2013 FCA 186, 2013 FCA 186

A-7-12 2013 FCA 186 Sanofi-Aventis ( Appellant ) v. Apotex Inc. ( Respondent ) and Sanofi-Aventis and Bristol-Myers Squibb Sanofi Pharmaceuticals Holding Partnership ( Appellants ) v . Apotex Inc., Apotex Pharmachem Inc. and Signa SA de CV ( Respondents ) Indexed as: Apotex Inc. v. Sanofi-Aventis Federal Court of Appeal, Noël, Pelletier and Gauthier JJ.A.—Toronto, January 28 and 29; Ottawa, July 24, 2013.

Patents –– Infringement –– Appeal from Federal Court decision finding that Sanofi-Aventis’ (appellant) Canadian Patent No. 1336777 ('777 patent) invalid for lack of utility on basis that promise of patent not demonstrated nor soundly predicted –– Also finding that invention described in patent obvious –– While Federal Court finding that Apotex Inc. (respondent) infringing appellant’s '777 patent, finding overtaken by conclusion that patent invalid –– Appellant developing, patenting, marketing Plavix, anti-coagulant drug –– Active ingredient in Plavix clopidogrel bisulfate (clopidogrel) –– Respondent applying for notice of compliance for own version of clopidogrel –– Appellant successfully applying to Federal Court for order prohibiting issuance of notice of compliance to respondent – Respondent commencing action in Federal Court to invalidate appellant’s '777 patent –– Federal Court justifying conclusion concerning utility on basis that since appellant’s genus patent (Canadian Patent No. 1194875 or '875 patent) containing reference to use in humans, '777 patent would fail as selection patent unless explicit promise for use in humans also read thereinto –– Finding that '777 selection patent could not promise less than appellant’s '875 genus patent –– Whether Federal Court erring in reading into '777 patent explicit promise that invention could be used in humans; whether erring in holding that invention obvious; whether any restrictions existing on appellant’s right to seek damages for infringement in this case –– Per Pelletier J.A. (Noël J.A. concurring): Federal Court erring in law when concluding that words of '777 patent containing explicit promise for use in humans –– Properly construed, '777 patent making no such promise –– Court’s reasoning problematic –– Allegation patent invalid for lack of utility should have been dismissed –– As to obviousness, Federal Court concluding that resolution of PRC 4099, compound coming within terms of '875 patent, “obvious to try” but properties of enantiomers of PCR 4099 not known –– Failing to recognize that unknown nature of properties of enantiomers of PCR 4099 or of any other compounds of '875 patent fatal to “obvious to try” analysis –– Respondent submitting that appellant limited in right of recovery for infringement –– Federal Court correct in failing to give respondent benefit of experimental, regulatory use exemption found in Patent Act , s. 55.2(1) –– With respect to limitation period, Federal Court finding Federal Courts Act , s. 39(2) applying –– However, erring to extent basing conclusions on place where cause of action arising or where damages occurring –– In present case, infringing acts of importing, exporting clopidogrel taking place other than in province –– Therefore, none of appellant’s claim statute barred –– Court reaching correct conclusion concerning effect of U.S. settlement reached by parties –– Appeal allowed — Per Gauthier J.A. (concurring): As to utility, statement at issue in '777 patent could not be construed as promise of specific result even assuming Federal Court correctly construing statement as referring to human use –– Regarding obviousness, Federal Court’s analysis incomplete because only focussing on resolution of PCR 4099 –– Not really weighing extent, nature, amount of efforts required to arrive at decision to actually develop PCR 4099 –– Thus, conclusion regarding obviousness could not stand.

This was an appeal from a Federal Court decision finding that Sanofi-Aventis’ (appellant) Canadian Patent No. 1336777 ('777 patent) was invalid for lack of utility on the basis that the promise of the patent had neither been demonstrated nor soundly predicted. The Federal Court also found that the invention described in the patent was obvious. While the Federal Court found that Apotex Inc. (respondent) had infringed the appellant’s '777 patent, that finding was overtaken by its conclusion that the patent was invalid.

Plavix is a successful anti-coagulant drug which was developed, patented and marketed by the appellant. The respondent, a well-known manufacturer and distributor of generic drugs, attempted to create and market its own version of the active ingredient in Plavix, clopidogrel bisulfate (clopidogrel). It applied for a notice of compliance from the Minister of Health alleging that its version of clopidogrel did not infringe the appellant’s patent which, it alleged, was invalid for a number of reasons, including obviousness.

The appellant responded by applying to the Federal Court for an order prohibiting the Minister from issuing the notice of compliance to the respondent. The application was successful so that the appellant continued to enjoy a monopoly with respect to the manufacture and sale of Plavix. The respondent then commenced an action in the Federal Court seeking a declaration that the appellant’s patent was invalid.

The appellant replied by commencing its own action, alleging that the respondent had infringed its patent by importing clopidogrel into Canada from Mexico and then exporting it from Canada for sale in other countries, including the U.S. The two actions were consolidated. The '777 patent is a selection patent, claiming a subset of compounds already within the scope of another patent, Canadian Patent No. 1194875 ('875 patent). The '875 patent discloses a class of compounds useful in inhibiting platelet aggregation activity in the blood.

The '777 patent discloses and claims clopidogrel bisulfate (Plavix) as an anti-coagulant that inhibits platelet aggregation activity in the blood. The Federal Court found that the person of ordinary skill in the art (POSITA) would find the promise respecting the use of the invention of the “777 Patent” to be a use in humans. It went on to find that the '777 patent was invalid because the utility of the invention had neither been demonstrated nor soundly predicted as of the date of the filing of the patent application. The Federal Court focussed on the

racemic mixture identified in the appellant’s laboratory documents, a compound (PCR 4099) among thousands which come within the terms of the '875 patent. It found that, at the relevant time, the compound at issue, though not its properties, was part of the common general knowledge and was featured in the '875 patent; that the POSITA would have known of the method available to resolve the compound at issue into its constituent enantiomers; that the methodology for salt selection was well-known at that time; and that there was motivation to separate PCR 4099 into its enantiomers.

Thus, on a balance of probabilities, it found that the invention of the '777 patent was obvious to try so that the patent was invalid for obviousness. The main issues were whether the Federal Court erred in reading into the '777 patent an explicit promise that the invention could be used in humans; whether it erred in holding that the invention was obvious based on the fact that the resolution of the racemate PCR 4099 was “obvious to try”; and whether there were any restrictions on the appellant’s right to seek damages for the infringement in this case. Held , the appeal should be allowed.

Per Pelletier J.A. (Noël J.A. concurring): Regarding the utility and the promise of the patent, the Federal Court concluded that the words of the '777 patent contained an explicit promise for use in humans. It erred in law in reading into the '777 patent a promise for use in humans on the basis of inferences, in the absence of language at least as clear and unambiguous as that used to establish the advantages of the selection over the compounds of the genus patent ('875 patent).

The Federal Court justified its conclusion on that ground, reasoning that since the '875 genus patent contained a reference to use in humans, the '777 patent would fail as a selection patent unless an explicit promise for use in humans was also read into it. It found that the '777 selection patent could not promise less than the '875 genus patent. This reasoning was problematic for two reasons. First and foremost, it is improper to construe a patent with an eye to its validity.

The Federal Court erred when it read into the '777 patent a promise of use in humans in order to validate the patent as a selection patent, then used this promise in order to invalidate it for lack of utility. Properly construed, the '777 patent made no such promise. Second, it found that the '777 patent described the advantages of the compound of the '777 patent over the compounds of the '875 patent and that the inventor was able to demonstrate the existence of those advantages as of the date of the filing of the patent application.

On that basis, it found that the '777 patent is a valid selection patent when measured against the '875 patent genus patent, regardless of the fact that it makes no promise for use in humans. A selection patent describes a compound which has an unexpected advantage over the compounds of the genus patent. That unexpected advantage need not be an improvement on every aspect of the invention described in the genus patent, though it may be. It is sufficient that it is a new and useful improvement on some aspect of that invention.

The '777 patent described a compound having advantages (including the absence of disadvantages) over the compounds of the '875 patent and those advantages were clearly disclosed in the patent specification. Thus, the allegation that the patent was invalid for lack of utility should have been dismissed. As to obviousness, the Federal Court concluded that the resolution of PRC 4099 was obvious to try. However, the properties of the enantiomers of PCR 4099 were not known.

The Federal Court failed to recognize that the unknown nature of the properties of the enantiomers of PCR 4099 or of any of the other compounds of the '875 patent was fatal to the “obvious to try” analysis. The distance between the common general knowledge and the inventive concept of the '777 patent could not be bridged by routine experimentation since the results to be obtained were unknown. Therefore, the Federal Court erred in finding that the invention of the '777 patent was obvious.

