APOTEX INC. Plaintiff v. PFIZER CANADA, 2017 FC 951

Date: 20171025 Docket: T-1064-13 Citation: 2017 FC 951 Ottawa, Ontario, October 25, 2017 PRESENT: The Honourable Mr. Justice Manson BETWEEN: APOTEX INC. Plaintiff and PFIZER CANADA INC. Defendant /Plaintiff by Counterclaim and PHARMACIA AKTIEBOLAG Plaintiff by Counterclaim ORDER AND REASONS [ 1 ] This is a motion by Apotex Inc. to further amend its Amended Reply and Defence to Counterclaim pursuant to Rule 75(1) of the Federal Courts Rules , SOR/98-106 [Federal Courts Rules]. I.

Background [ 2 ] Apotex Inc. is an Ontario corporation that manufactures “generic” pharmaceuticals, which are similar to drugs previously marketed under brand names. [ 3 ] Pfizer Canada Inc. is a Canadian corporation and Pharmacia Aktiebolag is a Swedish corporation. They are subsidiaries of Pfizer Inc., which is a pharmaceutical corporation based in the United States. [ 4 ] Pfizer holds Canadian Patent Number 1,339,132 (the “132 Patent”).

The 132 Patent relates to latanoprost, which is a medicine used to treat glaucoma and ocular hypertension. [ 5 ] Apotex alleges that on June 20, 2007, its apo-latanoprost solution, which is similar to latanoprost, became approvable under the Food and Drug Regulations , CRC, c 870. However, Apotex could not obtain a Notice of Compliance (“NOC”) because Pfizer held the 132 Patent for latanoprost. [ 6 ] On March 4, 2008, Pfizer received a Notice of Allegation (“NOA”) from Apotex.

In it, Apotex alleged that the 132 Patent was invalid on several grounds and that the apo-latanoprost solution would not infringe that patent. [ 7 ] While Pfizer successfully defended the 132 Patent before this Court on April 26, 2010, on appeal, the Federal Court of Appeal (“FCA”) on August 16, 2011, found there was no sound prediction of the 132 Patent’s promise that latanoprost could be used chronically for the treatment of glaucoma or ocular hypertension without eliciting unwanted side effects ( Apotex Inc v Pfizer Canada Inc , 2011 FCA 236 [ Latanoprost ]). [ 8 ] On August 19, 2011, Apotex obtained a NOC for apo-latanoprost. [ 9 ] On June 14, 2013, Apotex filed a statement of claim seeking damages for the period of time in which apo-latanoprost was approvable but a NOC could not be obtained. [ 10 ] In response, Pfizer filed a statement of defence and counterclaim arguing that the 132 Patent was valid, given that NOC proceedings are not determinative of infringement and validity, that Apotex would have infringed if it entered the market before the Latanoprost decision came out, and that Apotex had infringed ever since it brought apo-latanoprost to market. [ 11 ] Apotex replied on the basis that the 132 Patent was invalid and/or not infringed.

The invalidity allegations included, among other things: failure to pay a prescribed fee; double patenting; anticipation; lack of utility; obviousness; overly broad claims; and insufficient disclosure. [ 12 ] On June 30, 2017, the Supreme Court of Canada (“SCC”) released its decision in AstraZeneca Canada Inc v Apotex Inc , 2017 SCC 36 [ Esomeprazole ], which held that the “promise of the patent” doctrine (“Promise Doctrine”) is unsound, insofar as it has been applied to the question of utility of a patented invention under

section 2 of the Patent Act , RSC 1985, c P-4 [Patent Act]. [ 13 ] The SCC held that while overpromising is a mischief, it is improper to import section 27(3) sufficiency concerns which may include overpromising issues into the

section 2 utility requirement. [ 14 ] At paragraphs 44, 46 and 51 of the Esomeprazole decision, the SCC states: 44 The Promise Doctrine effectively imports s. 27(3) into s. 2 inappropriately, by requiring that to satisfy the utility requirement in s. 2 ,

any disclosed use (by virtue of s. 27(3)) be demonstrated or soundly predicted at the time of filing. If that is not done successfully, the entire patent is invalid, as the pre-condition for patentability – an invention under s. 2 of the Act – has not been fulfilled. 46 The scheme of the Act treats the mischief of overpromising in multiple ways. There are consequences for failing to properly disclose an invention by claiming, for instance, that you have invented more than you have.

