written and it is clear from the preliminary decision the trial judge limited the scope of the US claim to hydrosols formed in a different manner.
[188] Res judicata encompasses two forms of estoppel: cause of action estoppel and issue estoppel. In terms of Justice Tremblay-Lamer's previous decision, assuming but not deciding that the conditions for the application of cause of action estoppel and issue estoppel have been met, it is clear from the Supreme Court of Canada's decision in Danyluk v. Ainsworth Technologies Inc., [2001] 2 S.C.R. 460, meeting those preconditions to their operation is not sufficient. The Court must still determine whether, as a matter of discretion, estoppel ought to be applied.
[189] Justice Binnie, in Danyluk, supra, referred at paragraph 63 of his reasons to B.C. jurisprudence stating estoppel was an equitable doctrine closely related to abuse of process; it is designed as an implement of justice and a protection against injustice and calls upon the exercise of a judicial discretion to achieve fairness according to all of the circumstances in each case.
[190] In the context of administrative tribunals, Justice Binnie enumerated a number of factors to be weighed. Some of those factors are not relevant when a decision of a court is at issue rather than a decision of an administrative tribunal as was the case in Danyluk, supra.
[191] Availability of an appeal and potential injustice were identified by Justice Binnie with potential injustice being the most important factor.
[192] Taking into account the representations made by Rhoxal before the Federal Court of Appeal of the appeal from Justice Tremblay-Lamer's judgment when mootness was argued as a grounds to dismiss the appeal, I have no doubt that to apply either forms of estoppel in this case would be a clear injustice to Novartis.
[193] I ruled along this line in Novartis Pharmaceuticals, supra, when I found against Rhoxal who had sought in that proceeding to strike out Novartis' application on the grounds of abuse of process, a decision which was not appealed by Rhoxal.
(b) Does Rhoxal's capsule, when ingested, form a hydrosol in the human stomach?
[194] I have no difficulty in finding, as a fact, Rhoxal's capsule, after ingestion, forms a hydrosol after contact with water and the gastric juices in the human stomach. The hydrosol formed is of small solid particles of cyclosporine stabilized and suspended in the aqueous medium found in the human stomach.
[195] In fact, the evidence for this finding of fact is overwhelming. Dr. Ambühl ran tests on Rhoxal's formulation and found a hydrosol containing small solid particles of cyclosporine. He withstood cross-examination well.
[196] Dr. Bugay was not cross-examined. He ran experiments on the Rhoxal capsule and its contents. He found solid particles when the microemulsion caused by Rhoxal's formulation coming into contact with water was examined under ESEM microscopy.
[197] Dr. Brittain did not look for the small particles Dr. Ambühl had found and the strength of his other tests was weakened under cross-examination.
[198] Dr. Cartilier ran no experiments; his theory is unproven and contradicted by reliable evidence in the record.
(c) Is Rhoxal's NOA justified
[199] Rhoxal's NOA would be justified if Rhoxal's capsule which creates, as I have found, on a balance of probabilities, a hydrosol that meets the specifications for a hydrosol in the '656 Patent would not infringe that patent. Rhoxal argues its capsule does not infringe as a matter of patent construction because the '656 Patent does not cover a hydrosol formed in situ but rather is limited to hydrosols formed prior to ingestion; it is also limited to pre-ingestion pharmaceutical preparations.
(i) The principles of patent construction
[200] The proper approach to patent construction has been recently settled by the Supreme Court of Canada, Justice Binnie writing the reasons on behalf of the unanimous Court, in the Free World Trust and the Whirlpool Corp. cases, supra.
[201] I turn first to the Free World Trust case, supra, where he began his analysis by stating at paragraph 13 that "[P]atent protection rests on the concept of a bargain between the inventor and the public. In return for disclosure of the invention to the public, the inventor acquires for a limited time the exclusive right to exploit it".
[202] At paragraph 14, he stated patent claims are "frequently analogized to « fences » and « boundaries » giving the « fields » of the monopoly a comfortable pretence of bright line demarcation". He wrote at paragraph 15:
¶ 15 In reality, the "fences" often consist of complex layers of definitions of different elements (or "components" or "features" or "integers") of differing complexity, substitutability and ingenuity. A matrix of descriptive words and phrases defines the monopoly, warns the public and ensnares the infringer. In some instances, the precise elements of the "fence" may be crucial or "essential" to the working of the invention as claimed; in others the inventor may contemplate, and the reader skilled in the art appreciate, that variants could easily be used or substituted without making any material difference to the working of the invention. The interpretative task of the court in claims construction is to separate the one from the other, to distinguish the essential from the inessential, and to give to the "field" framed by the former the legal protection to which the holder of a valid patent is entitled.
