[1] This is an appeal from a February 12, 2004, decision of Snider J. of the Federal Court made under the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133. By her decision, Snider J. prohibited the Minister of Health from issuing a Notice of Compliance to the appellant Genpharm Inc. ("Genpharm") for its product GEN-ETI-CAL CAREPAC until expiry of the respondents' ("P & G") Patent No. 1,338,376 ("the '376 Patent").

[2] Genpharm says the prohibition order should not have been made because the '376 Patent is invalid. Genpharm submits that Snider J. made three errors of law in concluding that Genpharm's allegation of non-infringement due to invalidity of the '376 Patent was not justified.

1. She wrongly assessed Genpharm's allegation of non-infringement on a balance of probabilities standard rather than a lower standard, reflected by the word "justified" in subsection 6(2) of the Regulations.

2. She wrongly construed the claims at issue as excluding, rather than potentially including, a bone activator. It is said that if the claims were properly interpreted to potentially include a bone activator, they would have been recognized in the prior art, thus rendering the '376 Patent invalid by reason of obviousness.

3. She relied on outdated jurisprudence in her determination of the obviousness test, rather than on the "new" test that equates obviousness with sound prediction.

FACTS

[3] Genpharm's Notice of Allegation that was the precursor to the litigation leading to this appeal was served on December 19, 2001. This litigation arises from P & G's prohibition application dated February 1, 2002.

[4] P & G's '376 Patent claims a new way of using an existing drug, polyphosphonates, specifically etidronate, to treat osteoporosis.

[5] According to the background of the invention in the patent, in a healthy adult bone is lost and replaced in such a manner that bone resorption and bone formation are in balance. In osteoporotics, bone is lost at a rate faster than it is replaced.

[6] The use of polyphosphonates to inhibit bone loss was well documented. However, its continuous use in a chronic condition such as osteoporosis was not found to be particularly useful. This is because, while its use tended to inhibit bone loss, it also inhibited bone formation. Further, long-term, chronic inhibition of bone loss and bone formation was thought to lead to the development of spontaneous bone fractures.

[7] As mentioned above, the invention of the '376 Patent is said to be a new way of using polyphosphonates in osteoporosis. The new way of using them is said to be in intermittent cycles of treatment. If certain polyphosphonates are given in a limited amount according to a specific regimen of intermittent rather than chronic dosing, bone loss can be inhibited and bone mass can be increased. The intermittent use of the polyphosphonate appears to uncouple bone loss and bone formation by selectively inhibiting the loss or resorption phase without adversely affecting the formation phase, thus producing a net increase in bone mass.

[8] This treatment of osteoporosis is described in Claims 17 to 37 of the patent. Claim 17, which is the most general use claim, provides:

17. Use of a bone resorption inhibiting polyphosphonate for the treatment or prevention of osteoporosis in humans or lower animals afflicted with or at risk to osteoporosis, wherein the polyphosphonate is used in two or more cycles including use for about 1 day to 90 days followed by a rest period from about 50 days to 120 days.

The only claims at issue in this appeal are Claims 25 to 30. Each of these claims varies the dosages and/or the cycles of treatment and rest. Claim 25 identifies etidronate as the polyphosphonate and covers a range of dosages:

25. The use according to Claim 17 wherein the bone resorption inhibiting polyphosphonate is EHDP-like [etidronate], and is used daily in an amount of from about 0.25 x LED [limited effective dose] to about 4 x LED.

[9] Claim 26 narrows the dosage to the range of about 0.25 x LED to about 2.5 x LED. Claim 27 reduces the treatment period to a period of about 30 days. Claim 28 is identical to Claim 27. Claim 29 defines a rest period of about 70 days to 100 days. Claim 30 reduces the treatment period to about 14 days with a rest period of about 70 to 100 days.

[10] Genpharm says that two pieces of prior art render Claims 25 to 30 obvious. The first is referred to as Chesnut. Genpharm says that the Chesnut publication, which preceded the priority date claimed in the '376 Patent, disclosed the use of a polyphosphonate, clodronate, in cycles and dosages covered by the '376 Patent. Genpharm says that the appropriate dosages of etidronate could be easily determined according to routine tests that are not experimental.

