Leo Pharma Inc. v. Teva Canada Limited

Leo Pharma Inc. v. Teva Canada Limited
Court (s) Database
Federal Court Decisions
Date
2015-11-18
Neutral citation
2015 FC 1237
File numbers
T-1791-13
Decision Content
Date: 20151118
Docket: T-1791-13
Citation: 2015 FC 1237
Toronto, Ontario, November 18, 2015
PRESENT: The Honourable Mr. Justice Locke
BETWEEN:
LEO PHARMA INC.
Applicant
and
TEVA CANADA LIMITED AND THE MINISTER OF HEALTH
Respondents
and
LEO PHARMA A/S
Respondent/Patentee
PUBLIC JUDGMENT AND REASONS
(Confidential Judgement and Reasons issued October 30, 2015)
Table of Contents
I. Overview.. 3
II. Background. 4
III. The 565 Patent 6
IV. The Witnesses. 9
A. Leo’s Expert Witnesses. 9
(1) Arthur H. Goldberg. 9
(2) Kenneth Andrew Walters. 10
(3) Paul Contard. 11
(4) Neil Shear 12
(5) Fritz Blatter 12
B. Leo’s Fact Witnesses. 13
(1) Jens Hansen. 13
(2) Jacob Anker Rasmussen. 16
(3) Karen Gow.. 16
(4) Kang Lee. 16
C. Teva’s Expert Witnesses. 17
(1) Eugene R. Cooper 17
(2) Gerald G. Krueger 18
(3) Steven R. Feldman. 18
D. Teva’s Fact Witness. 19
(1) Anna Hucman. 19
V. Agreed Facts. 19
VI. The Issues. 20
A. Preliminary Issues. 21
(1) Burden of Proof. 21
(2) Notice of Allegation. 22
(3) Scope of Oral Representations. 23
(4) The Rule in Browne v Dunn. 24
B. Claim Construction. 26
(1) Applicable Law.. 27
(2) Person Skilled in the Art 29
(3) Analysis. 29
C. Obviousness. 32
(1) Applicable Law.. 32
(2) Person Skilled in the Art 35
(3) Common General Knowledge. 37
(4) State of the Art 38
(5) Inventive Concept 42
(6) Differences between Prior Art and the Inventive Concept 43
(7) Obvious to Try Analysis. 44
(8) Conclusion on Obviousness. 52
D. Lack of Utility. 52
(1) Applicable Law.. 52
(2) Analysis. 55
(3) Conclusion on Lack of Utility. 61
E. Insufficiency. 61
(1) Applicable Law.. 61
(2) Analysis. 62
(3) Conclusion on Insufficiency. 64
VII. Conclusion. 64
I. Overview [1] This is an application by Leo Pharma Inc. (Leo) under the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 [the Regulations], for an Order prohibiting the Minister of Health (the Minister) from issuing a notice of compliance (NOC) to Teva Canada Limited (Teva) in respect of 50 mcg/g calcipotriol and 0.5 mg/g betamethasone (as dipropionate) ointment until after the expiry of Canadian Patent No. 2,370,565 (the 565 Patent).
[2] The patented ointment is for use in the treatment of psoriasis, a chronic skin disease.
[3] Teva filed an Abbreviated New Drug Submission with the Minister seeking an NOC for approval to sell its version of the patented ointment. Because the 565 Patent is registered against the patented ointment on the patent register maintained by the Minister under sections 3 and 4 of the Regulations, Teva had to address the 565 Patent under section 5 of the Regulations before it could obtain its NOC.
[4] By letter dated September 18, 2013 to Leo, Teva served a notice of allegation (NOA) making a number of allegations that the 565 Patent is invalid and that it will not be infringed by its version of the patented ointment.
[5] In response to Teva’s NOA, Leo commenced the present application on October 31, 2013, by filing a notice of application asserting that Teva’s allegations are not justified. By virtue of paragraph 7(1)(e) of the Regulations, the commencement of this application began a 24-month period during which the Minister is prohibited from issuing the NOC that Teva has requested. The impending expiry of that 24-month period has created an urgency for the release of this decision.
[6] By the time of the hearing of this application, the issues in dispute raised in the NOA and the notice of application had been narrowed substantially. The infringement issues had been resolved such that the parties no longer dispute that claims 1 to 8, 10, 11, 15 to 18, 20 and 21 of the 565 Patent would be infringed by Teva’s version of the patented ointment, and claims 9, 12, 13 and 19 would not be infringed. Claim 14 no longer exists by virtue of a disclaimer that was submitted to the Patent Office in 2012 and recorded on November 4, 2013.