[203] He then embarked upon claim construction stating at paragraph 20:
¶ 20 Based on the expert evidence given at trial as to the meaning of the terms used, and the understanding that these terms would convey at the date of the patent to an ordinary worker skilled in the art of electro-magnetotherapy devices and possessing the common knowledge of people engaged in that field, it appears that while some of the elements of the '156 and '361 patents are essential if the devices are to work as contemplated and claimed by the inventor, others are non-essential. The non-essential elements may be substituted or omitted without having a material effect on either the structure or the operation of the invention described in the claims. [emphasis mine]
[204] Justice Binnie then discussed infringement issues at paragraphs 28 and 29:
¶ 28 The appeal in this Court was essentially directed to the infringement issues. It has been established, at least since Grip Printing and Publishing Co. of Toronto v. Butterfield (1885), 11 S.C.R. 291, that a patent owner has a remedy against an alleged infringer who does not take the letter of the invention but nevertheless appropriates its substance (or "pith and marrow"). This extended protection of the patentee is recognized in Anglo-Canadian law, and also finds expression in modified form in the United States under the doctrine of equivalents, which is said to be available against the producer of a device that performs substantially the same function in substantially the same way to obtain substantially the same result: Graver Tank & Mfg. Co. v. Linde Air Products Co., 339 U.S. 605 (1950), at p. 608.
¶ 29 It is obviously an important public policy to control the scope of "substantive infringement". A purely literal application of the text of the claims would allow a person skilled in the art to make minor and inconsequential variations in the device and thereby to appropriate the substance of the invention with a copycat device while staying just outside the monopoly. A broader interpretation, on the other hand, risks conferring on the patentee the benefit of inventions that he had not in fact made but which could be deemed with hindsight to be "equivalent" to what in fact was invented. This would be unfair to the public and unfair to competitors. It is important that the patent system be fair as well as predictable in its operation. [emphasis mine]
[205] He stated the appeal before him raised "the fundamental issue of how best to resolve the tension between « literal infringement » and « substantive infringement » to achieve a fair and predictable result" and stated the following propositions at paragraph 31:
(a) The Patent Act promotes adherence to the language of the claims.
(b) Adherence to the language of the claims in turn promotes both fairness and predictability.
(c) The claim language must, however, be read in an informed and purposive way.
(d) The language of the claims thus construed defines the monopoly. There is no recourse to such vague notions as the "spirit of the invention" to expand it further.
(e) The claims language will, on a purposive construction, show that some elements of the claimed invention are essential while others are non-essential. The identification of elements as essential or non-essential is made:
(i) on the basis of the common knowledge of the worker skilled in the art to which the patent relates;
(ii) as of the date the patent is published;
(iii) having regard to whether or not it was obvious to the skilled reader at the time the patent was published that a variant of a particular element would not make a difference to the way in which the invention works; or
(iv) according to the intent of the inventor, expressed or inferred from the claims, that a [page1044] particular element is essential irrespective of its practical effect;
(v) without, however, resort to extrinsic evidence of the inventor's intention.
(f) There is no infringement if an essential element is different or omitted. There may still be infringement, however, if non-essential elements are substituted or omitted.
[206] I propose to discuss briefly the underpinnings of the propositions enunciated by Justice Binnie. As the foundation for his first proposition, Justice Binnie drew on certain statutory provisions of the old Patent Act as it stood in 1985 and, in particular, upon then section 34 dealing with the contents of the specification of an invention.
[207] He canvassed the case law endorsing what he called "the primacy of the language of the claims" referring to the House of Lords decision in Catnic Components Ltd. v. Hill & Smith Ltd., [1982] R.P.C. 183, and indicated the primacy of claims language had already been deeply rooted in Canadian jurisprudence and should be affirmed again in the appeal before him.
[208] He explained his second proposition by stating, at paragraph 41, "[T]he scope of patent protection must not only be fair, it must be reasonably predictable. A patent is, after all, a public instrument" and the "scope of its prohibition should be made clear so that members of the public may know where they can go with impunity". Patent owners, potential infringers and the public, according to Justice Binnie, are "entitled to clear and definite rules as to the extent of the monopoly conferred [which] requires that the subjective or discretionary element of claims interpretation (e.g. the illusive quest for « the spirit of the invention » ) be kept to the minimum, consistent with giving « the inventor protection for that which he has actually in good faith invented » ." (see, paragraph 43)
[209] He concluded the point by stating that "[P]redictability is achieved by tying the patentee to its claim; fairness is achieved by interpreting those claims in an informed and purposive way". The courts, he stated, "have traditionally protected a patentee from the effects of excessive literalism" and he observed a patent "is not addressed to an ordinary member of the public, but to a worker skilled in the art" quoting H. G. Fox, The Canadian Law and Practice Relating to Letters Patent for Inventions (4th ed. 1969), as being "a hypothetical person possessing the ordinary skill and knowledge of the particular art to which the invention relates, and a mind willing to understand a specification that is addressed to him".
