AstraZeneca Canada Inc. v Apotex Inc.: The Supreme Court Overturns the Promise Doctrine
Patents exist to reward inventors and to facilitate the fulsome disclosure of inventions to the public’s benefit. However, prospective patents must meet statutory requirements in order to be approved. As per the Patent Act, RSC, 1985, c P-4 [Patent Act], prospective inventions must demonstrate that they are “useful” in order to enjoy protection under the Act.
Unquestionably, a patent should not be valid if it lacks utility. But what qualifies as useful? What is the legal standard for such utility? How should the court reconcile frivolously filed patents with the need for innovation? Such questions are at the heart of the Supreme Court of Canada (“SCC”) case AstraZeneca Canada Inc. v Apotex Inc., 2017 SCC 36 [Apotex, SCC], a case closely monitored by major pharmaceutical and technology companies alike.
AstraZeneca is a global pharmaceutical company that sold a gastric drug under the name Nexium. In connection with this drug, AstraZeneca owned Canadian Patent No. 2,139,653 (the “Patent 653”), which it allowed it to lay claim to optically pure salts of esomeprazole, an active ingredient of the drug.
Apotex is a Canadian pharmaceutical company that sought to release its own generic version of esomeprazole. In response, AstraZeneca brought an action for patent infringement of Patent 653 against Apotex. Apotex counterclaimed and sought a declaration that Patent 653 was invalid due to lack of usefulness and utility.
The Promise Doctrine
Under the Patent Act, an invention is described as:
“any new and useful art, process, machine, manufacture or composition of matter, or any new and useful improvement in any art, process, machine, manufacture or composition of matter” (Patent Act, section 2) (emphasis my own)
At the Federal Court, Justice Rennie ruled in favour of Apotex. The Court found that, while Patent 653 was indeed a new and novel invention, AstraZeneca did not meet the utility requirement of the invention as laid out in section 2 of the Patent Act (Federal Court, 2014 FC 638 (Apotex, FC at para 367). In assessing utility, the Federal Court relied upon the common law “promise of the patent” doctrine (the “Promise Doctrine”).
According to the Promise Doctrine, if the application documents of a Canadian patent sets out an explicit promise of utility, then utility will be measured against that promise.
More specifically, Justice Rennie provides:
“In the words of the Supreme Court, inutility means “that the invention will not work, either in the sense that it will not operate at all or, more broadly, that it will not do what the specification promises that it will do”: Consolboard Inc v MacMillan Bloedel (Saskatchewan) Ltd, 1981 CanLII 15 (SCC),  1 SCR 504 at 525. Thus, if a patent makes a promise, it will have utility only if that promise is fulfilled.” (Apotex, FC at para 86) (emphasis my own)
In this case, the Federal Court found that AstraZeneca’s Patent 653 contained two promises, but that only one of those promises had been met. More specifically, the initial patent application promised improved therapeutic properties at the time of filing—a promise that was not subsequently fulfilled. As a result, Patent 653 was found to be invalid for lack of utility, opening the way for Apotex to release its generic drug. The Federal Court of Appeal adopted the Federal Court’s analysis, dismissing AstraZeneca’s appeal (Federal Court of Appeal, 2015 FCA 158). AstraZeneca was granted leave to appeal to the SCC.
Overturning the Promise Doctrine
At the SCC, the main issue was whether the Promise Doctrine should continue to be the correct standard to measure utility.
In analyzing this case, the SCC ruled that the Promise Doctrine was too onerous in its formulation, namely: (1) it determines the standard of utility that is required of a patent by reference to the promises expressed in the patent (at the time of filing); and (2) where there are multiple expressed promises of utility, it requires that all be fulfilled in order for a patent to be valid.
As a result, the Court found that the real-world effect of the Promise Doctrine was to deprive an invention of patent protection if even one promise in the patent application does not materialize.
As Justice Rowe elaborates:
“To require all multiple uses be met for the patent’s validity to be upheld, has the potential for unfair consequences. The Promise Doctrine risks, as was the case here, for an otherwise useful invention to be deprived of patent protection because not every promised use was sufficiently demonstrated or soundly predicted by the filing date.” (Apotex, SCC at para 50)
Moreover, the Court found that the Promise Doctrine was burdensome to a fundamental bargain of patent law—the grant of a temporary monopoly to an inventor in exchange for the disclosure of their invention to the public’s benefit. Due to the onerous standards of the test, patentees may be discouraged from disclosing fully, where fulsome disclosure is to the benefit of the public. As the Promise Doctrine was contrary to the scheme and purpose of the Patent Act, the SCC ruled that it was not good law.
A New Standard for Utility
In modifying its test for sufficient utility, the SCC prescribed a new two-part standard: i) identifying the subject-matter of the invention as identified by the patent application documents and (ii) asking whether that subject-matter is capable of a practical purpose. Since the Patent Act does not prescribe the degree of usefulness required, the Court noted that “a scintilla of utility will do” (Apotex, SCC at para 55).
The practical effect of this change is that rather than undergo a line-by-line verification of all of the statements that relate to the utility of an invention (as the Promise Doctrine demands), the Court will instead look only at the overall subject-matter of the invention and determine if a scintilla of utility related to that subject-matter exists.
Applying this new standard to the case facts, the Court found optically pure salts of esomeprazole to be sufficiently useful within the context of Patent 653. Not only was it identified within the subject-matter of the application, it was also capable of practical purpose (even if the Nexium drug did not rely on that purpose). As such, the SCC upheld AstraZeneca’s patent rights.
Significance and Final Thoughts
Apotex lowers the threshold for establishing the utility of a Canadian patent. The ruling was seen largely as a win for large patent holders as well as several interveners who had argued that Canada’s patent laws were not in lock step with global standards.
For patent holders in the pharmaceutical and technology industries, greater protection and peace-of-mind is offered by the understanding that fulsome disclosure in the specification of their vast patent portfolios will not jeopardize their patent rights. So long as their patent promises serve a practical purpose, their patents will not be voidable if promises are not followed through in practice.
For litigants seeking to invalidate patents, the criteria offered through section 2 of the Patent Act is now harder than ever to make out in the absence of the Promise Doctrine. Instead, such litigants may instead choose to initiate action through section 53 of the Patent Act, which voids patents where they are “willfully made for the purpose of misleading.” However, the language of this section demands a different line-of-argument and presents a different burden of proof for litigants. Those seeking to file or challenge patents should engage experienced intellectual property counsel.