A disclosure which is not correct and full, or states an unsubstantiated use or operation of the invention, may be found to fail to fulfill the requirements of s. 27(3). An overly broad claim may be declared invalid; however, under the operation of s. 58 of the Patent Act , remaining valid claims can be given effect.

As well, this mischief may result in a patent being void under s. 53 of the Act, where overpromising in a specification amounts to an omission or addition that is "willfully made for the purpose of misleading". 51 The effect of the Promise Doctrine to deprive such an invention of patent protection if even one "promised" use is not soundly predicted or demonstrated is punitive and has no basis in the Act.

Furthermore, such a consequence is antagonistic to the bargain on which patent law is based wherein we ask inventors to give fulsome disclosure in exchange for a limited monopoly ( British United Shoe Machinery Co. v. A. Fussell & Sons Ltd. (1908), 25 R.P.C. 631(C.A.), at p. 650). To invalidate a patent solely on the basis of an unintentional overstatement of even a single use will discourage a patentee from disclosing fully, whereas such disclosure is to the advantage of the public.

The Promise Doctrine in its operation is inconsistent with the purpose of s. 27(3) of the Act which calls on an inventor to "fully describe the invention and its operation or use". Thus, the Promise Doctrine undermines a key part of the scheme of the Act; it is not good law. [ 15 ] On July 5, 2017, Apotex advised Pfizer of its intention to amend its pleadings due to the change in law caused by Esomeprazole . Pfizer requested the amendments as soon as possible, given that expert reports were due in three weeks.

Pfizer also expressed concerns with the potential loss of the scheduled trial dates beginning in January 2018. [ 16 ] On July 18, 2017, Apotex provided Pfizer with its proposed amendments, which were extensive. [ 17 ] On July 19, 2017, at a Case Management Conference (“CMC”), the Court suspended the deadline for expert reports. [ 18 ] On July 25, 2017, Pfizer advised Apotex that they opposed the majority of the amendments and provided reasons for their position. [ 19 ] On July 26, 2017, at a CMC, the trial date was vacated and a new trial date has been scheduled to commence on November 5, 2018. [ 20 ] On September 22, 2017, Apotex submitted its revised amendments.

While Pfizer does not object to most of the proposed amendments, Pfizer takes issue with three of Apotex’s proposed new pleas: i . In paragraph 10B, Apotex alleges that in the but-for world from 2007 to 2011, the Court would have invalidated Pfizer’s patent using the “Promise Doctrine”, which was the applicable law at that time, not the current law as recently determined by the SCC in the Esomeprazole decision.

Pfizer takes the position that Apotex is alleging that it would have been able to invalidate Pfizer’s patent using an unsound legal doctrine, which is a vexatious and ultimately an absurd plea (the “hypothetical invalidity plea”); Pfizer states that in paragraphs 136A and 145A and 145B, Apotex essentially re-argues the Promise Doctrine, asserting the patent “over promises” because the inventors had not demonstrated or soundly predicted the utility rendering the disclosure and claims invalid for: ii . Insufficiency; and iii . Overbreadth.

Pfizer argues that with these amendments, Apotex is improperly trying to repackage the arguments related to the Promise Doctrine rejected by the SCC in Esomeprazole . [ 21 ] Pfizer seeks all costs arising from the amendments and opposes the above three proposed amendments (the “Impugned Amendments”). II. Issues [ 22 ] The issues are: A . Do the claims disclosed in the Impugned Amendments disclose reasonable defences?; B . Would these amendments result in an injustice to Pfizer that is not capable of being compensated by costs and would the interests of justice be served by allowing the amendments?; and C .