With respect to infringement, while the respondent did not challenge the Federal Court’s finding that it had infringed the '777 patent, it submitted that the appellant was limited in its right of recovery for reasons of limitation period, the possession of clopidogrel for experimental and regulatory use and settlement and estoppel based on agreements settling litigation between the parties in the U.S. The Federal Court came to the correct conclusion, although in the case of the limitation defence, maybe for the wrong reasons.

The respondent claimed that the Federal Court failed to give it the benefit of the experimental and regulatory use exemption found at subsection 55.2(1) of the Patent Act . The respondent was entitled to that benefit for clopidogrel so long as it was used for the purposes permitted by that provision. To the extent that the respondent was unable to account for the clopidogrel used for regulatory purposes after it was no longer required for those purposes, it was reasonably inferred that the product had been sold, a use which fell outside the protection of subsection 55.2(1).

As for the limitation period, the Federal Court found that subsection 39(2) of the Federal Courts Act applied so that the applicable limitation period was six years. Thus, no part of the appellant’s claim was statute barred. In order for subsection 39(1) of the Federal Courts Act to apply, all the elements of the cause of action must have occurred in the same province. To the extent that the Federal Court based its conclusion on the place where the cause of action arose or the place where damages occurred, it erred.

It found that the acts of infringement consisted of the importation and exportation of clopidogrel from Mexico into Canada and then to the United States. The respondent argued that since the ports of entry and departure were located in Ontario, the cause of action arose in Ontario. For the purposes of importation and exportation of infringing goods, Canada is indivisible. Goods are imported or exported when they enter or leave Canada regardless of the port of entry or departure.

To that extent, the infringing acts of importing and exporting clopidogrel took place other than in a province so that subsection 39(2) of the Federal Courts Act applied. Therefore, none of the appellant’s claim was statute barred. Finally, regarding the effect of the settlement reached in the U.S. between the parties in a U.S. patent infringement action, the Federal Court rejected the respondent’s argument that the agreement was intended to settle all claims which the parties had or could have against each other in relation to clopidogrel.

It found that, had it been intended to settle all possible claims involving clopidogrel, the agreement would have indicated so. The Federal Court arrived at the correct conclusion. Per Gauthier J.A. (concurring): With respect to utility, even assuming that the Federal Court correctly construed the sentence at issue in the '777 patent as referring to human use, that statement could not be construed as a promise of a specific result. In this case, the public received all the information necessary to make and use clopidogrel, the invention claimed in the '777 patent.

The Federal Court found that the advantages necessary to make the selection inventive and thus justify the grant of a monopoly on clopidogrel were fully and properly described and demonstrated in the patent. In such a case, the level of disclosure required by law should be lower.

Assuming that the Federal Court’s construction was correct, the clear indication in the statement at issue in the '777 patent that use in humans was predicted as opposed to demonstrated should be sufficient at law to meet the test for sound prediction, which would be enough to enable the public to know that such practical application was not demonstrated at the time the patent application was filed.

As to obviousness, the Federal Court’s analysis was incomplete because it only focussed on the resolution of PCR 4099. The FederalCourt did not really weigh the extent, nature and amount of efforts required to arrive at a decision to actually develop PCR 4099 asopposed to any other racemic compound covered by the '875 patent to the point that separation will become relevant. It held that the '875patent did not point either directly or indirectly to PCR 4099 even if PCR 4099 itself was known as one of the 21 compounds used in theexamples of the '875 patent.

The Federal Court did not find that the person skilled in the art would obviously start a development projectbased on the '875 patent compound with PCR 4099 as opposed to any other compound, including the 21 compounds expressly used inthe examples. Thus, the conclusion in respect of obviousness could not stand. STATUTES AND REGULATIONS CITED Federal Courts Act, R.S.C., 1985, c. F-7, s. 39. Intellectual Property Law Improvement Act, S.C. 1993, c. 15, s. 31. Patent Act, R.S.C. 1985, c. P-4, ss. 2 “invention”, 34, 42, 55.1, 55.2(1). CASES CITED applied: Apotex Inc. v.

Wellcome Foundation Ltd., 2002 SCC 77, [2002] 4 S.C.R. 153; Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235;Whirlpool Corp. v. Camco Inc., 2000 SCC 67, [2000] 2 S.C.R. 1067; Consolboard Inc. v. MacMillan Bloedel (Sask.) Ltd., (SCC), [1981] 1 S.C.R. 504, (1981), 122 D.L.R. (3d) 203. considered: Sanofi-Synthelabo Canada Inc. v. Apotex Inc., 2005 FC 390, 39 C.P.R. (4th) 202, affd 2006 FCA 421, 282 D.L.R. (4th) 179, affd 2008SCC 61, [2008] 3 S.C.R. 265; In re I.G. Farbenindustrie A.G.’s Patents (1930), 47 R.P.C. 289 (Ch.D.); Re E.I. du Pont de Nemours &Co. (Witsiepe’

s) Application, [1982] F.S.R. 303 (H.L.); Eli Lilly Canada Inc. v. Novopharm Limited, 2010 FCA 197, [2012] 1 F.C.R.349; AstraZeneca Canada Inc. v. Mylan Pharmaceuticals ULC, 2011 FC 1023, 96 C.P.R. (4th) 159; Apotex Inc. v. Pfizer Canada Inc.,2004 FC 190, 31 C.P.R. (4th) 143; Metalsmiths Inc. v. Cercast Inc., et al., [1967] 1 Ex. C.R. 214; Markevich v. Canada, 2003 SCC 9,[2003] 1 S.C.R. 94. referred to: Commissioner of Patents v. Fabwerke Hoechst Aktiengesellschaft Vormals Meister Lucius & Bruning, (SCC), [1964]S.C.R. 49, (1963), 41 C.P.R. 9; Monsanto Canada Inc. v.

Schmeiser, 2004 SCC 34, [2004] 1 S.C.R. 902; Pioneer Hi-Bred Ltd. v. Canada(Commissioner of Patents), (SCC), [1989] 1 S.C.R. 1623, (1989), 60 D.L.R. (4th) 223; Teva Canada Ltd. v. PfizerCanada Inc., 2012 SCC 60, [2012] 3 S.C.R. 625; Free World Trust v. Électro Santé Inc., 2000 SCC 66, [2000] 2 S.C.R. 1024; MylanPharmaceuticals ULC v. Pfizer Canada Inc., 2012 FCA 103, 100 C.P.R. (4th) 203; Mylan Pharmaceuticals ULC v. AstraZeneca, 2012FCA 109, 101 C.P.R. (4th) 275; Dableh v. Ontario Hydro, (FCA), [1996] 3 F.C. 751, (1996), 68 C.P.R. (3d) 129(C.A.); Apotex Inc. v.

Allergan Inc., 2012 FCA 308, 105 C.P.R. (4th) 371; American Cyanamid Co. v. Berk Pharmaceuticals Ltd., [1976]R.P.C. 231 (Ch.D.); Xerox of Canada Ltd. et al. v. IBM Canada Ltd. (1977), 33 C.P.R. (2d) 24 (F.C.T.D.); Canada v. Maritime Group(Canada) Inc., (FCA), [1995] 3 F.C. 124, (1995), 185 N.R. 104 (C.A.); Kirkbi AG v. Ritvik Holdings Inc., 2002 FCT585, 20 C.P.R. (4th) 224; Beloit Canada Ltd. v. Valmet-Dominion Inc., (FCA), [1997] 3 F.C. 497, (1997), 73 C.P.R.(3d) 321 (C.A.); Re Alsop's Patent (1907), 24 R.P.C. 733. AUTHORS CITED Canadian Oxford Dictionary, 2nd ed. Toronto: Oxford University Press, 2004, “can”.

Siebrasse, N. “Must the Factual Basis for Sound Prediction Be Disclosed in the Patent?” (2012), 28 C.I.P.R. 39. APPEAL from a Federal Court decision (2011 FC 1486, 101 C.P.R. (4th) 1) finding in particular that Sanofi-Aventis’ patent was invalidfor lack of utility, that the invention described in the patent was obvious and that Apotex had infringed the patent. Appeal allowed. APPEARANCES Anthony G. Creber, Cristin A. Wagner and Marc Richard for appellants. Harry Radomski, Benjamin Hackett, Richard Naiberg and Sandon Shogilev for respondents.