[7] Three invalidity allegations remain in dispute: obviousness, lack of utility, and insufficiency. Each of these issues is discussed in turn later in this decision. For the reasons provided, I have concluded that each of Teva’s remaining invalidity allegations is not justified.
I. Background [8] As indicated above, psoriasis is a chronic skin disease. It is not normally deadly, but it is incurable and can cause great discomfort and/or embarrassment. It typically involves repeated recurrences of scaly and inflamed skin. The severity of an occurrence of psoriasis may vary greatly. It may be mild, moderate or severe. Severity is often estimated by the Psoriasis Area and Severity Index (PASI) which takes into account the size of the affected area, redness, thickness and scaling.
[9] Just as occurrences of psoriasis are intermittent, treatment is normally likewise intermittent, being directed to reducing the symptoms. During the 1990s, the most popular treatments were corticosteroids (of which betamethasone dipropionate is one) and vitamin D analogues, more specifically calcipotriol (which is also known as calcipotriene). Leo held a patent on calcipotriol in a number of countries which expired around 2009.
[10] Corticosteroids and calcipotriol could be applied individually. Each had advantages and disadvantages. In the early 1990s, it was found that there were advantages to a treatment regimen that involved both compounds. A sequential therapy, whereby each of the corticosteroid and the calcipotriol was applied at different times of the day or the week, became a well-known treatment. The sequential therapy resulted in fewer side effects, less irritation and more rapid onset of healing.
[11] However, there were problems of patient compliance with the sequential therapy, e.g. due to patients erring as to which compound should be applied at a particular time, or simply not having the patience to apply the treatment twice every day. A combined formulation of calcipotriol and a corticosteroid was sought.
[12] Unfortunately, it was not a simple matter to develop a combined formulation because the two products are pH incompatible. That is, their respective optimum stabilities are at significantly different pH values. Calcipotriol requires a pH value above 8 (an alkaline environment) for maximum stability, while corticosteroids require pH values in the 4-6 range (an acidic environment) for maximum stability. This pH incompatibility would make a combined formulation of a corticosteroid and calcipotriol alone unstable in that one or both of the compounds would be liable to degrade prior to application.
[13] The parties disagree as to the extent to which dermatologists and/or patients, prior to the development of the patented formulation, mixed calcipotriol and corticosteroids despite their incompatibility. Teva alleges that some dermatologists routinely instructed patients to apply the two compounds simultaneously on the skin. Leo does not accept that this method of treatment was common. The expert evidence likewise differs on this point. In any case, it is common ground that there was a motivation to create a combined formulation for treatment of psoriasis that would be stable for a reasonable period of time so that patients would not have to deal with two separate compounds and mix the compounds themselves.
II. The 565 Patent [14] The 565 Patent has a filing date of January 27, 2000, and is based on a priority application that was filed in Denmark on April 23, 1999. It was published on November 2, 2000, and is to expire on January 27, 2020. It names two inventors: Erik Didriksen and Gert Høy. At the time of its issuance on November 25, 2008, the 565 Patent had 21 claims, of which the only independent claim was claim 1. As indicated above, Leo submitted a disclaimer in 2012 against the 565 Patent. That disclaimer disclaimed claim 14 entirely and reduced the scope of claim 1. Neither the validity nor the effect of this disclaimer is in issue in the present application.
[15] The 565 Patent describes and claims a combined formulation of the two psoriasis drugs discussed above, with the addition of a solvent, which resolves the instability problem that had impeded combining the two previously. The patented formulation is in the form of a pharmaceutical non-aqueous ointment composition for dermal use comprising pharmacologically active components A and B, wherein the difference between their respective optimum stability pH values is at least 1, and at least one solvent component C. The broadest claim (independent claim 1) defines components A, B and C as follows:
Component A: at least one vitamin D or vitamin D analogue
Component B: at least one corticosteroid
Solvent C: at least one selected from
(i) a compound of the general formula R3(OCH2C(R1)H)x OR2 (I)
wherein x is in the range of 2-60, R1 in each of the x units independently is H or CH3, R2 is straight chain or branched C1‑20alkyl or benzoyl, and R3 is H;
(ii) a straight or branched C12-18-alkyl benzoate;
(iii) a straight or branched C2-4-alkyl ester of straight or branched C10‑18-alkanoic or -alkenoic acid;
(iv) a propylenglycol diester with C8-14-alkanoic acid; or
(v) a branched primary C18-24 alkanol.
