Teva v Pfizer: How Viagra Allowed the SCC to Stiffen Patent Disclosure Requirements

Canadian patent law has undergone a number of significant developments throughout the past year, with numerous issues capturing the attention of the Supreme Court of Canada (“SCC”). In particular, the issue of disclosure has undergone a great deal of juridical scrutiny. Disclosure constitutes a fundamental tenet of patent law aimed at striking a balance between the monopoly rights granted to inventors and society as a whole, effectively positing that an inventor can only be granted patent protection by making available to the public the method through which his/her product was created. The case of Teva Canada Ltd v Pfizer Canada Inc, [2012] 3 SCR 625 [Teva] represents the SCC’s most recent iteration concerning the requirements which must be met in order for sufficient disclosure to be recognized.

Facts

While conducting clinical studies regarding the compound sildenafil and its effect(s) on patients suffering from angina, Pfizer Canada Inc. (“Pfizer”) unintentionally discovered that the compound carries the side effect of inducing erections. As a result of this discovery, the company carried out an additional study to analyze the compound’s effect(s) on individuals experiencing erectile dysfunction (“ED”), which produced positive results. Subsequently, Pfizer filed an application to obtain a patent (Patent 2,163,446) which provided information regarding a large number of different compounds aimed at aiding individuals in the treatment of ED. The resulting product associated with this patent became the well-known and widely used Viagra pill.

Within Pfizer’s disclosure of its patent was a description of nine “especially preferred” compounds, a list which included sildenafil. However, the patent filed by Pfizer did not disclose the fact that, among the massive number of compounds listed in its patent, sildenafil stood as the only compound which had been proven successful at treating ED in clinical studies. The patent comprised seven claims concerning the various compounds, which were wide ranging; while claim 1 established a formula that included the use of 260 quintillion different compounds, claim 7 related to sildenafil alone. Nowhere in the patent application – neither within the general description nor the individual claims – was it disclosed that the working compound is found in Claim 7 or that the remaining compounds in the patent had not been proven effective in treating ED (Teva, para 5).

The patent was ultimately granted to Pfizer on July 7th, 1998, meaning that patent protection effectively granting monopoly rights over the use of Viagra would be retained by Pfizer until 2014.

Upon developing a generic version of the pill, Novopharm Limited (now Teva Pharmaceutical Industries, or “Teva”) applied for a “Notice of Compliance” against Pfizer, alleging that Pfizer’s patent should be deemed invalid for three reasons: 1) obviousness, 2) lack of utility, and 3) insufficient disclosure.

Trial History

At trial level, Kelen J held that the invention was not obvious, that it was useful and that Pfizer had not failed to adequately disclose it. According to Kelen J, relevant jurisprudence pointed to the notion that although the patent was unwieldy in terms of the breadth of information it presented, individually claimed substances constitute separate inventions within patent claims. This meant that although claims 1 through 6 could be rendered invalid based on their lack of utility (as they contained inoperative compounds), claim 7 of Pfizer’s patent was to be separately and independently evaluated, and was deemed useful on that basis. In terms of disclosure, Kelen J expressed discomfort with both the existing caselaw surrounding patent disclosure and issues regarding the likelihood of an individual (even if skilled in the art of manufacturing chemical compositions) being capable of recreating the product arising from Pfizer’s patent (i.e. Viagra, or a generic version thereof). However, given his firm belief that individual claims were to be considered independently – alongside the fact that one expert opinion seemed to support Pfizer’s position with regard to the potential “readability” of its patent – he found that Pfizer had established that their disclosure was sufficient.

Consequently, the Minister of Health was prohibited from issuing Teva the requested Notice of Compliance.

On appeal, Nadon JA found that Kelen J had not erred in any aspect of his ruling. In particular, Nadon JA supported Kelen J’s distinction that the invention was contained in Claim 7 and that disclosure requirements related to that claim alone. The appeal of Teva was therefore denied, and leave to appeal to the SCC was granted.

SCC Analysis

Delivering a unanimous opinion, Lebel J framed the relevant issues – placing a particular focus on disclosure – with reference to a fundamental principle of patent law known as the “patent bargain.” According to Lebel J, the patent system is based on a “quid pro quo” system, wherein full disclosure of a patentable invention to the public (the “quid”) grants exclusive rights in producing a new and useful invention for a limited period of time to the inventor (the “quo”) (para 32). This bargain is meant to ensure that a balance is struck between the degree of commercial privilege conferred upon an inventor and the capacity of the public to fully (and equally) benefit from that invention into the future. Without full disclosure to the public, monopoly rights must not be conferred.