SOLICITORS OF RECORD Gowling Lafleur Henderson LLP, Ottawa, for appellants. Goodmans LLP, Toronto, for respondents. The following are the reasons for judgment rendered in English by Pelletier J.A.: INTRODUCTION [1] Plavix is a very successful anti-coagulant drug which was developed, patented, and marketed by the appellant, Sanofi-Aventis

(Sanofi). Apotex Inc. (Apotex), a well-known manufacturer and distributor of generic drugs, attempted to create and market its own version of the active ingredient in Plavix, clopidogrel bisulfate (clopidogrel). It applied for a notice of compliance from the Minister of Health, alleging that its version of clopidogrel did not infringe Sanofi’s patent which, it alleged, was invalid in any event for a number of reasons, including obviousness. Sanofi responded by applying to the Federal Court for an order prohibiting the Minister from issuing the notice of compliance to Apotex.

That application was successful so that Sanofi continued to enjoy a monopoly with respect to the manufacture and sale of Plavix: Sanofi-Synthelabo Canada Inc. v. Apotex Inc ., 2005 FC 390 , 39 C.P.R. (4th) 202. Appeals to the Federal Court of Appeal, Sanofi-Synthelabo Canada Inc. v. Apotex Inc. , 2006 FCA 421 , 282 D.L.R. (4th) 179, and to the Supreme Court of Canada, Apotex Inc. v.

Sanofi-Synthelabo Canada Inc. , 2008 SCC 61 , [2008] 3 S.C.R. 265 ( Plavix ), were unsuccessful. [ 2 ] Apotex then commenced an action in the Federal Court seeking a declaration that Sanofi’s patent, Canadian Patent No. 1336777 (the '777 patent) was invalid. Sanofi replied by commencing its own action, alleging that Apotex had infringed its patent by importing clopidogrel into Canada from Mexico and then exporting it from Canada for sale in other countries including the United States. The two actions were consolidated and were heard by Boivin J. (the Trial Judge or simply, the Judge).

Following a 26-day trial, the latter found that the '777 patent was invalid for lack of utility on the basis that the promise of the patent had neither been demonstrated nor soundly predicted. In addition, the Trial Judge found that the invention described in the patent was obvious. Though the Trial Judge also found that Apotex had infringed the '777 patent, that finding was overtaken by his conclusion that the patent was invalid. The Trial Judge’s decision is reported as Apotex Inc. v. Sanofi-Aventis , 2011 FC 1486 , 101 C.P.R. (4th) 1 (reasons). [ 3 ] This is an appeal of that decision.

It raises a variety of issues including the promise of the patent, obviousness, and the limitation period applicable to certain acts of patent infringement. BACKGROUND [ 4 ] The following factual background will provide context for the analysis which will follow. [ 5 ] The '777 patent is a selection patent which means that it claims a subset of compounds which are already within the scope of another patent, Canadian Patent No. 1194875 ('875 patent).

I can do no better, in terms of describing the relationship of the patents and compounds in issue, than to quote paragraphs 3 to 6 of the Supreme Court’s decision in Plavix : The parties have accepted that the Sanofi respondents (“Sanofi”) are the relevant holders of patent 1,194,875 ('875 patent). This patent disclosed a genus or class of compounds useful in inhibiting platelet aggregation activity in the blood which is important in treating coronary artery, peripheral vascular and cerebral vascular diseases. This genus patent discloses over 250,000 possible different compounds useful for this purpose.

One of the compounds is a racemate described as methyl alpha-5 (4,5,6,7-tetrahydro (3, 2-c)-thieno pyridyl) (2-chlorophenyl)-acetate (the “racemate”). A racemate is a substance containing equal amounts of two structurally different compounds, called enantiomers or optical isomers. The two isomers, the dextro-rotatory isomer and the levo-rotatory isomer, are mirror images of each other and rotate plane-polarized light in opposite directions. The parties have accepted that Sanofi is also the relevant holder of subsequent Canadian patent 1,336,777 ('777 patent), the patent in suit.

It discloses and claims clopidogrel bisulfate, which is marketed by Sanofi under the trade name of Plavix as an anti-coagulant that inhibits platelet aggregation activity in the blood. Clopidogrel bisulfate is encompassed within the scope of the claims in the '875 patent. Clopidogrel is the dextro-rotatory isomer of the racemate, having beneficial properties over both the racemate and the levo-rotatory isomer. The dextro-rotatory isomer exhibits a platelet aggregation inhibiting activity and is less toxic and better tolerated than the levo-rotatory isomer and racemate.

The salts of the dextro-rotatory isomer, such as clopidogrel bisulfate, have a better therapeutic index than the salts of the racemic mixture and in fact, the levo-rotatory isomer exhibits almost no platelet aggregation inhibiting activity, and its toxicity is markedly higher than that of the dextro- rotatory isomer. [ 6 ] While there are differences in the evidence which was before the Supreme Court in the notice of compliance proceedings (which gave rise to the Plavix decision) and the evidence in this action, none of those differences affect the accuracy of the Supreme Court’s description of the relationship of the compounds in issue and their structure.

The '777 patent [ 7 ] The issues raised by this appeal require an understanding of the '777 patent. [ 8 ] The patent begins with a description of its subject matter: The present invention relates to the dextro-rotatory enantiomer of methyl alpha-5 (4,5,6,7-tetrahydro (3,2-

c) thieno pridyl) (2- chorophenyl)-acetate, a process for its preparation and pharmaceutical compositions containing it. [ 9 ] Following a description of the formula of the invention, the patent describes its advantages: In an unexpected manner only the dextro-rotatory enantiomer Id exhibits a platelet aggregation inhibiting activity, the levo-rotatory enantiomer Il being inactive. However, the inactive levo-rotatory enantiomer Il is the less well tolerated of the two enantiomers.

The invention also relates to the addition salts of the compounds of formula (Id) with pharmaceutically acceptable mineral or organic acids. [ 10 ] The patent then describes the processes by which the invention can be made, setting out detailed instructions by which the enantiomer can be separated from its racemate and a suitable salt obtained.

[ 11 ] The next

section of the patent is entitled “Pharmacological Activity”. In it, one finds a comparison between the compound of the '777 patent and the racemic mixture from which it was derived with respect to platelet inhibiting activity and toxicity. Platelet aggregation studies in rats showed that the levo-rotatory isomer is inactive and that the dextro-rotatory isomer is at least as active as the racemate. A test of anti-thrombotic activity showed that the levo-rotatory isomer showed no anti-thrombotic activity whereas the racemate and the dextro-rotatory isomer did.

Toxicity studies in rats showed that the toxicity of the racemic mixture was similar to that of the levo-rotatory isomer while the dextro-rotatory isomer is markedly less toxic. [ 12 ] This

section concludes as follows: The pharmacological study just presented has demonstrated the interesting inhibitory properties towards platelet aggregation of the compound Id and the absence of any activity of its isomer Il. The medicine of the invention can be made available for oral administration in form of tablets, sugar-coated tablets, capsules, drops, granules, or a syrup.

It can also be made available for rectal administration in the form of suppositories or for parenteral administration in the form of an injectable solution. … On account of its interesting inhibitory properties towards platelet aggregation and its interference in the mechanism of formation of arterial and venous thromboses, the medicine of the invention can be usefully administered in the treatment and prevention of platelet disorders due to extracorporeal blood circuits or the consequence of complications in artheroma. [ 13 ] The patent concludes with 11 claims which can be summarized as follows: - Claim 1 claims the dextro-rotatory isomer of methyl alpha-5 (4,5,6,7-tetrahydro (3,2-

c) thieno pridyl) (2-chorophenyl)-acetate, - Claims 2 to 5 claim salts of the compound in claim 1, - Claims 6 to 9 claim processes for preparation of the compound described in claim 1, -Claim 10 claims a pharmaceutical composition comprising an effective amount of the compound in claim 1 in admixture with a pharmaceutically acceptable carrier, and -Claim 11 claims a composition according to claim 10 within a given dosage range. THE DECISION UNDER APPEAL [ 14 ] After disposing of a number of preliminary questions which are not in issue in this appeal, the Trial Judge addressed the construction of the patent.

He first described the “inventive concept” of the patent, quoting the Supreme Court’s statement in Plavix (at paragraph 78): In the present case, it is apparent that the inventive concept of the claims in the '777 patent is a compound useful in inhibiting platelet aggregation which has greater therapeutic effect and less toxicity than the other compounds of the '875 patent and the methods for obtaining that compound. [ 15 ] The Trial Judge then inquired into the relationship between the inventive concept and the invention itself.

After a brief analysis relating to selection patents, the Trial Judge described the invention of the '777 patent as follows (reasons, at paragraph 140): … a compound which is useful in inhibiting platelet aggregation, has greater therapeutic effect and less toxicity than the other compounds of the '875 Patent, has the advantages of the salts (crystallize easily, not hygroscopic, and sufficiently water-soluble) and the methods for obtaining that compound. [ 16 ] This led to the analysis of the promise of the patent.

