S.C.C. Confirms GSK AZT Patent Validity

The Supreme Court of Canada confirmed, on December 5, 2002, the validity of GlaxoSmithKline’s (GSK) Canadian Patent No. 1,238,277 for the use of Zidovudine (AZT) in the treatment or prophylaxis of AIDS. The court also confirmed that the patent had been infringed by two generic drug manufacturers, Apotex Inc. and Novopharm Ltd. AZT, marketed under the brand name Retrovir(tm), was the first successful AIDS treatment and continues to be used.

In late 1990, Apotex and Novopharm instituted proceedings in the Federal Court of Canada, seeking a declaration that the patent was invalid on various bases: (1) that GSK’s work, which comprised testing AZT, a previously-known compound, for its effectiveness in blocking the activity of certain mouse viruses, established only a speculation that AZT might work against HIV, and thus did not constitute GSK scientists as inventors; and (2) that the individuals employed by the National Institutes of Health (NIH) who devised and conducted the tests that established that AZT should be tested in human beings infected with HIV should have been named as co-inventors. GSK resisted this challenge and instituted infringement proceedings to enforce its patent rights.

On March 25, 1998, Justice Howard Wetston declared that the patent was valid and that the generic AZT products distributed by Apotex and Novopharm infringed the patent. However, the judge agreed with Apotex and Novopharm that the NIH scientists were co-inventors and the GSK scientists had achieved only a theory, idea or belief without the work of the NIH. Apotex and Novopharm appealed the trial judgment. On October 26, 2000, the Federal Court of Appeal confirmed that the Canadian patent for AZT was valid and infringed. The reasons were jointly authored by Justices Marshall Rothstein, Edgar Sexton and Brian Malone. The court held that since the GSK scientists’ invention had the promised utility, GSK alone was entitled to the patent. Apotex and Novopharm then obtained leave to appeal from the S.C.C.

In its December 5, 2002 decision, written by Justice Ian Binnie, the S.C.C. dismissed Apotex and Novopharm’s Appeal. The judge agreed with Apotex and Novopharm that a mere speculation cannot found a patent application, and held that a patent is invalid if its utility is neither proven nor is soundly predictable in the state of knowledge existing at the priority date of the patent application. However, the judge found that once the NIH scientists had delivered their results to GSK, the utility of AZT as a treatment or prophylaxis of HIV infection became soundly predictable. Since the conception of this utility had been GSK’s alone, there was no merit to the allegation by Apotex and Novopharm that U.S. government scientists were co-inventors of the use of AZT for the treatment of AIDS. As the U.S. government scientists were not responsible for the inventive concept, the named GSK inventors were the proper and only inventors.

The S.C.C. applied its doctrine of sound prediction to reject the contention by Apotex and Novopharm that the patent was invalid because the inventors had not demonstrated the utility of AZT in humans by the claimed invention date. In the circumstances of the case before it, enough was known about AZT that its utility in humans was soundly predictable.

The S.C.C. judgment was released 12 years to the day after the first action was instituted in the Federal Court (Trial Division). GSK’s 1992 request for an interlocutory injunction, which would have prohibited the sale of infringing AZT by Apotex and Novopharm, was refused because GSK could demonstrate no irreparable harm. The permanent injunction pronounced after trial was stayed pending appeals to the Court of Appeal and the S.C.C. As a result, Apotex and Novopharm sold infringing AZT for most of this 12-year period. The amount of damages to which GSK is entitled to compensate for this infringement will be the subject of a separate reference.

GSK was represented by Ogilvy Renault, with a team that included Patrick Kierans in Toronto, Peter Stanford and Ken Sharpe in Ottawa and Brian Daley in Montreal. Apotex was represented by Harry Radomski, Richard Naiberg and David Scrimger of Goodmans LLP in Toronto. Carol Hitchman, Warren Sprigings and Paula Bremner of Hitchman & Sprigings in Toronto acted for Novopharm.