[11] The second piece of prior art is referred to as Anderson. Its publication also precedes the priority date of the '376 Patent. Genpharm says that the cycles and polyphosphonate etidronate referred to in Claims 25 to 30 are included in Anderson. Genpharm acknowledges that Anderson provides for the administration of a bone activating compound, which is not expressly referred to in Claims 25 to 30. However, Genpharm says that Anderson does not say that a bone activating agent is essential. Further, Genpharm says that Claims 25 to 30 must be read as including the possibility of the use of a bone activator. It is argued that because Claims 25 to 30 do not specifically exclude the use of a bone activator, they fall within the Anderson prior art and are therefore obvious.

STANDARD OF PROOF

Genpharm's Argument

[12] Genpharm relies on the word "justified" in subsection 6(2) of the Regulations. Subsection 6(2) provides:

6(2) The court shall make an [prohibition] order pursuant to subsection (1) in respect of a patent that is the subject of one or more allegations if it finds that none of those allegations is justified.

6(2) Le tribunal rend une ordonnance [de prohibition] en vertu du paragraphe (1) à l'égard du brevet visé par une ou plusieurs allégations si elle conclut qu'aucune des allégations n'est fondée.

[13] In oral argument, Genpharm submitted that because a patent infringement action remains available to a patentee if it fails to obtain a prohibition order under the Regulations, the standard of proof for the generic competitor is analogous to that on a motion for summary judgment. As long as the generic raises "a genuine issue for trial" as that term is understood in the Summary Judgment Rules (213-219), it has satisfied its burden and a prohibition order cannot issue. In its factum, Genpharm characterizes the standard in different words. It says that the relatively low standard of proof it has to meet is that it "has no basis for a reasonable belief that the patents are invalid, or not infringed, as the case may be." Genpharm says this is how the term "justified" is to be interpreted.

The Authorities

[14] Genpharm cites GlaxoSmithKline Inc. v. Canada (Minister of Health) (2003), 28 C.P.R. (4^th) 307 (F.C.T.D.) as authority for its lower standard of proof submission. I do not read Glaxo as supporting any other standard of proof than proof on a balance of probabilities.

[15] Noël J., in Glaxo, relied on this Court's decision in Bayer v. Canada (Minister of National Health and Welfare) (2000), 6 C.P.R. (4^th) 285 (F.C.A.) which, on this point, is the governing authority. In Bayer, Sharlow J.A. dealt with the burdens of proof on the patentee and the generic in proceedings under the Regulations. She explained that the patentee, being the applicant for the order of prohibition, bears the burden of establishing its entitlement to the order sought. Subsection 43(2) of the Patent Act, R.S., c. P-4, s. 1, as amended, provides that, "After the patent is issued, it shall, in the absence of any evidence to the contrary, be valid and avail the patentee..." Sharlow J.A. observed that because of that presumption of validity, the generic, as the party responding to the application for a prohibition order, has the burden of proof to displace the presumption.

[16] As to the standard of proof, at paragraph 9, she wrote:

The operation of the statutory presumption in the face of evidence of invalidity depends upon the strength of the evidence. If the evidence proves, on a balance of probabilities that the patent is invalid, the presumption is rebutted and is no longer relevant. [Emphasis added.]

Therefore, the standard of proof applicable to proving invalidity has been found to be proof on a balance of probabilities. The analysis and conclusion in Bayer disposes of Genpharm's standard of proof argument. However, because the standard of proof issue was not dealt with extensively in Bayer, for completeness, I will go on to consider Genpharm's other arguments.

Justified

[17] Contrary to Genpharm's submission, the term "justified" does not connote a lower standard of proof than proof on a balance of probabilities. In a civil case, the presumption is that, in the absence of anything to the contrary, the term "justified" connotes the ordinary civil standard of proof. Such a presumption might be rebutted if the context in which the term is used so indicates. However, there are no other words in the Regulations that Genpharm has pointed to that suggest the standard is anything other than the ordinary civil standard.