The Trial Judge identified the relationship between utility and the promise of the patent (reasons, at paragraph 143): It is also worth recalling the role of the promise of the patent with respect to utility. On behalf of the Federal Court of Appeal, Justice Laydon-Stevenson in Ely Lilly Canada Inc. , above, (FCA Olanzapine ), at para 76, stated the following: [76] Where the specification does not promise a specific result, no particular level of utility is required; a “mere scintilla” of utility will suffice.

However, where the specification sets out an explicit “promise”, utility will be measured against that promise : Consolboard ; Pfizer Canada Inc. v. Canada (Minister of Health) , [2009] 1 F.C.R. 253, 2008 FCA 108 ( Ranbaxy ) . The question is whether the invention does what the patent promises it will do. [Emphasis added by Trial Judge.] [ 17 ] After having reviewed the expert evidence, the Trial Judge framed the issue as whether the '777 patent promises use in humans or merely potential use in humans.

The Judge then considered the wording of the '777 patent, including the references to “the medicine of the invention” and “pharmaceutical compositions”, as well as its relationship to the '875 patent which explicitly referred to use in human and veterinary therapeutic applications. On the basis of this analysis, the Trial Judge concluded that (reasons, at paragraph 174): In

summary, the Court concludes that the POSITA [Person of Ordinary Skill in the Art] would find the promise respecting the use of the invention of the '777 Patent to be a use in humans. [ 18 ] Having come to this conclusion, the Judge examined whether the utility of the invention had been demonstrated. His analysis of this question was based on a clopidogrel human study described as P-1062, a randomized double blind study comparing clopidogrel to a placebo in 10 healthy humans. This study is not referred to in the patent.

The Judge found that the study was inconclusive as to the effectiveness of clopidogrel in humans. The Judge then considered whether one of the inventors of clopidogrel, Dr. Daniel Fréhel, was

aware of the activity of clopidogrel in humans prior the filing date. This issue turned on whether Dr. Fréhel was present at a meeting on January 28, 1988, at which time the therapeutic effect of clopidogrel in humans was discussed. The Trial Judge found the evidence on this point was also inconclusive. As a result, the Trial Judge found that the utility of clopidogrel in humans had not been demonstrated at the time of the patent application. [ 19 ] The Judge then turned to the question of whether the inventors, as of the filing date, could soundly predict that the invention would be useful in humans.

The Judge referred to the Supreme Court of Canada’s decision Apotex Inc. v. Wellcome Foundation Ltd. , 2002 SCC 77 , [2002] 4 S.C.R. 153 ( AZT ), at paragraph 70 , where the elements necessary to support a finding of sound prediction are set out: (

i) a factual basis, (ii) a sound line of reasoning, and (iii) disclosure of the first two elements. [ 20 ] After a thorough review of the history leading to the filing of the application, including prior work on the '875 patent, work on other compounds which had been abandoned, work on the racemate, (described as PCR 4099), as well as the circumstances leading to the decision to attempt to separate the enantiomers of the racemate, the Trial Judge found that there was both a factual basis for the sound prediction (paragraphs 404–488 of the reasons) and an articulable line of reasoning leading to the sound prediction (paragraphs 489–583 of the reasons). [ 21 ] The Trial Judge then asked if these two elements were sufficiently disclosed in the patent specification.

He concluded that they were not as “the '777 Patent, it does not instruct the POSITA [Person of Ordinary Skill in the Art] that there was a factual basis and a line of reasoning for the prediction that the animal studies conducted on rat models could be extrapolated to the prediction that the compound — clopidogrel — had a use in humans” [emphasis in original]: see reasons, at paragraph 570.

In particular, the Judge found that the inventors’ “track record” in the development of clopidogrel was crucial to enable the POSITA “to make the leap to predict use of the compound in humans” and that it had not been disclosed: see reasons, at paragraph 573. As a result, he found that the '777 patent was “invalid for lack of sound prediction”: see reasons, at paragraph 585.

To be more precise, the patent was invalid because the utility of the invention had neither been demonstrated nor soundly predicted as of the date of the filing of the patent application. [ 22 ] Having found the patent to be invalid for lack of utility, the Trial Judge nonetheless went on to consider obviousness, the other ground of invalidity advanced by Apotex. He began by setting out the four-step framework for the obviousness analysis set down by the Supreme Court in Plavix (cited above, at paragraph 67, quoted at reasons, at paragraph 589): (1) (

a) Identify the notional “person skilled in the art”; (

b) Identify the relevant common general knowledge of that person;

(2) Identify the inventive concept of the claim in question or if that cannot readily be done, construe it;

(3) Identify what, if any, differences exist between the matter cited as forming part of the “state of the art” and the inventive concept of the claim or the claim as construed;

(4) Viewed without any knowledge of the alleged invention as claimed, do those differences constitute steps which would have been obvious to the person skilled in the art or do they require any degree of invention? [ 23 ] The Judge reiterated the Supreme Court’s teaching that the “obvious to try” test may be appropriate at the fourth step of the analysis, particularly in fields in which advances come as a result of experimentation. [ 24 ] The Trial Judge identified the common general knowledge of the person skilled in the art. He then restated the inventive concept of the patent.

The Trial Judge concluded that there was more disclosed in the '777 patent than was in the common general knowledge: reasons, at paragraph 656. This then led to the last step in the analysis: was the invention simply the result of taking steps that were “obvious to try” [at paragraph 657]? [ 25 ] Since the claimed invention relates to the dextro-rotary isomer of a racemic mixture, the question which the Judge asked himself was whether it was obvious to separate the racemic mixture and thereby isolate the isomer which is the subject of the '777 patent.

The Trial Judge concluded that it was. [ 26 ] The Judge’s conclusion focused on the racemic mixture identified in Sanofi’s laboratory documents as PCR 4099. That compound is one of approximately 250 000 compounds which come within the terms of the '875 patent. The patent itself describes 21 specific examples of compounds coming within the terms of the patent, one of which is PCR 4099.

The Judge found that there were, at the relevant time, two relevant known methods of separating racemic mixtures of the type described in the '875 patent, and in particular, PCR 4099, though it was not self evident that either of them “ought to work”. In addition, he concluded that there was a well known and well-established method of obtaining salts of the compounds resulting from such separation, including the isomers of PCR 4099. [ 27 ] The Judge then asked whether there was a motive provided in the prior art to attempt to resolve compounds covered by the '875 patent into their optical isomers.

He identified factors which were known prior to the date of invention which would have led a person skilled in the art to separate the enantiomers of PCR 4099.

Those factors were: a- the “thalidoimide disaster” which sensitized regulators to the differential effects of isomers contained in a racemic mixture. b- guidelines issued by Japanese regulators which “directing sponsors of applications for racemic drugs to separate and characterize the enantiomers”: reasons, at paragraph 727. c- a speech given by senior official of the United States Food and Drug Administration (FDA) at the 1986 Annual Meeting of the American Pharmaceutical Association in which it was stated that sponsors of applications for racemic drugs would be expected to investigate the properties of the enantiomers of such racemic mixtures. d- the adoption in 1987 by the FDA of guidelines relating to applications for racemic drugs and the establishment in 1989 of a

stereoisomers committee by the FDA. e- the awareness among leading chemists in the area of drug discovery that prior to 1989, there was already regulatory pressure towardseparation of racemic mixtures. [28] In

summary, the Trial Judge found that, at the relevant time, the PCR 4099 compound, though not its properties, was part of thecommon general knowledge and was featured in the '875 patent, that the POSITA would have known of the method available to resolvePCR 4099 into its constituent enantiomers, that the methodology for salt selection was well known at that time, and that there wasmotivation to separate PCR 4099 into its enantiomers.

He therefore found, on a balance of probabilities, that the “invention of the '777Patent was ‘obvious to try’” so that the patent was invalid for obviousness: see reasons, at paragraph 784. [29] At trial, the issue of infringement was a live issue as were certain defences to infringement raised by Apotex. Those conclusionswere overtaken by the Trial Judge’s conclusions as to the validity of the '777 patent. For the purposes of readability, I will deal with theanalysis of the issues of validity and then deal with the issues of infringement separately.

ANALYSIS OF THE VALIDITY OF THE PATENT Issue [30] In my view, the critical issue with respect to utility arises from the Trial Judge’s construction of the '777 patent. Did the TrialJudge err in reading into the patent an explicit promise that the invention could be used in humans? [31] As to obviousness, the issue is whether the Trial Judge erred in holding that the invention was obvious based on the fact that theresolution of the racemate PCR 4099 was “obvious to try”? Standard of review [32] This is an appeal of a decision reached by a Trial Judge after a 26-day trial.

The standard of review is that set out in Housen v.Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235 (Housen). Findings of fact are to be reviewed on a standard of palpable and overridingerror: Housen, cited above, at paragraph 10. The Trial Judge’s conclusions on questions of law are subject to review on a standard ofcorrectness: Housen, cited above, at paragraph 6.