[16] Further claims in the 565 Patent define the various components more narrowly. Claims 2 to 5 reduce the scope of component A with claim 5 focusing on calcipotriol or its hydrate. Claims 6 to 9 reduce the scope of component B. Claims 15 to 17 reduce the scope of solvent component C. Claim 17 specifies that solvent component C is polyoxypropylene-15-stearyl ether (POP-15). It should be noted that claim 10 specifies that the claimed composition is non-aqueous, and claim 11 specifies that it is an ointment. Since the disclaimer, which narrowed claim 1 to a non-aqueous ointment, claims 10 and 11 are essentially redundant. As indicated above, claim 14 was disclaimed entirely.
[17] The 565 Patent provides data concerning the results of a four-week clinical trial. The trial measured the efficacy in patients (in terms of percentage change in PASI score) of a composition combining calcipotriol (as component A) and betamethasone dipropionate, a corticosteroid (as component B), and compared those results to results for patients treated either with calcipotriol alone, with betamethasone dipropionate alone, or with a composition containing neither active ingredient. The combination composition produced the best results.
[18] The 565 Patent describes an Example 1 in which an ointment was tested for stability. It comprised calcipotriol as component A, betamethasone dipropionate as component B, and POP-15 as solvent component C. This ointment also included α-Tocopherol, the nature and purpose of which is discussed below in relation to the allegation of lack of utility. The test of the Example 1 ointment showed adequate stability of both the calcipotriol and the betamethasone dipropionate.
[19] A similar test was conducted on another ointment, this one using propylene glycol as solvent component C in place of POP-15, and also containing lanolin as an emulsifier. This ointment did not contain α-Tocopherol. This time the calcipotriol degraded badly.
III. The Witnesses [20] The record in this application includes the evidence of 13 witnesses. Leo had nine witnesses (five experts and four fact witnesses) and Teva had four witnesses (three experts and one fact witness). The witnesses are each discussed briefly below.
[21] Each party devoted considerable efforts to arguing that I should discount the evidence of certain of the other party’s experts because of a lack of expertise and/or a tendency to advocate on behalf of the party that retained them. Having now considered the parties’ arguments on these points, I have concluded the same for all: As regards expertise, I am satisfied that all of the expert witnesses have adequate expertise to provide relevant opinions in this case. As regards the concerns about witnesses’ bias, I recognize that, despite intentions to be neutral, there is a natural tendency to emphasize the points that favour one’s client and downplay points that work against the client. I have read the experts’ evidence with this in mind. However, I have not been convinced that any of the experts’ evidence is so flawed in this respect or demonstrates bias to such an extent that I should give it little or no weight.
A. Leo’s Expert Witnesses (1) Arthur H. Goldberg [22] Dr. Goldberg is an expert in formulation. He obtained a PhD in Pharmaceutical Chemistry from the University of Michigan, and taught for four years at the College of Pharmaceutical Sciences, Colombia University, before entering the pharmaceutical industry as a formulator. In his positions at various pharmaceutical companies, he was involved in the development of several topical formulations, including one unsuccessful coal tar preparation for psoriasis. He has written a book chapter on dispersion techniques in relation to topical ointments.
[23] In his affidavit, Dr. Goldberg presented his interpretation of the 565 Patent as well as his assessment of issues of infringement and validity of the 565 Patent. He devoted the majority of his affidavit the issue of obviousness.
(2) Kenneth Andrew Walters [24] Dr. Walters is another expert in formulation. He is the director of An-eX Analytical Services Ltd, an independent contract research and development laboratory that focuses on the dermatological and transdermal field and regularly performs in vitro human skin permeation studies. Dr. Walters obtained his PhD from the University of Strathclyde, Glasgow, following the submission of a thesis entitled The Effects of Nonionic Surface-Active Agents on Epithelial Membranes. He has worked in a variety of positions involving research and development (R&D) on systems designed to deliver drugs into and through the skin, and has over 30 years of experience in the design and formulation of transdermal drug delivery systems. Since the 1980s, he has both participated in and organized many academic conferences on percutaneous absorption and formulation science.