[18] Nonetheless, Genpharm says that an ordinary civil action for patent infringement is always available to a patentee; that proceedings under the Regulations are based on written and not oral evidence; that there is no opportunity to conduct discovery; and no opportunity to amend pleadings or evidence as the case is developed. Therefore, a lower standard of proof is implied.

[19] I agree with Genpharm as to its characterization of the nature of the proceedings under the Regulations and that a patent infringement action remains available to a patentee. But these are not reasons why the term "justified" should be interpreted as requiring the generic only to meet the "genuine issue for trial" standard applicable to summary judgment.

[20] Summary judgment is a potential step in an action. Where on a motion for summary judgment it is found that there is a genuine issue for trial, summary judgment will be denied and the matter will proceed to trial. However, the scheme of the Regulations does not connect a prohibition application with an action for patent infringement. Nor does it contemplate a proceeding by way of action. See Bayer v. The Minister of Health, (1994), 51 C.P.R. (3d) 329 at 337. The Regulations constitute a self-contained procedure. There is no indication in the Regulations that the burden of proof on a generic alleging patent invalidity in a prohibition application is reduced or is in any way affected by the availability of a patent infringement action to a patentee.

[21] The Governor in Council has determined that the decision under the Regulations is to be based on written and not oral evidence and without all the trappings of pretrial procedures that apply to actions leading to a trial. I agree with P & G that the Regulations are a result of policy considerations by the Governor in Council involving the balancing of the interests of patentees and generics. They provide benefits and obligations for both patentees and generics. It is not for the Court to change that balance by adopting a "genuine issue for trial" standard of proof that is not supported by anything in the words and context of the Regulations.

Purpose of the Regulations

[22] Genpharm argues that the purpose of the Regulations is not to prevent patent infringement. Rather, this should be left to a full-blown patent infringement action. This is another version of its lower standard of proof argument. Again, the weight of authority is against Genpharm.

[23] As far back as 1994, this Court observed that the "clear intention [of the Regulations] is to facilitate the protection of private commercial patent rights." See Merck Frosst Canada Inc. v. Canada (Minister of Health and Welfare) (1994), 55 C.P.R. (3d) 302 at 304 (F.C.A). In Merck Frosst Canada Inc. v. (Minister of Health and Welfare), [1998] 2 S.C.R. 193, Iacobucci J. stated at paragraph 30:

The purpose of the Regulations is simply to prevent patent infringement by delaying the issuance of NOCs until such time as their implementation would not result in such infringement.

In Parke-Davis Division, Warner Lambert Canada Inc. v. Canada (Minister of Health) (2003), 22 C.P.R. (4^th) 417, this Court, at paragraph 33, expressly followed Iacobucci J. in Merck Frosst.

[24] It is not necessary to go further. On this issue, Genpharm's submission is simply out of step with the weight of authority of the Supreme Court of Canada and this Court.

The Scope of Patent Infringement Protection under the Regulations

[25] Genpharm acknowledges that subsection 55.2(4) of the Patent Act authorizes the Governor in Council to make regulations "it considers necessary for preventing the infringement of a patent." However, it is said that this provision is not one of general application but is restricted because of the relationship between subsections 55.2(4) and 55.2(1).

[26] Subsection 55.2(1) and paragraphs 55.2(4)(a) and (e) provide:

55.2 (1) It is not an infringement of a patent for any person to make, construct, use or sell the patented invention solely for uses reasonably related to the development and submission of information required under any law of Canada, a province or a country other than Canada that regulates the manufacture, construction, use or sale of any product.

(4) The Governor in Council may make such regulations as the Governor in Council considers necessary for preventing the infringement of a patent by any person who makes, constructs, uses or sells a patented invention in accordance with subsection (1), including, without limiting the generality of the foregoing, regulations

(a) respecting the conditions that must be fulfilled before a notice, certificate, permit or other document concerning any product to which a patent may relate may be issued to a patentee or other person under any Act of Parliament that regulates the manufacture, construction, use or sale of that product, in addition to any conditions provided for by or under that Act;

[...]

(e) generally governing the issue of a notice, certificate, permit or other document referred to in paragraph (a) in circumstances where the issue of that notice, certificate, permit or other document might result directly or indirectly in the infringement of a patent.

