Federal Court Decisions

Date: 20060324

Docket: T-697-04

Citation: 2006 FC 379

Ottawa, Ontario, March 24, 2006

PRESENT:      The Honourable Mr. Justice Phelan

BETWEEN:

BAYER AG, BAYER HEALTHCARE AG and

BAYER INC.

Applicants

and

NOVOPHARM LIMITED and

THE MINISTER OF HEALTH

Respondents

REASONS FOR JUDGMENT AND JUDGMENT

I.           OVERVIEW

[1]                This is an application by Bayer AG, Bayer Healthcare AG and Bayer Inc. (Bayer) for an order prohibiting the Minister of Health from issuing a Notice of Compliance to Novopharm Limited (Novopharm) until the expiry of Canadian Letters Patent No. 1,282,006 ("'006" patent). The application is filed pursuant to section 55.2(4) of the Patent Act (Act) and section 6 of the Patented Medicines (Notice of Compliance) Regulations (Regulations).

[2]                Bayer's application is intended to prevent the Minister from issuing an approval which would permit Novopharm to sell an intravenous formulation of the drug Ciprofloxacin (Cipro). Bayer also requests a declaration that Novopharm's Notice of Allegation (NOA) is not valid and is not in compliance with the Regulations.

[3]                Bayer developed a medicine using Cipro, an antibacterial drug of the fluoroquinolone class which was ready to use in injection or infusion solutions. The Canadian patent for this medicine was Canadian Letters Patent No. 1,228,547 (the "'547" patent) which expired on February 17, 2004.

[4]                The medicine had significant and harmful physiological effects of local intolerance and kidney crystalluria. As a result, Bayer spent two years attempting to find a solution to these negative effects of their drug under the '547 patent. It then developed a new drug that avoided these side effects, the '006 patent, principally through finding the proper balance of the key elements of the '547 drug. It is this new drug, and, more particularly, the '006 patent, which is the subject of attack in these proceedings.

[5]                Novopharm alleges that the '006 patent is invalid for reasons of obviousness (largely abandoned) and obviousness type double-patenting (patenting that which was already in a previous patent). Novopharm also alleges that its drug would not infringe Bayer's '006 patent because the expired '547 patent taught what Novopharm proposes to do. Novopharm says that it is doing that which is "old" and therefore can invoke the "Gillette defence". Novopharm also states that if the '006 patent is claimed to be a "selection patent", it does not meet the criteria for a selection patent.

[6]                The nature of NOC proceedings is summarized in Fournier Pharma Inc. v. Canada(Minister of Health)(2004), 38 C.P.R. (4^th) 297, 2004 FC 1718 at paragraphs 6, 8 and 9:

6.          As noted, this proceeding is brought under the Regulations. The history and scheme of the Regulations have been delineated in various decisions of the Federal Court of Appeal and need not be repeated here. See: Merck Frosst Canada Inc. v. Canada(Minister of National Health and Welfare)(1994), 55 C.P.R. (3d) 302 (F.C.A.); AB Hassle v. Canada(Minister of National Health and Welfare)(2000), 7 C.P.R. (4^th) 272 (F.C.A.); Novartis AG et al. v. Abbott Laboratories Ltd. et al (2000), 7 C.P.R. (4^th) 264 (F.C.A.). Basically, issues of non-infringement and validity between the patent holder (first person) and the person seeking a NOC from the Minister (second person) originate with a NOA, served on the first person by the second person, setting out the second person's allegations, including the legal and factual basis in support. The first person may disagree and apply to the court for an order prohibiting the Minister from issuing a NOC to the second person until after expiration of the patent.

8.          Section 6 proceedings are not to be likened to actions for determining validity or infringement. They are proceedings in judicial review, to be held expeditiously, whose aim is to determine whether the Minister is free to issue the requested NOC. Their scope is confined to administrative purposes: Apotex Inc. v. Canada(Minister of National Health and Welfare)(1997), 76 C.P.R. (3d) 1 (F.C.A.). The determination must turn on whether there are allegations by the second person sufficiently substantiated to support a conclusion for administrative purposes (the issuance of a NOC) that an applicant's patent would not be infringed if the second person's product is put on the market: Pharmacia Inc. v. Canada (Minister of National Health and Welfare) (1994), 58 C.P.R. (3d) 209 (F.C.A.).

9.          By merely commencing the proceeding, the applicant obtains what is tantamount to an interlocutory injunction without having satisfied any of the criteria a court would require before enjoining issuance of a NOC: Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare) (1998), 80 C.P.R. (3d) 368 (S.C.C.); Bristol-Myers Squibb Canada Inc. v. Canada(Attorney General) (2001), 11 C.P.R. (4^th) 539 (F.C.A.). The Regulations allow a court to determine summarily, on the basis of the evidence adduced, whether the allegations are justified. Section 6 proceedings are not adjudicative and cannot be treated as res judicata. The patentee is in no way deprived of all the recourses normally available to enable it to enforce its rights. If a full trial of validity or infringement issues is required, this can be obtained in the usual way by commencing an action: Pfizer Canada Inc. v. Apotex Inc. (2001), 11 C.P.R. (4^th) 245 (F.C.A.); SmithKline Beecham Pharma Inc. v. Apotex Inc. (2001), 14 C.P.R. (4^th) 76 (F.C.T.D.) aff'd (2002), 21 C.P.R. (4^th) 129 (F.C.A.); Novartis A.G. v. Apotex Inc. (2002), 22 C.P.R. (4^th) 450 (F.C.A.).

