Eli Lilly Canada Inc. v. Apotex Inc.

Eli Lilly Canada Inc. v. Apotex Inc.
Court (s) Database
Federal Court Decisions
Date
2007-04-27
Neutral citation
2007 FC 455
File numbers
T-156-05, T-787-05
Notes
A correction was made on December 9, 2015
Reported Decision
Decision Content
Date: 20070427
Docket: T-156-05
T-787-05
Citation: 2007 FC 455
Ottawa, Ontario, April 27, 2007
PRESENT: The Honourable Justice Johanne Gauthier
BETWEEN:
ELI LILLY CANADA INC.
Applicant
and
APOTEX INC. and
THE MINISTER OF HEALTH
Respondents
and
ELI LILLY AND COMPANY LIMITED
Respondent/Patentee
REASONS FOR JUDGMENT AND JUDGMENT
[1] Eli Lilly Canada Inc. (Lilly) seeks an order prohibiting the Minister of Health from issuing a Notice of Compliance under the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 (the Regulations), that would allow Apotex to make and sell 2.5 mg, 5 mg, 7.5 mg, 10 mg, 15 mg and 20 mg tablets of olanzapine.
[2] The applications in the two above-mentioned files are identical except that file T-787-05 only pertains to the 10 mg tablets of olanzapine. The circumstances mandating the issuance of two almost identical proceedings will be discussed in a distinct order dealing with costs.
[3] The drug olanzapine is the subject of Canadian Patent 2,041,113 (the ‘113 Patent) which is made and marketed in this country by Eli Lilly Canada Inc. under the brand name Zyprexa®.[1]
[4] The character of the Regulations and so called “NOC proceedings” has been described in two recent decisions of the Supreme Court of Canada: Bristol‑Myers Squibb Co. v. Canada (Attorney General), 2005 SCC 26, [2005] 1 S.C.R. 533 (the “Biolyse decision”); AstraZeneca Canada Inc. v. Canada (Minister of Health), 2006 SCC 49, [2006] 2 S.C.R. 560. It is here sufficient to state that NOC proceedings serve a limited purpose. They are intended to be an expeditious way of determining issues relating to the validity and infringement of patents listed on a register established pursuant to the Regulations. They are not the equivalent of a civil action for patent infringement or for a declaration of invalidity nor are decisions made as a result of NOC applications binding in any subsequent action between the parties with respect to the validity of the patent under review.
[5] However, it is worth mentioning that since the adoption of the Regulations, it appears that NOC proceedings have become more and more complex. Today, they can hardly be described as summary. In this instance, the applicant filed 10 affidavits in chief plus nine affidavits in reply, whereas Apotex filed 12 affidavits in chief and 11 more affidavits in sur-reply. The body of some of these affidavits contain more than 80 pages. A list of the many experts who supplied evidence along with their stated qualifications is attached as Appendix A.
[6] The hearing of the present applications lasted a full seven days and did not go longer only because the parties agreed to limit their representations to pointing the way to the most pertinent evidence that the Court should consider and to outlining the legal and procedural issues to be determined. There was little time to go through the voluminous books of authorities submitted by the parties even though they agree that some of the legal issues relating to “selection patents” are quite new and important. Indeed, Apotex implies that such patents are to figure in many future NOC proceedings and that, in the same manner that these patents are sometimes described as “second generation patents”, one could describe the procedure for addressing them as “second generation NOC”. Hopefully, we will find a more efficient way of dealing with these so-called “summary proceedings” given that, in this case, the need to limit the hearing to seven days meant that the Court had to review more than 100 cases as well as a very substantial amount of evidence after the hearing.
[7] As will become apparent later, a good portion of this evidence relates to issues which are simply not that relevant to the ultimate decision to be made. Each side raised numerous objections to the evidence presented by the other, including objections on the basis of hearsay and failure to put in evidence facts underlying the experts’ opinions. The objections also include attacks on the admissibility of certain evidence while both parties challenge the weight to be attributed to various experts’ opinion.
[8] This comment by the Supreme Court of Canada in R. v. D.D. (2000 SCC 43, [2000] S.C.J. No. 56 (QL)) is most appropriate and illustrates the need for reform or, at least, better management of expert evidence in NOC proceedings:
Finally, expert evidence is time-consuming and expensive. Modern litigation has introduced a proliferation of expert opinions of questionable value. The significance of the costs to the parties and the resulting strain upon judicial resources cannot be overstated. When the door to the admission of expert evidence is opened too widely, a trial has the tendency to degenerate into “a contest of experts with the trier of fact acting as referee in deciding which expert to accept.”