55.2 (1) Il n'y a pas contrefaçon de brevet lorsque l'utilisation, la fabrication, la construction ou la vente d'une invention brevetée se justifie dans la seule mesure nécessaire à la préparation et à la production du dossier d'information qu'oblige à fournir une loi fédérale, provinciale ou étrangère réglementant la fabrication, la construction, l'utilisation ou la vente d'un produit.

(4) Afin d'empêcher la contrefaçon d'un brevet d'invention par l'utilisateur, le fabricant, le constructeur ou le vendeur d'une invention brevetée au sens du paragraphe (1), le gouverneur en conseil peut prendre des règlements, notamment_:

a) fixant des conditions complémentaires nécessaires à la délivrance, en vertu de lois fédérales régissant l'exploitation, la fabrication, la construction ou la vente de produits sur lesquels porte un brevet, d'avis, de certificats, de permis ou de tout autre titre à quiconque n'est pas le breveté;

[...]

e) sur toute autre mesure concernant la délivrance d'un titre visé à l'alinéa a) lorsque celle-ci peut avoir pour effet la contrefaçon de brevet.

[27] Paragraph (a) of subsection 55.2(4) authorizes the Governor in Council to regulate the issuance of a notice (i.e. Notice of Compliance under the Food and Drug Regulations, C.R.C. 1978 c. 870) to a generic in respect of a product to which a patent may relate. Paragraph (e) authorizes regulations governing the circumstances in which the issuance of such a notice might result, directly or indirectly, in the infringement of a patent.

[28] Subsection 55.2(1) states that it is not an infringement of a patent for a person to take steps for the development and submission of information required for a Notice of Compliance from the Minister of Health. If the generic restricts its activities to the development and submission of such information, it will not infringe a patent. However, paragraph 55.2(4)(e) authorizes regulations to prohibit infringement of the patent if the generic oversteps what it is authorized to do under subsection 55.2(1). Issuance of a Notice of Compliance that would allow a generic to make, construct, use, or sell a patented invention in competition with a patentee during the lifetime of a valid patent is precisely what the Regulations are designed to prevent.

Reasonable Belief

[29] In its factum, Genpharm submits that the test is whether the generic "has no basis for a reasonable belief that the patents are invalid." This is yet another version of its lower standard of proof argument. Subsection 6(2) of the Regulations requires the Court to decide if one or more of the generic's allegations of non-infringement are justified. The Court is to consider the allegations themselves, not what the reasonable belief of the generic might be. Genpharm's argument finds no support in the words of the Regulations.

Conclusion on Standard of Proof

[30] I conclude that the standard of proof under subsection 6(2) of the Regulations is proof on a balance of probabilities and that Snider J. did not err in assessing the evidence before her on that standard.

OBVIOUSNESS

Genpharm's Submission

[31] Genpharm says that Claims 25 to 30 of the '376 Patent are obvious. In oral argument, Genpharm relied on the use of the word "including" in Claim 17 of the '376 Patent. Use of that word, Genpharm says, means that the invention of the '376 Patent is covered by the prior art of Anderson and is therefore obvious. It is said that this is a matter of claim construction and therefore a question of law.

[32] Snider J. construed and summarized the relevant patent claims at paragraph 22 of her reasons:

1. In respect of the "use" claims:

a. Use of etidronate as a limited effective dose ("LED") to treat osteoporosis;

b. Intermittent administration in a regimen, which consists of two stages:

i) use of etidronate; and

ii) a rest period during which the patient takes a placebo or nutrient such as calcium.

c. Use on a cyclical basis.

[Emphasis added]

Genpharm says that Snider J. erred in using the term "consists of" in her construction of the patent claims and that she should have used the word "includes". Had she done so, she would have concluded that Claims 25 to 30 were broad enough to include a bone cell activator as in the Anderson prior art.

Analysis

[33] The Court is to give patent claims a purposive construction. In Whirlpool Corp. v. Camco Inc., [2000] 2 S.C.R. 1067, Binnie J. stated at paragraph 49:

A patent must therefore be given such interpretation according to s. 12 of the Interpretation Act "as best ensures the attainment of its objects". Intention is manifested in words, whose meaning should be respected, but words themselves occur in a context that generally provides clues to their interpretation and a safeguard against their misinterpretation.