[25] Like Dr. Goldberg, Dr. Walters’ affidavit reviewed the 565 Patent and then addressed issues of infringement and validity thereof. In relation to obviousness, Dr. Walters opined that it would not have been more or less self-evident for a person skilled in the art to arrive to the invention of the 565 Patent, based on his or her common general knowledge and/or the prior art. Dr. Walters also considered utility and over-breadth, concluding that Teva’s arguments in this regard were unfounded. Finally, in relation to sufficiency, Dr. Walters concluded that the 565 Patent discloses everything that is essential for the invention to function properly and for the skilled formulator to reproduce it.
[26] Dr. Walters also provided a reply affidavit that was responsive to a comment by Teva’s expert witness Eugene Cooper concerning known combination formulations.
(3) Paul Contard [27] Dr. Contard is an Associate Clinical Professor of Dermatology at Mount Sinai School of Medicine and a practising dermatologist who regularly treats patients with psoriasis. He has an MD from The Mount Sinai School of Medicine and a PhD in Biology from the City University of New York.
[28] In his affidavit, he provided a primer on psoriasis and its treatment prior to the invention of the 565 Patent, focusing particularly on vitamin D analogue and corticosteroid treatments. He stated that these products require different pH values in their environment to be stable and so, prior to the patented invention, had to be applied sequentially, leading to problems of patient compliance. He opined that, by combining these two products into a single stable, efficacious formulation, the patented product solves this problem, as well as providing a number of additional benefits. Finally, Dr. Contard addressed Teva’s claims regarding the broad range of dosages covered by the patent, opining that the doses claimed and described in the 565 Patent are appropriate, useful, and sufficiently clear given the knowledge of the skilled person at the relevant time.
(4) Neil Shear [29] Dr. Shear is a professor at the University of Toronto and a practising dermatologist who regularly treats patients with psoriasis. He earned his MD from McMaster University and is currently Head of Dermatology at the Sunnybrook Health Science Centre.
[30] In his affidavit, Dr. Shear summarized the teachings of the 565 Patent and discussed his medical experience with the use of Dovobet, which is the name of Leo’s patented formulation in Canada and which he prescribes frequently and finds to be very effective.
(5) Fritz Blatter [31] Dr. Blatter is a Project Manager in the Department for Solid-State Development at Solvias AG, a privately held company which supports the research and development of drug substances and the optimization of manufacturing processes for pharmaceutical, biotechnology, and life sciences companies.
[32] Dr. Blatter was asked to reproduce an experiment from the prior art and investigate whether calcipotriol in ointment mixtures containing another active pharmaceutical ingredient would be stable over at least three months. The results of this study confirmed the finding in the prior art, that significant degradation occurs when the testing is extended to fifteen days and beyond.
B. Leo’s Fact Witnesses (1) Jens Hansen [33] Dr. Hansen was Vice-President, Analysis and Pharmaceutical Development at Leo, and the direct supervisor of the two inventors around the time the subject-matter of the 565 Patent was being developed. His testimony was introduced in large part based on the unavailability of both inventors. According to Dr. Hansen, one of the inventors (Erik Didriksen) retired in 2004 and was adamant that he did not want to participate in this litigation. xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx.
[34] Dr. Hansen joined Leo on January 1, 1998. At that time, Leo was already developing a topical formulation for the treatment of psoriasis. Dr. Hansen managed the development team, participating in discussions about formulations as a result of his interest in the topic. Relying on development reports, lab notebooks, meeting minutes, memos, and other documents from the relevant time period, Dr. Hansen recounted in his affidavit the history of the research and development that led to the patented formulation. He concluded that the development of this product was the result of a series of experience, coincidence, and luck.
[35] Teva argues that most of the evidence provided by Dr. Hansen on the subject of the development of the patented formulation is hearsay, and as such should be given little, if any, weight. In support of this assertion, the respondent cites R v Khelawon, 2006 SCC 57, for a definition of hearsay (paras 35-36), a reiteration of the importance of the hearsay rule in relation to a fair trial (paras 48-49), and a review of the principled approach to addressing hearsay issues, which is directed to assessing the reliability and necessity of the hearsay evidence (paras 42, 61).