Should Pfizer be awarded their costs arising from Apotex’s amendments? III. Analysis A. Do the claims disclosed in the Impugned Amendments disclose reasonable defences? [ 23 ] The parties generally agree on the law governing motions to amend pleadings. Rule 75 of the Federal Courts Rules provides that the Court may allow a party to amend a pleading “at any time…on such terms as will protect the rights of the parties” .

[24] Firstly, the Court should be satisfied that it is in the interests of justice to do so. In considering whether the interests of justicewould be served by permitting amendments, the Court may consider a number of factors, including:

a) The timelines of the motion to amend;

b) The extent to which the proposed amendments would delay the expeditious trial of the matter;

c) The extent to which a position taken originally by one party has led another party to follow a course of action in the litigationwhich it would be difficult or impossible to alter; and

d) Whether the amendments sought will facilitate the Court’s consideration of the true substance of the dispute on its merits. (Abbvie Corp v Janssen Inc, 2014 FCA 242 at para 3, referring to Continental Bank Leasing Corp v R, [1993] TCJ No 18 (QL)). [25] Moreover, the Court should be satisfied that permitting amendments will not cause an injustice that cannot be compensated byan award of costs.

As stated in Canderel Ltd v Canada, (FCA), [1994] 1 FC 3 (CA) at 10 (cited with approval inMerck & Co Inc v Apotex Inc, 2003 FCA 488 [Lisinopril] at paras 30 and 64): . . . while it is impossible to enumerate all the factors that a judge must take into consideration in determining whether it is just, in agiven case, to authorize an amendment, the general rule is that an amendment should be allowed at any stage of an action for the purposeof determining the real questions in controversy between the parties, provided, notably, that the allowance would not result in aninjustice to the other party not capable of being compensated by an award of costs and that it would serve the interests of justice. [26] Finally, the absence of a reasonable prospect of success is a well-established reason for the Court to dismiss a motion forleave to amend (Teva Canada Limited v Gilead Sciences Inc, 2016 FCA 176 [Gilead] at para 29).

Only if the amendment has areasonable prospect of success will the Court investigate other matters, such as prejudice the opposing party may suffer as a result of theamendment (Gilead at para 31). [27] In deciding whether a pleading stands a reasonable prospect of success, the Court must accept the alleged facts as proven andonly find it unreasonable where it is plain and obvious or beyond reasonable doubt that the pleading cannot succeed (Lisinopril at para43).

The burden is on the amending party to demonstrate such a reasonable prospect of success (Lisinopril at para 46). [28] Pfizer’s submission is that none of the Impugned Amendments have a reasonable prospect of success. i.

Hypothetical Invalidity [29] Apotex’s proposed amendment reads as follows: [10B] Had Pfizer commenced a hypothetical patent infringement action in the but-for world in response to Apotex’s market entry withApo-latanoprost on June 20, 2007, which is expressly denied, the trial of that patent infringement action, the trial decision in that patentinfringement action and the decisions on any appeals therefrom would have been completed or rendered before August 16, 2011, and, inthe alternative, long before the release of the Supreme Court of Canada’s decision in AstraZeneca v Apotex, 2017 SCC 36, such that the“promise doctrine” described in that decision would have been applied by the Court(

s) in that hypothetical patent infringement action toinvalidate the 132 Patent. The Court(

s) would have arrived at the same conclusion in that hypothetical patent infringement action that theFederal Court of Appeal arrived at in Federal Court File No. A-206-10 (2011 FCA 236), namely, that the promise of the 132 Patent is totreat glaucoma and intraocular hypertension on a chronic basis without causing substantial side effects, and that there was nodemonstration or sound prediction of that promised utility by the filing date, rendering the 132 Patent invalid for lack of utility.