[9] Given the nature of the proceedings and the fact that the hearing took place barely two months before the end of the 24-month period set out in the Regulations, my reasons on certain issues will not be as precise or detailed as the very comprehensive nature of the parties’ submissions and evidence might warrant. An index for the discussion and reasons set out herein is as follows:
1) Overview of the drug & chemistry para. 10-39
2) NOA para. 40
3) Preliminary matters
(a) Motion to strike para. 59
(b) The failure to allege invalid selection in the NOA para. 72
(c) Dr. Pullar’s affidavit para. 126
(d) Dr. Forman’s affidavit in T-156-05 para. 163
(e) The MPI Study para. 173
(f) Impact on Lilly’s experts para. 189
(g) Experts’ qualifications and Issues
affecting the weight of their opinions para. 201
4) Burden of Proof
(a) The presumption s. 43 of the Patent Act para. 224
(b) Heavy burden of proof para. 241
5) Anticipation
(a) General principles para. 247
(b) Application
(i) Person skilled in the art para. 269
(ii) The ‘687 Patent para. 273
(iii) The “Schauzu article” para. 278
6) Obviousness
(a) General principles para. 296
(b) Application para. 308
(c) Secondary indicia para. 352
7) Double Patenting para. 359
8) Section 53 para. 365
9) Conclusion para. 383
1) Overview of the drug chemistry and background
[10] Olanzapine is an antipsychotic medicine used to treat patients who suffer various forms of mental illness, particularly schizophrenia.
[11] There are two types of antipsychotic: typical (a classical or first generation antipsychotic) and atypical (a second generation antipsychotic). An atypical antipsychotic does not result in serious extrapyramidal side effects (EPS). As described in the affidavit of Dr. Richard Williams, EPS can result in involuntary twitching of the face and tongue, and painful body distortions.
[12] In general, antipsychotic compounds work by blocking various receptor sites (including sub-types of those for dopamine and serotonin) in the brain or by binding and releasing to receptor sites at different rates.
[13] The first commercially available antipsychotic medicine, chlorpromazine, was introduced in 1953. Though the drug was capable of treating schizophrenia, its use was limited because it induced serious EPS in certain patients as well as other serious side effects. Dr. Williams describes the drug haloperidol, introduced in the 1960’s, as “the next substantial improvement”; however, he states that it produced EPS at the same rate as chlorpromazine.
[14] The first atypical antipsychotic, called clozapine, was introduced in 1968. It was withdrawn from the market after it was observed that some patients suffered serious haematological side effects which included a dramatic reduction of white blood cells. Since then, clozapine has returned to the market[2] but those who are prescribed it must undergo biweekly monitoring of their white blood cell count.
[15] Beginning in the early 1970’s, Lilly scientists conducted research into drugs having useful activity on the central nervous system (CNS). Dr. Chakrabarti a researcher at Lilly and one of the inventors of the ‘113 Patent, was also one of the two inventors listed on Canadian Patent number 1,075,687 (‘687 Patent) filed in 1975 and which issued on April 15, 1980. The ‘687 Patent covers a very broad genus or class of chemical compounds[3] having useful CNS activity. This genus encompasses olanzapine.
[16] Olanzapine is not disclosed specifically in any of the one hundred examples listed in the ‘687 patent. While listing specific examples, the patent also describes criteria that designate certain “preferred compounds” within the broad genus it encompasses. It also identifies a more specific set of these criteria to designate a presumably smaller set of compounds as “most preferred”.