[36] Hearsay evidence is presumptively inadmissible unless it falls under an exception to the hearsay rule. The traditional exceptions to the hearsay rule remain presumptively in place: R v Mapara, 2005 SCC 23, at para 15. One of these exceptions concerns business records, which exception is discussed in Distrimedic Inc v Dispill Inc, 2013 FC 1043 at para 83:
The main requirements for admission of hearsay evidence under the common law business records exception are that the person who created the record did so contemporaneously, based on personal knowledge and under a duty to do so: Ares v Venner, [1970] SCR 608.
[37] The reports, notebooks, minutes, memos, and other documents relied upon by Dr. Hansen in his affidavit appear to meet these criteria. Teva does not argue the contrary. Accordingly, I conclude that these documents satisfy the business records exception to the hearsay rule.
[38] The focus of Teva’s hearsay challenge is more on statements made by Dr. Hansen based on meetings and conversations with the inventors and others involved in the development of the patented formulation prior to Dr. Hansen’s arrival at Leo. Here, Leo must rely on the principled approach which assesses the reliability and the necessity of the hearsay statements. Reliability is to be assessed functionally, by focusing on the particular dangers raised by the hearsay evidence sought to be introduced and on those attributes or circumstances relied upon by the proponent to overcome those dangers: Clayson-Martin v Martin, 2015 ONCA 596 at para 29 [Clayson-Martin]. Necessity is to be interpreted flexibly, and is not restricted to the absolute unavailability of a witness: Clayson-Martin at para 28.
[39] As regards the reliability of Dr. Hansen’s statements, Teva argues that he was unsure what he himself had done (quite aside what others had told him), and that he volunteered information that was not asked of him during cross-examination. Teva argues that Dr. Hansen’s testimony is not reliable. Having considered Teva’s assertions in this regard, I am not satisfied that Dr. Hansen’s testimony impairs the reliability of his evidence. I am not satisfied that his memory was poor or that his testimony demonstrated any sort of bias.
[40] With regard to the issue of necessity, Teva argues that the evidence concerning the unavailability of the inventors to testify is inadequate. I do not agree. With regard to Dr. Høy, I am fully satisfied that Leo has established that there was a good reason not to have him testify. I have no reason to doubt the evidence submitted by Leo in this regard. The reason for omitting Erik Didriksen as a witness is less compelling. It is simply a matter of his having been retired for a long time and not wishing to participate. However, based on the flexible approach taken to the necessity requirement, I am satisfied that Dr. Hansen’s testimony satisfies this requirement for both inventors.
[41] Overall, I am satisfied that it is not unfair to Teva to admit Dr. Hansen’s hearsay evidence. Accordingly, I conclude that his testimony is admissible.
(2) Jacob Anker Rasmussen [42] Mr. Rasmussen has been employed by Leo since 1997, most recently as Vice-President, Global Patient Solutions Dermatology. In his affidavit, Mr. Rasmussen provided a history of Leo, as well as details on the commercial success of the patented ointment. This information includes sales data from 11 countries, including Canada, for the time period between 2001, when the product was launched, and 2013. Mr. Rasmussen also provided charts on the comparative sales of major topical psoriasis treatments across America, Europe, and Asia from 2011 to 2013.
(3) Karen Gow [43] Ms. Gow is currently the Vice-President, Market Access and Business Intelligence at Leo, and has been employed there since 2009. In her affidavit, she provided some background information regarding the current litigation.
(4) Kang Lee [44] Mr. Lee is a lawyer with Leo’s counsel Fasken Martineau DuMoulin. He reproduced documents and information concerning certain patent documents discussed in the parties’ arguments.
C. Teva’s Expert Witnesses (1) Eugene R. Cooper [45] Dr. Cooper obtained his PhD in Chemistry from Iowa State University, and has spent his professional career researching and developing nanoparticle technology in relation to drug delivery. He has experience in formulation development, and has developed a theory for predicting skin transport from molecular properties and for designing penetration enhancers. Though Leo vigorously challenged Dr. Cooper’s expertise, I am satisfied that his testimony is admissible and should not be discounted.
[46] In his affidavit, Dr. Cooper construed the patent, and then considered whether the patented invention was obvious. He concluded that that the skilled person would have been led directly and without difficulty to making the non-aqueous ointment described and claimed in the 565 Patent. Dr. Cooper also opined that the 565 Patent lacks utility as the skilled person could not have predicted, based on the information provided in the 565 Patent, that all of the claimed non-aqueous ointments would be stable and effective. In relation to insufficiency, Dr. Cooper indicated in the alternative that the 565 Patent fails to provide sufficient information to allow the skilled person to make ointments across the entire range of components claimed. Dr. Cooper concluded his affidavit by commenting on the affidavits of Dr. Hansen, Dr. Walters, and Dr. Goldberg.