In thebut-for world, Apotex thus would not have been held to infringe the 132 Patent had it commenced marketing and selling Apo-Latanoprost on June 20, 2007 or at any time prior to the grant of its NOC. [Emphasis mine] [30] Accordingly, it is Apotex’s position that if Pfizer commenced a patent infringement action in response to Apotex’s marketentry in 2007, prior to Esomeprazole, the Promise Doctrine would have been applied to invalidate the 132 Patent. [31] In response, Pfizer argues that the Court is in no position to knowingly apply incorrect legal principles to adjudicate whatwould have happened.

The issue is whether the 132 Patent is valid; the fact it might have been invalidated under different law isirrelevant. [32] In a claim for damages under

section 8 of the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, theCourt’s task is to assess a hypothetical world where the impugned conduct did not take place (Pfizer Canada Inc v Teva Canada Limited, 2016 FCA 161 [Venlafaxine] at para 46). As the Court stated inVenlafaxine at paragraph 50: Both “would have” and “could have” are key. Compensatory damages are to place plaintiffs in the position they would have been in hada wrong not been committed.

Proof of that first requires demonstration that nothing made it impossible for them to be in that position—i.e., they could have been in that position.

And proof that plaintiffs would have been in a particular position also requires demonstrationthat events would transpire in such a way as to put them in that position—i.e., they would have been in that position. [33] Neither party referred to any case law that would really help determine whether the outcome of a hypothetical infringementaction in the past might have been different than in the present, due to an intervening change in law – here, that change being the SCCdecision in Esomeprazole.

[34] Apotex argues that the Court should not reach “back to the future” in considering whether current case law would haveinfluenced or determined the outcome in the hypothetical but-for world ten years ago, when the law as it was then developed, relating toutility and promise of the patent, was good law and would have been applied in a different context than today. [35] Pfizer counters that it would be absurd to do other than apply the law as it now is and should have been at the earlier date,given the recent decision of the SCC in Esomeprazole and the fact that validity attacks based on inutility have been wrongly applied bythe Courts over the relevant period. [36] Notwithstanding it may be a difficult argument for Apotex at trial, this is not a straight-forward question of law to determineon a motion to amend.

The Court should have a fulsome record before it, in order to decide what is no doubt an important legal question,with lasting and long-reaching implications for the parties and for others who face the same question. It should be left for considerationby the trial judge, after final argument in the context of the relevant facts and law (Mercks et al v Apotex et al, 2012 FC 454 at paras 30-31, citing Hunt v Carey Canada Inc, [1990] 1 SCR 959 at 980; Fullowka v Whitford, (NWT CA) at para 22; and R vImperial Tobacco, 2011 SCC 42 at para 21). [37] The amended paragraph 10(

B) is allowed. ii.

Insufficiency [38] Apotex's proposed amendments read as follows: [145A] Because the 132 Patent overpromises, it contains a disclosure that is not correct and full and it states an unsubstantiated use oroperation of the purported invention, which constitutes a failure to fulfill the requirements of subsection 27(3) of the Patent Act (and/orsection 36 of the Patent Act as it existed before 1989), thereby rendering the 132 Patent and all of the Asserted Claims invalid. [145B] As described above, the 132 Patent asserts that latanoprost can be usefully administered on a chronic basis for the treatment ofglaucoma or ocular hypertension without causing substantial side effects.

However, for the reasons described under the headings “Lackof Utility” and “No Demonstrated Utility/ Lack of Sound Prediction”, there was no demonstration or sound prediction of this before thefiling date of the 132 Patent and this was never in fact achieved. The 132 Patent thus asserts an unsubstantiated use or operation for theinvention, which constitutes the mischief of overpromising and renders all of the Asserted Claims invalid for failure to fulfill the requirements of subsection 27(3) of the Patent Act (and/or

section 36 of the Patent Act as it existed before 1989). [Emphasis added] [39] Section 27(3) of the Patent Act states that the specification must: a. Correctly & fully describe the invention & 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 and concise terms as to enable any person skilled in the art or science towhich it pertains, or with which it is most closely connected, to make, construct, composed or use it; [40] Apotex’s position is that because the 132 Patent overpromises, it contains a disclosure that is not correct and full and states anunsubstantiated use or operation of the invention, which constitutes a failure to fulfill the disclosure requirements of section 27(3) of thePatent Act. [41] Pfizer argues that Apotex is improperly trying to insert the Promise Doctrine into the sufficiency of disclosure analysis, whichwas rejected in Esomeprazole.