[17] While the parties agree that olanzapine meets the criteria for a “preferred compound”, they disagree as to whether it also qualifies as a “most preferred” compound. Lilly expert Dr. Nichols, in his affidavit, asserts that olanzapine cannot be a “most preferred” compound because it does not possess all of the criteria of that category. However, Dr. Nichols’ comments on cross-examination seem to contradict his initial position. Specifically, he recognizes that ethylflumezapine is expressly listed as a “most preferred compound”, yet he also concedes that it does not possess one of the requisite criteria listed in the patent. This contradiction lends further support to the position held by Apotex’ experts, particularly Drs. McClelland and Castagnoli, that it is not possible for a single compound to possess every one of the “most preferred” criteria. The Court agrees with them. However, the Court also observes that both of the sub-classes (i.e. “preferred” and “most preferred”) of the ‘687 Patent nonetheless still comprise a very large number of compounds.[4]
[18] The ‘687 Patent does not specifically refer to the side effects of these compounds, but it states that their properties (described as “potent centrally acting compounds with neuroleptic, sedative or relaxant or anti-emetic[5] properties”) coupled with their high therapeutic index, render them useful in the treatment of mild anxiety and certain kinds of psychotic conditions such as schizophrenia and acute mania. The range of dosage referred to in the ‘687 Patent is very wide and depends on “the compound as well as the condition and size of the mammal”[6] to be treated. For humans, proposed dosage ranges from 0.1 to 20 mg per kg (for an average person of 70 kilos, this means 7 mg to 1400 mg per day).
[19] Some of Apotex’ experts opined that the reference to the high therapeutic index of those compounds would imply that they had a good side effect profile and maybe even a low EPS profile. It appears from the evidence that the term “therapeutic index” is used in different ways depending on the context. The Court is satisfied that it would not have been understood in the context of the ‘687 Patent as promising minimal EPS.
[20] As stated above, in addition to the broad genus, the claims of the ‘687 Patent list certain specific compounds and a process for synthesizing the members of the genus. Among the specifically disclosed compounds are three that will be discussed in further detail below. They can be referred to as flumezapine, ethyl flumezapine and the ‘222 compound (the first two compounds are in fact specifically covered in claims 19 and 21 of the ‘687 Patent).
[21] A brief glossary supplied by Lilly is attached as Appendix B.
[22] It is helpful to depict the general structure of the genus as it is represented in the’687 Patent (labels and dotted lines are my additions):
[23] The compounds that will be discussed in this opinion can be depicted as follows (distinguishing features of each compound have been circled):
- Flumezapine:
Olanzapine:
[24] As these illustrations show, all these compounds are closely related. But a review of the case law dealing with chemical selection patents indicates that this is not unusual.[7]
[25] In the 1980s, it appears Lilly scientists, particularly Dr. Chakrabarti, continued experimenting on compounds encompassed within the genus covered by the ‘687 Patent with the goal of finding an effective atypical antipsychotic. It is in the course of such research that Dr. Chakrabarti and his colleagues published several articles reporting on their findings after they had synthesized and tested several such compounds. None of these articles specifically disclose olanzapine.
[26] It is worth noting that Lilly was not the only company working on compounds of this sort. It appears from the “Hunziker article”[8] (Apotex document no. 15) published in 1981 that a Sandoz research unit in Berne was synthesizing and testing the activities of a closely related class of compounds, called thienobenzazepines.
[27] In Apotex document no. 16 (“Chakrabarti 1980”)[9], the Lilly team reports on the results of various in vitro and in vivo tests on rats to assess toxicity and potency of a number of compounds covered by the ‘687 Patent. In the experiments, they employed the following tests to measure response to the compounds[10]: LD50, CAR, CAT and mouse hypothermia (ED).
[28] As noted by Apotex in its memorandum of fact and law, the CAR test suggests what compound are potentially useful as antipsychotics whereas the CAT test is used as a crude predictor of the occurrence of EPS.
[29] It is worth noting immediately that, using the CAR and CAT tests as crude predictors, it appears that many of the compounds covered by the ‘687 Patent for which test results were published in 1980 did not have sufficient activity to be useful as potential antipsychotics. This is consistent with the broad nature of the description made in the ‘687 Patent in respect of the utility of the genus. Also, it is clear from the various test results reported in 1980 and 1982 that many of those compounds that had sufficient antipsychotic activity had the potential to produce typical drugs (i.e. giving rise to EPS) as opposed to atypical drugs.
