J. Bradley White, Brad Jenkins
Sept 10, 2014
There is no more contentious question in Canadian patent law at the moment than the question of utility. Much of the debate focuses on whether an invention need only have a scintilla of utility or whether utility must be measured against the promise of the patent. However, a second, equally important question has also been raised. Where utility was only predicted (as opposed to demonstrated) at the time of filing, must the patentee disclose the factual basis and line of reasoning underlying the prediction in the patent specification? Until recently, the existence of this so-called heightened disclosure requirement appeared to be settled law. Following a string of recent decisions in which patents were invalidated for failing to disclose the basis of their predicted utility, this disclosure requirement has recently been called into question.
The Doctrine of Sound Prediction
In Canada, applicants must have demonstrated the utility of their inventions at the time they filed their patent applications. The doctrine of sound prediction is an exception to this general rule. As articulated by the Supreme Court of Canada in the seminal AZT case (Apotex v Wellcome Foundation 2002), the doctrine allows inventors to apply for a patent even if utility was only predicted at the time of filing. The doctrine has three essential elements. First, the inventor must have had a factual basis for predicting utility. Second, the inventor must have had a sound line of reasoning linking the factual basis and the prediction of utility. Third, the inventor must disclose both the factual basis and the line of reasoning in the patent application.
Even though sound prediction eased the utility requirement to benefit patentees, the doctrine has recently come under attack. In a proceeding brought under the North American Free Trade Agreement, Eli Lilly has claimed, amongst other things, that the doctrine of sound prediction imposes a “heightened evidentiary requirement” that is inconsistent with the disclosure requirement under section 27(3) of the Patent Act and article 5 of the Patent Cooperation Treaty (PCT). The disclosure requirement under the Act has been interpreted as requiring applicants to answer two questions: “What is your invention?” and “How does it work?”. Similarly, article 5 of the PCT states only that the description “shall disclose the invention in a manner sufficiently clear and complete for the invention to be carried out by a person skilled in the art.” On the face of it, the disclosure requirement for sound prediction patents may appear more onerous than that imposed under the Act or the PCT.
The Viagra Case
The Supreme Court of Canada raised these criticisms in Teva Canada v Pfizer Canada 2012 (Viagra case), noting that “there is no requirement whatsoever in s 27(3) to disclose the utility of the invention.” The Court also stated that there is no requirement to disclose the basis of the invention’s utility under section 2 of the Act, which requires only that the invention has utility. However, the context of these comments is critical. The Court was addressing whether the patentee Pfizer, was obliged to disclose in the specification the basis of its conclusion that sildenafil was useful in treating erectile dysfunction. The Court found Pfizer had no such obligation because sildenafil’s utility had been demonstrated at the time of filing. The Court did not say there is no obligation to disclose the factual basis and sound line of reasoning where utility was only predicted at the time of filing. Rather, the Court specifically did not address that issue, stating that “whether there is an ‘enhanced’ or ‘heightened’ disclosure requirement with respect to sound predictions does not arise in this case and need not be addressed.”
Even though the Supreme Court expressly declined to address the disclosure requirement for patents based on predicted utility, the Viagra decision has been cited in two recent cases that, to different degrees, dilute the requirement. In Bell Helicopter Textron v Eurocopter 2013, the Federal Court of Appeal stated that the level of disclosure required by the doctrine of sound prediction must be assessed with reference to the relevant knowledge already possessed by the skilled person. Where the factual basis can be found in scientifically accepted laws or principles known to the skilled person, disclosure may not be necessary. Similarly, where the skilled person would accept the logic in the specification and thereby expect that the invention would work, disclosure of the complete line of reasoning may not be necessary. In this light, the Court concluded that “where the sound prediction is based on knowledge forming part of the common general knowledge and on a line of reasoning which would be apparent to the skilled person (which is often the case in mechanical inventions), the requirements of disclosure may readily be met by simply describing the invention in sufficient detail such that it can be practiced.”
There is a certain logic to the Court’s reasoning. As patents are addressed to skilled persons, insisting on disclosure of information that would be self-evident to the skilled person could be considered pedantic. Moreover, recourse to the skilled person’s common general knowledge is already permissible in considering other grounds of invalidity, like sufficiency, anticipation and obviousness. Thus, the Court’s views in Eurocopter may merely align or reconcile the approach to considering utility with the approaches to other grounds of invalidity.