[47] Dr. Cooper also provided a sur-reply affidavit that responded to Dr. Walters’ reply affidavit.
(2) Gerald G. Krueger [48] Dr. Krueger is a Professor of Dermatology at the University of Utah Health Sciences Center, where his research focus is the diagnosis and treatment of psoriasis. He has held several specialized positions in relation to the study and treatment of psoriasis, including Chairman of the National Institute of Health’s Committee to Evaluate Psoriasis Research.
[49] In his affidavit, Dr. Krueger described his experience in treating psoriasis prior to 1999, when he would generally prescribe simultaneous once-a-day application of calcipotriol and a topical corticosteroid. He continues to prescribe this treatment today. Though he has also prescribed the patented formulation, it is not his preferred formulation due to factors of efficacy and cost. Dr. Krueger also responded to the affidavits of Dr. Shear and Dr. Contard.
(3) Steven R. Feldman [50] Dr. Feldman is a Professor of Dermatology at Wake Forest Baptist Health, where he directs the Center for Dermatology Research and the Psoriasis Treatment Center. He received his MD and PhD from Duke University, and his chief clinical expertise relates to treatment of psoriasis. He has published numerous articles and book chapters in the field of dermatology. In his affidavit, he provided background information on psoriasis and its treatment, and explained his understanding of the 565 Patent as a dermatologist.
[51] Dr. Feldman opined that, from an efficacy and side effects standpoint, the patented formulation is not better than the calcipotriol and topical corticosteroid combination regimens that were being prescribed by dermatologists as of January 1999. Dr. Feldman also responded to the applicant’s experts, Dr. Shear, Dr. Contard, and Mr. Rasmussen.
[52] Further, Dr. Feldman provided a sur-reply affidavit that responded to Dr. Walters’ reply affidavit.
D. Teva’s Fact Witness (1) Anna Hucman [53] Ms. Hucman is a law clerk employed with Teva’s counsel Aitken Klee LLP. In her affidavits, she reproduced the NOA as well as a number of publications related to the issues in dispute.
IV. Agreed Facts [54] The parties are agreed on a number of the relevant facts. There is no disagreement that vitamin D and vitamin D analogues, specifically calcipotriol, were known for treatment of psoriasis prior to the 565 Patent. Likewise, corticosteroids were known for treatment of psoriasis. The parties do not dispute that Leo held a patent on calcipotriol which expired around 2009.
[55] As of 1994 at the latest, it was well-known that sequential therapy of calcipotriol and a corticosteroid was advantageous over either treatment alone. The parties are agreed that, because of this synergy, there was motivation to create a formulation that combined calcipotriol and a corticosteroid. However, these two drugs could not simply be mixed because of the instability of calcipotriol in any environment in which the pH value was favourable to the stability of a corticosteroid, and vice versa.
[56] The parties agree on the qualities of the person skilled in the art from whose point of view the 565 Patent is to be construed and the allegations of invalidity are to be assessed. The skilled person is a developer of topical formulations. The 565 Patent is also directed to clinicians (dermatologists).
[57] Finally, and as indicated above, the parties acknowledge that Teva’s version of the patented ointment would infringe claims 1 to 8, 10, 11, 15 to 18, 20 and 21 of the 565 Patent, but would not infringe claims 9, 12, 13 and 19.
V. The Issues [58] As indicated above, the allegations of invalidity of the 565 Patent which remain in issue are obviousness, lack of utility, and insufficiency. In light of the acknowledged infringement of certain claims by Teva’s version of the patented ointment, it follows that Leo will be entitled to the Order it seeks in this application if it is able to establish that, for at least one of the claims in issue, all of Teva’s allegations of invalidity are not justified.
[59] The parties have made many arguments in relation to these issues. Because of my findings on some of the arguments, it is not necessary for me to decide others. Accordingly, I have not reached conclusions with regard to some of these other arguments.
A. Preliminary Issues [60] Before discussing the invalidity issues in dispute, there are a few preliminary issues that require discussion.
(1) Burden of Proof [61] The parties do not appear to disagree on the burden of proof in the present application in respect of Teva’s allegations of invalidity of the 565 Patent. However, because the burden of proof is complicated and somewhat counterintuitive in the context of an application under the Regulations, it warrants some discussion.
