PFIZER IRELAND PHARMACEUTICALS Appellant v. APOTEX INC., 2014 FCA 13

Date: 20140122 Docket: A-560-12 Citation: 2014 FCA 13 CORAM: SHARLOW J.A. DAWSON J.A. MAINVILLE J.A. BETWEEN: PFIZER IRELAND PHARMACEUTICALS Appellant and APOTEX INC. Respondent Heard at Toronto, on October 15, 2013. Judgment delivered at Ottawa, Ontario, on January 22, 2014. REASONS FOR JUDGMENT BY: SHARLOW J.A. CONCURRED IN BY: DAWSON J.A. MAINVILLE J.A. Date: 20140122 Docket: A-560-12 Citation: 2014 FCA 13 CORAM: SHARLOW J.A. DAWSON J.A. MAINVILLE J.A.

BETWEEN: PFIZER IRELAND PHARMACEUTICALS Appellant and APOTEX INC. Respondent REASONS FOR JUDGMENT SHARLOW J.A. [ 1 ] In the judgment under appeal ( 2012 FC 1339 ), Justice Zinn granted the motion of the respondent Apotex Inc. for

summary judgment in its action to impeach Canadian Patent No. 2,163,446. Based on Teva Canada Ltd. v. Pfizer Canada Inc ., 2012 SCC 60 , [2012] 3 S.C.R. 625 (“ Teva 2012 ”), he declared that the 446 patent is invalid and is not infringed by the sildenafil tablets produced by Apotex. The judgment is appealed by Pfizer Ireland Pharmaceuticals (“Pfizer”), the registered owner of the 446 patent. For the following reasons, I would dismiss the appeal. The 446 patent [ 2 ] Pfizer and its affiliates have relied on the 446 patent for many years to protect the Canadian monopoly on sildenafil.

It is the active medicinal ingredient in Viagra, a commercially successful drug used to treat erectile dysfunction. A licensed affiliate of Pfizer produces and sells Viagra in Canada pursuant to a notice of compliance issued in 1999 under the Food and Drug Regulations , C.R.C. 1978, c. 870. [ 3 ] The title of the 446 patent is “Pyrazolopyrimidinones for the treatment of impotence”. The application was filed in 1994. It issued on July 7, 1998 with an expiry date of May 13, 2014. [ 4 ] The 446 patent contains 27 claims.

In this appeal, the parties have addressed directly only Claims 5, 6 and 7, and by necessary implication the preceding claims upon which they are dependent. Neither party has suggested that anything in this appeal turns on Claims 8 through 27, or the disclaimers filed in respect of the 446 patent.

For that reason, this discussion will refer only to claims 1 through 7. [ 5 ] Claim 1, read literally, claims the use of: … a compound of formula (I) [the chemical description of which is stated] or a pharmaceutically acceptable salt thereof, or a pharmaceutical composition containing either entity, for the manufacture of a medicament for the curative or prophylactic treatment of an erectile dysfunction in a male animal or sexual dysfunction in a female animal. [ 6 ] There are approximately 260 quintillion compounds included within Claim 1. Claims 2, 3, 4 and 5 are cascading claims based on Claim 1.

That is, each of them claims the use according to Claim 1 for a group of compounds that is a subset of the group in the immediately preceding claim. [ 7 ] The successively smaller groups of compounds are the “preferred group” (Claim 2 – approximately 60 billion compounds), the “more preferred group” (Claim 3 – approximately 1.8 million compounds), the “particularly preferred group” (Claim 4 – 768 compounds), and the “especially preferred group” (Claim 5 – nine compounds) (affidavit of Dr.

Robert Gristwood, paragraphs 8.9 and 8.21, Appeal Book Volume II, pages 155 and 157). [ 8 ] Claim 6 and Claim 7 each claim the same use for a single compound within the group of compounds described in Claim 4, or a pharmaceutically acceptable salt thereof.

[9] The single compound specified in Claim 6 is designated UK-114,542. The single compound specified in Claim 7 issildenafil. UK-114,542 and sildenafil are among the nine compounds listed in Claim 5. Teva 2012 [10] There has been much litigation relating to the 446 patent.