[30] In searching for an appropriate drug, Lilly’s team investigated several compounds. For example, ethyl flumezapine was tested in a dog study and was found to produce a high incidence of blood disorder and its progression to human clinical testing was terminated.[11]
[31] Another candidate was flumezapine. After a successful dog study, Lilly proceeded with its first clinical human test. The ‘113 Patent reports that a total of seventeen patients received treatment with flumezapine “before the clinical trial was terminated after consultation with the U.S. Food and Drug Administration, because of an unacceptably high incidence of raised enzyme levels in the treated patients. The enzyme, creatinine phosphokinase (CPK), and the liver enzymes, serum glutamate oxalacetic transaminase (SGOT) and the serum glutamate pyruvate transaminase (SGPT) … were in substantial excess of normal values, indicating the possibility of toxicity”. This tendency, according to the disclosure, is “similar to chlorpromazine, an antipsychotic which has long been in use but whose safety has been called into question”. Also, in such clinical trials, two patients treated with flumezapine showed possible signs of EPS as measured on the AIMS scale.[12]
[32] As discussed above, Lilly researchers continued during the 1980s to perform research on compounds covered by the ‘687 Patent. It was published in documents that will be referred to as “Chakrabarti 1980” (cited above, note 9), “Chakrabarti 1980 #2” (Apotex document No. 17)[13], “Chakrabarti 1982” (Apotex document No. 18)[14] and “Chakrabarti 1989” (Apotex document No. 25)[15].
[33] Partial results of a comparative dog study involving the ‘222 compound and olanzapine are described in the ‘113 Patent and are the focus of many arguments raised in the NOA and the applications.
[34] In the ‘113 Patent, the inventors state:
In dog toxicity studies with a closely analogous compound, 2-ethyl-10-(4-methyl-1-piperazinyl)-4H-thieno [2,3-b] – [1,5] benzodiazepine, at a dosage of 8 mg/kg, it was observed that four out of eight dogs showed a significant rise in cholesterol levels, whereas the compound of the invention did not show any rise in cholesterol levels.
[35] There is no evidence that the ‘222 compound was ever tested in humans. However, olanzapine did go through full clinical human testing. It was introduced as a drug in Canada in 1997.
[36] The ‘113 Patent also refers to other perceived advantages of olanzapine over other prior known antipsychotic agents not included in the genus covered by the ‘687 Patent. These include lower elevation of prolactin levels which suggest fewer disturbances of the menstrual cycle and less gynecomastia and galactorrhea and no alteration of white blood cell count.
[37] The ‘113 Patent also states that olanzapine is an effective antipsychotic for treatment of schizophrenia, exhibiting high activity “at surprising low dosage levels”. It later specifies that the preferred treatment for adult humans is from 0.1 to 20 mg per day. The patent goes on (at page 6) to present the following conclusion:
Overall, therefore, in clinical situations, the compound of the invention shows marked superiority, and a better side effects profile than prior known antipsychotic agents, and has a highly advantageous activity level. [My emphasis.]
[38] None of the claims of the ‘113 Patent expressly describe the advantages referred to above. The patent claims the compound olanzapine, its use for the treatment of schizophrenia and other less acute mental illnesses. It claims also pharmaceutical compositions.
[39] At the hearing, the parties were agreed that there is no issue with respect to the construction of the ‘113 Patent and that Apotex’s proposal to manufacture and sell tablets of olanzapine would infringe at least the following claims:
3. 2-Methyl-10-(4-methyl-1-piperazinyl)-4H-thieno-[2,3-b][1,5] benzodiazepine, or a pharmaceutically acceptable acid addition salt thereof.
6. The use of a compound according to claim 2 or 3 for the manufacture of a medicament for the treatment of schizophrenia.
13. A pharmaceutical composition comprising the compound of claim 3 together with a pharmaceutically acceptable diluent or carrier therefore.
2) The Notice of Allegation (NOA)
[40] Apotex sent its first notice of allegation on December 16, 2004 and the second one on March 21, 2005. For the purposes of this section, the two NOA’s may be treated as identical; the later NOA (concerning 10 mg tablets of olanzapine) incorporates by reference all of the factual and legal arguments concerning olanzapine as they are set out in the initial NOA. As stated above, the circumstances giving rise to an identical and redundant set of proceedings will be treated in a distinct order on costs.
[41] Lilly has argued that Apotex raised several new issues in its evidence, including an allegation that the ‘113 Patent could not be a “valid selection patent”. It is thus necessary to review, in some detail, the structure and content of the NOA. The body of the NOA is 105 pages. It is followed by various schedules dealing with the law in respect of the legal issues raised in the body; the last schedule lists the 63 documents (prior and post art) referred to in the NOA.
