AstraZeneca Canada v. Apotex

A look at a landmark case in patent law, in which the so-called “promise doctrine” was struck down by the Supreme Court of Canada

The Supreme Court of Canada judgment in this case concerned AstraZeneca’s appeal of the invalidation of its patent for NEXIUM (esomeprazole) for lack of patent utility based on the “promise of the patent” doctrine. This was the most significant patent case before the SCC since the Sanofi decision in 2008 reconfigured the test for patent obviousness (see “Top 10 Cases,” p. 46). The “promise of the patent” doctrine has been the most controversial issue in Canadian pharmaceutical patent law for the past several years. 

As a result of the lower Federal Courts’ adoption of this doctrine, Canada’s patent utility law had been widely perceived to be overly stringent and out of step with its international trade obligations in a manner that has particularly negatively affected the validity of pharmaceutical patents.

On June 30, 2017, the so-called promise doctrine was conclusively rejected by Canada’s highest court as a basis for invalidating a Canadian patent.  In a significant judgment that reversed years of jurisprudence in the lower courts, the Supreme Court held that the level of utility required of a Canadian patent must not be measured by any “promise” in the patent disclosure, but rather should be based on a claims-based analysis of the subject-matter of the invention. This judgment, which applies to patents for all subject matters, brings Canadian law more closely in line with that of our international trading partners and is in particular a significant win for pharmaceutical innovation in Canada.

Background of dispute

The Supreme Court’s decision was in the context of a dispute regarding the validity of a patent for esomeprazole, a proton-pump inhibitor (PPI) used in the reduction of gastric acid, reflux esophagitis, and related maladies. AstraZeneca markets esomeprazole in Canada as NEXIUM®; esomeprazole is claimed in Canadian Patent No. 2,139,653 (the 653 Patent).

In the lower Federal Court judgments on the validity of the 653 Patent, the entire patent was declared invalid for failure to demonstrate or soundly predict utility alleged by the generic company Apotex to be promised in the disclosure portion of the patent.

The main issue before the courts was whether statements of usefulness in the disclosure amounted to a promise of utility by which standard the validity of the patent should be measured.

Following the dismissal by the Federal Court's Hughes J. (as he then was) of a prohibition application by AstraZeneca under the Patented Medicines (Notice of Compliance) Regulations in 2010, Apotex launched a competing esomeprazole product in Canada. This launch led to an action in which AstraZeneca sued Apotex for infringement of the 653 Patent.

Apotex defended the action in part by counterclaiming for a declaration of invalidity. In 2014, Rennie J. (as he then was) found the 653 Patent invalid and dismissed AstraZeneca’s action for infringement. Although Rennie J. agreed with AstraZeneca that the subject matter of the claims of the 653 Patent in suit was novel and inventive (non-obvious), he found the entire patent invalid for failure to demonstrate or soundly predict the utility promised in the patent.

AstraZeneca’s appeal to the Federal Court of appeal was dismissed by a unanimous panel in 2015. Dawson J.A. concluded that Rennie J. had correctly applied the law in his construction of the promised utility of the patent.

On the appeal, the SCC heard oral argument from the AstraZeneca and Apotex parties, as well as the following interveners: Innovative Medicines Canada and BIOTECanada (jointly); the Centre for Intellectual Property Policy; and the Fédération internationale des conseils en propriété intellectuelle.

The court also received written submissions from the Canadian Generic Pharmaceutical Association, the Intellectual Property Owners Association, and the Intellectual Property Institute of Canada.

Promise doctrine is an error of law

In unanimous reasons, the Supreme Court of Canada allowed AstraZeneca’s appeal and struck down the promise doctrine as an error of law.

Writing for the court, Rowe J. emphasised the connection between utility and the subject-matter of the invention as identified by claims construction:

For the subject matter to function as an inventive solution to a practical problem, the invention must be capable of an actual relevant use and not be devoid of utility.

With this in mind, Rowe J. held that utility must instead be assessed using the following two-step test:

First, courts must identify the subject-matter of the invention as claimed in the patent. Second, courts must ask whether that subject-matter is useful — is it capable of a practical purpose (i.e. an actual result)?

This test is driven by the claims of the patent, rather than the disclosure portion.

Rowe J. also confirmed that there is a single, low bar for proof of utility, restoring the “scintilla” standard as the focus of the analysis.

The Act does not prescribe the degree or quantum of usefulness required, or that every potential use be realized — a scintilla of utility will do. A single use related to the nature of the subject-matter is sufficient, and the utility must be established by either demonstration or sound prediction as of the filing date […].

In reaching this conclusion, the court recognized that the promise doctrine was excessively onerous and inconsistent with the scheme of the Patent Act. By wrongly conflating the utility requirement in section 2 with the disclosure requirement in subsection 27(3), the promise doctrine had the potential to punish patentees for attempting to fulfill their part of the patent bargain by fully describing the invention and its use.

Declaration of invalidity reversed

Applying the correct test for utility, the SCC held that the 653 Patent was valid and reversed the courts below.

In the Federal Court, Rennie J. had held that the subject matter of the main 653 Patent claims in issue was “optically pure salts of the enantiomer of omeprazole”. He had also held that one of the uses he identified under the promise doctrine — that these salts would be useful as PPIs to reduce gastric acid secretion — had been soundly predicted by the relevant date.

These holdings were sufficient to support the utility of the 653 Patent claims in suit: the other uses found by the lower courts to have been promised were irrelevant to the utility analysis.

Gunars GaikisYoon Kang and Y. Lynn Ing of Smart & Biggar acted for the appellants, AstraZeneca Canada Inc., AstraZeneca Aktiebolag and AstraZeneca UK Limited.

Harry B. RadomskiAndrew R. BrodkinRichard Naiberg and Sandon Shogilev of Goodmans LLP  were counsel for the respondents, Apotex Inc. and Apotex Pharmachem Inc.

Patrick E. Kierans, Kristin Wall and Jillian Hyslop of Norton Rose Fulbright Canada LLP represented the interveners Innovative Medicines Canada and BIOTECanada.

Jeremy de Beer of the University of Ottawa and E. Richard Gold of McGill University represented the intervener the Centre for Intellectual Property Policy.

Jonathan Stainsby and Scott A. Beeser of Aitken Klee LLP acted for the intervener the Canadian Generic Pharmaceutical Association.

Julie Desrosiers and Kang Lee of Fasken Martineau DuMoulin LLP and Alain M. Leclerc of Goudreau Gage Dubuc acted for the intervener Fédération internationale des conseils en propriété intellectuelle.

Andrew Bernstein and Yael Bienenstock of Torys LLP were counsel for the intervenor the Intellectual Property Owners Association.

Jason Markwell of Belmore Neidrauer LLP acted for the intervenor the Intellectual Property Institute of Canada.