Canadian Supreme Court holds promise doctrine "unsound" in AstraZeneca v Apotex Nexium dispute

The AmeriKat when promises have been made,
but not delivered....

Yesterday, on the eve of Canada Day, the Supreme Court of Canada rendered its much-awaited decision in the appeal between AstraZeneca Canada v Apotex (2017 SCC 36).  The Court unanimously rejected the controversial "promise doctrine" in relation to the utility requirement under Canadian patent law.

Background

In 1994, AstraZeneca made an application for the 2,139,653 patent ("the '653 patent").  The '653 patent claimed the optically pure salts of esomeprazole.  Esomeprazole is a proton pump inhibitor which blocks acid producing pumps in cells to reduce the amount of stomach acide  The drug is marketed under the name NEXIUM.

Apotex sought to sell a generic version of NEXIUM, applying for a Notice of Compliance to the federal Minister of Health to enable it to do so. Under the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, AstraZeneca applied to the Minister of Health to stop the issuance of a Notice of Compliance to Apotex. This application was dismissed by Justice Hughes in 2010, allowing Apotex to launch. AstraZeneca brought an action for patent infringement against Apotex. Apotex counterclaimed for invalidity.

At first instance,Justice Rennie found that the '653 was novel and inventive, but lacked utility.  Although the patent proved to be useful for some purposes, it was invalid because "it promised more than it could provide".  Thus, falling foul of the Promise Doctrine.  The Federal Court of Appeal dismissed AstraZeneca's appeal.  AstraZeneca appealed to the Supreme Court arguing that the Promise Doctrine was unsound. The Supreme Court agreed.

Principles

The Court set out some basic background and principles which inform their reasoning.  These were as follows:

• The patent system has a duel purpose - incentivize new inventions (by granting time-limited exclusive rights) and encourage inventors to publicly disclose knowledge about those inventions for society's benefit (Teva Canada v. Pfizer Canada (2012 SCC 60)).  

• For a creation to be an "invention", section 2 demands that the subject matter be useful.  This is the utility requirement.  This requirement avoids granting patents prematurely (and thereby restricting others ability to conduct research/development).  It ensures that patents are not granted where the use is speculative, fanciful or inoperable.  At this stage of the patent analysis - section 2 - the invention just need to be useful and not merely a "laboratory curiosity" where its "only possible claim to utility is as a starting material for further research" (Re Application of Abitibi Co (1982) 62 CPR).  

• The claims define the subject matter of the invention and set out the scope of the monopoly (section 27(4)). This allows others "to ascertain with some measure of exactness the boundaries of the exclusive privilege upon which they may not trespass during the exercise of the grant" (Pioneer v Canada [1989] 1 SCR 1623).  

• Section 2 is a qualifying gateway.  Once the subject matter qualifies as an invention , then the invention must be properly disclosed.  

• Section 27(3) provides that the specification must describe the invention "with sufficiently complete and accurate details as will enable" a skilled person to "construct or use that invention".  

O Canada, thank you for getting rid of the
Promise Doctrine 

The Court's Analysis 

The utility requirement is a necessary pre-condition to patentability - if the invention that a patent purports to protect is not useful, it cannot be an invention (Apotex v Wellcome (2002 SCC 77), Teva v Pfizer). But useful for what? That lower courts had answered that question with the reply - the "promise of the patent" (Pfizer v  Mylan (2011 FC 547).  This means that:

"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 v.Canada (Minister of Health), 2008 FCA 108, [2009] 1 F.C.R. 253 (Ranbaxy). The question is whether the invention does what the patent promises it will do." [Emphasis added.]  (Eli Lilly v Novopharm (2010 FCA 197)

This exercise requires:

1. Reviewing the entire specification (claims and entire disclosure)
2. Identifying the promises made in the entire specification 
3. Determining whether the patent fulfils those promises by demonstration or sound prediction.

This exercise is a question of law viewed through the skilled person at the time of filing (with the assistance of expert evidence) and has been applied in several cases (BMS v Apotex (2005 FC 1348), Servier v Apotex (2009 FCA 222), Sanofi v Apotex (2009 FC 676), Eli Lilly; AstraZeneca v Mylan (2012 FCA 109)).

The Court stated that although the Promise Doctrine is viewed as uniquely Canadian, it has its roots in English law in Hatmaker v Joseph ((1919) 36 PRC 231) and Re Alsop's Patent ((1907) 24 RPC 733 - "false suggestion or representation") where, the now extinct doctrine the Court referred to as the "False Promise Doctrine" derived.  The Court explained, citing this paper by former Guest Kat, Professor Norman Siebrasse (see Norman's blog here), that this was a doctrine from a different era which was based on the view that no one wanted to second guess the Crown in its exercise of granting a patent.  So if the representations made by an applicant turned out to be false, it was not for the Courts to presume that the Crown would have granted the patent based on a more "limited" promise.  [Although admittedly not having poured over Victorian patent law precedent, the AmeriKat read both Hatmaker v Joseph and Re Alsop's Patent and could not discern a logical evolution between the dicta in either case, especially Hatmaker, and what ultimately resulted in what became the Canadian Promise Doctrine -  a task for another time...].