[7]                The Court can prohibit the Minister from issuing an NOC if Bayer's '006 patent is valid and if Novopharm's proposed drug would infringe this valid patent.

II.          MATERIAL FACTS

[8]                As indicated, Cipro is an antibacterial drug that Bayer used in its '547 patent which expired on February 17, 2004. At issue in this case is the formulation of the solution used to administer Cipro. The drug can be delivered to patients orally or parenterally. Parenteral delivery alternatives including administration either into a vein (intravenously), into a muscle (intramuscularly) or under the skin (subcutaneously).

[9]                The '006 patent is for a parenteral formulation of Cipro for intravenous infusion, as opposed to intravenous injection. The infusion technique is commonly called a "drip" which means the drug is taken over a longer period of time and using a larger volume of liquid compared to the injection-needle technique.

[10]            The Novopharm formulation consists of an infusion solution of Cipro for use in intravenous minibags. A 100 ml solution of this formulation contains 200 mg of Cipro, 64 mg of lactic acid, 5 g of glucose monohydrate, and hydrochloric acid to adjust the pH.

[11]            The claims at issue in respect of the '547 and '006 patents are set out in the following table:

[12]            An essential feature of the '547 patent is that in addition to the lactic acid salts of the active substance, the solution contains at least one acid that does not lead to precipitation. The additional acid stabilizes the solution by maintaining its cohesion and its potency. Stabilization was a key factor for Bayer in the '547 patent. Another essential feature was the absence of any linking of any specific concentration of Cipro to a concentration of lactic acid.

[13]            It was Bayer's intention that its drug using the '547 patent would deliver a "short sharp shot" to deal with bacterial infection. However, studies showed that intramuscular formulations caused adverse local reaction in animals and this form of delivery was abandoned.

[14]            Despite evidence that the lactate salt intravenous injection caused vein irritation, that formulation was stable and the '547 worldwide family of patents (including the '018 European patent application) was filed. However, a second problem arose not foreseen at the time of the '547 patent filing priority date, the formation of crystals in the kidney (crystalluria) which leads to kidney damage.

[15]            As a result of these problems, the intravenous aspect of the '547 patent drug project was in jeopardy and a change in formula was necessary. The search for a solution took more than two years and involved considerable experimentation on animals and humans, ultimately resulting in the formulation in patent '006.

[16]            The essential feature of the '006 patent is that it is physiologically tolerated. This is accomplished by lowering the concentration of Cipro and imposing a restricted range of lactic acid in comparison to Cipro. The solution to the physiological problem was finding the proper balance between Cipro and lactic acid, in part through dilution.

[17]            Novopharm's contention is that the '547 patent taught one that this result could be obtained through dilution. Therefore, the '006 patent is not new and Novopharm's drug utilizes "old" knowledge contained in the '547 patent.

[18]            As with all NOC cases, the evidence was largely submitted through experts called on behalf of both sides. Comments regarding some of this expert testimony will be dealt with later; what follows is a brief summary of the evidence of the key witnesses as identified by the parties in their submissions. There were other well qualified witnesses but their evidence was just confirmatory of evidence presented by other witnesses and while reviewed, does not need to be described here. A list of all witnesses is attached to these Reasons as Appendix "A".

Bayer's Experts

George Michael Archieri is a medical doctor currently licensed to practice in New Jersey. He holds an M.D. from New York Medical College and is a private consultant in anti-infection clinical research and drug development. He has worked for Bayer and is responsible for monitoring and overviewing clinical trials involving the drug ciprofloxacin in its oral and i.v. formulations.

His mandate was to provide his recollection of the process for developing the i.v. formulation for ciprofloxacin, specifically with respect to overcoming the problems that were encountered in developing the i.v. formulations and how solutions were arrived at.

His conclusions were that:

·                     The outcome was an i.v. formulation of ciprofloxacin that was a marked improvement over the formulations that had been studied earlier in the laboratory and in human subjects.

·                     The final approved and marketed product reduced excess lactic acid formulation of 0.2% ciprofloxacin concentration and its method of administration represented a substantive improvement over the earlier formulation having a ciprofloxacin concentration of 1% in higher excess lactic acid. The pharmaceutical changes that were made to the latter were innovative, useful and the result of much experimentation in animals and in man. Moreover, the resultant product provided physicians and patients with an efficacious drug that could be given with enhanced safety and practicality.

Peter Ball has been an infectious disease physician for over thirty years, specializing in both adult and paediatric medicine. He was experienced in urinary tract infections and knowledgeable about the quinolones genus of drugs.