[62] The general principle in an application is that the applicant bears the onus of proof. This applies in the present application, even on issues of patent validity.
[63] Because subsection 43(2) of the Patent Act, RSC 1985, c P-4 [the Patent Act], creates a presumption that a patent is valid, the jurisprudence has held that, once the existence of the patent has been established, the onus shifts to the respondent (Teva, here) who then has the burden of putting its allegations of invalidity “into play”: Pharmascience Inc v Canada (Health), 2014 FCA 133 at para 32 [Pharmascience]. This can be done by adducing evidence which is “not clearly incapable of establishing its allegations of invalidity”: Pfizer Canada Inc v Canada (Health), 2007 FCA 209 at para 109. The respondent’s burden in this respect has also been characterized as the requirement to “lead sufficient evidence to give its allegations ‘an air of reality’.” The standard of proof here is lower than a balance of probabilities: Pharmascience at para 33; Pfizer Canada Inc v Apotex Inc, 2007 FC 971 at para 51, aff’d 2009 FCA 8 [Pfizer]. However, the respondent’s onus cannot be satisfied by the mere fact of detailing its allegations in its NOA: Pharmascience at para 36.
[64] Once the respondent has properly put its invalidity allegations into play, the onus shifts back to the applicant (Leo, here) to establish, on a balance of probabilities, that those allegations are not justified.
[65] Leo argues that Teva’s invalidity allegations have not been put into play, and that the onus of proof has therefore not shifted back to Leo. For the purposes of this application, I have assumed, without deciding, that those of Teva’s invalidity allegations that were properly raised in its NOA have indeed been put into play and that the onus of proof has indeed shifted back to Leo.
(2) Notice of Allegation [66] Leo also argues that Teva has improperly raised new arguments not contemplated in its NOA. Leo argues that Teva is not entitled to raise any new arguments, allegations, facts, or prior art that were not set out in the NOA: Alcon Canada Inc v Apotex Inc, 2014 FC 791 at para 75 [Alcon]; Bayer Inc v Cobalt Pharmaceuticals Company, 2013 FC 1061 at paras 34-36. This is because it would be unfair for Leo, who decided to commence the present application, and who prepared its notice of application and its evidence, on the basis of Teva’s NOA, to face shifting allegations and facts.
[67] For its part, Teva argues that there is a recognized exception to this general rule which permits it to defend itself against Leo’s arguments and to respond to Leo’s evidence: AstraZeneca Canada Inc v Teva Canada Limited, 2013 FC 245 at para 54 [AstraZeneca].
[68] For the most part, it is not necessary for me to decide whether there is any merit to Leo’s objections on this issue. In many cases, I have not refused to consider Teva’s arguments simply on the basis that they were not raised in the NOA. Cases in which I have refused to consider Teva’s argument are discussed in my analysis of the relevant issues.
(3) Scope of Oral Representations [69] Each party also argues that the other made oral representations at the hearing of this application that were not included in their respective memoranda of fact and law, and which should therefore be ignored. In my view, little turns on this issue. Most such arguments were made by Leo against Teva. However, I have not excluded any of Teva’s arguments simply on the basis that they were not mentioned in its memorandum of fact and law.
(4) The Rule in Browne v Dunn [70] This issue was raised at the hearing by Teva concerning an argument made by Leo. Leo argues that I should give less weight to the testimony of Teva’s witnesses Dr. Feldman and Dr. Krueger because some of the opinions expressed in their affidavits are inconsistent with opinions they expressed in earlier publications. Teva objects to this argument on the basis of the Rule in Browne v Dunn (1893), 6 R 67 (HL) [Browne v Dunn]. This Rule is discussed in Green v Canada (Treasury Board) (2000), 254 NR 48 (FCA) at para 25:
Browne v. Dunn stands for a rule of evidence that where the credibility of a witness is to be impeached by evidence that contradicts his testimony, the witness must be given a fair opportunity to explain the discrepancy. This is a rule grounded in fairness and reason. Its application depends upon the circumstances of the case. The trier of fact is always entitled to disbelieve or reject any evidence that is presented (J. Sopinka, S.N. Lederman and A.W. Bryant, The Law of Evidence in Canada, 2nd ed., (Toronto: Butterworths, 1999) at 954-957).
