On December 24, 2020, the Federal Court issued the fourth trial decision under the amended Patented Medicines (Notice of Compliance) Regulations (Allergan Inc. v. Sandoz Canada Inc. et al, 2020 FC 1189, per Crampton CJ). Interesting comments prepared by my colleagues Alain Leclerc, Jason Markwell and myself.
The Court gave a very narrow interpretation of section 53.1(1) that could allow in the future all licensee of a patent to avoid file wrapper estoppel.
Allergan is the exclusive Canadian licensee of RAPAFLO® (silodosin) 4mg and 8mg capsules for the treatment of benign prostatic hyperplasia. Sandoz filed an ANDS for approval to sell a generic version of the Allergan product in Canada and served a Notice of Allegation in respect of Canadian Patent 2507002. Allergan responded by commencing an action pursuant to section 6 of the PM(NOC) Regulations, and Sandoz filed a counterclaim for a declaration of invalidity.
The Court dismissed Allergan’s claim for patent infringement on the basis that Sandoz did not use an essential element of the claims, viz. wet granulation, to manufacture its product. The Court also dismissed Sandoz’s counterclaim because the claimed invention would not have been obvious to the skilled person at the claim date. While the case turned largely on the evidence and settled principles of law, two aspects of the ruling are noteworthy from a jurisprudential perspective:
1. File wrapper estoppel: Section 53.1 of the Patent Act allows the Court to admit into evidence any written communication “made by the patentee” during prosecution to rebut any representation “made by the patentee” in any action or proceeding as to the construction of a claim in the patent. This provision came into force on October 30, 2019 and has been interpreted by the Court in only a handful of cases. Sandoz sought to rely on this rule to rebut an allegation made by Allergan in the action that “wet granulation” was not an essential element of the asserted claims. The Court held that section 53.1 did not apply because Allergan is a “licensee” under the patent, not a “patentee”, and did not communicate with the patent office during prosecution. Conversely, the “patentee”, Kissei Pharmaceutical Co., Ltd., a party defendant with separate counsel, did not “make any representation” to the Court in the action with respect to the construction of a claim in the patent. As such, the Court held that it could not consider the prosecution history in construing the patent claims, but “observe[d] in passing” that this is a “glaring example of the mischief that is implicitly permitted by the current wording of subsection 53.1(1).” The Court gave a very narrow interpretation of section 53.1(1) that could allow in the future all licensee of a patent to avoid file wrapper estoppel.
2. Inventive concept: The Supreme Court of Canada has held that inventiveness (non-obviousness) must be determined by comparing the “inventive concept” of each asserted claim to the state of the art at the relevant claim date (Sanofi 2008). However, in a few recent cases, the Court of Appeal noted that identifying the “inventive concept” often leads to distraction and unnecessary satellite debates. To avoid this problem, the Court urged trial judges to “simply avoid the inventive concept altogether and pursue to the alternate course of construing the claim” (CIBA, 2017).
The Court considered it “necessary to supplement” the claims with “four additional details in the patent specification that permit the inventive concept to be fully and fairly understood...
In the present case, the Court rejected Sandoz’s invitation to follow the “alternate course” recommended by the Court of Appeal because it was “readily apparent … that the claims alone do not provide sufficient information to properly and fairly understand the innovative (sic) concept or to perform the … obviousness analysis.” Accordingly, the Court considered it “necessary to supplement” the claims with “four additional details in the patent specification that permit the inventive concept to be fully and fairly understood, and then compared with the prior “state of the art” in the third step of the overall analysis.” Using this yardstick, the Court held that the subject matter of the asserted claims would not have been obvious to the skilled person as of the claim date.
In conclusion, it is apparent from this decision that there is a loophole in the application of file wrapper estoppel in Canada, namely, if a licensee sues for patent infringement, then previous statements made by the licensor/patentee during prosecution cannot be raised under Section 53.1 of the Patent Act. The decision is also a reminder that construction starts with the language used in the claims, but when “it is not possible to fully grasp the nature of the inventive concept from those claims”, the Court may seek guidance from the description of the invention to determine the “inventive concept” for analyzing obviousness allegations. Thus, a patent description may provide critical input into the inventive concept.
 Please note this article was initially posted on LinkedIn Pulse by Julie Desrosiers : Federal Court indentifies loophole in Canadian Patent Act | LinkedIn.