A question of mixed fact and law is also to be reviewed on a standard of palpable andoverriding error unless the error involves an extricable error of law, in which case the standard of correctness applies. [33] The construction of the patent is a question of law: Whirlpool Corp. v. Camco Inc., 2000 SCC 67, [2000] 2 S.C.R. 1067(Whirlpool), at paragraph 76. The Trial Judge must interpret the patent as it would be understood by a person skilled in the art to which itpertains.

This requires the Judge to take into account the evidence as to how persons skilled in the art would understand certain wordsand phrases used in the patent, but it is for the Judge to decide what the patent means: Consolboard Inc. v. MacMillan Bloedel (Sask.)Ltd., (SCC), [1981] 1 S.C.R. 504, (Consolboard), at pages 521–525. Utility and the promise of the patent [34] In Canadian law, patent law is purely statutory: Plavix, at paragraphs 12 and 13; Commissioner of Patents v. Fabwerke HoechstAktiengesellschaft Vormals Meister Lucius & Bruning, (SCC), [1964] S.C.R. 49.

While the Courts have added to thefabric of patent law in Canada, the starting point for any analysis is the Patent Act, R.S.C., 1985, c. P-4 (the Act), as it read at thematerial time. Since the application for the '777 patent was filed in Canada on February 2, 1988, this dispute is governed by the terms ofthe Act as it read immediately before October 1, 1989 (the Old Act). [35] The following two provisions of the Old Act are relevant to the issue of utility. The first is the definition of “invention” [atsection 2]:

Definitions 2. … … “invention”« invention »“invention” means any new and useful art, process, machine, manufacture or composition of matter, or any new anduseful improvement in any art, process, machine, manufacture or composition of matter; [My emphasis.] [36] The second relevant statutory provision is subsection 34(1) (now subsection 27(3) [of the Intellectual Property LawImprovement Act, S.C. 1993, c. 15, s. 31]) which read as follows at the material time: Specification34.

(1) An applicant shall in the specification of his invention (

a) correctly and fully describe the invention and its operation or use as contemplated by the inventor; (

b) set out clearly the various steps in a process, or the method of constructing, making, compounding or using a machine,manufacture or composition of matter, in such full, clear, concise and exact terms as to enable any person skilled in the artor science to which it appertains, or with which it is most closely connected, to make, construct, compound or use it; (

c) in the case of a machine, explain the principle thereof and the best mode in which he has contemplated the applicationof that principle; (

d) in the case of a process, explain the necessary sequence, if any, of the various steps, so as to distinguish the inventionfrom other invention; and (

e) particularly indicate and distinctly claim the part, improvement or combination that he claims as his invention.

Claims to bestateddistinctly

(2) The specification referred to in (1) shall end with a claim or claims stating distinctly and in explicit terms the things orcombinations that the applicant regards as new and in which he claims an exclusive property or privilege. [37] These provisions are important because they frame the issue of what must be disclosed in the patent itself which, in turn, isrelevant to the construction of the promise of the patent. [38] Given the fact that an invention must be new and useful, must the demonstration of novelty and utility appear in the patent itself? [39] In Consolboard, the Supreme Court considered this very question and held that an inventor need not describe the utility of hisinvention in his patent (at pages 525 and 526): In my respectful opinion the Federal Court of Appeal erred also in holding that s. 36(1) requires distinct indication of the real utility ofthe invention in question. … Although (i) s. 36(1) [now s.27(3)] requires the inventor to indicate and distinctly claim the part, improvement or combination which heclaims as his invention and (ii) to be patentable an invention must be something new and useful (s. 2), and not known or used by anyother person before the applicant invented it (s. 28(1)(a)), I do not read the concluding words of s. 36(1) as obligating the inventor in hisdisclosure or claims to describe in what respect the invention is new or in what way it is useful.

He must say what it is he claims to haveinvented. He is not obliged to extol the effect or advantage of his discovery, if he describes his invention so as to produce it. [Myemphasis.] [40] The Supreme Court of Canada has consistently followed this reasoning: see, e.g. Monsanto Canada Inc. v. Schmeiser, 2004 SCC34, [2004] 1 S.C.R. 902, at paragraph 18; Whirlpool Corp. v. Camco Inc., 2000 SCC 67, [2000] 2 S.C.R. 1067 (Whirlpool) [cited above],at paragraph 52; Pioneer Hi-Bred Ltd. v. Canada (Commissioner of Patents), (SCC), [1989] 1 S.C.R. 1623, at page 1636and, most recently, Teva Canada Ltd. v.

Pfizer Canada Inc., 2012 SCC 60, [2012] 3 S.C.R. 625, at paragraphs 49–52. [41] Are selection patents subject to the same rules? The nature of selection patents was explained in Plavix, cited above, whichmakes frequent reference to the English case of In re I.G. Farbenindustrie A.G.’s Patents (1930), 47 R.P.C. 289 (Ch.D.) (I.G.Farbenindustrie) (Plavix, cited above, at paragraph 9): At p. 321, he [Maugham J. the trial judge in I.G. Farbenindustrie] explained that in the field of chemical patents (which would of courseinclude pharmaceutical compounds), there are often two “sharply divided classes”.

The first class of patents, which he called originatingpatents, are based on an originating invention, namely, the discovery of a new reaction or a new compound. The second class comprisespatents based on a selection of compounds from those described in general terms and claimed in the originating patent. Maugham J.cautioned that the selected compounds cannot have been made before, or the selection patent “would fail for want of novelty”. But if theselected compound is “novel” and “possess[es] a special property of an unexpected character”, the required “inventive” step would besatisfied (p. 321).

At p. 322, Maugham J. stated that a selection patent “does not in its nature differ from any other patent”. [Myemphasis.] [42] Maugham J. specified that the “unexpected character” is a “substantial advantage to be secured … [or] disadavantage to be …avoided … [by the use] of the selected members”: see I.G. Farbenindustrie, cited above, at pages 322 and 323. [43] The same concepts can be found in Re E.I. du Pont de Nemours & Co. (Witsiepe’

s) Application, [1982] F.S.R. 303 (H.L.), whereLord Wilberforce stated, at page 311: It is the absence of the discovery of the special advantages, as well as the fact of non-making, that makes it possible for such persons tomake an invention related to a member of the class. [44] In Plavix, cited above, the Supreme Court, at paragraph 11, accepted that a selection patent is like any other patent. As a result, itmust satisfy the requirements of the Act, including the requirement that the invention be new and useful.

The element of novelty issatisfied by the fact that the selected compounds have not previously been made. The element of utility is usually satisfied by thepresence of a special property of an unexpected character, consisting in the advantage secured or the disadvantage avoided by theselection and which is at the heart of the inventive steps (Plavix, above, at paragraphs 9–10). Were it not so, no selection would meet thestatutory criteria for patentability. [45] A selection patent must also satisfy the disclosure requirements found in

section 34 of the Old Act. It does so by setting out in thespecification “in clear terms the nature of the characteristic which the patentee alleges to be possessed by the selection for which heclaims a monopoly”: see Plavix, at paragraph 114. See also Eli Lilly Canada Inc. v. Novopharm Limited, 2010 FCA 197, [2012] 1 F.C.R.349 (Olanzapine), at paragraph 78. [46] A patent holder whose patent is challenged on grounds of lack of utility must be able to show that, at the time of the patent wasapplied for, the utility of the invention could either be demonstrated or soundly predicted: see AZT, at paragraph 46.

The sticking point,in this case as in others, is to determine what it is that must be demonstrated or soundly predicted. This is where the notion of the promiseof the patent comes into play. [47] The promise of the patent is the standard against which the utility of the invention described in the patent is measured. Thesource of the concept is found in the decision of the Supreme Court of Canada in Consolboard (at page 525): There is a helpful discussion in Halsbury's Laws of England, (3rd ed.), vol. 29, at p. 59, on the meaning of “not useful” in patent law.

Itmeans “that the invention will not work, either in the sense that it will not operate at all or, more broadly, that it will not do what thespecification promises that it will do”. [My emphasis.]

[48] While an inventor need not describe the utility of his invention in his patent, if he does so, he will be held to the promise whichhe has made. This was set out as follows in Olanzapine, cited above, at paragraph 76: Where the specification does not promise a specific result, no particular level of utility is required; a “mere scintilla” of utility willsuffice. However, where the specification sets out an explicit “promise”, utility will be measured against that promise: Consolboard;Pfizer Canada Inc. v. Canada (Minister of Health), 2008 FCA 108, [2009] 1 F.C.R. 253 (Ranbaxy).

The question is whether theinvention does what the patent promises it will do. [Emphasis added.] [49] If the inventor does not make an explicit promise of a specific result, the test for utility is a “mere scintilla” of utility.