His conclusions were that:

·                     The ciprofloxacin i.v. formulation disclosed by the '006 patent is not obvious, as a person ordinarily skilled in the art would not have been led directly and without difficulty to the '006 patent formulation by the '547 patent and the prior art available at the date of invention.

·                     With respect to double-patenting, the claims of the '006 patent are distinct from those of the '547 patent. The solution to the vein phlebitis and kidney crystalluria problems would not have been obvious to a person ordinarily skilled in the art and the claims of the '006 patent claim a different innovation than disclosed in the '547 patent.

·                     The '006 patent does not claim a mere dilution of the '547 patent's invention but rather discloses an improved formulation.

He also held that a person ordinarily skilled in the art should not be defined as a mere formulator.

John Raymond Evans is an independent consultant in the area of pharmaceutical research and development, particularly in the areas of preformulation, formulation and biopharmaceutics, and has been consulting in this area since 2001. From 1973-2001 he was employed at ICI Pharmaceuticals Division (AstraZeneca). During that time, he devised various experimental formulations, including i.v. formulations, to satisfy the demand for short and long-term toxicological, biological pharmacokinetic and pharmacodynamic studies. The positions he held ranged from Senior Experimentalist to Biopharmaceutical Expert, and, in later years, he performed mainly managerial tasks. This background is important in view of the attacks by Novopharm on the weight to be given his evidence.

His conclusions were that:

·                     A person of ordinary skill in the art would not be led directly and without difficulty to the invention claimed in the '006 patent, based on the common general knowledge of infusion formulation and the prior art alleged by Novopharm or at all. All of Novopharm's documents, taken together, lack specific data and do not analyze, discuss or even mention the safety issues that would lead a person of ordinary skill in the art to explore formulation solutions of the type exhibited in the invention of the '006 patent.

·                     The '006 patent is inventive over the '547 patent. While the '006 patent does lower the concentration of the ciprofloxacin, it is not merely a dilution of the invention of the '547 patent. The formulation of the '006 patent was not an obvious formulation based on the teachings in the '547 patent or its corresponding foreign patents or the other alleged prior art relied on by Novopharm.

·                     The '006 patent is novel over the '547 patent, and Novopharm is not practicing "old" '547 patent teachings.

·                     "I am able to say without any hesitation that the Novopharm formulation falls within the scope of the following claims of the '006 patent: claims 1-17, 19, 24, 25 and 36."

Dr. Christine Ruhl-Fehlertis a doctor of veterinary medicine. She outlined the work and studies done to deal with the problems created by use of the '547 patent drug.

Novopharm's Experts

Dr. Patrick DeLuca is a Professor at the University of Kentucky in the Department of Pharmaceutical Sciences, and has held a series of professional chemistry/ pharmacist positions in the private sector. His primary areas of interest in pharmaceutics are pharmaceutical technology, sterile products, and intravenous administration systems (such as injections and infusions).

He provided his opinion as an expert in the area of pharmaceutical formulations, and, in particular, pharmaceutical formulations of parenteral administration (i.e., dosage forms that are administered by a route other than the gastrointestinal tract).

His conclusions were that:

·                     The '547 patent and the '006 patent are directed to pharmaceutical scientists who formulate and, in particular, those scientists who formulate solutions for administration by infusion and injection.

·                     The infusion solutions described in the claims of the '006 patent are the same as the infusion solutions claimed in the '547 patent, and there is nothing in the claims of the '006 patent that is novel or inventive over the claims of the '547 patent.

·                     The Novopharm formulation is disclosed and taught in the '018 patent.

·                     The person ordinarily skilled in the art with respect to the '006 and '547 patents is a pharmaceutical formulator.

Dr. Gideon Koren is a paediatrician and medical professor. He concluded that when faced with crystalluria in monkeys, the solution would be to reduce the active ingredient below 1%.

Dr. Leon Lachman, a PhD, is an independent consultant and consults in various areas including pharmaceutical research and development (such as drug formulation of parenterals), formulation and process optimization, quality systems, process and laboratory methods qualification/validation, regulatory filing and compliance, and biopharmaceuticals of sterile and non sterile medications. He had direct experience in the formulation, manufacture, testing and qualifications of sterile injectable medications and other pharmaceutical dosage forms.

His conclusions were that:

·                     The '547 and '006 patents are directed to a formulator. They are meant to tell a formulator how to prepare infusion solutions and in addition (with respect to the '547 patent) how to prepare injection solutions containing ciprofloxacin. As such, the person ordinarily skilled in the art is a formulator rather than an amalgam of persons, as suggested by Bayer.

·                     The claims of the '006 patent contain nothing inventive or new over and above that which is claimed in the '547 patent.

·                     The Novopharm 2mg/mL infusion solution is the same as the infusion solutions disclosed in the '018 patent. By its manufacture of its 2 mg/ml infusion solutions, Novopharm is simply doing that which is disclosed by the '018 patent.

Dr. Samuel Yalkowsky is a Professor of Pharmaceutical Sciences at the College of Pharmacy at the University of Arizona. He was asked to replicate what a formulator would do with the '547 patent as of July 1983 to formulate an infusion solution containing 200 mg of Cipro. His conclusion was that most of his own solutions came within at least some of the '006 patent claims.