...

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".

[34] There is nothing in the claims referring to a bone cell activator. The claims refer only to two steps, a treatment stage and a rest stage. The treatment stage refers only to the administration of etidronate.

[35] Reading the word "including" in Claim 17 in context leads to no other conclusion than that the word is used to refer to the inclusion of varying durations of treatment and rest respectively rather than envisaging the use of a bone activating compound as Genpharm submits.

[36] Snider J.'s interpretation of the claims is consistent with what is found in the patent disclosure. Consideration of the patent disclosure is appropriate to ascertain the nature of the invention and to assist in apprehending and construing the claim. In Whirlpool, at paragraph 52, Binnie J. stated:

...InConsolboard, supra, as mentioned, Dickson J. considered that the whole of the specification (including the disclosure and the claims) should be looked at "to ascertain the nature of the invention" (p. 520). To the same effect is the statement of Taschereau J. in Metalliflex Ltd. v. Rodi & Wienenberger Aktiengesellschaft, [1961] S.C.R. 117, at p. 122:

The claims, of course, must be construed with reference to the entire specifications, and the latter may therefore be considered in order to assist in apprehending and construing a claim, but the patentee may not be allowed to expand his monopoly specifically expressed in the claims "by borrowing this or that gloss from other parts of the specifications".

More recently, Hayhurst...cautioned that "[t]erms must be read in context, and it is therefore unsafe in many instances to conclude that a term is plain and unambiguous without a careful review of the specification". In my view, it was perfectly permissible for the trial judge to look at the rest of the specification, including the drawing, to understand what was meant by the word "vane" in the claims, but not to enlarge or contract the scope of the claim as written and thus understood.

[37] The disclosure expressly distinguishes the claimed invention from the regimens that required administration of a bone cell activator such as that disclosed in Anderson. At page 13 of the '376 Patent, it is stated:

By "rest period" as used herein is meant a period of time during which the patient is not given a bone resorption inhibiting polyphosphonate, nor is the patient subjected to a bone cell activating amount of a bone cell activating compound or other conditions which would result in significant activation or inhibition of new bone remodeling units... It is this fact which further distinguishes the present invention from other regimens of the art (see, e.g....and Anderson et al., Calcified Tissue International, 36, 341-343 (1983)... [Emphasis added.]

[38] Genpharm submits that Anderson's protocol, like the '376 Patent, does not require the use of a bone activating compound. A close reading of Anderson indicates that this is not the case. Anderson's protocol was known as the "Coherence Theory" and involved the administration of multiple substances, specifically, phosphate sandoz (a bone activating compound), Didronal (etidronate) and dietary calcium.

[39] Snider J. found that, in the mid-1980s when Anderson was published, the above substances were, according to the Coherence Theory, only considered as working together. She further found that the substances had never been examined separately to assess their efficacy in treating osteoporosis individually.

[40] Because the Coherence Theory tested all three elements together, it is apparent that the bone activating compound was an integral component of the theory. Without it, Anderson's protocol simply does not exist as published. Therefore, I cannot accept that a bone activating compound is not an essential or key element in Anderson.

[41] Snider J. did not err in interpreting the relevant claims as consisting of only two stages and excluding a bone cell activator, as described in Anderson. Anderson does not render the '376 Patent obvious.

Chesnut

[42] Genpharm submits that the Chesnut prior art would have made the claimed invention obvious. Snider J. dealt with evidence relating to Chesnut in detail. She found that Chesnut's regimen did not utilize etidronate but rather clodronate. She concluded that dosages of etidronate could not be extrapolated from dosages of clodronate and therefore Chesnut's prior art would not have made the claimed invention obvious. There is no indication here of any palpable or overriding error in Snider J.'s assessment of the evidence and her conclusion based on it.

ARE OBVIOUSNESS AND SOUND PREDICTION THE SAME?

