Anthony Creber and Cristin Wagner Click here to see full sized version.

The Supreme Court of Canada has rewritten the tests for “obviousness” and “anticipation” in Canadian patent law to reflect recent developments in Britain and the U.S.

Depending on how the Federal Court interprets Apotex Inc. v. Sanofi Synthelabo in the future, intellectual property lawyers predict the top court’s Nov. 6 judgment could make it easier to defeat weak patent claims in Canada.

At the same time, the high court ruled 7-0 against a generalized offensive by the generic pharmaceutical industry which attacked the validity of the doctrine of “selection” patents granted for novel and not obvious improvements flowing from earlier “genus” patents.

Selection patents are critical and common in the chemical and biotech industries.

“A system of genus and selection patents is acceptable in principle,” Justice Marshall Rothstein held in his 7-0 ruling.

“It’s a very good decision,” observed University of New Brunswick law professor Norman Siebrasse. “It represents evolution, not revolution, and it generally aligns our law with that of the U.K. and the U.S.” 

Had the generic drug industry prevailed, “it would have been a disaster for patentees because you would have been able to challenge almost any selection patent,” Siebrasse remarked.

He suggested the judgment’s biggest impact will flow from the court’s adoption of a lower, more flexible, threshold for “obviousness” that could make it “somewhat easier” for challengers to defeat patents by showing that the claimed inventions are obvious.

The Supreme Court dismissed the appeal of Apotex Inc., which had lost in the courts below its challenge to the validity of Patent ’777 for Plavix, a popular blood thinner used to prevent heart attacks and strokes.

The generic drug manufacturer applied to the Minister of Health for approval of its own version of the drug patented by Sanofi Synthelabo. However the brand-name manufacturer successfully argued that its patent for Plavix was valid and would be infringed by Apotex’s proposed copycat drug.

Apotex assailed the ’777 Patent on three grounds: that the method for creating the drug was obvious and Plavix was therefore not a patentable invention; that Plavix was not new because it was anticipated by the earlier genus patent; and that Plavix duplicated an earlier invention and hence could not be patented (double-patenting).

The Supreme Court rejected all three arguments.

Justice Rothstein concluded that the prior art and common general knowledge of persons skilled in the art at the relevant time were not sufficient for it to be more or less self-evident for such persons to try to find the compound protected by Patent ’777.

He noted that Sanofi-Synthelabo spent several years and millions of dollars developing Plavix up to the point of preliminary human clinic trials before it was discovered that drug was active and non-toxic. It was also not self-evident from the genus patent, or from common general knowledge, what the beneficial properties of Plavix would be and that what was being tried ought to work. Nor were the drug’s advantages quickly or easily predictable.

Counsel told The Lawyers Weekly Justice Rothstein’s reasons are a must read for all IP practitioners. 

“Certainly, in the pharmaceutical field [a contrary decision] could have put at risk many of the most important drugs that are on the market today, and it would have had an immediate and potentially devastating effect on employment in Canada, as well as research and development,” said Sanofi’s lawyers,
Tony Creber and Cristin Wagner of Gowlings in Toronto. 

Creber said the ruling “also has significant legal impact because Canada had a bit of a legal reputation as being not very pro-patentee, and this puts us more in the neutral category and more in line with the U.K. and the U.S., our major trading partners.”  

Justice Rothstein’s judgment reworks the established tests for two of the major grounds for challenging patents: anticipation and obviousness.  

In light of recent landmark decisions by the U.K. House of Lords in Angiotech Pharmaceuticals Inc. v. Conor Medsystems Inc., [2008] UKHL 49, and by the U.S. Supreme Court in KSR International Co. v. Teleflex Inc., 127 S. Ct. 1727 (2007), Justice Rothstein said the Canadian approach to obviousness since the leading case of Beloit Canada Ltd. v. Valmet OY (1986), 8 C.P.R. (3d) 289 (F.C.A.) was too restrictive.  

He devised a four-part approach to obviousness. Drawing on the foreign patent cases, he ruled that a new factor that can sometimes be considered in determining whether a patent claim is obvious is whether the combination of the elements sought to be patented is “obvious to try.”

This factor is relevant where it is “very plain” or “more or less self-evident” that what is being tested will work. He suggested this factor is likely to have application, for example, in the pharmaceutical field where advances are based on experimentation.

The judge also ruled that the Beloit test for anticipation should be reconfigured into a two-part test. Thus in order to prove that a patent was anticipated by an earlier patent, a challenger would have to show that a prior publication would have disclosed the subject matter of the invention to the notional person skilled in the art, and that the prior publication would have enabled the person skilled in the art to perform or create the invention without undue burden.

The judgment “tweaks” the obviousness test, suggested Creber.

“The [appellants] were arguing that as long as someone else could go down the same path as the inventors did then you could never get a valid invention – which would essentially destroy almost every patent that has ever been issued,” he said. “The Supreme Court of Canada said that’s not the test [for obviousness]. It’s a path that not only is it clear that you should go down, but it is clear before you have done any work that it will give you the benefits and the advantages that were discovered by the inventor.”

Ed Hore of Toronto’s Hazzard & Hore, counsel for the intervener Canadian Generic Pharmaceutical Association, said his client is pleased that the top court softened the restrictive test for obviousness, including adopting the “obvious to try” factor as part of the analysis.

Depending on what lower courts do, “it’s an easier test,” Hore said. “It’s going to have an immediate impact on a lot of other cases that are going on.”

Hore noted that Canadian cases in recent years have repeatedly decided that “‘worth a try’ was not part of Canadian law and... that if there was any experimentation that a notional person skilled in the art would have had to do, then it couldn’t be obvious. That was a big problem in the pharmaceutical industry because any formulation always involved testing and experimentation. The courts are now saying: ‘Well, if you have a finite number of options, and you pursue those options knowing that you are going to get the result that you want, then the invention may be obvious.’ In other words, you may not be entitled to a patent.”

He predicted that the court’s “unprecedented” heavy use of U.K. and U.S. jurisprudence may lead to more foreign patent law finding its way into Canadian courtrooms.

Plavix heralds “a brave new world,” remarked IP litigator Elizabeth Dipchand of Toronto’s Lenczner Slaght. “The ‘obvious to try’ test, in particular, may fundamentally alter existing legal principles that apply to obviousness,” she suggested.

Dipchand said a key unknown is how much of the patent law established over the past 30 years survives in the wake of the top court’s overhaul. Moreover, how Plavix plays out in other cases depends very much on the nature and circumstances of individual patents, as well as on the Federal Court’s interpretation of Justice Rothstein’s judgment.

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Reasons: Apotex Inc. v. Sanofi-Synthelabo Canada Inc., [2008] S.C.J. No. 63.