[19]            Bayer criticised Novopharm's expert evidence because, out of the four witnesses called, three are from the formulation arts and one is a paediatrician. Bayer says that this selection of experts not only miscasts the '006 patent as formulation arts, but also means that the experts were unable to address the clinical aspects of the '006 patent - the resolution of kidney crystalluria balanced with the efficacy of the drug. Even Dr. Koren's (the Professor of Paediatrics) evidence was said to be unpersuasive on the matter of crystals in the kidney since he was neither told that the drug was Cipro nor has he ever worked with the drug before.

[20]            Novopharm attacks Bayer's fact witnesses, Drs. Ruhl-Fehlert, Serno and Archieri because they were employees of Bayer, working in Bayer's laboratories on the development of infusion solutions of Cipro. As such, they did not represent a "person ordinarily skilled in the art" (sometimes referred to as a "POSITA") as envisaged by Novopharm.

[21]            Novopharm levelled considerable focus of attack on Bayer's expert, John Evans, who was put forward as a person skilled in the art of pharmaceutical formulation. The attack was based on the fact that Evans did not have a university degree (much less a PhD or MD of which all other witnesses seemed to possess at least one), nor had he written articles concerning pharmaceutical formulations for publication in text books, medical journals or pharmaceutical journals. Novopharm clarified that it did not attack Evans so much as an expert but rather was arguing that the weight to be given his evidence ought to be lessened because of his lack of academic accreditation and work.

[22]            Novopharm criticized Bayer's expert, Dr. Ball - a medical doctor of infectious diseases - because he had a relationship with Bayer since 1982 according to which he was remunerated for his professional services. Novopharm also challenges Dr. Ball's evidence because he had no expertise as a chemical formulator or involvement in patent drafting. As such, it is said that his evidence as to claim construction should be rejected - Dr. Ball was not a POSITA.

[23]            All of the witnesses were qualified as experts. In the absence of direct evidence to the contrary, the Court accepts that their evidence was truthful. More specifically, the Court rejects the suggestion that because a witness is paid for his/her expert opinion or has a long relationship with one of the parties, that his/her evidence will necessarily be less than forthright.

[24]            The difficulty many of the witnesses faced was trying to replicate what a person would have done in the past if that person did not have current knowledge. This exercise of retrospective speculation/opinion must be contrasted with what was actually done by people "on the ground". In addition, evidence by persons who have actually been engaged in the very type of activity at issue, formulation, rather than those who studied such activities, is preferable as it more closely mirrors the realities to which the expert opinion is directed.

[25]            On the whole, the Court finds evidence of persons such as John Evans to be compelling as is the evidence of Bayer's witnesses involved directly with the '547 patent problem and '006 patent solution. Such evidence is clear, consistent and well grounded.

III.        ISSUES

[26]            The principal issues in these proceedings are:

·                     Is Bayer's '006 patent invalid by reason of double patenting (obviousness)?

·                     Is Novopharm's formulation taught or found in '547 patent, thus entitling Novopharm to raise the "Gillette defence"?

·                     Is the '006 patent a selection patent which meets the special requirements of a selection patent?

[27]            While the parties raised the issue of onus and burden of proof, and therefore the Court will briefly address the matter, the issues in this case do not turn on that more narrow subject. The Applicants have been attacked as if the burden was entirely that of the Applicants without regard for the presumption of validity of the '006 patent. A fuller analysis of this issue can be found in the final portion of these Reasons.

IV.        ANALYSIS

A.         Claim Construction

[28]            Novopharm claims that if one reads the '547 patent it teaches one to do exactly what is contained in the '006 patent. In other words, Novopharm contends that Bayer's position is to narrow the '547 patent so that the '006 patent looks like it did something new. Novopharm alleges that Bayer intentionally degrades the '547 patent in order to build up the '006 patent.

[29]            The analysis of the issues raised by the parties must commence with a consideration of the construction of the claims at issue.

[30]            The primacy of the claims language and the principles of interpretation are well set forth in Free World Trust v. Électro Santé Inc., [2000] 2 S.C.R. 1024; (2001), 9 C.P.R. (4^th) 168 at 184:

(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 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.

[31]            This purposive construction was again emphasized along with the concept of "a mind willing to understand" in Whirlpool Corp. v. Camco Inc., [2000] 2 S.C.R. 1067; (2001), 9 C.P.R. (4^th) 129 at p. 149-150:

(c)         The orthodox rule is that a patent "must be read by a mind willing to understand, not by a mind desirous of misunderstanding", per Chitty J. in Lister v. Norton Brothers and Co. (1886), 3 R.P.C. 199 (Ch. D.) at p. 203. A "mind willing to understand" necessarily pays close attention to the purpose and intent of the author.

...

