Attacking the validity of selection patents

The conclusion is not surprising: a selection patent will not receive special treatment. Its validity is vulnerable to attack on any of the grounds provided in the Patent Act. Accordingly, a determination that the conditions for a select patent have not been met does not constitute an independent basis upon which to attack the validity of the patent (Eli Lilly Canada Inc. v Novopharm Limited).

In this case, Eli Lilly commenced an action for patent infringement against Novopharm with respect to Lilly’s ‘113 patent. The ‘113 patent is a selection patent for the compound olanzapine (sold under the brand name Zyprexa), used to treat schizophrenia.

Novopharm defended the infringement allegation made against it and counterclaimed on the ground that the ‘113 patent was not a valid selection patent. Novopharm’s other grounds included, inter alia, anticipation, double patenting and obviousness.

The concept of selection patents is well known in the context of chemical compounds. In general terms, a selection patent is one whose subject matter (compounds) is a fraction of a larger known class of compounds that was the subject matter of a prior patent (the originating or genus patent).

In this case, the ‘113 patent identifies an already-patented compound disclosed in an earlier Canadian patent (the ‘687 patent) obtained by Lilly on the basis that it allegedly manifests unexpected, substantial and special properties in comparison with the other members of its chemical family.

Trial decision

The trial judge examined the ‘113 patent specifically in relation to the proclaimed advantageous qualities of olanzapine and divided the advantages into two categories: the superiority of olanzapine over the other compounds of the ‘687 patent and its superiority over other known anti-psychotic drugs.

The trial judge framed the main question as “is the ‘113 patent a valid selection patent?” and held that a selection patent is valid if it discloses to the public something new and useful in exchange for a further monopoly on the already patented compound.

The inventor of a selection patent must disclose an invention over and above what was disclosed in the ‘genus’ patent covering the selected compound. Relying on the principles set out in the British case of Re I.G. Farbenindustrie A.G.’s Patents (1930), which were referred to by the Supreme Court of Canada in Apotex Inc. v Sanofi-Synthelabo Canada Inc., the trial judge set out the steps for analysing the validity of the ‘113 patent as follows:

After substantive analysis and discussion based on the above steps, the trial judge found that the ‘113 patent did not describe an invention over and above what was disclosed in the ‘687 patent. Therefore, the ‘113 patent was not a valid selection patent. Except for obviousness, the trial judge reasoned, largely on the same basis, that most of “the other grounds of attack on the ‘113 patent [became] superfluous”.

Having decided that there is no invention, the trial judge concluded that there is no need to analyse whether the “invention” was anticipated by prior art, or whether it was double-patented. In this case, by definition, the ‘113 patent was anticipated by the ‘687 patent and olanzapine was considered as double-patented by the ‘687 and the ‘113 patents.

Lilly appealed against the trial judgment.

Appeal decision

On appeal, the crux of the issue was whether there was foundation in law for an independent attack of the validity of a patent based solely on the conditions for a valid selection patent.

The Federal Court of Appeal determined that although selection patents are vulnerable to attack on the grounds of novelty, obviousness, sufficiency and utility, the selection patent conditions themselves cannot be exclusively relied upon to invalidate a patent.

The court held that the trial judge erred in determining the validity of the ‘113 patent on the basis that he did. The Federal Court of Appeal allowed the appeal on the issues of anticipation, obviousness and double-patenting, but returned the issues of utility and sufficiency of disclosure to the trial division for determination.

Regarding anticipation, the Court of Appeal applied the principles enunciated in Sanofi to separately consider the requirements of prior disclosure and enablement. It is worth noting that in the court’s view, at the stage of disclosure inquiry, it is the content of the prior art that is relevant, not whether the content is true. The Court of Appeal went on to conclude that the “disclosure” requirement had not been met and therefore the ‘113 patent was not anticipated by the ‘687 patent:

“...Olanzapine was not one of the examples described in the ‘687 Patent. It was one of a large class of most preferred compounds described by reference to several criteria. It was not specifically disclosed in the ‘687 Patent. Nor had it been made before. Since its advantages (as alleged in the ‘113 Patent) could not have been ascertained until it was made, it was not disclosed...by the ‘687 Patent.”

In reversing the trial judge’s finding on anticipation, the Court of Appeal emphasised that the trial judge’s failure to conduct an analysis in accordance with the approach set out in Sanofi was an error of law. The court cautioned that treating a selection patent differently from any other patent may result in a misguided or tainted approach to assessing a patent’s validity.

On the issue of obviousness, the Court of Appeal acknowledged that the trial judge cited the correct test for obviousness endorsed in Sanofi. However, the court took issue with the trial judge’s finding that “the development of olanzapine was neither obvious nor an invention”. The Court of Appeal viewed such determinations of non-inventiveness and non-obviousness as being inconsistent and unable to stand together, and constituting palpable and overriding error.

Further, in concluding that there was no inventive step, the trial judge was misled by his independent determination that the conditions of a valid selection patent had not been met. As such, his analysis was again tainted.

Applying the Sanofi test for obviousness, the Court of Appeal stated that the inventiveness of selection patents lies in the making of a compound that is advantageous over the genus patent. The Court of Appeal concluded that the inventive concept in this case is the olanzapine compound that was selected from the 15 trillion compounds disclosed in the ‘687 patent and that this, coupled with its advantages, was non-obvious.

The Court of Appeal found that the trial judge had erred in holding that the ‘113 patent was invalid for double-patenting. The two patents do not claim the same invention merely because the ‘113 selection patent is within the ambit of the prior genus patent; the claims of the ‘113 patent were “patently distinct” from the claims in the ‘687 patent.

Regarding utility, the Court of Appeal stated that selection patents must promise an advantage, the construction of which is fundamental to analysing the patent’s utility. Because the trial judge failed to provide a foundation for the construction of the patent’s ‘promise’, and due to a lack of reference to expert evidence on the issue, the utility issue was returned to the trial division for determination.

Finally, on the subject of sufficiency of disclosure, the Court of Appeal agreed with the trial judge that both the sound prediction disclosure requirement and the disclosure requirement under Section 27(3) of the Patent Act needed to be satisfied. However, the Court of Appeal disagreed with the trial judge’s analysis that the two requirements were equivalent, and because there was an insufficient basis on which to review the decision, the issue was returned to the trial division for determination.

Novopharm’s application for leave to appeal to the Supreme Court of Canada was denied.

Conclusion

The Canadian Federal Court of Appeal held that ‘invalid selection’ does not constitute an independent ground for invalidating a patent. Rather, the conditions for a valid selection patent serve to characterise the patent and accordingly inform the analysis for the grounds of validity set out in the Patent Act—novelty, obviousness, sufficiency and utility. In short, a selection patent is vulnerable to attack on any of the grounds set out in the Patent Act.

While this case does not discuss the extent to which conditions for a selection patent can be relevant to utility or other grounds of invalidity, it nevertheless suggests that invalidity analysis must be conducted pursuant to the Patent Act and established jurisprudence.

Katie Wang is a lawyer and patent and trademark agent at Shapiro Cohen. She can be contacted at: kwang@shapirocohen.com