However, for the purpose of this appeal the most important caseis Teva 2012. [11] Teva 2012 originated with proceedings in which a corporate predecessor of Teva Canada Ltd. (“Teva”), a generic drugmanufacturer, filed with the Minister of Health an abbreviated new drug submission under the Food and Drug Regulations in whichTeva sought a notice of compliance for its generic version of Viagra. [12] As permitted under the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 (the NOC Regulations),Teva served Pfizer and certain of its affiliates (collectively, the “Pfizer group”) with a notice of allegation that the 446 patent was invalidon the basis of obviousness, lack of utility, and insufficient disclosure.

That prompted the Pfizer group to commence an application underthe NOC Regulations for an order prohibiting the Minister from issuing a notice of compliance for the Teva generic version of Viagrauntil after the expiry of the 446 patent. [13] The application was granted by the Federal Court on June 18, 2009, with the result that Teva was unable to receive itsnotice of compliance (2009 FC 638). Teva appealed to this Court, without success (2010 FCA 242, [2012] 2 F.C.R. 69). Teva thensought and obtained leave to appeal to the Supreme Court of Canada. Teva’s appeal was allowed on November 8, 2012.

Within a day,the Minister issued notices of compliance for sildenafil drugs to Teva and to a number of other drug manufacturers, including Apotex. [14] Teva was successful in Teva 2012 because the Supreme Court of Canada concluded that Teva’s allegation of invalidity onthe basis of insufficient disclosure was justified. The reason for that conclusion is encapsulated in paragraph 5 of the reasons of JusticeLeBel, writing for the Court: 5. At the time of Pfizer’s patent application, Pfizer had conducted tests that demonstrated that sildenafil was effective in treating [erectiledysfunction].

None of the other compounds in Patent ’446 had been shown to be effective in doing so. Although Patent ’446 includes thestatement that “one of the especially preferred compounds induces penile erection in impotent males” […], neither the disclosure — thedescriptive portion of the patent application — nor the claims specify that sildenafil is the compound that works.

Nowhere in the patentapplication is it disclosed that the compound that works is found in Claim 7 or that the remaining compounds in the patent had not beenfound to be effective in treating [erectile dysfunction]. [15] I summarize as follows the reasoning of Justice LeBel in support of the conclusion that the 446 patent was invalidbecause of insufficient disclosure: Principles (

a) The patent system is based on a bargain in which the inventor is granted exclusive rights to a new and useful invention for alimited period in exchange for disclosing the invention so that society can benefit from the knowledge when that period expires (ApotexInc. v. Wellcome Foundation Ltd., 2002 SCC 77, [2002] 4 S.C.R. 153, at paragraph 37, and Consolboard Inc. v. MacMillan Bloedel(Sask.) Ltd., (SCC), [1981] 1 S.C.R. 504, at page 523). (

b) The bargain underlying the patent system is reflected in subsections 27(1) to 27(3) of the Patent Act, R.S.C. 1985, c.P-4. Thedisclosure requirement is stated in subsection 27(3), which reads in relevant part as follows: 27.

(3) The specification of an inventionmust 27.

(3) Le mémoire descriptif doit :

(

a) correctly and fully describe theinvention and its operation or use ascontemplated by the inventor;

a) décrire d’une façon exacte etcomplète l’invention et son applicationou exploitation, telles que les a conçuesson inventeur; (

b) set out clearly the various steps in aprocess, or the method of constructing,making, compounding or using amachine, manufacture or composition ofmatter, in such full, clear, concise andexact terms as to enable any personskilled in the art or science to which itpertains, or with which it is most closelyconnected, to make, construct,compound or use it;

b) exposer clairement les diverses phasesd’un procédé, ou le mode deconstruction, de confection, decomposition ou d’utilisation d’unemachine, d’un objet manufacturé ou d’uncomposé de matières, dans des termescomplets, clairs, concis et exacts quipermettent à toute personne versée dansl’art ou la science dont relèvel’invention, ou dans l’art ou la sciencequi s’en rapproche le plus, deconfectionner, construire, composer ouutiliser l’invention; (

c) in the case of a machine, explain theprinciple of the machine and the bestmode in which the inventor hascontemplated the application of thatprinciple; and

c) s’il s’agit d’une machine, en expliquerclairement le principe et la meilleuremanière dont son inventeur en a conçul’application ; (

d) in the case of a process, explain thenecessary sequence, if any, of thevarious steps, so as to distinguish theinvention from other inventions.