[210] Justice Binnie expressed the view there was only one approach to infringement namely infringement of the claims as written but "purposively" construed. He rejected the approach which consists of determining whether the device accused of infringement "has literally taken the invention" and, if not, then embarking upon the second step of determining "whether, in substance, the invention was wrongfully appropriated".
[211] At paragraph 50 of his reasons he stated " « purposive construction » does away with the first step of purely literal interpretation but disciplines the scope of « substantive » claims construction in the interest of fairness to both the patentee and the public".
[212] Justice Binnie then expanded on the proposition that claims language will, on a purposive construction, show that some elements of the claim invention are essential while others are non-essential and pointed that the allocation between essential and non-essential elements is assessed by taking into account three factors:
(1) on the basis of the common knowledge of the worker skilled in the art to which the patent relates;
(2) what constitutes an essential element is to be interpreted in the light of the knowledge of the art at the date of the publication of the patent specification; and
(3) regard is to be had to whether it was obvious at the time the patent was published that substituting a different variant would make a difference in the way in which the invention works.
[213] I make these observations on the three factors enumerated by Justice Binnie as the basis upon which the allocation between essential and non-essential elements is to be made.
[214] At paragraph 51 of his reasons, Justice Binnie stressed "[T]he involvement in claims construction of the skilled addressee" means that the patentee has "the comfort that the claims will be read in light of the knowledge provided to the court by expert evidence on the technical meaning of the terms and concepts used in the claims". He added:
51. ... The words chosen by the inventor will be read in the sense the inventor is presumed to have intended, and in a way that is sympathetic to accomplishment of the inventor's purpose expressed or implicit in the text of the claims. However, if the inventor has misspoken or otherwise created an unnecessary or troublesome limitation in the claims, it is a self-inflicted wound. The public is [page1054] entitled to rely on the words used provided the words used are interpreted fairly and knowledgeably. [emphasis mine]
[215] The second allocation factor speaks to the knowledge of the art at the date of publication by the reader skilled in the relevant art, i.e. what "a competent workman reading the specification at its date would have understood it to have disclosed and claimed" quoting from Hoffmann J. (as he then was), in Improver Corp. v. Remington Consumer Products Ltd., [1990] F.S.R. 181 (Pat. Ct.), at p. 182, "[W]ould this (i.e.: that the variant had no material effect) have been obvious at the date of publication of the patent to a reader skilled in the art? If no, the variant is outside the claim".
[216] As to the final factor of allocation, it considers "whether it was obvious at the time the patent was published that substitution" of a different variant would make a difference to the way in which the invention works.
[217] To determine whether this criteria is met, Justice Binnie approved the three questions which now Lord Hoffman had set out in Improver, supra. Those three questions were put to Dr. McGinity and the questions and Dr. McGinity's answers are set out in paragraphs 105 to 107 of these reasons.
[218] One of the propositions stated by Justice Binnie in paragraph 31 of his reasons is that the identification of elements as essential or non-essential will be determined in accordance with the intent of the inventor. Justice Binnie noted at paragraph 58 the inventor, in the patent, "is addressing others in the same line of work" and that the courts "recognize the pitfalls of language and will do what they can to give the inventor « protection for that which he has actually in good faith invented » ."
[219] The last notion I take from Free World Trust, supra, is that the proper comparison in an infringement case is between the claims as set out in the patent and the devices or products marketed by the alleged infringer.