If, on theother hand, the inventor makes an explicit promise of a specific result, then utility will be assessed by reference to the terms of theexplicit promise. [50] When this Court said at paragraph 80 of Olanzapine, cited above, that the promise of the patent must be ascertained, it should notbe taken to have assumed that every patent contains an explicit promise of a specific result since, subject to what is said below withrespect to selection patents, there is no obligation on the part of the inventor to disclose the utility of his invention in the patent.

InOlanzapine, the Court was simply indicating that the first step in assessing utility was to determine the standard against which utility willbe measured. This requires the Court to construe the patent to determine if a person skilled in the art would understand it to contain anexplicit promise that the invention will achieve a specific result. If so, the inventor will be held to that promise.

If there is no explicitpromise of a specific result, then a mere scintilla of utility will do. [51] In the case of selection patents, as we have seen, the novelty of the selection and its advantages (including disadvantages to beavoided) are the invention and must be described in the patent.

The Trial Judge’s description of the invention is framed in terms of itsadvantages over the genus patent as was the Supreme Court’s description of the same invention in Plavix, cited above at paragraph 78.For ease of reference, I reproduce his description of the invention (reasons, at paragraph 140): … a compound which is useful in inhibiting platelet aggregation, has greater therapeutic effect and less toxicity than the othercompounds of the '875 Patent, has the advantages of the salts (crystallize easily, not hygroscopic, and sufficiently water-soluble) and themethods for obtaining that compound. [52] The Trial Judge turned his mind to whether the invention of the '777 patent worked as described above.

He examinedtoxicological tests in rats, mice and baboons, as well as studies of base activity, and concluded that the studies demonstrated the existenceof the advantages which the inventors identified for the selection (reasons, at paragraphs 392, 395 and 399): In terms of persuasive evidence given on this point, the Court notes that a Sanofi study (D-136, Tab-122 — SA361) demonstrated adifferential LD50 and LD10 and that convulsions were a problem with PCR 4099 and the levo-rotatory enantiomer but not withclopidogrel.

On this basis, it can be concluded that there was a differential toxicity as well as the better tolerability of clopidogrel. … On the basis of this evidence [the tests described at paragraph 394], the Court finds that Sanofi has demonstrated the differential toxicityas well as the better tolerability of clopidogrel. … Based on the evidence above, the Court accordingly finds that Sanofi has demonstrated the differential activity of clopidogrel. [53] Had the analysis ended here, the Trial Judge would have found that the compound of the '777 patent had the advantages over thecompounds of the '875 patent which were described in the patent and whose existence had been demonstrated at the time of the filing ofthe application for the patent.

To that extent, the promise of the patent had been met. [54] An inventor whose invention is described in a patent which would otherwise be valid can nonetheless promise more for hisinvention than required by the Act so as to render his patent invalid. If he does so, so be it; it is a self-inflicted wound: see Free WorldTrust v. Électro Santé Inc., 2000 SCC 66, [2000] 2 S.C.R. 1024, at paragraph 51. But Courts should not strive to find ways to defeatotherwise valid patents.

As the Supreme Court said in Consolboard, cited above, and reiterated some 20 years later in Whirlpool, citedabove, at paragraph 49(g): 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 ( (SCC), [1950] S.C.R. 36)being neitherbenevolent nor harsh, but rather seeking a construction which is reasonable and fair to both patentee and public.

There is no occasion forbeing 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 theCourt in Western Electric Company, Incorporated, and Northern Electric Company v.

Baldwin International Radio of Canada (SCC), [1934] S.C.R. 570, at p. 574, “where the language of the specification, upon a reasonable view of it, can be so read asto afford the inventor protection for that which he has actually in good faith invented, the court, as a rule, will endeavour to give effect tothat construction”. [My emphasis.] [55] While the construction of the patent is reserved to the Trial Judge, he is to read it and understand it as would the person skilled inthe art. To that end, he has the evidence of experts as to how a person skilled in the art would understand the patent.

In this case, onlyApotex’s expert, Dr. Hirsh, a haemotologist, read the patent as promising that the invention would be effective in humans. Dr. Hirshcame to this conclusion on the basis of inferences which he drew from particular expressions used in the patent. [56] Dr. Hirsh first noted that some of the diseases referred to in the patent are clearly human diseases and conditions (expert report ofDr. Hirsh (confidential), appeal book, Tab 20, at paragraphs 25 and 68; trial transcripts, Vol. 2, appeal book, page 386, lignes 4, 5, 24–26; page 387, lines 1–5).

[ 57 ] Second, he noted that the high end of the daily dosage used to effect platelet aggregation was based on 10mg/kg, a dosage that would correspond with that needed by a human of average weight, approx. 50kg (expert report of Dr. Hirsh (confidential), appeal book, Tab 20, at paragraph 69). [ 58 ] Third, the invention is described as being a “medicine and ‘active medicinal[s]’ for therapeutic purposes”. According to Dr. Hirsh, a haemotologist would understand from these words that this is a medicine that can be used in humans (expert report of Dr.

Hirsh (confidential), appeal book, Tab 20, at paragraph 68). [ 59 ] Sanofi’s experts on the other hand recognized that the patent invites the person skilled in the art to understand that the invention has potential use in humans, but all expressed the view that the person skilled in the art would understand that no promise of a specific result is made in that regard. [ 60 ] Dr.

Byrn, a chemist said that (reasons, at paragraph 150): ... any pharmaceutical chemist would interpret the '777 Patent as telling the world that very interesting results had been obtained and thus one might expect similar results would be achieved in humans but no clear promise or guarantee that such results would be achieved in humans. [ 61 ] Dr.

Rodricks, a toxicologist, testified to the effect that (reasons, at paragraph 151): … the combination of platelet aggregating inhibiting activity and reduced toxicity ... would suggest that the dextro-rotatory enantiomer holds promise as a useful human drug…. however ... the '777 Patent does not guarantee that the enantiomer would be a successful human drug. [ 62 ] Finally, Dr.

Shebuski, a cardiovascular pharmacologist, was of the view that (reasons, at paragraph 152): ... it would be understood that clopidogrel had potential to be used as an antithrombotic medicine….a person skilled in the art would not understand the teachings of the '777 Patent to be promising a specific result in humans. [ 63 ] The Trial Judge was not persuaded by the evidence of Dr.’s Byrn, Rodricks and Shebuski. Relying on the expert testimony of Dr.

Hirsh, he came to the conclusion that the words of the patent contained “an explicit promise” for use in humans (reasons, at paragraph 163). [ 64 ] In this context, the Trial Judge needed to clearly explain why he saw an “explicit promise” for use in humans when Dr. Hirsh did not point to any explicit promise. It appears that Dr.

Hirsh’s opinion is that the person skilled in the art would infer from the high end of the dosage set out in the patent, the diseases and conditions to which it refers and the phrase “medicines and ‘active medicinal[s]’ for the therapeutic purposes” that the invention promises use in humans. These inferences are all equivocal. Dosage is often expressed in terms of units of medicine per unit of weight. Animals, like humans, come in a wide range of weights.

Similarly, practitioners of veterinary medicine have their “patients” to whom they administer “medicines” for “therapeutic purposes”. [ 65 ] Beyond adopting the inferences drawn by Dr. Hirsh or, as he put, it the “indications” that the patent promises use in humans, the Trial Judge drew additional inferences of his own: reasons, at paragraph 163. First, he inferred from the fact that clopidogrel is to be administered by oral, rectal or parenteral administration that human use is contemplated.

He drew the same inference from the use of the word “patient” and from the phrase “the patent indicates that the dosage depends on the age of the patient and the severity of the disorder to be treated”. The Trial Judge was also influenced by the fact that the active ingredient is formulated into “tablets, capsules and other dosage forms that are useful for administration”.

This exercise in the construction of a document, familiar as it is to lawyers, is an unreliable guide to the skilled person’s reading of such a document. [ 66 ] While these “indications” are consistent with human use, they are not inconsistent with other uses. Although Dr. Hirsh was entitled to form an opinion on the basis of the inference which he drew, the Trial Judge was held to a higher standard.

He erred in law in reading into the '777 patent a promise for use in humans on the basis of inferences, in the absence of language at least as clear and unambiguous as that used to establish the advantages of the selection over the compounds of the genus patent. [ 67 ] The frailty of the Trial Judge’s conclusion is even more apparent when the distinction drawn in the jurisprudence between the potential use of an invention and an explicit promise to achieve a specific result is considered. As Dr.

Byrn made clear, the inventive step was in the differential activity and tolerability of clopidogrel as demonstrated in rats. The pharmaceutical industry’s interest of the invention obviously lay in its potential use in humans which the invention foreshadowed. The person skilled in the art would understand that in alluding to this possibility, the inventors were not promising that this result had been or would be achieved. As was held in AstraZeneca Canada Inc. v.