Courts have consistently maintained the distinction between the disclosure requirement under

section 27of the Patent Act and the utility requirement under

section 2 of the Patent Act.

There can be no conflation of these two legal concepts. [42] Justice Brown recently decided in Pfizer Canada Inc v Apotex Inc, 2017 FC 774 [Pfizer] that not only was the PromiseDoctrine not good law in terms of utility but also overbreadth of claims and insufficiency of patent specifications, as the SCC did notspecifically endorse the Promise Doctrine with respect to construing section 27(3) of the Patent Act and would have done so if that wasthe Court’s intention. [43] In Pfizer, Justice Brown held at paragraphs 359, 360, 363 and 365: 359 While I do not fault Apotex for raising its "overpromise" doctrine given the invitation to make additional comments onAstraZeneca, I note Apotex did not ask to raise "overpromising" in its letter of July 4, 2017, in which it requested a broadening of thescope of post hearing submissions: it only asked to raise anticipation and obviousness.

Thus, while Apotex raised obviousness in its post-hearing filings, it said nothing about anticipation; instead it raised the new issue of "overpromising". 360 I also observe that the alleged overpromises resemble the promise arguments advanced by Apotex, which are no longer validhaving regard to AstraZeneca.

If the Supreme Court intended to say, in effect, that the Promise Doctrine was not good law in terms ofutility under s 2, but was good law in terms of patent specifications under subsection 27(3) it could have done so; it did not. 363 …I am unable to see a rationale for the argument that the Supreme Court of Canada removed the Promise Doctrine from theutility analysis yet simultaneously required it to be considered, in the manner Apotex proposes, in the specification analysis.

If that wasthe case, a major underlying problem identified by the Supreme Court itself would remain, namely that "a patentee will be dissuadedfrom stating the invention can be used for things that are not sufficiently established at the time of filing if doing so would riskinvalidating the entire patent." See AstraZeneca para 45. 365 I see nothing in AstraZeneca that alters what I take from the foregoing namely that the specifications analysis under subsection27(3) requires the patentee to define the precise and exact extent of the exclusive property and privilege claimed.

In addition, nothing inAstraZeneca departs from the proposition that under subsection 27(3), "the applicant must disclose everything that is essential for the

invention to function properly. To be complete, it must meet two conditions: it must describe the invention and define the way it isproduced or built ... The applicant must define the nature of the invention and describe how it is put into operation.

A failure to meet thefirst condition would invalidate the application for ambiguity, while a failure to meet the second invalidates it for insufficiency." SeeTeva at para 51 citing to Pioneer Hi-Bred Ltd v Canada (Commissioner of Patents), (SCC), [1989] 1 SCR 1623, pp.1637-38. [44] Apotex argues that to the extent the Pfizer decision stands for the proposition that the SCC removed overpromising as a basisfor finding insufficiency or overbreadth because it did not clearly state it was a valid argument on those issues, the Pfizer decisionoverstates the effective result of the SCC Esomeprazole decision. [45] What is apparent is that the SCC did not equate the application of the Promise Doctrine to utility with the potential foroverpromising to be a relevant factor in determining validity with respect to insufficient disclosure under section 27(3) or due to claimoverbreadth. [46] Apotex states that this is particularly true when one reasonably considers that the SCC stated in Esomeprazole, at paragraph46: The scheme of the Act treats the mischief of overpromising in multiple ways.

There are consequences for failing to properly disclose aninvention by claiming, for instance, that you have invented more than you have. A disclosure which is not correct and full, or states anunsubstantiated use or operation of the invention, may be found to fail to fulfill the requirements of s. 27(3). An overly broad claim maybe declared invalid; however, under the operation of s. 58 of the Patent Act, remaining valid claims can be given effect.