[42] Under the title “Background”, Apotex reviews various prior art documents from the late 1960’s and onwards, as well as post art, which refer to various disclosures of compounds related to olanzapine as well as to olanzapine itself, many of which are also discussed later in the NOA under the specific headings of anticipation and obviousness. In this section, Apotex also makes many allegations that are relevant to the question of “selection” which was at the heart of much of the debate before me. It is important to note that such issues related to selection are raised under this “Background” heading, and not (aside for the very few that are all noted in this summary) under the headings set out elsewhere in the NOA that specifically describe grounds of invalidity, ie “anticipation”; “obviousness”; double-patenting”.
[43] At page 41 of the NOA, as part of a section titled “Documents subsequent to 1980”, Apotex notes that the ‘113 Patent claims that flumezapine and the ‘222 compound, which are both covered by the ‘687 Patent, are unsuitable drugs. Apotex goes on to note, however, that since the filing of the patent, and more particularly with the 2004 filing in the U.S. of the IVAX patent application[16], it has been established that the ‘222 compound is a useful antipsychotic.[17]
[44] Apotex then goes on to say that the dog study reported in the ‘113 Patent was flawed, inappropriate and invalid as well as not scientifically significant for various reasons described at page 41, 42 and 43.[18]
[45] After denying that the ‘222 compound causes cholesterol in female dogs, Apotex’ NOA goes on to allege that, in any event, the dog is not an appropriate animal model for predicting cholesterol increases in humans. Apotex further argues that a test on dogs is inadequate if such a test takes place without also testing other species. Apotex concludes, “Accordingly, dog toxicity studies without studies on other species do not demonstrate that, at the time the [‘113 Patent] Application was filed, neither [‘222 compound] nor olanzapine had any special distinguishing features over the compounds claimed in the ‘687 Patent.”
[46] After concluding that the various documents described in the NOA (from page 49 to 61) show that the comparison between olanzapine and the ‘222 compound (as related at pages 5-6 of the ‘113 Patent) is inappropriate, Apotex says: “In fact, the following has been determined in respect of olanzapine.” Then from pages 61 to 66, Apotex reviews documents (mostly post art) which deal with the properties of olanzapine as they are now understood, particularly its more recent association with weight gain and an increase in trigyceride levels. For example, Apotex cites its document No. 56 which concludes at page 742: “Olanzapine treatment was associated with weight gain and elevated levels of insulin, leptin, and blood lipids as well as insulin resistance, with 3 patients diagnosed to have diabetes mellitus”.[19] [my emphasis]
[47] At page 63 of the NOA, Apotex quotes another abstract that discusses side-effects of antipsychotic medicines. The quoted text includes: “the issue of diabetes is some [sic] more controversial and recently second generation antipsychotics are implicated in the development of type 2 diabetes”.[20]
[48] It is worth mentioning that the NOA does not contain allegations or any specific reference to the question of prolactin levels, white blood cell count or other specific disadvantages referred to in the ‘113 Patent with respect to prior known antipsychotic agents. Nor does it contain any allegation challenging the results or the validity of the tests involving flumezapine.
[49] At the bottom of page 66, Apotex alleges that differences between the ‘113 Patent and the UK patent application on the basis of which it claims priority (GB9009229.7) clearly show that the invention claimed in the ‘113 Patent is “artificially continued.” By this, Apotex would seem to imply that new language (such as “surprising”) inserted in the Canadian patent was further evidence of Lilly’s alleged efforts to improperly “evergreen” an existing invention. Apotex goes on to argue that the ‘113 Patent should not be able to claim a priority date from its UK counterpart on the grounds that it contains new language, new material and additional claims. As such, says Apotex, the appropriate priority date for the ‘113 Patent should be its Canadian filing date of April 24, 1991, rather than the UK one which was one year earlier. It became apparent during the hearing, however, that the difference of opinion as to the proper claims date is immaterial in respect of determining the various grounds of invalidity set out in the NOA. In that regard, none of the important prior art relied upon by Apotex, particularly at the hearing, would be excluded on the basis of the earlier claim date.
[50] The so-called “Background” portion of the NOA seems to conclude at page 69 with a statement which Apotex says shows that it intended to rely on all issues raised in the background to support the legal grounds distinctly raised thereafter. That statement is as follows:
Apotex asserts that each of the Claims in Issue is invalid, void and of no effect. Apotex relies on all of the material discussed in the NOA as supporting its allegations that each of the Claims in Issue is invalid, void and of no effect.