Mylan Pharmaceuticals ULC , 2011 FC 1023 , 96 C.P.R. (4th) 159, at paragraph 139 : I accept AstraZeneca's argument that not all statements of advantage in a patent rise to the level of a promise. A goal is not necessarily a promise . The third paragraph of the 420 Patent refers to a forward looking goal, a hoped-for advantage of the invention. [My emphasis.] AstraZeneca Canada Inc. v. Mylan Pharmaceuticals ULC , 2011 FC 1023 [cited above], at paragraph 139 . For other examples of this distinction, see Mylan Pharmaceuticals ULC v.

Pfizer Canada Inc. , 2012 FCA 103 , 100 C.P.R. (4th) 203, at paragraph 61 , Mylan Pharmaceuticals ULC v. AstraZeneca , 2012 FCA 109 , 101 C.P.R. (4th) 275, at paragraphs 32–33 . [ 68 ] The Trial Judge justified his conclusion on another ground. He reasoned that since the genus patent (the '875 patent) contained a reference to use in humans, the '777 patent would fail as a selection patent unless an explicit promise for use in humans was also read into it (reasons, at paragraphs 169–171).

In the Judge’s words, “the '777 selection Patent cannot promise less than the '875 genus Patent”: reasons, at paragraph 172). [ 69 ] This reasoning is problematic for at least two reasons. First and foremost, it is improper to construe a patent with an eye to its validity ( Whirlpool Corp. v. Camco Inc. , 2000 SCC 67 , [2000] 2 S.C.R. 1067 ( Whirlpool ) [cited above], at paragraph 49 (a); Dableh v.

Ontario Hydro, (FCA), [1996] 3 F.C. 751 (C.A.), at paragraph 26; Apotex Inc. v. Allergan Inc., 2012 FCA 308, 105C.P.R. (4th) 371, at paragraph 65; American Cyanamid Co. v. Berk Pharmaceuticals Ltd., [1976] R.P.C. 231 (Ch.D.), at page 234; Xeroxof Canada Ltd. et al. v. IBM Canada Ltd. (1977), 33 C.P.R. (2d) 24 (F.C.T.D.), at page 43).

The Trial Judge erred when he read into thepatent a promise of use in humans in order to validate the patent as a selection patent, then used this promise in order to invalidate it forlack of utility. [70] Second, the Trial Judge found that the '777 patent described the advantages of the compound of the '777 patent over thecompounds of the '875 patent, and that the inventor was able to demonstrate the existence of those advantages as of the date of the filingof the patent application.

On that basis, the '777 patent is a valid selection patent when measured against the genus patent, the '875patent, regardless of the fact that it makes no promise for use in humans. A selection patent describes a compound which has anunexpected advantage over the compounds of the genus patent. That unexpected advantage need not be an improvement on every aspectof the invention described in the genus patent, though it may be.

It is sufficient that it is a new and useful improvement on some aspect ofthat invention. [71] Having regard to all of the above, I am of the view that the Trial Judge erred in law in his construction of the promise of thepatent. The '777 patent described a compound having advantages (including the absence of disadvantages) over the compounds of the'875 patent and those advantages were clearly disclosed in the patent specification. The Trial Judge found that those advantages weredemonstrated at the time of the patent application.

The Trial Judge erred in construing the patent as specifically promising a result whenthe invention was used in humans and then assessing the utility of the patent against that specific promise. Properly construed, the '777patent made no such promise. As a result, the allegation that the patent was invalid for lack of utility ought to have been dismissed. Obviousness [72] The Trial Judge’s analysis of obviousness turned on the “obvious to try” analysis set out in the Supreme Court’s decision inPlavix. It is worth remembering that the issue of obviousness was raised and rejected in Plavix.

The Supreme Court’s reasoning turnedon a few key facts: 1- “there were five well known methods to separate this racemate into its isomers”: Plavix, cited above, at paragraph 75. 2- “the relative advantage of the dextro-rotatory isomer would not have been known by the skilled person”: Plavix, ibid. 3- “Nothing distinguishes the racemate in this case from other compounds disclosed or tested in terms of therapeutic effect or toxicity”:Plavix, cited above, at paragraph 79. [73] With these facts in mind, the Supreme Court articulated why the separation of the racemate was not obvious to try.

It held thatjust because the methods of separating a racemate into its isomers are known, it does not follow that a person skilled in the art wouldnecessarily apply them. The Supreme Court explained (Plavix, cited above, at paragraphs 85 and 90): It is true that at the relevant time there was evidence that a skilled person would know that the properties of a racemate and its isomersmight be different. However, a possibility of finding the invention is not enough. The invention must be self-evident from the prior artand common general knowledge in order to satisfy the “obvious to try” test.

That is not the evidence in this case. … However, the prior patent did not differentiate between the efficacy and the toxicity of any of the compounds it covered. This suggeststhat what to select or omit was not then self-evident to the person skilled in the art. [74] What emerges from this review of the Supreme Court’s decision in Plavix, cited above, is that the key factor in its “obvious totry” analysis was the lack of knowledge of the properties of the enantiomers of the compounds of the '875 patent, including the racematefrom which clopidogrel was obtained.

Absent that knowledge, it was not obvious to try to resolve the racemate, or any other compound,so as to obtain the enantiomer having those advantageous properties. [75] In his analysis of obviousness, the Trial Judge focused exclusively on the question of whether it was obvious to try to resolvePCR 4099: reasons, at paragraphs 663, 668, 672, 675, 679, 681, 692, 712, 724, 730 and 750. He found that the existence of PCR 4099,though not its properties, was part of the common general knowledge at the relevant time: reasons, at paragraphs 614 and 647.

He foundas well that the possible methods of separation were within the common general knowledge: reasons, at paragraph 665. The Trial Judgeconcluded there was motivation to resolve PCR 4099: reasons, at paragraph 750. [76] All of these factors led the Trial Judge to conclude that the resolution of PCR 4099 was obvious to try.

Apotex supports thisconclusion by pointing to evidence which it says was before the Trial Judge and which was not before the Supreme Court in Plavix, citedabove, notably that PCR 4099 was the “lead” drug in the '875 patent and the most potent of the compounds whose test results werereported in that patent.

These distinctions are not supported by the evidence and, even if they were, they do not detract from the key factthat the properties of the enantiomers of PCR 4099 were not known. [77] The Trial Judge found that “the '875 Patent does not, either directly or indirectly, point to PCR 4099 or to clopidogrel” (myemphasis): reasons, at paragraph 612. As noted above, the Trial Judge also noted that “PCR 4099 (not its properties) … would form partof the common general knowledge that a person skilled in the art could find by undertaking a reasonably diligent search of patentapplications”: reasons, at paragraph 614.

Furthermore, the properties of PCR 4099 would not have been discoverable by means of areasonably diligent patent search: reasons, at paragraphs 645–647. [78] As a result, the Trial Judge found himself in exactly the same position as did the Supreme Court when it decided Plavix, citedabove. The focus of the obviousness analysis in Plavix was not the difficulty in separating the racemates covered by the '875 genuspatent—which included PCR 4099—but the unknown properties of the resulting enantiomers (Plavix, cited above, at paragraph 92):

The method to obtain the invention of the '777 patent were common general knowledge. It can be assumed that there was a motive to find a non-toxic efficacious product to inhibit platelet aggregation in the blood. However, it was not self-evident from the '875 patent or common general knowledge what the properties … would be … and therefore that what was being tried ought to work . [My emphasis.] [ 79 ] The reasons of the Trial Judge make it clear that, as was the case in Plavix , it was not possible to predict the properties of the separated enantiomers: reasons, at paragraphs 673 and 676.

The lack of knowledge as to these properties is precisely what led the Supreme Court in Plavix , cited above, to hold that it was not self-evident that what was being tried ought to work ( Plavix , cited above, at paragraph 92).

Simply put, the person skilled in the art would not think of separating PCR 4099 and testing its enantiomers in order to obtain the benefit of its properties when the existence and nature of those properties were unknown. [ 80 ] It follows that although the resolution of PCR 4099 was part of the common general knowledge, nothing turns on this as it is the unknown nature of the properties of the enantiomers which explains why the invention was not “obvious to try”. [ 81 ] Given that the Trial Judge applied the test for obviousness set out in Plavix , and given that he applied it to the same material facts as the Supreme Court, he ought to have come to the same conclusion.

His error lay in failing to recognize that the unknown nature of the properties of the enantiomers of PCR 4099, or of any of the other compounds of the '875 patent, was fatal to the “obvious to try” analysis. Put another way, the distance between the common general knowledge and the inventive concept of the '777 patent could not be bridged by routine experimentation since the results to be obtained were unknown.