[43] Genpharm's argument is that, as a result of the decisions of the Supreme Court in Whirlpool and Apotex Inc. v. Wellcome Foundation Ltd., [2002] 4 S.C.R. 153, the Supreme Court altered the traditional test for obviousness such that it is no longer as difficult to meet as had traditionally been thought. In oral argument it was submitted that obviousness and sound prediction are one and the same.

[44] Genpharm's submissions are again unsupported by any authority. The long-standing "difficult test to satisfy" for obviousness is that expressed by Hugessen J.A. (as he then was) in Beloit Canada Ltd. v. Valmet OY (1986), 8 C.P.R. (3d) 289 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.

[45] Genpharm says Whirlpool changed the Beloit test. I do not agree. Whirlpool only reiterated what was already stated in Beloit. In Whirlpool, Binnie J. stated at paragraph 74:

While the hypothetical "ordinary worker" is deemed to be uninventive as part of his fictional personality, he or she is thought to be reasonably diligent in keeping up with advances in the field to which the patent relates. The "common knowledge" of skilled workers undergoes continuous evolution and growth.

The definition of obviousness in Beloit contains the same assumption as in Whirlpool, that the ordinary worker will keep up with advances in the field; "... the technician ... would, in the light of the state of the art and of common general knowledge as at the claimed date ...". I see nothing in Whirlpool that would make the test for obviousness less difficult to satisfy than that expressed in Beloit.

[46] In Apotex v. Wellcome, the doctrine of sound prediction was extensively reviewed by Binnie J. At paragraph 56, he explains that where the invention is a new use for an old product, the utility required for patentability must, as of the priority date, either be demonstrated or be a sound prediction based on the information and expertise then available. At paragraph 61, Binnie J. refers to Monsanto Co. v. Commissioner of Patents, [1979] 2 S.C.R. 1108, in which the Supreme Court dealt with a patent that included claims to numerous chemical compounds to inhibit premature vulcanization of rubber, but only three of which had actually been prepared and tested before the date the application was filed. The Supreme Court applied the doctrine of sound prediction on the basis that the "architecture of chemical compounds" was no longer a mystery but was, within limits, soundly predictable.

[47] As counsel for P & G has pointed out, sound prediction and obviousness are considerations with different perspectives. Sound prediction is relied upon by an inventor to justify patent claims whose utility is not actually demonstrated but can be soundly predicted from information and expertise that is available. Obviousness is relied upon by a potential competitor of the patentee, who argues that what is claimed in a patent is something that a skilled technician keeping up with the state of the art and common general knowledge would be able to come to directly and without difficulty in the absence of the solution taught by the patent. These are different concepts and they are not to be conflated. The doctrine of sound prediction has no application to the doctrine of obviousness.

CONCLUSION

[48] Snider J. was correct in her construction of the relevant patent claims and in her analysis of the obviousness test. She made no palpable or overriding error in finding that the claims in question were not obvious.

[49] The appeal should be dismissed with costs.

"Marshall Rothstein"

J.A.

"I agree

Marc Noël J.A."

"I agree

K. Sharlow J.A."

FEDERAL COURT OF APPEAL

NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET: A-135-04

APPEAL FROM THE ORDER OF THE FEDERAL COURT DATED FEBRUARY 12, 2004, IN DOCKET NO. T-155-02

STYLE OF CAUSE: Genpharm Inc. v. Procter & Gamble Pharmaceuticals Canada, Inc.; The Procter & Gamble Company and the Minister of Health

PLACE OF HEARING: Ottawa, Ontario

DATE OF HEARING: October 26, 2004

REASONS FOR JUDGMENT: Rothstein J.A.

CONCURRED IN BY: Noël J.A.

Sharlow J.A.

DATED: November 22, 2004

APPEARANCES:

Roger T. Hughes, Q.C.

Ms. Barbara Murchi FOR THE APPELLANT

Ms. Sheila Block

Mr. Ronald E. Dimock FOR THE RESPONDENTS P & G

SOLICITORS OF RECORD:

Sim, Hughes, Ashton & McKay LLP

Toronto, Ontario FOR THE APPELLANT

Torys LLP

Toronto, Ontario

Dimock Stratton LLP

Toronto, Ontario FOR THE RESPONDENTS P & G

You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.

Do not display this message anymore