[51] The Court here notes that, substantive issues aside, the drafting and structure of the NOA is poorly organized to say the least. This lack of structure and coherence in such a voluminous document could easily produce confusion or misunderstanding. It was clearly a source of frustration for the applicant.
[52] In the following section entitled “Anticipation” (pages 69-75, NOA), Apotex refers to only four documents, two of which have been already referred to above: the ‘687 “genus” Patent and the scientific journal article “Chakrabarti 1980” (cited above, note 9). The third allegedly anticipatory reference cited by Apotex in its NOA can be referred to as “the Schauzu article”.[21] This document, described in further detail below, is a scientific article from a German journal that presents a chart of 12 compounds. Apotex alleges that olanzapine is disclosed by number 11 on that list and that the article teaches that the compound has antipsychotic activity. Finally, the NOA briefly refers to a teratology study[22] which allegedly published a compound identical to olanzapine; however, Apotex has since withdrawn its assertion that the study is a disclosing prior art reference. Also, the article was not discussed at the hearing. It will therefore be referred to no further.
[53] At the conclusion of the NOA’s section on anticipation, Apotex asserts that all four publications give “so clear a direction that a skilled person in the art reading and following it in every case and without possibility of error would be led to the claimed invention in the Claims in Issue.”
[54] In the section of the NOA entitled Obviousness (pages 75-85), Apotex states in a brief introduction that it “relies on the state of the art and common knowledge of a person skilled in the art set out in this NOA” and adds that “persons skilled in the art would be led directly and without difficulty to the subject matter” in the claims. As will be discussed further on, Apotex has offered little evidence to support its assertions in the NOA as to what was common general knowledge in the field at the relevant time (April 1990 – April 1991). Apotex made more precise submissions after the hearing, informing the Court that its position was that expert evidence established that such knowledge would include all the prior art documents listed in its NOA, and particularly those referred to in the affidavits of Drs. Klibanov, Dordick and Dr. McClelland.
[55] In any event, Apotex alleges specifically that elements of common knowledge and the following combination of prior art render olanzapine obvious: the ‘687 Patent and Apotex document Nos. 14[23] and 17[24]. Next, it argues olanzapine is obvious on the basis of compounds disclosed in “Chakrabarti 1980” (Apotex document No. 16).[25] Finally, Apotex asserts obviousness in light of the “Schauzu article”.[26]
[56] Apotex concludes the obviousness section of the NOA by asserting that olanzapine was in the “wings” at the time flumezapine was discovered to be unsuitable. It adds that qualities related to side effects do not save the ‘113 Patent from being obvious; Apotex notes at page 84 that none of the patent’s claims refers to side effects and that the reference to the ‘222 compound in the ‘113 Patent does not assist Lilly with respect to the inventiveness of olanzapine “for reasons as discussed previously”.
[57] The NOA goes on to allege invalidity on the basis of double patenting, more particularly “having regard to the claims of the [‘687 Patent] and the common knowledge of a person skilled in the art” as well as obviousness double patenting.
[58] Finally, Apotex alleges that the ‘113 Patent is void pursuant to paragraph 53(1) of the Patent Act.[27] More particularly, it alleges that Lilly failed to mention various limitations which applied to the dog toxicity study referred to in the disclosure of the ‘113 Patent. Such omissions were, says Apotex, made willfully for the purpose of misleading the Commissioner of Patents. Also, the respondent says that the applicant failed to disclose the ‘687 Patent (the Canadian patent that corresponds to UK Patent 1,533,235 specifically referred to in the disclosure). This omission, suggests Apotex, was also made in order to mislead the Commissioner and to avoid the issue of double patenting. Lilly allegedly also deliberately failed to disclose various pieces of prior art such as the Schauzu article[28] and Chakrabarti (1980 and 1982)[29]. This section of the NOA concludes with the following passage:
When the earlier selections (Flumezapine and other compounds selected by Eli Lily) had been not proceeded with for whatever reasons, olanzapine was waiting in the “wings” ready to be used.
Thus, the ‘113 Patent is void for breach of Section 53. (See Schedule “D” for a further discussion of Section 53.)