Given that patents operate as a creature of statute, the court turned to a number of relevant provisions found in the Patent Act, RSC, 1985, c P-4. Most importantly, section 27(3) concerns “invention specification,” and reads as follows:

(3) The specification of an invention must

(a) correctly and fully describe the invention and its operation or use as contemplated by the inventor;

(b) set out clearly the various steps in a process, or the method of constructing… a machine, manufacture or composition of matter, in such full, clear, concise and exact terms as to enable any person skilled in the art or science to which it pertains, or with which it is most closely connected, to make, construct, compound or use it…

Through referencing the oft recited precedent established by Dickson J in Consolboard Inc v MacMillan Bloedel (Sask) Ltd, [1981] 1 SCR 504 [Consolboard], the Court illustrated the proper interpretation of this provision. According to Dickson J, two fundamental questions must first be asked: what is the invention, and how does it work? While the answer to each question must be “correct and full,” Dickson J explained that “it is a well established principle that a patent specification is addressed, not to the public generally, but to persons skilled in the particular art” (Consolboard, p 521). Thus, in order to prove the requirements of disclosure have been met, an inventor need only prove that an individual skilled in the relevant craft at issue would be capable of harnessing the disclosure as a means of replicating the product following the conclusion of the invention’s period of protection.

This principle was applied at both the trial and appeal level. However, the SCC departed from the reasoning applied by Kelen J and Nadon JA in terms of applying this principle to the overall structure of Pfizer’s patent. According to Dickson J in Consolboard, a court must “look to the whole of the disclosure and the claims to ascertain the nature of the invention and methods of its performance” (p 520). This appeal effectively turned (at least in part) on the Court’s affirmation of this proposition. The Act requires that courts “consider the specification as a whole to determine whether the disclosure of the invention is sufficient” (Teva, para 55). According to Lebel J, this constitutes a fundamental flaw in the reasoning applied by both Kelen J and Nadon JA. When considered as a whole, all of the compounds listed in the patent for the treatment of ED comprise a single inventive concept. As a result, even if a skilled reader could narrow the effective compound down to the ones listed in Claim 6 and Claim 7, “further testing would have been required to determine which of those two compounds was actually effective in treating ED” (para 74). Interestingly, this was in fact confirmed by the trial judge Kelen J, who had prior conceded in his judgment that a skilled reader would need to “undertake a minor research project to determine which claim is the true invention” (Pfizer Canada Inc v Novopharm Limited, 2009 FC 638 para 135).

Lebel J agreed that Pfizer’s use of “cascading claims” was in no way uncommon or unacceptable, but deemed the patent invalid due to the fact that the manner in which Pfizer executed the patent’s disclosure carried the effect of “obscuring the true invention.” (Teva, para 80) The appeal was therefore allowed, and the prohibition against Teva was lifted.

Implications

This case is rather unique in that the precedent the SCC seemingly established has not yet been fully realized. On the contrary, it has in a certain sense been reined in, at least temporarily. Following the decision, Pfizer filed a motion for a modification of the judgment on the basis that the Court had effectively exceeded its jurisdiction in wholly invalidating their patent. According to Pfizer, the issue brought forward was not intended to involve an analysis of “validity” per se; rather, the issue originally before the Court was whether Teva should be prohibited from obtaining a Notice of Compliance for its generic version of the drug Viagra (admittedly on the basis that Pfizer’s patent was not valid). In other words, through referencing a technicality, Pfizer argued that the SCC had unjustifiably forced their interpretation of patent validity into the legal system (and, by extension, onto their patent).

The Court granted Pfizer’s motion in part, deleting “statements that Pfizer’s patent at issue was ‘invalid’, and inserting in those same paragraphs words to the effect that Teva had established its allegation that the same patent was ‘not valid’.” The implications of this case must therefore be read in combination with the Court’s subsequent modification of its original decision. The simple fact that Pfizer continued to battle even after a unanimous decision was handed down by the highest court in Canada against them illustrates the nature of Canadian patent law. The stakes are high, which is precisely why delineating the issue of disclosure in a narrow fashion carries potentially massive economic fallout, prompting companies to pursue the longevity of their respective patents through any available legal avenues.

Regardless, it is clear that the SCC – given that its judgment was indeed unanimous – has developed a coherent collective vision regarding the manner in which the patent bargain should operate. This vision might become capable of full realization in the case of Apotex Inc v Pfizer Ireland Pharmaceuticals, 2012 FC 1339 [Apotex], which was decided only weeks after Teva, and involves very similar claims (including an allegation of invalidity against Pfizer). In the case of Apotex, Zinn J of the Federal Court declared Pfizer’s patent invalid, relying on the SCC’s reasoning in an impeachment action brought by Apotex. Aware of the motion Pfizer brought forward regarding the modification of the SCC’s decision, Zinn J acknowledged that while it would seem redundant to deem the patent invalid in his decision, doing so would in fact ensure that the SCC would be granted a second chance at applying their reasoning in the case that Pfizer’s motion for modification was eventually approved (Apotex, para 34).

Given that Pfizer’s motion was indeed approved, and the decision of Zinn J has been appealed, it appears possible that it will only be a matter of time until the determination originally reached by the SCC will become formally cemented as a general principle of Canadian patent law.