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Supreme Court of Canada strikes down patent utility “promise doctrine” as “not good law”

In mid-2017, the Supreme Court of Canada delivered an important and highly anticipated decision: AstraZeneca Canada Inc. v Apotex Inc. (2017 SCC 36), in which it rejected the "promise doctrine" and clarified the requirement for patent "utility" in Canada. The unanimous decision represents an important victory for innovators seeking protection in Canada, and is especially welcome in the highly litigated area of pharmaceutical patents.

The so-called "promise doctrine" developed by the Federal Courts in recent years had become the yardstick against which utility is measured. The promise doctrine holds that if a patentee's patent application specification promises a specific utility, only if that promise is fulfilled, can the invention have the requisite utility. Generally, an analysis regarding issues of validity, such as novelty or non-obviousness, focuses on the claims alone, and only considers the disclosure where there is ambiguity in the claims. The promise doctrine, by contrast, directs courts to read both the claims and the disclosure to identify potential promises, rather than the claims alone, even in an absence of ambiguity in the claims. After a process of identifying promises, the doctrine equates the fulfillment of such promises (by demonstration or sound prediction) with the requirement in s. 2 of the Patent Act that an invention be useful. The doctrine then goes on to provide that if any one of the promises is not fulfilled, the utility requirement in s. 2 is not met and the patent, in its entirety, is invalid.

This had become a highly contentious issue as it resulted in the invalidity of numerous valuable pharmaceutical patents. Eli Lilly had recently raised, without success, the draconian promise doctrine in an arbitration under the dispute resolution provisions of the North American Free Trade Agreement (NAFTA), alleging that the Canadian Courts' interpretation of the utility requirement for patentability violated Canada's obligations under NAFTA.

In the case under appeal, the Court considered AstraZeneca's patent covering the compound esomeprazole in NEXIUM, AstraZeneca's successful proton pump inhibitor (PPI) drug that reduces gastric acid and treats maladies such as reflux esophagitis. The patent was found novel and non-obvious at trial (2014 FC 638), but invalid for lack of utility.

Applying the promise doctrine, the trial judge had identified two promises: (i) as a PPI, and (ii) "improved pharmacokinetic and metabolic properties which would give an improved therapeutic profile such as a lower degree of interindividual variation". There was no dispute the first utility was soundly predicted, but the second was held to not be demonstrated or soundly predicted at the patent application filing date in Canada. The trial judge declared the entire patent to be invalid for failing to meet the utility requirement for an invention under s. 2 of the Patent Act. The Federal Court of Appeal upheld this decision (2015 FCA 158).

The Supreme Court of Canada's total rejection of the promise doctrine is clear: "the Promise Doctrine is not the correct method of determining whether a patent has sufficient utility"; it is "incongruent with both the words and the scheme of the Patent Act"; "it is not good law"; and, is "unsound".

The Court found the promise doctrine is excessively onerous in two ways: (i) it determines the standard of utility that is required of a patent by reference to the promises expressed in the patent; and (ii) where there are multiple expressed promises of utility, it requires that all be fulfilled for a patent to be valid.

The Court set out the correct approach, as follows:

[49] …. ultimately, every invention pertains to a single subject-matter, and any single use of that subject-matter that is demonstrated or soundly predicted by the filing date is sufficient to make an invention useful for the purposes of s. 2.

[53] Utility will differ based on the subject-matter of the invention as identified by claims construction. Thus, the scope of potentially acceptable uses to meet the s. 2 requirement is limited – not any use will do. By requiring the usefulness of the proposed invention to be related to the nature of the subject-matter, a proposed invention cannot be saved by an entirely unrelated use. It is not sufficient for a patentee seeking a patent for a machine to assert it is useful as a paperweight.

[54] To determine whether a patent discloses an invention with sufficient utility under s. 2, courts should undertake the following analysis. First, courts must identify the subject-matter of the invention as claimed in the patent. Second, courts must ask whether that subject-matter is useful – is it capable of a practical purpose (i.e. an actual result)?

[55] The Act does not prescribe the degree or quantum of usefulness required, or that every potential use be realized – a scintilla of utility will do. A single use related to the nature of the subject-matter is sufficient, and the utility must be established by either demonstration or sound prediction as of the filing date…

[57] The application of the utility requirement in s. 2, therefore, is to be interpreted in line with its purpose – to prevent the patenting of fanciful, speculative or inoperable inventions.

Applying the correct approach, the Supreme Court found AstraZeneca's patent was valid. As the trial judge had found the claimed subject-matter – the optically pure salts of the S enantiomer of omeprazole (esomeprazole) – to be useful for a purpose, as a PPI to reduce production of gastric acid, that relevant use was sufficient utility to make the subject-matter useful within the meaning of s. 2.

The Supreme Court accordingly allowed AstraZeneca's appeal.

The Federal Courts have subsequently applied the Supreme Court's corrected approach in several cases that may have otherwise resulted in patent invalidity.

One illustrative example is Federal Court of Appeal's decision in Bristol-Myers Squibb Canada Co. v. Apotex Inc., (2017 FCA 190). Prior to the Supreme Court's decision in AstraZeneca, the Federal Court had found, notwithstanding that a claim in the patent was to a bare compound dasatinib (SPRYCEL), the patent nonetheless promised that the compound would be useful in treating a range of ailments and also in inhibiting enzymes from two different families of protein tyrosine kinases or PTKs.

[31] … the promise is that the compounds will inhibit both a Src-family PTK and HER1/HER2, and be therapeutically useful in treating a PTK-associated disorder or useful as anti-angiogenic agents.

The Federal Court further held that Apotex' allegation of patent invalidity was justified as Bristol-Myers Squibb (BMS) had failed to establish that all of the promised utilities were demonstrated or soundly predicted as of the relevant date.

On appeal, the Federal Court of Appeal applied the corrected two step test for utility, and found: (i) the subject matter of the claim is merely the compound dasatinib, and does not include its potential therapeutic uses; and (ii) that BMS had demonstrated as of the relevant date that dasatinib acted to inhibit Src-family PTKs. While Apotex had asserted that such a demonstration does not establish a scintilla of utility because "the binding of dasatinib to certain isolated enzymes in a test tube […] cannot satisfy the utility requirement" the Court of Appeal disagreed stating:

[40] … Establishing that a compound has the ability to inhibit a biological target implicated in disease is doubtlessly a useful discovery. Here, it was known as of the relevant date that enhanced activity of PTK was involved in many diseases, as stated in the specification and confirmed in the evidence of several of the experts. Thus, discovery of a substance that acted to inhibit certain PTKs represented an important advance and certainly meets the minimal utility requirements that are now applicable following the decision of the Supreme Court …

Also noteworthy is the subsequent attempt by generic manufacturers in Canada to try to resuscitate the promise doctrine under the guise of other grounds of patent invalidity. In Hospira Healthcare Corp. v. Kennedy Trust for Rheumatology Research, (2018 FC 259), Hospira argued that that the Supreme Court in AstraZeneca had indicated that "overpromising is a mischief" and hence a patent may still be invalid applying the principles of the promise doctrine. The Federal Court rejected the attempt to resurrect the promise doctrine, stating:

[258] Hospira attempts to import the discarded "promise" doctrine into insufficiency and overbreadth. Certainly AstraZeneca does not do so and it would be inconsistent to discard that doctrine only to have it resurface under another principle without clear language to do so.

Consequently, the long sought after correction to the law of utility for patentability in Canada has finally arrived with distinct clarity, as confirmed by the subsequent decisions that have applied it. The promise doctrine is dead in all its potential manifestations.