As well, thismischief may result in a patent being void under s. 53 of the Act, where overpromising in a specification amounts to an omission oraddition that is "willfully made for the purpose of misleading". [47] Apotex also argues that there is nothing in the SCC Esomeprazole decision that precludes making an “overpromising”argument for insufficiency or overbreadth of claims, as an unsubstantiated use or operation of the purported invention, even if it amountsto a “repackaging” of the inutility attack under a different legal guise.

It is a separate ground of attack, and a sufficiently important legalquestion not to be struck on a motion to amend, but should be left for the trial judge to decide on a full legal and factual foundation. It is,Apotex argues, not an amendment that has no reasonable prospect for success. [48] However, the impugned insufficiency amendment in the Apotex pleading relies solely on the same factual basis as theinutility plea held invalid by the SCC in Esomeprazole and as relied upon in the earlier Apotex pleading.

It does not address, on adifferent factual basis, the question of whether the disclosure enabled a person of ordinary skill in the science or field of the invention toproduce it, using only the instructions contained in the specification (Pioneer Hi-Bred Ltd v Canada (Commissioner of Patents), (SCC), [1989] 1 SCR 1623 at 1628). [49] As stated by the SCC in Teva Canada Ltd v Pfizer Canada Inc, 2012 SCC 60 at excerpts from paragraphs 49-52: 49 In Consolboard, this Court reviewed the Act's disclosure requirements, which at that time were found in s. 36. Although there arevariations in wording between that

section and the current s. 27(3), the substance of the disclosure requirements has remained the same. 50 Dickson J. discussed what the specification must contain in order to meet the disclosure requirements. He stated clearly that thenature of the invention must be disclosed and that the entire specification, including the claims, must be considered in determining thenature of the invention and whether disclosure was sufficient: […] Section 36(1) (now

section 27) seeks an answer to the questions: "What is your invention? How does it work?" With respect to eachquestion the description must be correct and full in order that, as Thorson P. said in Minerals Separation North American Corporation v.Noranda Mines, Limited (SCC), [1947] Ex.

C.R. 306]: ... when the period of monopoly has expired the public will be able, having only the specification, to make the same successful use of theinvention as the inventor could at the time of his application. [at p. 316] Since Consolboard, the Court has constantly applied the principles stated by Dickson J., which is a testament to the soundness of hisreasoning: see, e.g., Monsanto Canada Inc. v. Schmeiser, 2004 SCC 34, [2004] 1 S.C.R. 902, at para. 18; Whirlpool Corp. v. Camco Inc.,2000 SCC 67, [2000] 2 S.C.R. 1067, at para. 52; Pioneer Hi-Bred Ltd. v.

Canada (Commissioner of Patents), (SCC),[1989] 1 S.C.R. 1623 ("Pioneer Hi-Bred"), at p. 1636. 52 In Consolboard and in Pioneer Hi-Bred, the Court correctly analysed the disclosure requirements set out in s. 27(3) of the Act.

Thereasoning in those cases should be reaffirmed and applied in the case at bar. [50] I agree with Justice Pelletier of the FCA, in Bristol-Myers Squibb Canada Co et al v Teva Canada Limited et al, 2017 FCA 76at paragraph 68, that “… the Supreme Court does not change substantive law by implication, particularly when it has shown a cautiousapproach to change in the same context: see Apotex Inc v Eli Lilly Canada Inc, 2016 FCA 267 at para 37”. [51] This approach resonates when one considers the history and purposive

interpretation of section 27(3) of the Patent Act. [52] In this case, the impugned insufficiency plea does not stand a reasonable prospect of success. There is no allegation that Pfizerfailed to sufficiently disclose what the invention is or how the invention can be used. Nothing has changed the applicable test forsufficiency of a disclosure and Apotex’s impugned plea must fail. [53] The impugned insufficiency amendment is not allowed.