(g)         While "purposive construction" is a label introduced into claims construction by Catnic, supra, the approach itself is quite consistent, in my view, with what was said by Dickson J. the previous year in Consolboard, supra, on the topic of claims construction, at pp. 520-21:

We must look to the whole of the disclosure and the claims to ascertain the nature of the invention and methods of its performance, (Noranda Mines Limited v. Minerals Separation North American Corporation [[1950] S.C.R. 36]), being neither benevolent nor harsh, but rather seeking a construction which is reasonable and fair to both patentee and public. There is no occasion for being too astute or technical in the matter of objections to either title or specification for, as Duff C.J.C. said, giving the judgment of the Court in Western Electric Company, Incorporated, and Northern Electric Company v. Baldwin International Radio of Canada [[1934] S.C.R. 570], at p. 574, "where the language of the specification, upon a reasonable view of it, can be so read as to afford the inventor protection for that which he has actually in good faith invented, the court, as a rule, will endeavour to give effect to that construction".

Not only is "purposive construction" consistent with these well-established principles, it advances Dickson J.'s objective of an interpretation of the patent claims that "is reasonable and fair to both patentee and public".

[32]            When one examines the '547 patent, it is evident that its emphasis is on the use of an acid "which does not lead to precipitation". The particulars of Claim 1 which ground the remaining claims require the solutions be lactic acid salts and contain a ratio of 1:1 with Cipro. In addition, there is a requirement of an excess of acid to prevent precipitation, which excess acid must fall within prescribed ranges.

[33]            There was considerable dispute about the scope of the '547 patent, particularly as to whether the patent imposed a range of lactic acid content for the solution. The particular reference in dispute is found on page 3 of the Disclosure and reads:

"Depending on the primary means of packaging used, the concentration of the active substance in the solution, the pH of the solution and the shelf-life requirements imposed, the lactic acid content of the solutions according to the invention can be 0.1 to 90%. The lactic acid content of the solution to be administered can be 0.1 to 10%, preferably 0.5 to 1.4%."

(Emphasis added)

[34]            Novopharm claims that "can be" should be interpreted as permissive and therefore the '547 patent teaches that ranges can be used. Novopharm says that this leads to the teaching of dilution but does not restrict the '547 patent in a manner which makes it narrower than the '006 patent.

[35]            Given that the '547 patent is directed towards stabilization, it is difficult to understand how the term "can be" could be as open-ended as suggested by Novopharm. Applying a purposive approach toward securing stabilization and non-precipitation, it is more consistent to read the term as setting inner and outer limits which are mandatory if one is to ensure stabilization.

[36]            When the '006 patent is examined, it calculates its ratios on the basis of grams to 100 ml - 0.015 to 0.5 g of the active compound per 100 ml of aqueous solution. It also uses Molar Ratios, for example, 0.99 to 1.50 mol of lactic acid, relative to 1 mol of active compound (Claim 9).

[37]            To make a meaningful comparison between the patents, it is necessary to convert Molar Ratio to percentages, as used in the '547 patent. Using Stoichometry (the number of atoms needed for each ingredient to make a compound), the range of lactic acid to Cipro in the '006 patent is .0005% to .03%. The lower range in the '547 patent of lactic acid to the whole solution is .1% or three times the range of lactic acid to just one active compound (Cipro).

[38]            There are other critical differences between the two patents:

·                     '006 patent relates only to infusion solutions not to infusion and injection;

·                     '006 patent is restricted to Cipro and does not include the other compounds disclosed in the '547 patent;

·                     '006 patent restricts the concentration of Cipro to a specific range between 0.015 and 0.5 g per 100 ml of solution;

·                     for Claims 8-10 of the '006 patent, it is required that there be a combination of a specific range of Cipro and a specific range of excess acid. This also includes the provision that the claims (e.g. 9-10) can be sub-equimolar (less than 1:1), a factor not existent in the '547 patent.

[39]            The claims of '547 and '006 patents are not identical although there is some overlap. In addition to the ranges, the Molar Ratios, and type of delivery of the drug, Claim 36 in the '006 patent specifically targets humans and animals - a reflection that problems existing with the '547 patent had been solved. Given a purposive interpretation, '547 and '006 patents are very different patents within the same range of pharmaceuticals.

B.          Obviousness Double-Patenting - General

[40]            There is no issue that the Bayer '006 patent and Novopharm's formulation are virtually identical. Novopharm has not advanced an argument of "obviousness" per se but of obviousness double-patenting. Novopharm submits that the '006 patent breaches the prohibition against obtaining a second patent for something already contained in an earlier patent or obtaining a second patent with claims that are not patently distinct from those of the earlier patent.

[41]            As outlined in Whirlpool at p. 158, Justice Binnie confirmed the prohibition, as discussed in Consolboard Inc. v. MacMillan Bloedel (Saskatchewan) Ltd., [1981] 1 S.C.R. 504, that a second patent could not be justified unless the claims exhibited "novelty or ingenuity" over the first patent.

[42]            As held in Whirlpool, a comparison between the claims of the two patents is critical to assessing this type of double-patenting. The critical differences are described in paragraph 38 above.

[43]            There is no doubt that Bayer had significant problems with the '547 patent. The Court rejects the suggestion by Novopharm that the problems were "straw men" which Bayer "knocked down" to give credence to its '006 patent. The evidence is that the problems were real and significant and that the solution was not readily apparent.