d) s’il s’agit d’un procédé, expliquer lasuite nécessaire, le cas échéant, desdiverses phases du procédé, de façon àdistinguer l’invention en cause d’autresinventions. (

c) Adequate disclosure in the specification is a precondition for the granting of a patent (Eli Lilly Canada Inc. v. Apotex Inc., 2008FC 142, at paragraph 74). (

d) Where the sufficiency of a patent disclosure is challenged, the question to be asked is whether the public is getting theinformation it needs to be getting in exchange for the exclusive monopoly rights. (

e) The leading case on the sufficiency of disclosure is Consolboard (cited above), confirmed by the Supreme Court of Canada inMonsanto Canada Inc. v. Schmeiser, 2004 SCC 34, [2004] 1 S.C.R. 902, at paragraph 18, Whirlpool Corp. v. Camco Inc., 2000 SCC 67,[2000] 2 S.C.R. 1067, at paragraph 52, and Pioneer Hi-Bred Ltd. v. Canada (Commissioner of Patents), (SCC), [1989] 1S.C.R. 1623 at page 1636. The principles in Consolboard should be applied in this case. (

f) Consolboard establishes that the nature of the invention must be disclosed, and that the entire specification, including theclaims, must be considered in determining the nature of the invention and whether the disclosure was sufficient. (

g) Consolboard also establishes (at page 520, citing Minerals Separation North American Corp. v. Noranda Mines, Ltd., (SCC), [1947] Ex. C.R. 306) that the disclosure is sufficient if the public, using only the specification, can make the same useof the invention as the inventor. A similar statement appears in Pioneer Hi-Bred (cited above) at page 1638. (

h) Contrary to the statements in the courts below, Consolboard does not stand for the proposition that in determining thesufficiency of the disclosure, the only relevant questions are “What is your invention?” and “How does it work?” Application of the principles in the Teva 2012 case (

i) It does not matter that Claim 1 includes 260 quintillion compounds. The practice of cascading claims, even if it results in

claims that are overly broad, does not necessarily interfere with the public’s right to disclosure. The skilled reader knows that when apatent contains cascading claims, the useful claim usually is the one at the end of the cascade that names a single compound. Providedthe disclosure is sufficient,

section 58 of the Patent Act ensures that any valid claim survives despite the existence of invalid claims. (

j) Since Pfizer had conducted tests that demonstrated that sildenafil was effective in treating erectile dysfunction, and none of theother compounds in the 446 patent had been shown to be effective in doing so, the invention was the use of sildenafil for the treatment oferectile dysfunction. That is what had to be disclosed in order to meet the requirements of subsection 27(3) of the Patent Act. (

k) However, that disclosure was not made. The 446 patent includes the statement that “one of the especially preferred compoundsinduces penile erection in impotent males”, but the specification does not say that sildenafil is the effective compound, that Claim 7contains the effective compound, or that the remaining compounds in the patent had not been found to be effective. (

l) Whether or not a specification is sufficient depends on what a skilled person would consider to be sufficient. Expert evidence inthis case reveals that there was no basis for a skilled person to determine which of Claim 6 or Claim 7 describes the compound found tobe useful in treating erectile dysfunction. Pfizer’s own expert witness admitted that a person skilled in the art who read the patent wouldnot know which compound was shown by the study to be useful. (

m) Even if a skilled reader could have discerned that the effective compound must be one of the two compounds named in Claim 6and Claim 7, further testing would have been required to determine which of the two was actually effective. On the facts as found by thetrial judge, that would require a minor research project. (

n) The public’s right to sufficient disclosure was denied in this case because the claims ended with two individually claimedcompounds, obscuring the true invention. Pfizer gained a benefit from the Patent Act — exclusive monopoly rights — while withholdingdisclosure as required by the Patent Act. Therefore, the question as to whether the disclosure was sufficient must be answered in thenegative.

The Teva 2012 remedy [16] The formal order in Teva 2012 as originally issued read as follows (Bulletin of Proceedings, Supreme Court of Canada,November 9, 2012, page 1728): The appeal from the judgment of theFederal Court of Appeal, Number A-292-09, 2010 FCA 242, dated September24, 2010, heard on April 18, 2012, isallowed with costs and Patent 2,163,446is declared void.