3) Preliminary matters
(a) Motion to strike
[59] In July 2005, Lilly filed a motion to strike the evidence filed by Apotex in respect of issues and documents which according to Lilly were not set out in the NOA. The motion was heard by Prothonotary Roger Lafrenière who adjourned the part of the motion related to the striking of the evidence to the hearing on the merits.
[60] In its motion, Lilly also sought the right to file reply evidence. This part of the motion was granted by Prothonotary Lafrenière on the basis that he was satisfied that Lilly could not have anticipated Apotex’s evidence as adduced or the allegation of anticipation as advanced and that it would be seriously prejudiced if denied an opportunity to adduce reply evidence. Apotex did not appeal the decision of Prothonotary Lafrenière and Lilly says that this finding in respect to Lilly’s right to file reply evidence is res judicata. This was not challenged by Apotex.
[61] Initially, the list of new issues and of new documents dealing with old and new issues proposed by Lilly (see Daybook volume 7, tab 3 and 4) was quite long and it related to many experts’ affidavits and cross-examinations in which these issues were discussed.
[62] At the hearing, Lilly advised that to shorten the debate, it was no longer seeking to strike the evidence relating to the allegation of off-label prescription, and the Zyprexa product monographs (Canadian and American versions). Also, Apotex indicated that it was no longer relying on the IVAX Patent Applications (Apotex document No. 28 and 29) and that the Court should also disregard the evidence relating to it. So this issue was also withdrawn by Lilly from its list.
[63] During a teleconference held on March 30, 2007, Apotex further advised the Court that it would not be relying on the other contested documents listed in Tab 4 of the Day Book in Volume 7. Thus, it was agreed that the Court does not have to deal with the request to strike this evidence as well as the paragraphs of the various experts’ affidavits referring to it.
[64] This means that only two of the original issues are left: diabetes and the use of Apotex document No. 21, an article entitled: “In Vitro Thiomethylation” (Sullivan, H.R. et al. (1985), Vol. 13, No. 3, Drug Metabolism and Disposition p. 276-278). This document, listed in the NOA under the heading “Documents Subsequent to 1980”, was only described by Apotex as disclosing the formula of flumezapine. Later, however, it was used by two Apotex experts to support the view that the prior art teaches away from the use of halogen substituents on the benzene ring. Lilly objects to this use of the document for a “new” purpose.
[65] Finally, Lilly objected to Apotex contesting the basis on which the selection was made because the latter never raised this as a ground of invalidity in its NOA.
[66] This important question will be dealt with separately later on in these reasons. It is for now sufficient to say that the Court does not accept Apotex proposition that selection is simply a defence to anticipation and it therefore had no obligation to raise these various issues in its NOA.
[67] A related issue concerns Apotex’ contestation that the disclosure contained in the ‘113 Patent was not accurate or sufficient insofar as it did not reveal olanzapine’s potential association with diabetes and other maladies. On this matter, the Court has carefully reviewed the NOA and noted particularly the passages cited at paragraphs 46 and 47 of these reasons. It is now satisfied that Apotex did, as a matter of fact, allege that olanzapine has a controversial association with diabetes. As will be discussed later on, this finding will have little impact on the merits, especially given that this issue is not very relevant to those grounds of invalidity that were properly put before the Court.
[68] Turning now to Lilly’s objection regarding Apotex’ use of document No. 21 for a “new” purpose, there appears to be no case law that directly addresses this point. Unlike the circumstances described in cases such as A.B. Hassle et al v. Minister of National Health and Welfare, (2000) 7 C.P.R. (4th) 272 (FCA), [2000] F.C.J. No. 855 (QL) and Mayne Pharma (Canada)Inc. v. Aventis Pharma Inc., 2005 FCA 50, [2005] F.C.J. No. 215 (QL), Apotex has in fact included the contested document in its NOA.
[69] Although the NOA does not present a full discussion of the significance of Apotex’s document No. 21, the relevance of the article is hardly cryptic. It is clear that this document was not presented as disclosing olanzapine itself. It is thus difficult to imagine that its inclusion in the NOA would have been perceived by Lilly to relate to anything but obviousness.
[70] A close review of A.B. Hassle and Mayne, above, suggests that the rationale for barring the introduction of new prior art is that doing so would prejudice the patentee or the first person of the opportunity to decide whether or not to launch the NOC proceeding. To use undisclosed prior art after Lilly decided to file its application would be unfair and would amount to an ambush.