[44]            Not only is finding the solution a matter of inventiveness, recognizing that the problem exists may be an inventive step. (GlaxoSmithKline Inc. v. Canada(Minister of Health)(2004), 28 C.P.R (4^th) 307 at para. 45.)

[45]            Bayer relies on three principal areas of inventiveness and novelty:

·                     linking the concentration of Cipro to lactic acid;

·                     the use of sub-equimolar amounts of acids; and

·                     the use of lower concentration to treat humans.

C.         Person Ordinarily Skilled in the Art (POSITA)

[46]            In considering whether something was newly discovered or was already taught in the first patent, it is important to determine to whom the teachings in a patent were directed - the person ordinarily skilled in the art (POSITA).

[47]            Bayer contends that such a person, particularly in respect of the '006 patent, is a multi-disciplinary amalgam of skilled people with the skills of a formulator and clinician. The POSITA bears some resemblance to the team of skills used to solve the '547 patent problem. The following quote from Bayer Aktiengesellschaft v. Apotex Inc. (1995), 60 C.P.R. (3d) 58 at 79 is supportive of Bayer's position:

The notional skilled technician can be a composite of scientists, researchers and technicians bringing their combined expertise to bear on the problem at hand: "This is particularly true where the invention relates to a science or art that transcends several scientific disciplines." (Per Wetston J. in Mobil Oil Corp. v. Hercules Canada Inc. (unreported, September 21, 1994, F.C.T.D., at p. 5 [now reported 57 C.P.R. (3d) 488 at p. 494, 82 F.T.R. 211].)

[48]            Novopharm, on the other hand, contends that the POSITA is a formulator with no background or experience in clinical matters. In respect of obviousness double-patenting, Novopharm relies on the Federal Court of Appeal's judgment in Beloit Canada Ltd. v. Valmet Oy (1986), 8 C.P.R. (3d) 289 (FCA) at 294:

The test for obviousness is not to ask what competent inventors did or would have done to solve the problem. Inventors are by definition inventive. The classical touchstone for obviousness is the technician skilled in the art but having no scintilla of inventiveness or imagination; a paragon of deduction and dexterity, wholly devoid of intuition; a triumph of the left hemisphere over the right. The question to be asked is whether this mythical creature (the man in the Clapham omnibus of patent law) would, in the light of the state of the art and of common general knowledge as at the claimed date of invention, have come directly and without difficulty to the solution taught by the patent. It is a very difficult test to satisfy.

[49]            Novopharm's position, however, is undermined by its witness' (Dr. Lachman) evidence at Questions 66-77, to the effect that some outside input is necessary for the formulator to do his/her job. The scientific equivalent of the "reasonable person" is not so devoid of outside knowledge or the need for consultation as the above quote from Beloit is said to indicate. Therefore, Bayer's description of the relevant POSITA is more consistent with the realities of these circumstances.

[50]            At the time of the development of the '006 patent, a formulator, he/she who possesses the core skill agreed to by both parties, would have to have some knowledge or input from the clinical side.

[51]            In trying to replicate this mythical POSITA, the parties advance a number of experts who, as best they can, try to describe and replicate what this POSITA would know and do. However, the one person who most nearly fits into Novopharm's thesis of the POSITA is Mr. Evans, the person with years (more years than that suggested as necessary) of experience as a formulator.

[52]            The criticism of Mr. Evans is that not only has he no university degree, he has never published articles or books. It would be speculative to suggest that he was too busy engaged in formulation; the primary skill Novopharm says its POSITA requires. Whatever the reason, this absence of publications does nothing to undermine the weight to be given his evidence.

[53]            Mr. Evan's evidence that a POSITA would not be led directly and without difficulty to the invention in the '006 patent and that its formulation was not obvious, significantly undercuts what Novopharm says its POSITA would conclude.

D.         Obviousness Double-Patenting - Specific

[54]            Novopharm's position on double-patenting and its claim to the Gillette defence are based on essentially similar grounds. The argument is that the '547 patent (which Novopharm claims is prior art) teaches dilution, which is what Novopharm has used to arrive at its formulation. Thus, Novopharm asserts that the '006 patent is making use of the same process as the '547 patent and is therefore an attempt to patent again that which was patented and for which the patent has expired.

[55]            As indicated earlier, there are critical differences between the '006 patent and the '547 patent, which make it novel. These include:

·                     the '006 patent claims a particular concentration of Cipro and restricts the amount of lactic acid with respect to that concentration, whereas the '547 patent only claims the excess lactic acid relative to the weight of the solution;

·                     the allowable range of total lactic acid in the '006 patent ranges from sub-equimolar to greater than equimolar, whereas the '547 patent is restricted to greater than equimolar; and

·                     unlike the '547 patent, the '006 patent has a use claim for the low concentration solutions disclosed within it.

[56]            The issue in this aspect of double-patenting is whether the claims in the '547 and '006 patents are sufficiently identical to justify invalidation of the '006 patent. (See Whirlpool, above, at paragraph 63.)