[71] With regard to Dr. Feldman, I see no inconsistency in his testimony. In his affidavit, Dr. Feldman stated that the patented combination ointment is not his first choice in treating psoriasis because it is greasy and expensive. In an earlier publication, he had discussed several advantages of the patented combination ointment. However, these advantages do not contradict the assertions of greasiness and expense. Accordingly, I need not consider the Rule in Browne v Dunn as it relates to Dr. Feldman.
[72] The situation with Dr. Krueger is different. He made several statements in his affidavit that, before the claim date of the 565 Patent, he had prescribed and discussed publicly the simultaneous application of calcipotriol and a corticosteroid in the treatment of psoriasis. A publication of which he is a co-author, dating from the period after the claim date of the 565 Patent but before the commencement of the present application, discussed recommended treatments for psoriasis. Though the publication mentions sequential application of calcipotriol and a corticosteroid (e.g. corticosteroids applied twice a day for two weeks, followed by calcipotriol twice a day for one week, followed by alternating weeks of each), it is conspicuously silent on the subject of simultaneous treatment. Leo argues that this is inconsistent with Dr. Krueger’s affidavit.
[73] With regard to the Rule in Browne v Dunn, Leo argues that it showed this publication to Dr. Krueger during his cross-examination, and read him certain portions of it. However, I note that Leo did not go to the portions of the publication that discuss recommended treatment regimens for psoriasis. The cross-examination focused instead on a statement in the publication that calcipotriol “is a relatively unstable molecule and is inactivated by an acid pH. It is therefore not compatible in combination with some therapies.” Leo did not put the allegedly inconsistent statement to Dr. Krueger.
[74] Leo also argues that its reference to these earlier publications by these witnesses is not in order to impeach their credibility. Leo draws my attention to R v Quansah, 2015 ONCA 237, which states at para 81 that
Compliance with the rule in Browne v. Dunn does not require that every scrap of evidence on which a party desires to contradict the witness for the opposite party be put to that witness in cross-examination. The cross-examination should confront the witness with matters of substance on which the party seeks to impeach the witness’s credibility and on which the witness has not had an opportunity of giving an explanation because there has been no suggestion whatever that the witness’s story is not accepted.
[Emphasis in original]
[75] As regards the failure of the publication co-authored by Dr. Krueger to acknowledge the use of simultaneous application of calcipotriol and a corticosteroid in the treatment of psoriasis, I sustain Teva’s objection on the basis of the Rule in Browne v Dunn. In my view, the passages in question were clearly relied upon by Leo in order to challenge Dr. Krueger’s credibility, and he was entitled to have those passages (or at least their subject) brought to his attention during cross-examination so that he would have an opportunity to explain the omission of reference to simultaneous application of calcipotriol and a corticosteroid.
B. Claim Construction [76] The interpretation of the claims in issue is preliminary to determination of the invalidity issues in dispute discussed below. This is because the meaning of those claims must be understood before their validity can be assessed.
[77] The issue of claim construction is also important in determining the inventive concept of the 565 Patent. Leo argues that it concerns the stability of the patented ointment, while Teva notes that the claims do not mention stability and simply define a pharmaceutical non-aqueous ointment composition for dermal use comprising certain defined components.
(1) Applicable Law [78] Claims construction is antecedent to consideration of both validity and infringement issues: Whirlpool Corp v Camco Inc, 2000 SCC 67 at para 43 [Whirlpool].
[79] A patent is not addressed to an ordinary member of the public, but to a worker skilled in the art described as:
[A] hypothetical person possessing the ordinary skill and knowledge of the particular art to which the invention relates, and a mind willing to understand a specification that is addressed to him. This hypothetical person has sometimes been equated with the “reasonable man” used as a standard in negligence cases. He is assumed to be a man who is going to try to achieve success and not one who is looking for difficulties or seeking failure.
[Free World Trust v Électro Santé Inc, 2000 SCC 66 at para 44, quoting Fox, Harold G. The Canadian Law and Practice Relating to Letters Patent for Inventions, 4th ed., Toronto: Carswell, 1969 at 184]
[80] As stated in Catnic Components Ltd v Hill & Smith Ltd, [1982] RPC 183 at 242-243, and quoted in Whirlpool at para 44:
A patent specification should be given a purposive construction rather than a purely literal one derived from applying to it the kind of meticulous verbal analysis in which lawyers are too often tempted by their training to indulge. The question in each case is: whether persons with practical knowledge and experience of the kind of work in which the invention was intended to be used, would understand that strict