iii. Overbreadth [ 54 ] Apotex's proposed amendment reads as follows: [136A] As described above, the 132 Patent asserts that latanoprost can be chronically administered for the treatment of glaucoma or ocular hypertension without causing substantial ocular irritation. However, for the reasons described under the headings “Lack of Utility” and “No Demonstrated Utility / Lack of Sound Prediction”, there was no demonstration or sound prediction of this before the filing date of the132 Patent and this was never achieved . This constitutes the mischief of overpromising and renders all of the Asserted Claims invalid for overbreadth: (

a) claim 12 (which claims a therapeutic ophthalmological composition containing latanoprost for the treatment of glaucoma or ocular hypertension in an amount sufficient to reduce intraocular pressure without causing substantial ocular irritation) is invalid for overbreadth because glaucoma and ocular hypertension are chronic disorders that require chronic administration of a medicament for treatment and this is more than what the named inventors of the 132 Patent had invented because they had not demonstrated or soundly predicted that the subject matter of claim 12 would not cause substantial ocular irritation upon the chronic administration required for the treatment of glaucoma or ocular hypertension.

The 132 Patent improperly asserts that the claimed composition can be usefully administered on a chronic basis for the treatment of glaucoma or ocular hypertension without causing substantial side effects; (

b) claim 19 (which claims latanoprost) is invalid for overbreadth because the 132 Patent asserts that latanoprost can be usefully administered on a chronic basis for the treatment of glaucoma or ocular hypertension without causing substantial side effects and this is more than what the named inventors of the 132 Patent had invented because they had not demonstrated or soundly predicted that latanoprost would not cause substantial ocular irritation and/or conjunctival hyperemia upon the chronic administration required for the treatment of glaucoma or ocular hypertension .

A compound that has not been demonstrated or soundly predicted to avoid these substantial side effects upon chronic administration cannot be useful in the treatment of glaucoma or ocular hypertension. Further, while the 132 Patent asserts that its invention is limited in scope to compounds that can be usefully administered on a chronic basis for the treatment of glaucoma or ocular hypertension without causing substantial side effects, claim 19 claims a compound without limitation as to its properties and thus is necessarily overly broad relative to the invention made or disclosed; (

c) claim 31 (which claims the use of latanoprost in the treatment of glaucoma or ocular hypertension) is invalid for overbreadth because glaucoma and ocular hypertension are chronic disorders that require chronic administration of medicament for treatment and this is more than what the named inventors of the 132 Patent had invented because they had not demonstrated or soundly predicted that latanoprost would be useful upon the chronic administration required for the treatment of glaucoma or ocular hypertension.

Further, a compound that has not been demonstrated or soundly predicted to avoid substantial side effects upon chronic administration cannot be useful in the treatment of glaucoma or ocular hypertension . The 132 Patent improperly asserts that latanoprost can be usefully administered on a chronic basis for the treatment of glaucoma or ocular hypertension without causing substantial side effects; (

d) claim 38 (which claims the use of latanoprost in the treatment of glaucoma or ocular hypertension) is invalid for overbreadth for the same reasons as claim 31. [Emphasis added] [ 55 ] Apotex thereby alleges that several claims in the 132 Patent assert that latanoprost can be chronically administered without causing substantial ocular irritation, but there has been no demonstration or sound prediction of this advantage.

This constitutes the mischief of overpromising referred to by the SCC in Esomeprazole and renders the claims invalid for overbreadth. [ 56 ] Pfizer argues that this is again an attempt to circumvent the reasoning of the SCC in Esomeprazole and improperly conflates overbreadth with utility, which is what Apotex has done with the impugned pleas related to insufficiency under section 27(3) .

Assertions that rely on utility as the basis for overbreadth are incorrect in law. [ 57 ] As the FCA has consistently held, a claim is overly broad and invalid if it asserts an exclusive property or privilege in something the inventor did not actually invent or did not fully disclose (see, for example, Pfizer Canada Inc v Canada (Health) , 2007 FCA 209 at para 116 ). [ 58 ] Apotex’s allegation of overbreadth stands a reasonable prospect of success.