L’appel interjeté contre l’arrêt de la Courd’appel fédérale, numéro A-292-09,2010 CAF 242, en date du 24 septembre2010, entendu le 18 avril 2012, estaccueilli avec dépens et le brevet2,163,446 est déclaré nul. [17] The declaration of invalidity was surprising because the appeal originated with an application for a prohibition orderunder the NOC Regulations. There is a long and consistent line of jurisprudence to the effect that such a proceeding cannot, as a matter oflaw, result in a final determination as to the validity or infringement of a patent.

The earliest authorities are Merck Frosst Canada Inc. v.Canada (Minister of National Health and Welfare) (1994), 55 C.P.R. (3d) 302 (F.C.A.) and David Bull Laboratories (Canada) Inc. v.Pharmacia Inc., (FCA), [1995] 1 F.C. 588 (F.C.A.), both cited with approval in Eli Lilly & Co. v. Novopharm Ltd.;Eli Lilly & Co. v.

Apotex Ltd., (SCC), [1998] 2 S.C.R. 129, at paragraphs 95 to 97. [18] On November 9, 2012, the day after the issuance of Teva 2012, the Pfizer affiliates filed a motion in the Supreme Courtof Canada to seek amendments to the reasons and the formal order, essentially to give effect to the jurisprudence mentioned in theprevious paragraph. The motion was granted in part by an order dated June 4, 2013. The amendment to the formal order is described inparagraph 5 of the amending order, which reads as follows (Bulletin of Proceedings, Supreme Court of Canada, June 14, 2013, at page1098-9):

5. The formal order is amended to read as follows: “The appeal from the judgment of the Federal Court of Appeal, Number A-292-09, 2010 FCA 242 , dated September 24, 2010, heard on April 18, 2012, is allowed with costs and Teva having established its allegation that Patent 2,163,446 is not valid, the application of Pfizer for an order of prohibition under s. 55.2(4) of the Patent Act , R.S.C. 1985, c. P-4, and s. 6 of the Patent Medicines (Notice of Compliance) Regulations , SOR/93-133 , is dismissed” …. 5.

« L’appel du jugement de la Cour d’appel fédérale, numéro A-292-09, 2010 CAF 242 , en date du 24 septembre 2010, entendu le 18 avril 2012, est accueilli avec dépens et, Teva ayant fait la preuve de son allégation portant que le brevet 2 163 446 n’est pas valide, la demande de Pfizer pour que soit prononcée une ordonnance d’interdiction en application du par. 55.2(4) de la Loi sur les brevets , L.R.C. 1985, ch. P-4, et de l’ art. 6 du Règlement sur les médicaments brevetés (avis de conformité) , DORS/93-133, est rejetée. »

The impeachment action of Apotex [ 19 ] On May 13, 2009, Apotex filed a statement of claim seeking, among other things, a declaration that the 446 patent is invalid and that its sildenafil tablets will not infringe any valid claim of the 446 patent. The statement was amended several times, most recently on September 7, 2012. The statement of claim as it read on September 7, 2012 asserts numerous grounds for impeaching the 446 patent, but for the purpose of this appeal it is enough to say that Apotex alleges insufficient disclosure.

Pfizer defended the claim on all grounds, specifically disputing the claim that the disclosure is insufficient. The trial was scheduled to begin on November 26, 2012. The

summary judgment motion [ 20 ] On November 9, 2012, the day after the issuance of the initial judgment in Teva 2012 , Apotex filed a motion in the Federal Court seeking

summary judgment of its action to impeach the 446 patent, relying on Teva 2012 . The order granting that motion is the order now under appeal. [ 21 ] A respondent opposing a motion for

summary judgment must present evidence aimed at establishing that there is a genuine issue for trial ( MacNeil Estate v. Canada (Department of Indian and Northern Affairs) , [2004] 3 F.C.R. 3, 2004 FCA 50 , at paragraph 25 , citing what was then Rule 215 and is now Rule 214). In this case, it was incumbent on Pfizer to adduce evidence capable of establishing that the sufficiency of the disclosure in the 446 patent cannot fairly be determined without a trial. [ 22 ] That is what Pfizer attempted to do, but without success.