Although dead in English law, the Doctrine found a new home in Canada.  But, the Supreme Court noted, "this doctrine...is unsound".  The Court stated that the doctrine was as "excessively onerous" in two respects :  (i) expressed promises and (ii) multiple uses.

The Promise Doctrine conflates utility with sufficiency 

In relation to expressed promises,  the Court stated that the Promise Doctrine conflated utility (s. 2) with sufficiency (s. 27(3)) - utility is a "condition precedent to an invention" and sufficiency is a "disclosure requirement independent of the first" (see Dickson J (as he then was) in Consolboard).   The Promise Doctrine effectively imports sufficiency requirements into the utility requirements by demanding that for an invention to have utility "the disclosed use [must] be demonstrated or soundly predicted at the time of filing".  If the disclosed use does not fulfil this requirement, then the entire patent is invalid as utility is the pre-condition of patentability.

Although "overpromising is a mischief", the Canadian Patents Act deals with this in a variety of ways (namely via sufficiency).  The Court stated:

"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”."

The Promise Doctrine deprives patent protection where not every promised use is sufficiently demonstrated

Christmas has come early for Canadian
patentees thanks to the Supreme Court

In relation to multiple uses, the Court stated that the Promise Doctrine was contrary to the Act by requiring that where multiple promises were expressed, all of them must be satisfied to meet the utility requirements.  All that was required was that "[a]ny single use of the subject matter that is demonstrated or soundly predicted by the filing date is sufficient to make an invention useful for the purposes of" the utility requirement.   To demand that all uses be met is unfair as it would risk an:

"otherwise useful invention to be deprived of patent protection because not every promised use was sufficiently demonstrated or soundly predicted by the filing date....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."  [Emphasis added]

In summation, "promises are not the yardstick against which utility is to be measured" [63].

The correct test for utility

The Court stated that utility requires the subject matter of an invention to be useful.  This means that the invention must be capable of an actual use relevant to the subject matter and not devoid of utility.  At [55] the Court stated:

"A single use related to the nature of the subject-matter is sufficient and utility must be established by either demonstration or sound prediction as of the filing date."

To determine whether a patent discloses an invention with sufficient utility, the courts should adopt a two-stage test:

1. Courts must identify the subject-matter of the invention as claimed in the patent
2. Courts must ask whether that subject-matter is useful - is it capable of a practical purpose (ie. actual result)

The Court stated, in line with Consolboard, that is not a requirement of section 2 that a patentee must disclose the utility of the invention, just that the subject matter must have utility.  

The Court's Decision

Having put the Promise Doctrine firmly in a locked box in respect of the utility requirement, the Court was tasked with deciding whether the '653 Patent was indeed "useful" under section 2.  The subject matter of the '653 patent was defined by Justice Rennie as:

". . . the subject matter of the ‘653 patent was optically pure salts of the enantiomers of omeprazole, described as novel compounds, having improved pharmacokinetic and metabolic properties and high stability to racemization in neutral and basic pH, a method to make them, and therapeutic uses."

The subject of the patent that must be useful for the purposes of section 2 is the "optically pure salts of the enantiomer of omeprazole".

It was accepted at first instance that at the filing date the optically pure salts of the enantiomer of omeprazole would be useful as a proton pump inhibitor to reduce the production of gastric acid.  Use as a proton pump inhibitor is related to the subject matter of the patent, thereby making it useful within the meaning of section 2.  This is sufficient utility to satisfy the requirements of section 2.

The Supreme Court thereby allowed the appeal finding that the patent was not invalid for lack of utility.

Comment 

Patentees and industry organizations are heralding yesterday's decision as a big win for innovation. This is not the least bit surprising given that since its inception in 2005, the Promise Doctrine resulted in the invalidation of 26 patents relating to 22 medicines and over $1 billion in sales. As you would expect, the US Chamber of Commerce's Global IP Center stated in a press release that:

"The Doctrine’s extremely restrictive approach has created harmful instability and uncertainty for medical innovators by making it difficult to obtain or defend a life science patent in Canada. Today, the Supreme Court has begun to restore much-needed clarity and confidence that biopharmaceutical innovators will be afforded equal protections under the law. This ruling sends an important signal that Canada is open for the business of innovation."

AstraZeneca stated that the decision:

"will resolve a key issue for Canadian innovators because it removes the ambiguity that the promise doctrine created. It signals to global investors that Canada is a good place to invest with a predictable and stable market, aligned to other major trading partners.”

From a political angle, the removal of this hurdle will be a welcome development for both the US and Canada as they prepare for the upcoming NAFTA talks.

Legally, however, it is also important to note the limits of the decision.  This was a question about utility - not sufficiency.  The Court noted that sufficiency has an important role in patent law in remedying the mischief of "over promising".  Utility was and is not the place for this function, as otherwise the consequences of an applicant not even being able to jump over the first hurdle to obtain patent protection at all is excessively onerous (as opposed to, the Court noted at [46], obtaining a patent, but then having to rely on a limited claim should a broader claim be found to over promise at the relevant date).

With the promising of patents all the rage at the moment, the next question will be how the UK Supreme Court will grapple with similar arguments in the context of plausibility in sufficiency.