[71] In the present instance, it is quite understandable that Lilly would have desired a better structured NOA. But the Court cannot agree that the fairness concern expressed in A.B. Hassle and Mayne, above, applies here. The true remedy in cases like this one is to seek the right to reply and Lilly did just that. The Prothonotary was right when he gave the applicant the right to file a reply. As such, I am satisfied that there is no reason to strike the document notwithstanding the fact that it does not appear to be essential to Apotex’ position (indeed, they did not rely on it at all during the hearing). Nevertheless, the Court has specifically dealt with the issue in these reasons.
(b) The failure to rely on invalid selection in the NOA
Positions
[72] As mentioned, Lilly submits that Apotex failed to state in its NOA that the ‘113 Patent was not “a valid selection patent”. In this particular context, this means that Apotex had an obligation to explicitly raise in the NOA its various allegations as to why the ‘113 Patent did not meet the criteria of a selection patent. Apotex should have stated, among other things, that the advantages listed in the patent were not substantial, that the assertions made were vague and unsupportive and, in any event, insufficient to constitute the ‘113 Patent as a valid selection[30]. Apotex should have made it clear in its legal allegations how, in its view, the fact that it has allegedly now become known that olanzapine does not actually have all of the advantages listed in the patent (and that it has other side effects such as weight gain, association with hyperglycemia and diabetes etc.) affects the validity of the patent.
[73] In reply to this, Apotex says:
(i) The issue of selection was put forth by Lilly as a defence to the allegation of double patenting in the Notice of Application. It was an issue raised by Lilly and, as such, Apotex was entitled to respond with evidence and arguments as it saw fit. This position is consistent with the principle that a second person is not expected to anticipate the defence to its allegations that a first person will put forth in its Notice of Application, and that a second person is entitled to reply to the evidence produced by the first person.
(ii) Lilly should have included in its application its allegation that such arguments were new and filed an affidavit supporting such allegation. It did not do so and it is evident that Lilly understood the case it had to meet. It specifically raised as an issue the superiority of olanzapine over other ‘687 compounds and filed evidence to establish that the inventive step in the ‘113 Patent was an improved side effect profile.
[74] Lilly replies to Apotex by arguing that the latter’s argument that selection is a defence to anticipation (or to obviousness or to double patenting) amounts to an attempt by Apotex to place on Lilly the burden of establishing the validity of its own patent rather than establishing that the particular grounds of invalidity alleged in the NOA are unjustified. This also disguises the fact that Apotex is now relying on grounds of invalidity that it has not raised in its NOA.
[75] For Lilly the ‘113 Patent, on its face, is a selection patent and must be dealt with as such by Apotex in its NOA. It claims that allowing Apotex to challenge the validity of the ‘113 Patent on grounds other than those set out in the NOA (i.e. anticipation, obviousness, double patenting and misrepresentation pursuant to section 53) would constitute procedural unfairness.
[76] Furthermore, Lilly submits that it could not and did not file an affidavit because it did not realize, until well after the filing of its evidence, the true extent of the new arguments put forth by Apotex. Allegedly, some were in fact only raised or properly explained at the hearing. Lilly says that its evidence in chief dealing with the advantages of olanzapine, in particular, was relevant to obviousness and obviousness double patenting. It was essentially opinion evidence based on the advantages set out in the patent itself. Its evidence in respect of the dog study, its validity and the disclosed advantage of olanzapine over the ‘222 compound was an answer to the “fraud” (ie s. 53(1)) allegations made against it in the NOA but which, in fact, were barely touched upon during the hearing by Apotex.
[77] The position put forth by Apotex does indeed seem to have a number of important implications that go beyond the question of what it had to specifically allege in its NOA. The Court will need to consider, among other things, its impact on: what Lilly must prove in order to meet its burden of showing that the allegations set out in the NOA are unjustified; the evidential burden on Apotex. But, before considering Apotex’s “selection as a defense” argument, it is useful to review Apotex’s position in some more detail.
[78] Apotex contests that the ‘113 Patent is on its face a selection patent because none of the claims include a reference to the invention’s special advantages as they are described in the disclosure. Also, it says that the invention is presented as an improvement over existing antipsychotic agents and not simply over the members of the genus covered