The claims in the 132 Patent repeatedly refer to latanoprost with respect to the “treatment of glaucoma or ocular hypertension...without causing substantial ocular irritation” and “use … in the treatment of glaucoma or ocular hypertension.” Apotex alleges that latanoprost cannot be used chronically without causing substantial irritation and therefore cannot be used in the treatment of glaucoma and ocular hypertension.

To the extent that a claimed use is unsubstantiated, an allegation of an overly broad claim may succeed. [ 59 ] While the onus is on Apotex to prove this invalidity plea at trial, and it may be difficult to do so, it has a reasonable prospect of success. The amendment is allowed. B.

Would these amendments result in an injustice to Pfizer that is not capable of being compensated by costs and would the interests of justice be served by allowing the amendments? [ 60 ] Having decided the issues above relating to the Impugned Amendments, I find that the amendments, as allowed, will not result in an injustice not capable of being compensated by costs and that it is in the interests of justice to allow the amendments. [ 61 ] As pointed out by Apotex, non-compensable prejudice does not include prejudice resulting from potential success of the proposed plea or the fact that the amended plea may increase the length or complexity of the trial.

The parties have agreed to the trial being adjourned until November 2018, so timing is no longer an issue.

[ 62 ] As well, given the recent decision of the SCC in Esomeprazole has materially changed the law, and given that the Impugned Amendments as allowed are related to that decision, this Court should permit the amendments. [ 63 ] Moreover, in the absence of any asserted prejudice to Pfizer flowing from the purported “lateness” of the proposed amendments, “lateness” alone is not a sufficient ground to deny the amendments. C.

Should Pfizer be awarded their costs arising from Apotex’s amendments? [ 64 ] Pfizer seeks all costs arising from Apotex’s amendments such as amending pleadings, reviewing its strategy and document production, and additional discovery and use of experts. [ 65 ] The change in law caused by Esomeprazole required pleading amendments to facilitate the Court’s consideration of the issues in the dispute on their merits. [ 66 ] However, there were delays and costs associated with the amendments. The initial amendments were extensive and added several pages to the pleadings.

Moreover, it was only in response to Pfizer’s prior objections that Apotex eventually provided amendments in a form substantially agreed to by Pfizer, excepting the Impugned Amendments. In the meantime, the trial date was vacated. It is unclear to what extent additional discovery and use of experts maybe required, or what costs are properly attributable to the amended pleadings being now relied upon by Apotex.

It is also questionable whether some or many of the amendments truly result from the SCC Esomeprazole decision, or could not have been made much earlier. [ 67 ] Apotex shall bear the costs of the motion and the Court will consider possible additional costs attributable to the amendments with respect to additional discovery and use of experts after final submissions at trial. ORDER in T-1064-13 THIS COURT ORDERS that: 1. Apotex’s motion to further amend its Amended Reply and Defence to Counterclaim in the form attached as

Schedule A hereto is allowed, except for paragraph 10B, which is hereby struck; 2. Pfizer shall have 30 days from the date of this Order to serve and file a Further Amended Reply to Defence to Counterclaim; 3. Costs to Pfizer in any event, to be determined by the trial judge following final submissions at trial. "Michael D. Manson" Judge

SCHEDULE A

FEDERAL COURT SOLICITORS OF RECORD DOCKET: T-1064-13 STYLE OF CAUSE: APOTEX INC. v PFIZER CANADA INC. ET AL PLACE OF HEARING: Vancouver, British Columbia DATE OF HEARING: October 16, 2017 ORDER AND reasons: MANSON J. DATED: october 25, 2017

APPEARANCES : Harry Radomski Jordan Scopa For The plaintiff Jordana Sanft Tracey Stott For The defendant / plaintiff by counterclaim SOLICITORS OF RECORD : GOODMANS Toronto, Ontario For The plaintiff NORTON ROSE FULBRIGHT Toronto, Ontario For The defendanT / plaintiff by counterclaim, PFIZER CANADA INC. ORESTES PASPARAKIS Toronto, Ontario for the plaintiff by counterclaim, PHARMACIA AKTIEBOLAG