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Supreme Court declines to hear Eli Lilly’s “promise of the patent” appeal

May 16, 2013

The Supreme Court of Canada denied leave to appeal today from the Federal Court of Appeal (“FCA”) decision in Eli Lilly Canada Inc v Novopharm Ltd., 2012 FCA 232. This proceeding concerned the standard of utility and, specifically, the “promise of the patent doctrine”. Under this doctrine, if “…the specification sets out an explicit ‘promise’, utility will be measured against that promise” (2010 FCA 197, at 76). This is distinct from the usual requirement that “the patent holder need only show a scintilla of utility for the patent to be valid” (2011 FC 1288, at 84).

Eli Lilly brought an action against Novopharm alleging that Novopharm had infringed Eli Lilly’s patent for olanzapine, a medicine marketed for the treatment of schizophrenia. Olanzapine was first patented as one of more than 15 trillion structurally-related compounds included in a genus patent granted in 1980 (Canadian Patent No. 1,075,687). It was later the subject of a selection patent granted in 1998 (Canadian Patent No. 2,041,113). It is this latter patent that Eli Lilly alleges has been infringed.

At trial (2009 FC 1018), Justice O’Reilly dismissed the infringement action finding that the 1998 patent was an invalid selection patent as it did not represent an invention over and above the compounds disclosed in the earlier patent. In addition, he found that it was invalid for non-utility, insufficiency, anticipation, and double patenting.

On appeal (2010 FCA 197), the trial judge was held to have erred in viewing the conditions of a selection patent as an independent basis upon which to attack the validity of the patent. Further the FCA held that the 1998 patent was not anticipated or obvious, nor was it invalid for double patenting. The issues of utility and sufficiency were referred back to the trial judge.

On remand (2011 FC 1288), Justice O’Reilly held that the disclosure was sufficient, but found the patent invalid for lack of utility. He construed the “promise of the patent” to be that olanzapine was “…substantially better (‘marked superiority’) in the clinical treatment of schizophrenia (and related conditions) than other known antipsychotics…” (at 124) and found that, at the time of filing, there was “…no sound and articulable line of reasoning, or a prima facie reasonable inference, that would have led the inventors from the evidence available at the relevant time to the explicit promise” (at 267). Eli Lily’s appeal to the FCA was dismissed (2012 FCA 232).

The “promise of the patent doctrine” has also attracted criticism outside of the courts. In November 2012 Eli Lilly served a Notice of Intent to Submit a Claim to Arbitration under Chapter 11 of the NAFTA. The notice states that Canadian Judge-made law on utility is not in compliance with Canada’s treaty obligations. It also noted that “[t]his non-statutory ‘promise doctrine’ is not applied in any other jurisdiction in the world” (at 37). In May 2013 the “Special 301 Report” of the Office of the United States Trade Representative expressed “…serious concerns about the heightened utility requirements for patents that Canadian courts have been adopting recently” (at page 46).

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Adam Bobker Adam Bobker
B.Sc. (Elec. Eng.), LL.B.
416.957.1681  email Adam Bobker