The judge concluded that he was bound by Teva 2012 to find the 446 patent invalid because the disclosure is insufficient whether or not the Supreme Court of Canada amended its judgment and removed the declaration of invalidity, as it eventually did. [ 23 ] The issue for this Court is whether the judge erred in law or misapplied the test for

summary judgment when he concluded as he did. For the following reasons, I have concluded that the judge made no error warranting the intervention of this Court. Analysis [ 24 ] Pfizer argues that Teva 2012 is based on a particular construction of the 446 patent which cannot be conclusive for all purposes because, in the context of an application under the NOC Regulations for a prohibition order, any conclusion on the construction of the patent is necessarily provisional.

I agree, based on the authorities cited above in paragraph 17 ( Merck Frosst (F.C.A. 1994), David Bull (F.C.A. 1995), Eli Lilly (S.C.C. 1998)). [ 25 ] However, to establish that there is a triable issue with respect to the construction of the 446 patent, it was incumbent on Pfizer to adduce evidence or to refer to evidence already adduced in this matter. In particular, Pfizer should have adduced or referred to evidence that addresses how the skilled reader would construe the specification, and why that construction casts doubt on the correctness of the construction adopted in Teva 2012 .

The record contains no such evidence. [ 26 ] Pfizer points to evidence that UK-114,542, the compound named in Claim 6, was in fact tested before the Canadian filing date and found to be useful for treating erectile dysfunction. However, what the patent discloses is that as of the filing date studies had confirmed that one of the compounds in the especially preferred group induces penile erection in impotent males. There is no disclosure

that UK-114,542 was tested, and Pfizer has adduced no evidence that is capable of establishing that the skilled reader should have discerned from the specification that it was tested. Therefore, evidence that UK-114,542 was tested is not capable of establishing a genuine issue for trial on the question of the sufficiency of the disclosure. [ 27 ] Pfizer pointed out in argument that it had little time to gather evidence to respond to the

summary judgment motion. I note that this is not a ground of appeal that is before this Court. However, even if it were, I would reject it. The

summary judgment motion was made in November of 2012. The argument in the Supreme Court of Canada in Teva 2012 was heard in April of 2012, and Pfizer was a party to that proceeding. The issue of the sufficiency of disclosure appears in the latest version of the statement of claim in this case, which was filed in September of 2012. Therefore, for a considerable time before the

summary judgment motion was made, it should have been apparent to Pfizer that it could be a problem that the disclosure in the 446 patent does not mention the testing of UK-114,542. Relevant date for determining the sufficiency of the disclosure [ 28 ] The argument of the parties discloses a possible debate as to whether the relevant date for determining the sufficiency of the disclosure is the date of the Canadian patent application, or the date on which the patent application becomes public.

That issue was not fully argued in the parties’ memoranda of fact and law, and additional written submissions were requested and received. However, given my conclusion that the state of the record on the status of tests conducted on UK-114,542 is incapable of establishing a genuine issue for trial on the question of the sufficiency of the disclosure, I do not consider it necessary in this appeal to attempt to resolve that debate. Conclusion [ 29 ] For these reasons, I would dismiss the appeal with costs. “K. Sharlow” J.A. “I agree Eleanor R. Dawson J.A.” “I agree Robert M.

Mainville J.A.” FEDERAL COURT OF APPEAL NAMES OF COUNSEL AND SOLICITORS OF RECORD Docket: A-560-12 (APPEAL FROM A JUDGMENT OR ORDER OF JUSTICE ZINN OF THE FEDERAL COURT DATED NOVEMBER 20, 2012 (DOCKET NUMBER T-772-09))

DOCKET: A-560-12 STYLE OF CAUSE: PFIZER IRELAND PHARMACEUTICALS v. APOTEX INC. PLACE OF HEARING: Toronto DATE OF HEARING: October 15, 2013 REASONS FOR JUDGMENT BY: SHARLOW J.A. CONCURRED IN BY: DAWSON, MAINVILLE JJ.A. DATED: jANUARY 22, 2014 APPEARANCES : Patrick E. Kierans Kristin Wall For The Appellant Andrew Brodkin Michel Anderson For The Respondent SOLICITORS OF RECORD : Norton Rose Canada LLP Toronto, Ontario For The Appellant Goodmans LLP Toronto, Ontario For The Respondent