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Supreme Court of Canada rules on Promise Doctrine in favor of Pharma Patent Owners

On Friday, June 30th, the Supreme Court of Canada issued a ruling in AstraZeneca Canada Inc. v. Apotex Inc., which gives patent owners a far greater ability to protect their intellectual property in the face of Canada’s Promise Doctrine, a part of Canadian patent law that requires an invention to be “useful” in order to be patent-eligible subject matter. The ruling is being heralded by patent owners, especially those in the pharmaceutical space, and it provides an interesting juxtaposition in contrast to recent United States policy, which has been tipping the scales in the favor of generic drugmakers over branded pharmaceuticals.

In Canadian patent law, the Promise Doctrine arises out of Section 2 of Canada’s 1985 Patent Act, which defines an invention 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.” (emphasis added) The part of the statute which includes the word “useful” has been interpreted by Canadian courts in recent years as a mechanism for invalidating more than 25 patents since 2005.

The recent Canadian Supreme Court case follows an AstraZeneca appeal of a decision by the Federal Court of Canada from July 2nd, 2014, which invalidated a patent covering esomeprazole, a proton pump inhibitor which treats gastrointestinal disorders like ulcers by reducing stomach acid; AstraZeneca markets the drug in Canada as Nexium. AstraZeneca is the owner of Canadian Patent No. 2139653, which claimed an optically pure chemical compound designed to inhibit acid production. The Federal Court of Canada invalidated the patent in 2014 based on an argument made by Apotex Inc., a Toronto-based drugmaker seeking to sell generic esomeprazole in Canada. Apotex argued that that a plain reading of the ‘653 patent includes an implied promise of an improved therapeutic profile. The court found that the promise of a “lower degree of interindividual variation” was not something that was achieved by the drug:

“Had the patent stated that such compounds ‘may’ or “could’ give an improved therapeutic profile, then the argument that such statements referred merely to a goal would be more compelling. The same cannot be said of ‘will.’ Will does not convey a low threshold of potential outcomes, but to the contrary, a high threshold of probable or certain outcomes that will occur, which in turn, suggests that such outcomes are promised by the patent.”

The 2014 Federal Court of Canada decision cites to a 2010 decision made by that court in Eli Lilly Canada Inc. v. Novopharm Limited where the court held that “[t]he promise of the patent is fundamental to the utility analysis.” The concept of “promise” of the invention as important to the patentability of the subject matter appears to arise out of British law, specifically a 1919 decision in Hatmaker v. Joseph Nathan & Co., argued before the House of Lords. In that decision, the British court held that “[patent] protection is purchased by the promise of results. It does not, and ought not to, survive the proved failure of the promise to produce the results.” Canadian courts have used this doctrine, in conjunction with the use of subject matter experts, as a reason to invalidate patents.


However, the recent ruling in the AstraZeneca case eradicates the Promise Doctrine as a basis for declaring a Canadian patent invalid. “The Promise Doctrine is not the correct method of determining whether the utility requirement under [Section 2] of the Patent Act is met,” the Canadian Supreme Court’s ruling reads.

“The Promise Doctrine is incongruent with both the words and the scheme of the Patent Act. First, it conflates [Sections 2 and 27(3), the latter of which governs specification], by requiring that to satisfy the utility requirement in [Section 2], any use disclosed in accordance with [Section 27(3)] must be demonstrated or soundly predicted at the time of filing. If that is not done successfully, the entire patent is invalid, as the pre?condition for patentability — an invention under [Section 2] of the Act — has not been fulfilled. Second, to require all multiple uses be met for the patent’s validity to be upheld, runs counter to the words of the Act and 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. Such a consequence is antagonistic to the bargain on which patent law is based wherein we ask inventors to give fulsome disclosure in exchange for a limited monopoly.”

The Canadian Supreme Court’s ruling in AstraZeneca is a welcome surprise not only to pharmaceutical patent owners but also the U.S. Chamber of Commerce. “The Doctrine’s extremely restrictive approach has created harmful instability and uncertainty for medical innovators by making it difficult to obtain or defend a life science patent in Canada,” said Patrick Kilbride, VP of international intellectual property policy. “Today, the Supreme Court has begun to restore much-needed clarity and confidence that biopharmaceutical innovators will be afforded equal protections under the law. This ruling sends an important signal that Canada is open for the business of innovation.” Kilbride cited the U.S. Chamber’s Roots of Innovation IP index report which found that countries with strong IP frameworks see increased biotech innovation, improved access to advanced technologies and greater direct investment in biomedical tech from foreign sources. It’s likely that the AstraZeneca case could improve Canada’s ranking in the IP index; Canada’s patent system was ranked 17th in the most recent IP index and any upward mobility next year could bring it closer to the U.S., which has the 10th-ranked system, tied with Hungary. Indeed, one of Canada’s key weaknesses, as noted by the index, was a narrow scope of patentability for biopharmaceutical inventions due to the “[c]ontinued imposition of onerous patentability requirements.”

In stark contrast to this, the federal government of the United States is busy trying to open doors to generic drugmakers in the interest of promoting competition and reducing drug costs. On Tuesday, June 27th, the U.S. Food and Drug Administration (FDA) announced a new initiative that the agency hopes will improve competition among prescription drugmakers to bring cheaper drugs into the market. Part of the FDA’s initiative involves a new policy which expedites the processing of abbreviated new drug applications (ANDAs) on generic versions of drugs which face little competition.

“No patient should be priced out of the medicines they need, and as an agency dedicated to promoting public health, we must do our part to help patients get access to the treatments they require,” the press release quotes FDA Commissioner Scott Gottlieb as saying. He further stated that this initiative was designed to improve patient access to lower-cost treatment options and make sure that obstacles to new competition were reduced.

The FDA’s list of drugs without approved generics is separated into two parts. The first part identifies drugs for which the FDA could immediately accept an ANDA without prior discussion. This first part includes dozens of drugs such as the anti-parasite Albendazole, hormone treatments like Dinoprostone, chemotherapy agents like Streptozotocin and even the artificial sweetener Sorbitol. The second part of the list includes dozens of drug products which have potential legal, regulatory or scientific issues which should be addressed with the FDA prior to submission of an ANDA.

The FDA is also unveiling a new policy manual which creates an expedited process for the review of original ANDAs, filings which have been increasing in number in recent years. The Office of Generic Drugs (OGD) may grant expedited review status for an ANDA filing when fewer than three generics have been approved, or ANDAs containing a Paragraph IV certification and received by the OGD as “substantially complete” having “first filer” status. Expedited review can also be granted when ANDA submissions are related to drug shortages, subject to special review programs, related to public health emergencies, related to certain government purchasing programs, or when only one approved drug product is listed in the Orange Book. According to the FDA’s announcement, the policy is based on data presented to the FDA that indicates consumers see significant price reductions when multiple FDA-approved generics are on the market.


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One comment so far.

  • [Avatar for Chris Gallagher]
    Chris Gallagher
    July 7, 2017 08:50 am

    Great job Steve commenting on a significant top court rejection in Canada of a long-standing but judicially-created complication of Canada’s threshold statutory utility criterion, an elaboration that was internationally unique and hobbling investment in Canadian innovation.The US patent system is similarly hobbled by its judicially-created Sec101 threshold criteria which like Canada’s Promise Doctrine also appear to be internationally unique. Like their northern judicial peers, SCOTUS might well be inspired to consider walking back its complicating elaborations of the Patent Act’s Sec 101 threshold eligibility criteria which similarly are internationally unique and are interfering with US investment in US innovation.