[220] The Supreme Court of Canada released its decision in Whirlpool, supra, on the same day as it issued the Free World Trust case, supra. It is unnecessary for me to summarize Justice Binnie's reasons in the Whirlpool case, supra, but I draw from that case the following:
(1) it is the claims, not the rest of the specification, that define the monopoly. (paragraph 18);
(2) at paragraph 48, citing Catnic, supra, "as in the earlier case law, the scope of the monopoly remains a function of the written claims but, as before, flexibility and fairness is achieved by differentiating the essential features ( « the pith and marrow » ) from the unessential, based on a knowledgeable reading of the whole specification through the eyes of the skilled addressee rather than on the basis of the « kind of meticulous verbal analysis in which lawyers are too often tempted by their training to indulge » (Catnic, supra, p, 243)";
(3) the courts will look at the whole of the specification (including the disclosure and the claims) to ascertain the nature of the invention and methods of its performance". "There is no occasion for being too astute or technical in the matter of objections to either title or specification" (paragraph 49) as expressed by Justice Dickson, as he then was, in the Consolboard case cited by Justice Binnie, a "[S]imple « dictionary » approach to construction claims . . . must be rejected" (paragraph 52);
(4) "patent specification is not addressed to grammarians, etymologists or to the public generally, but to skilled individuals sufficiently versed in the art to which the patent relates to enable them on a technical level to appreciate the nature and description of the invention"; (paragraph 53)
(5) "[K]nowledge of purpose is one of the important attributes the skilled worker brings to the exercise" (paragraph 53);
(6) a "preferred embodiment" does not "necessarily exhaust the invention" (paragraph 54);
(7) purpose of construction does not permit going "outside the four corners of the specification, and both properly limit themselves to the words of the claims interpreted in the context of the specification as a whole" (paragraph 49).
(ii) Application of the principles to this case
[221] Construing claim 2(a) of the '656 Patent in a purposive way by considering the whole of the disclosure and the claims and being instructed as to the meaning of its terms by experts skilled in the art of formulation of pharmaceutical preparations, I reached the conclusion a hydrosol form in situ is within the claim as a pharmaceutical preparation consisting of a hydrosol. Properly interpreted "pharmaceutical preparation" is not limited to a hydrosol prepared before ingestion and claim 2(a) is not limited to parenteral applications.
[222] I appreciate this conclusion is different than the conclusion reached by Justice Tremblay-Lamer in her decision.
[223] It is clear to me, however, from a reading of her decision, the evidence before her was substantially different than the evidence I received and that difference justifies the opposite conclusion I have reached.
[224] I do not think there can be any question the crux of the invention to which the '656 Patent relates lies in the creation of a hydrosol of solid particles of cyclosporine in stable form and within the nanometres specified. The purpose of the hydrosol is to make the medicine cyclosporine more soluble and more stable so as to facilitate its absorption into the human body thereby increasing its efficacy.
[225] Moreover, there can be no question the '656 Patent is clear and Novartis' experts have acknowledged it, the preferred embodiment of the '656 Patent is the formation of a hydrosol for intravenous application.
[226] The question remains whether the inventors of that patent created a limitation within its claims which would exclude from within their scope a hydrosol formed in situ after ingestion. I think not.
[227] The first paragraph of the specification of the '656 Patent reads:
This invention relates to hydrosols of pharmacologically active agents, suspended or re-suspendable in an aqueous medium.
[228] It is true, as counsel for Rhoxal forcefully argued, one finds, throughout the specification, several references to the invention's application for intravenous administration.
[229] However, those references are qualified by words such as "especially" (page 1), "in particular" (page 2), "the invention also provides a hydrosol" (pages 7, 9, 11 and 12).
[230] Moreover, there is a specific reference to oral administration. The first two full paragraphs at page 7 of the specification read:
Cyclosporin is especially useful in the field of transplant surgery and of autoimmune diseases where it is administered orally in amounts of about 50 to about 900 mg, . . . . It can also be administered intravenously . . . .
The invention also provides a hydrosol comprising solid particles of a cyclosporin or . . . in a stabilized, pharmaceutically acceptable form, which form is suspended or is dry and re-suspendable in an aqueous medium.
[231] The specification at page 10 is also instructive. It is indicated the hydrosol particles, according to the invention, are prepared by a process different from the prior art process. The third full paragraph at page 10 states:
The present invention provides a process, characterised in that a solution in an organic solvent miscible with water of an active agent difficultly soluble in water is mixed with a comparatively large amount of water under conditions. . . .
[232] The next paragraph at page 10 of the specification points out another difference from the prior art process in terms of the hydrosol particles and the last full paragraph of page 10 of the specification reads:
The novel hydrosol forms may particularly be prepared as follows: a solution of the active agent in a solvent which is miscible with water, e.g. in alcohol, e.g. ethanol . . ., is mixed with a comparatively large amount of water, under such conditions that a hydrosol is produced.
[233] Finally, it is to be noted claim 1 is specifically limited to a pharmaceutical preparation for intravenous administration comprising a hydrosol while claim 2 is open-ended in terms of simply providing for a pharmaceutical preparation, the active ingredient of which comprises cyclosporine said preparation comprising a hydrosol.