[57]            To maintain the defence against the allegation of obviousness double-patenting, the claims must exhibit novelty and ingenuity. (Sanofi-Synthelabo Canada Inc v. Apotex Inc. (2005), 39 C.P.R. (4^th) 202; 2005 FC 390 at paragraph 86.)

[58]            When one examines the history of the '006 patent, it is evident that Bayer has met this test. The problems caused by the '547 patent were not known outside Bayer. It took a team of experts two years to develop the solution to the intolerance problem embodied in the '006 patent. In arriving at the solution, Bayer did not merely dilute one substance but had to find the correct balance between the active compound and other elements of the drug; an exercise for which there were a myriad of permutations and combinations.

[59]            The '006 patent, by the use of inventiveness and ingenuity, solved a problem created by the '547 patent. That problem of physiological intolerance rendered the '547 patent virtually useless. The evidence establishes that extra inventive steps, much more than dilution for dilution's sake (as referred to in Whirlpool), were required.

[60]            If the POSITA is the pure formulator relied upon by Novopharm, its evidence of lack of inventiveness through Dr. Yalkowsky, is undermined by the fact that his testing did not stay within the prior art or within the '547 patent claims.

[61]            If the POSITA is the more broadly based formulator urged by Bayer, evidence of inventiveness is well documented. The evidence that the formulation in the '006 patent is not obvious is compelling.

[62]            The fact that Bayer would take two years of research and development to solve the problems created by the '547 patent strongly suggests that something more than what was taught in the '547 patent was needed to address the issues of physiological intolerance. To conclude otherwise is to suggest that Bayer was virtually incompetent by missing a solution which was so apparent.

[63]            The preponderance of the evidence confirms that Novopharm cannot establish the traditional definition of obviousness (although a claim of anticipation in respect of the '006 patent is not in issue) that its POSITA would come "directly and without difficulty to the solution taught by the patent" (Beloit above). If that were the case, it is difficult to understand why Bayer did not immediately, directly and without difficulty come to the '006 patent solution.

E.          Gillette Defence

[64]            The Gillette defence is a plea of both non-infringement and invalidity. The defence is available when a product is alleged to infringe a patent but is made in accordance with a specific disclosure in the prior art.

[65]            The Novopharm formulation is argued to fall within Claim 1 of the '547 patent. Novopharm says that it is using the "old" art in an expired patent as well as the prior art disclosed in '547's European equivalent patent, the '018 patent application ("'018").

[66]            The Novopharm formulation also falls into, at least, Claims 8, 9 and 10 of the '006 patent which would indicate that Novopharm was using current art (the '006 patent) rather than prior art. Since, for purposes of this proceeding, the Court finds that the '006 patent is not double-patenting, Novopharm cannot make out the allegation that it is not infringing Bayer's patent.

[67]            In addition, the '018 patent application is not prior art. Its publication date (April 1985) is after the date of invention of the '006 patent asserted by Bayer (February 1985).

[68]            In order for Novopharm to succeed, it must establish that what it is doing is taught in the prior art, specifically the '547 patent. For reasons given earlier, the evidence does not establish that it would be obvious that the dilution of Cipro and lactic acid in the specific ratios is taught by the '547 patent, much less the five-fold dilution called for in the '006 patent.

[69]            Novopharm's witness, Dr. DeLuca, admitted that there was nothing obvious in the prior art which addresses dilution. His own formulations did not fall within the examples in the '547 patent, including Example 22.

[70]            Novopharm's formulation did not follow from the '547 patent or the '018 patent application as these would not lead to the solution of kidney crystalluria, local intolerance or stability. As Dr. DeLuca admitted, there would be no motive for a POSITA (of either type) to seek a five-fold dilution and, in fact, on his best case formulation, arising from the '547 patent, he only chose a four-fold dilution, even with the benefit of hindsight.

[71]            Therefore, Novopharm is unable to make out the Gillette defence on the grounds that there was some prior art on which it could rely to develop its own formulation.

F.          Selection Patent

[72]            In Novopharm's Memorandum of Fact and Law, it raised for the first time the issue of the specific requirements of selection patents. This issue was not raised in the Notice of Allegation (NOA) but arose as a response to Bayer's position that the '006 patent is inventive over the '547 patent.

[73]            Where a patent could be held to be invalid because of obviousness double-patenting, the patent's validity can be saved if it meets the requirements of a "selection patent". One of those requirements is that the patent must disclose the advantage to be gained (or the disadvantage to be avoided) by using the selection patent. Novopharm states that Bayer made no such disclosure.

[74]            There are three problems with Novopharm's submissions on selection patent:

·                     the absence of obviousness double-patenting;

·                     the procedure by which the issue arose; and

·                     the adequacy of the disclosure of advantage.

[75]            As found earlier in these Reasons, Bayer has not engaged in obviousness double-patenting. Therefore, the issue of selection patent is irrelevant.

[76]            Even if it can be said to be relevant, the manner in which this matter was raised is problematic. It was not raised in the NOA. Bayer's first opportunity to know that this issue was "in play" was when Novopharm filed its Memorandum of Fact and Law in this Court. Therefore, there is no evidence specifically on the matter of whether the '006 patent would meet the qualifications for a selection patent.

