First Trial Decision Under Canada’s Amended Patented Medicines (Notice of Compliance) Regulations Offers Guidance on Key Issues
Earlier this week, the Federal Court of Canada publicly released Amgen Inc. v. Pfizer Canada ULC, 2020 FC 522, the first trial decision under the amended Patented Medicines (Notice of Compliance) Regulations (“PM(NOC) Regulations”). Prior to 2017, proceedings under Canada’s drug patent linkage legislation, the PM(NOC) Regulations, proceeded by summary application with affidavit evidence and cross-examinations out of court. The pre-2017 PM(NOC) Regulations were unique in that judgments operated strictly in personam between the particular parties before the court. Additionally, once a patent challenger had obtained marketing approval from Health Canada, any appeals were considered moot, and the patent owner’s sole recourse was to commence a separate action for patent infringement.
In 2017, the PM(NOC) Regulations were amended to provide for full actions. Until this week, no action under the 2017 PM(NOC) Regulations had proceeded through to a trial decision.
The facts of this action were somewhat unique.
First, the plaintiff, Amgen, had previously brought an application under the pre-2017 PM(NOC) Regulations against a different generic and had lost on the basis that the invalidity allegations were justified. In this action, Amgen alleged infringement of the same patent that was previously found invalid in the earlier in personam application.
Second, the patent at issue, Canadian Patent No. 1,341,537 (the “537 Patent”), was also filed and issued under Canada’s pre-1989 Patent Act (the “Old Act”). In 1989, Canada’s Patent Act was substantially amended, converting Canada from a first-to-invent jurisdiction into a first-to-file jurisdiction. Relevant to this case, under the Old Act, patent applications were not published until the patent was issued.
The 537 Patent covered Amgen’s biologic drug product NEUPOGEN, which contained the medicinal ingredient filgrastim. Pfizer wished to market a biosimilar to NEUPOGEN, called NIVESTYM. Pfizer sent Amgen a notice of allegation and Amgen sued for a declaration that, if approved, NIVESTYM would infringe the 537 Patent. Pfizer counterclaimed for a declaration of invalidity. The Court found for Pfizer, holding that the asserted claims were obvious.
Although the Court provided detailed reasons on all the issues in dispute, this blog post will focus on four:
- Abuse of process/judicial comity in light of the prior application decision;
- Treatment of “blinded” experts by the Court;
- Guidance from the Court on the date for insufficiency analysis; and
- The defense of prior use.
1. Abuse of Process/Judicial Comity in Light of the Prior Application Decision
The defendant, Pfizer, argued that it was abusive for Amgen to re-litigate factual and legal issues that were decided in the earlier application because it would negatively impact judicial economy, consistency, finality, and the integrity of the administration of justice.
The Court disagreed, holding that it would be unfair to hold the plaintiff to the findings and holdings of the prior application decision, when it did not have the benefit of any effective appeal. After Amgen had lost the earlier application, it appealed. However, the appeal was dismissed as moot once the patent challenger had obtained marketing approval from Health Canada, in part because res judicata did not apply to the application decision, and Amgen could pursue a subsequent action for infringement of the same patent against the same patent challenger.
In its opening submissions, Pfizer also argued that the Court should observe the holdings in the earlier application decision as a matter of judicial comity. The Court disagreed with this argument too, holding that comity has no application to findings of fact. The only relevant legal holding in the prior application decision was the Court’s claim construction. However, even that finding was based on the particular expert evidence in the application. Additionally, claim construction was not one of the findings Pfizer asked the Court to adopt.
Ultimately, the Court recognized that the earlier findings and holdings were potentially persuasive and should be afforded respectful attention. However, the issues were to be answered based upon the evidence adduced in this action.
2. Expert Blinding
At trial, Pfizer argued that its experts should be preferred to Amgen’s experts because they were “blinded” and provided portions of their opinions without having first reviewed the patent. The Court held that the effect of blinding is a question of relevance, reliability, and weight. In other words, there was no legal rule that blinded experts should be preferred. In the circumstances of this action, the Court held that Pfizer’s blinded experts were more reliable because they had independently assessed what a skilled person would have done with the prior art in hand.
Amgen argued that, having been blinded to the patent, Pfizer’s experts did not properly define the skilled person, as required, before offering their opinions. Instead, Pfizer had employed a non-blinded expert whose mandate was to read the patent and define the skilled person. That definition was then provided to Pfizer’s blinded experts. The Court agreed that this approach enhanced the reliability of the blinded experts’ opinions.
3. The Date for Assessing Insufficiency
Pfizer alleged that the disclosure of 537 Patent was insufficient to enable the skilled person to practice the invention. The parties were agreed that the two-step analysis set out in Teva Canada Ltd. v. Pfizer Canada Inc., 2012 SCC 60 applied. The first step is to define the nature of the invention in the patent. The second step is to determine whether the disclosure would enable the skilled person to practice the invention, i.e. to produce the invention using only the instructions in the patent.
The parties agreed that the relevant date for conducting the second step, producing the invention based on patent instructions, was the issue date. The parties disagreed over the date for conducting the first step in the analysis, defining the nature of the invention.
Pfizer submitted that the first step was to be conducted as of the filing date. Amgen submitted that the relevant date was the issue date. The Court agreed with Amgen, holding that the relevant date was the issue date.
This holding needs to be viewed in light of the fact that old patents, like Amgen’s patent, are not published until they are issued. As a result, for Amgen’s patent, the publication date and issue date are the same. By contrast, modern patents are published 18 months after their filing date and thus their issue date and publication date may not be the same.
In light of this nuance, the Courts holding is consistent with the Supreme Court’s holding in Free World Trust v. Électro Santé Inc., 2000 SCC 66, and Whirlpool Corp. v. Camco Inc., 2000 SCC 67, that patents are to be construed as of their publication date. In the instance of Amgen’s patent, the publication date was the issue date.
This case suggests defining the nature of the invention for sufficiency analysis as of the date of publication, whenever that may be.
4. The Defense of Prior Use
While the asserted claims were found invalid for obviousness, the Court nevertheless went on to consider Pfizer’s prior use defence under section 56 of the Old Act.
The reasons focus on the somewhat complicated history of amendments to the Patent Act, which led the Court to conclude that the prior use defence could only apply if the prior use occurred before October 1, 1996. However, as Pfizer’s prior use occurred in 2004 the statutory defence was not available.
In the alternative, Pfizer argued that a gap was created by the transitional provisions and that it had recourse to the common law defence of prior use. The Court saw no such gap, holding that Parliament could have drafted the transitional provisions to provide the defence after October 1, 1996, but had not. Pfizer’s circumstances simply did not fall within the parameters prescribed by Parliament for invoking the prior use defence.
For more information, please contact the McCarthy Tétrault Intellectual Property Litigation group in Toronto.
 Under the pre-2017 PM(NOC) Regulations, the test applied was whether the generic’s allegations were justified.