On the facts, this was confirmed by the fact that the inventors, who had more knowledge that the person of ordinary skill in the art, attempted to resolve a number of other compounds before finally trying PCR 4099: see reasons, at paragraphs 752–759. [ 82 ] As a result, the Trial Judge erred in finding that the invention of the '777 Patent was obvious. Conclusion on invalidity [ 83 ] For the reasons set out above, I believe that the judgment of the Federal Court erred in finding that the '777 patent was invalid. The Court’s conclusion that the patent was invalid for lack of utility was based on a flawed

interpretation of the patent. The Trial Judge erred in construing the patent as containing an explicit promise that the invention of the '777 patent could be used in humans with beneficial effects. [ 84 ] I am also of the view, for the reasons expressed above, that the Court’s conclusion that the invention of the '777 patent was obvious was in error.

INFRINGEMENT Facts and trial decision [ 85 ] Sanofi alleged that Apotex infringed the '777 patent by importing, offering for sale, selling, making, possessing for commercial purposes, using and exporting clopiodgrel tablets, all of which are acts which deprive it of the benefit of the monopoly conferred by the '777 patent and the Act .

Specific instances of infringement consisted of (reasons, at paragraphs 207, 208 and 210): - arranging for the manufacture of bulk clopidogrel in Mexico and its importation into Canada; - the formulation of bulk clopidogrel into tablets in Canada which were then exported to the United States, and other countries such as Australia, New Zealand, Hong Kong, Malaysia, Singapore, Hungary, the Phillipines, Malta, and Iran;and - the possession for commercial purposes of large amounts of bulk clopidogrel in Canada, some of which was said to have been exported back to Mexico. [ 86 ] The Trial Judge found that Apotex contracted with Apotex Pharmachem Inc. (Pharmachem), an Apotex subsidiary, to have the latter develop “the Apotex product and the process of manufacture”: see reasons, at paragraph 198.

Pharmachem then entered into a Technology Transfer and Custom Manufacturing Agreement by which Pharmachem transferred to a Mexican company, Signa S.A. de C.V., the process and manufacturing information it had developed. Signa manufactured clopidogrel according to Pharmachem’s specification and sold it in bulk to Apotex. Signa agreed to supply only Apotex (in respect of Canada and the U.S.) while Apotex agreed to by exclusively from Signa.

To the date of trial, Apotex received approximately 80 000 kilograms of clopidogrel from Signa. [ 87 ] Signa shipped clopidogrel to Apotex at Pearson International Airport in Toronto via Air Canada usually under a waybill issued in Montreal. All customs documentation showed Apotex as the importer. Once the bulk clopidogrel cleared customs, it was trucked to Apotex’s manufacturing plant where it was formulated into tablets for resale.

Apotex then exported the tablets to various markets in accordance with agreements with Apotex subsidiaries. [ 88 ] In this appeal, Apotex does not contest the Trial Judge’s conclusion that it infringed Claims 1, 3, 6, 7, 8, 9, 10, and 11 of the '777 patent: see paragraph 112 of Apotex’s memorandum of fact and law. Instead, it raises a number of issues which, if successful, would preclude Sanofi from recovering any damages for the infringement.

Those issues include the appropriate limitation period, the possession of clopidogrel for experimental and regulatory use, and settlement and estoppel based on an agreements settling litigation between the parties in the U.S. [ 89 ] Sanofi did not challenge Apotex’s right to claim the exemption for experimental and regulatory use but questioned its application in this case. The Trial Judge found that Apotex failed to provide the Court with evidence as to the ultimate destination of the material said to have been developed for regulatory purposes.

The Trial Judge was clearly of the view that the experimental and regulatory use exception in subsection 55.2(1) of the Act did not apply if the regulatory samples were sold subsequent to their use for regulatory purposes. Since Apotex could not produce records showing the destruction of the disputed lots of clopidogrel, the Trial Judge concluded that it had not demonstrated that the experimental and regulatory use exemption applied to those lots.

[ 90 ] Apotex’s argument with respect to limitation periods flows from

section 39 of the Federal Courts Act , R.S.C., 1985, c. F-7: Prescription and limitation on proceedings 39.

(1) Except as expressly provided by any other Act , the laws relating to prescription and the limitation of actions in force in a province between subject and subject apply to any proceedings in the Federal Court of Appeal or the Federal Court in respect of any cause of action arising in that province. Prescription and limitation on proceedings in the Court, not in province

(2) A proceeding in the Federal Court of Appeal or the Federal Court in respect of a cause of action arising otherwise than in a province shall be taken within six years after the cause of action arose. [ 91 ] The Trial Judge examined the question of where Sanofi’s cause of action arose in order to determine whether subsection (1) or (2) of

section 39 applied to the facts of this case. Relying on Apotex Inc. v. Pfizer Canada Inc. , 2004 FC 190 , 31 C.P.R. (4th) 143 ( Apotex v. Pfizer ) and the cases cited in the latter, he found that “‘both the damages suffered as well as the act that caused the damage’” must have occurred in the same province in order for subsection 39(1) to apply: see reasons, at paragraph 250. [ 92 ] The Trial Judge found that the importation from Mexico and subsequent exportation to other countries was a sufficient basis for concluding that the cause of action (infringement) was not limited to a single province.

In addition the Trial Judge relied on a number of other factors, such as the fact that Apotex conducts business in many provinces, accepts orders for its product from foreign entities and that it retained an Indian manufacturer to assist in the sale of its clopidogrel in India, to conclude that the damages suffered as a result of Apotex’s infringement were not limited to a single province. As a result, he found that subsection 39(2) of the Federal Courts Act applied, so that the applicable limitation period was six years.

In the result, no part of Sanofi’s claim was statute barred. [ 93 ] Apotex also argued before the Trial Judge that Sanofi was precluded from seeking damages for infringement by reason of a settlement agreement reached between Sanofi and Apotex in the context of a U.S. patent infringement action brought by Sanofi with respect to its U.S. patent (the '265 patent) for clopidogrel. Two settlement agreements were entered into because the settlement required regulatory approval.

For the purposes of this appeal, the relevant provisions are those which would come into effect if the settlement agreement was not approved by the U.S. authorities. [ 94 ] The Trial Judge summarized the situation as follows (reasons, at paragraph 267): However, during the negotiations, Sanofi/BMS advised Apotex that they were under consent decrees with the Federal Trade Commission (FTC) and the Attorneys General of some of the states in the U.S. that prevented them from entering into patent settlements without prior approval.

As a result of this, Apotex demanded and Sanofi/BMS agreed to concessions to Apotex if the settlement was submitted to the regulators but was not approved by them.

The concessions were, first, that, in the event of regulatory denial, Apotex would have a period of time within which to sell off its inventory ( i.e. without facing the prospect of a motion for an interlocutory injunction) and, second, that, in the event that the action proceeded to trial with Apotex having launched at risk, Apotex would be guaranteed a profit in respect of its sales by way of an agreement to a fixed level of damages that would be less than Apotex' profits . (My emphasis.) [ 95 ] The first settlement agreement was not approved by the U.S. authorities, so Apotex and Sanofi renegotiated their agreement in an attempt to obtain that approval.

At the same time, the clauses which came into effect if the settlement was not approved were also amended so as to reduce the amount of the Liability Exposure Provision (the fixed level of damages referred to above) from 70 percent of net sales to 50 percent of net sales. The second agreement, dated May 26, 2006, did not obtain regulatory approval either. As a result, the U.S. litigation proceeded. The validity of the '265 patent was upheld and Apotex was found to have infringed it.

However, in keeping with the Liability Exposure Provision, Apotex’s liability for damages was limited to 50 percent of U.S. sales, or US $442 209 362. [ 96 ] Before the Trial Judge, Apotex argued that the Liability Exposure Provision which limited Apotex’s liability for damages (and therefore Sanofi’s right of recovery) prevented Sanofi from claiming damages for any U.S. sales since it had already agreed to limit its recovery in the May 26, 2006 agreement.

While the Trial Judge does not expressly say so, one assumes from Apotex’s argument that all of the clopidogrel sold in the U.S. by Apotex originated in Canada. [ 97 ] The Trial Judge reviewed the May 26, 2006 agreement and found that it was limited to the U.S. litigation with respect to the '265 patent. The words “'777 Patent’ or ‘Canada’” did not appear in the agreement which was expressly limited to “litigation … involving the U.S. Patent No. 4, 847, 265.02CV-2255 and 05CV-3965”: see reasons, at paragraph 280.

As a result, the Trial Judge concluded that the May 26, 2006 agreement did not limit Sanofi’s ability to recover damages for infringement of the '777 patent. [ 98 ] Apotex then argued that Sanofi was estopped from pursuing a second claim for compensation in respect o

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