[77]            Quite apart from issues of burden of proof and onus, the adequacy of any NOA is determined by whether it provided the patent holder/licensee with sufficient understanding of the case it had to meet. (See Abbott Laboratories and Abbott Laboratories Limited v. The Minister of Health and Apotex Inc., [2005] F.C.J. No. 1721 (QL); 2005 FC 1332.)

[78]            Raising the issue, as if it is a defence, works an injustice to the patentee by depriving it of the opportunity to address the issue in its evidence and memorandum. It may also deprive the court of the necessary evidentiary base and legal submissions to properly address this matter.

[79]            In this instance there is no reason why the NOA could not have raised the allegation that the '006 patent is not a selection patent, or, alternatively, there is no explanation why a new NOA could not have been filed although it is recognized that such a filing could initiate another 24 month stay period.

[80]            Even if Novopharm could overcome these two problems, the Court is satisfied that if Bayer had to make out a case for a selection patent, it has done so.

[81]            In Halsbury's Laws of England, Volume 35, 4^th ed., Butterworths, London, 1994, the summary of law on selection patents suggests that there is no special standard of disclosure required; there is no need to extol the benefits of the selection patent.

[82]            It is sufficient if the selection patent discloses the inventive step that it has over its parent genus (in this case, allegedly the '547 patent). (See Pfizer Canada Inc. v. Apotex Inc. (1997), 77 C.P.R. (3d) 547.)

[83]            The advantages are sufficiently disclosed where the '006 patent discloses its low toxicity and specifically claims in Claim 36 "Use of an infusion solution according to Claim 1 for the therapeutic treatment of the human or animal body".

[84]            For all of these reasons, Novopharm's submission that the '006 patent is an invalid selection patent cannot be sustained.

G.         Burden of Proof/Onus

[85]            As indicated earlier, this case does not turn on the issue of who has the burden of proof and on whom the onus lies. The law in this area, particularly in the context of the statutory presumption of validity, is somewhat opaque.

[86]            In this case, however, Bayer did exactly as it should when Novopharm put the issue of validity so clearly in play. Bayer defended the issue of validity as if it had a case to meet and without complete reliance on the statutory presumption of validity. If the case had come down "on the margins", resort to the statutory presumption of validity might be necessary.

[87]            The statutory presumption is simply that - a presumption. The burden of proof overall remains with an applicant. On the issue of validity, the Court must examine the evidence to determine if the presumption is rebutted, and, if so, the question is has the applicant satisfied its burden of disproving the allegation of invalidity.

[88]            Thus, the Court starts from the proposition that the burden is on the applicant in all instances but with a strong presumption in favour of validity. Bayer has more than met its evidentiary burden.

V.         CONCLUSION

[89]            For all these reasons, the Court concludes that the Applicants have maintained the validity of the '006 patent and are entitled to the Order requested.

JUDGMENT

IT IS ORDERED THAT the Minister of Health is prohibited from issuing a Notice of Compliance to Novopharm Inc. for the drug Ciprofloxacin involving the i.v. minibags (liquid) dosage form, 2 mg/ml strength (DIN 02237334), until after the expiration of Canadian Patent No. 1,282,006 ('006 patent).

IT IS FURTHER ORDEREDthat the Applicants shall have their costs and disbursements assessed in accordance with the top end of Column III of the Federal Court Tariff.

"Michael L. Phelan"

APPENDIX "A"

LIST OF WITNESSES

Bayer's Experts

Dr. George Michael Archieri

Dr. Peter Ball

Ms. Anna Braeken

Mr. John Raymond Evans

Dr. Christine Ruhl-Fehlert

Dr. Peter Serno

Novopharm's Experts

Dr. Patrick DeLuca

Mr. James Galbraith

Dr. Gideon Koren

Dr. Leon Lachman

Ms. Maureen McFarland

Mr. Neil Nachshen

Dr. Samuel Yalkowsky

FEDERAL COURT

NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:                                           T-697-04

STYLE OF CAUSE:                           Bayer AG, Bayer Healthcare AG and Bayer Inc.

                                                            and

                                                            Novopharm Limited and The Minister of Health

PLACE OF HEARING:                     Vancouver, British Columbia

DATE OF HEARING:                       January 31, 2006

                                                            February 1, 2 and 3, 2006

REASONS FOR ORDER:                Phelan J.

DATED:                                              March 24, 2006

APPEARANCES:

Mr. Neil Belmore Mr. Ken Clark	FOR THE APPLICANTS
Mr. Ian Godfrey Mr. William Mayo	FOR THE RESPONDENT, NOVOPHARM LIMITED

SOLICITORS OF RECORD:

GOWLING LAFLEUR HENDERSON LLP Barristers & Solicitors Toronto, Ontario	FOR THE APPLICANTS
HEENAN BLAIKIE LLP Barristers & Solicitors Toronto, Ontario	FOR THE RESPONDENT, NOVOPHARM LIMITED