[234] Dr. McGinity, in his April 30, 2002 affidavit, construed claims 1 and 2 by touching upon several of the indicators set out in the patent that claim 2 is not limited to intravenous preparations and includes oral dosage forms such as a capsule or a solution. He was of the view Rhoxal's allegation of non infringement of the '656 Patent cannot be correct because Rhoxal's product will form a hydrosol when taken by the patient.
[235] Dr. McGinity was not cross-examined and I add Dr. Cartilier on cross-examination admitted the specification in the '656 Patent was not textually limited to intravenous application.
[236] Finally, I find artificial Rhoxal's argument the term "pharmaceutical preparation" should be limited to pre-ingestion preparations; such an argument favours form rather than substance.
[237] The evidence of Drs. Ambühl and McGinity make it clear that a pharmaceutical preparation may have several forms because of the transformations which take place. It is well-known by persons skilled in the art that such transformations can occur in situ so as to deliver an invention's benefit in situ, i.e. make it functional for its intended purpose. Rhoxal's capsule, when ingested, inevitably forms a hydrosol when coming into contact with the water or gastric juices in the stomach.
[238] I conclude a hydrosol formed in situ is a pharmaceutical preparation within claim 2(a) of the '656 Patent.
[239] For these reasons, Novartis has demonstrated Rhoxal's NOA is not justified. Accordingly, the Minister of Health is prohibited from issuing a NOC to Rhoxal in respect of its 25mg and 50mg cyclosporine soft gel capsules for oral administration.
(d) Is the doctrine of equivalents applicable and if so, what is the result?
[240] Counsel for Novartis argued the application of the doctrine of equivalents if I came to the conclusion claim 2(a) was limited to hydrosols formed prior to ingestion. According to him, a hydrosol formed in situ is equivalent to a hydrosol formed outside the body which is introduced into the human body by injection or by swallowing.
[241] While I have concluded claim 2(a) is not limited to hydrosols formed outside the body, I may be wrong in my conclusion and, in such circumstance, it is appropriate for me to decide whether a hydrosol formed in situ is equivalent to one formed outside the body.
[242] Counsel for Rhoxal argued the doctrine of equivalents has no application to NOC proceedings which are summary in nature, for limited administrative purposes, and not akin to an action for infringement.
[243] Both counsel cited several cases to me and, while the point may not have been clearly decided, the cases cited by counsel for Novartis favour the proposition the Court has endorsed the use of the doctrine of equivalents in NOC proceedings (see the Federal Court of Appeal's decision in Merck Frosst Canada Inc. v. Canada (Minister of National Health & Welfare) (2000), 8 C.P.R. (4th) 48, and Janssen Pharmaceutica Inc. v. Apotex Inc. (2001), 13 C.P.R. (4th) 410 at paragraphs 42-43.
[244] If there was any doubt on the issue, I think Justice Binnie's decision in Free World Trust, supra, settles the point.
[245] He integrated the doctrine of equivalents into the mainstream of the inquiry into infringement. This is apparent from paragraph 28 of his decision as well as his discussion on essential and non essential elements of the invention, the factors of their allocation and, in particular, the third allocation factor whether it was obvious at the time the patent was disclosed substituting a different variant would make a difference in the way the invention works bringing into play the three questions posed by Lord Hoffman in Improver, supra.
[246] Dr. McGinity answered those three questions, found equivalency and was not cross-examined.
[247] Based on his evidence, I find equivalency between a hydrosol of cyclosporine particles within the specified nanometre range formed in situ and a hydrosol of cyclosporine particles with the same specifications formed outside the body.
[248] For all of these reasons, Novartis' application is allowed and an order of prohibition directed to the Minister of Health has been issued prohibiting the issuance of a NOC to Rhoxal in respect of its 25mg and 50mg cyclosporine capsules. Novartis is entitled to its costs.
"François Lemieux"
J U D G E
OTTAWA, ONTARIO
March 29, 2004
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-462-02
STYLE OF CAUSE: NOVARTIS PHARMACEUTICALS CANADA INC. ET AL V. PHOXALPHARMA INC. ET AL
PLACE OF HEARING: OTTAWA, ONTARIO
DATE OF HEARING: JANUARY 6TH, 2004
REASONS FOR ORDER BY THE HONOURABLE JUSTICE LEMIEUX
APPEARANCES:
Mr. Anthony Creber
Mr. Jay Zakaib
Mr. John Norman FOR APPLICANTS
Ms. Marie Lafleur
Mr. Martin Sheehan FOR RESPONDENT
SOLICITORS OF RECORD:
GOWLINGS
OTTAWA, ONTARIO FOR APPLICANTS
FASKEN MARTINEAU DUMOULIN LLP
MONTREAL, QUEBEC FOR RESPONDENT