While complete disclosure of the factual basis and line of reasoning underlying a prediction may not always be required from a scientific or technical perspective, there may be a principled reason for nevertheless requiring full disclosure. Simply put, the skilled person and the inventor are not synonymous. Unless an inventor discloses the basis of his or her prediction, one cannot know whether the application was filed on the basis of reasoned thought or a lucky hunch. The fact that experts may later agree that a hypothetical skilled person would have been able to soundly predict utility does not mean that the inventor did so, as a matter of fact. As has frequently been stated in discussions of obviousness, everything looks easier in hindsight. Unless the factual basis and line of reasoning are disclosed in the patent, we may again find ourselves arguing about when the invention was actually reduced to practice—the exact argument that is supposedly avoided in a first-to-file regime. Given these potential problems, disclosure of the factual basis and line of reasoning may serve an important evidentiary role in establishing true inventorship.
The New Use Angle
While the Eurocopter case may have changed the law incrementally, the recent Astrazeneca Canada v Apotex 2014 (Esomeprazole) decision raises a much more serious challenge to the ongoing relevance of the sound prediction disclosure requirement. In the Esomeprazole case, the court stated that the Viagra decision overturned earlier Federal Court of Appeal decisions which held that disclosure was a requirement for all patents based on sound prediction. Based on this supposed change in the law, the court held that the heightened disclosure requirement only applies in situations where the patent claims a new use for a known compound.
Interestingly, the court in Esomeprazole acknowledged that the Supreme Court’s comments on the disclosure requirement in Viagra were obiter but stated it was, nevertheless, “compelled” to follow these comments because the question of disclosure received “such explicit treatment.” This comment is somewhat perplexing. As noted, Justice Lebel was addressing disclosure in cases of demonstrated utility; he plainly stated he was not addressing the disclosure requirement in cases of sound prediction. If the Supreme Court in Viagra did not meaningfully address the law of sound prediction, the Federal Court of Appeal’s earlier holdings that proper disclosure of the prediction is required remain binding precedent.
Distinctions Within Prediction Cases
The court’s interpretation in Esomeprazole of the AZT decision also raises other questions. Focusing on a clause in which the Supreme Court describes the disclosure requirement “in this sort of case,” the court concluded that the heightened disclosure requirement applies only to one particular “sort” or subset of sound prediction cases: cases dealing with predicted new uses for known compounds. This selective reading is difficult to reconcile in the context of the rest of the paragraph which begins with an unequivocal general statement that “the doctrine of sound prediction has three components” and proceeds to identify proper disclosure as one of these components – with no restriction to a particular “sort” of sound prediction case.
The Esomeprazole decision does raise other interesting questions that warrant further consideration. Most significantly, the court added its voice to a growing number that argue sound prediction’s disclosure requirement lacks a firm statutory foundation, suggesting that the requirement does not derive directly from either the utility requirement in section 2 of the Patent Act or the disclosure requirement in section 27(3) of the Patent Act. However, it is arguable that the prediction is the invention and, therefore, must be disclosed. Even if one were to accept that there is no direct statutory basis, the doctrine of sound prediction itself, is a judicial creation (as are many other elements of Canadian patent law) that relaxes the requirement to have demonstrated utility prior to filing for a patent. To the extent that this heightened disclosure requirement places an additional burden on patent applicants, it can be viewed as the price that must be paid in exchange for the privilege of applying for a patent before utility has been demonstrated. As Justice Binnie noted in AZT, disclosure of the prediction is the quid pro quo that the patentee offers in exchange for its monopoly.
Despite questioning the statutory foundation of the disclosure requirement, the court in Esomeprazole acknowledged the compromise underlying the doctrine of sound prediction. In explaining why a heightened disclosure requirement may be appropriate when dealing with patents claiming new uses for known compounds, the court stated that an unsupported prediction of utility “would fairly raise concerns for the court when evaluating the bargain between innovators and the public” because “utility is the only thing being offered in exchange for the patent monopoly since the compound itself was previously disclosed.” Unfortunately, this idea was not more fully developed. Implicitly, the court appears to suggest that patents claiming new uses for known compounds are somehow less substantial or meritorious than patents claiming a new compound (diminishing the former by stating that the “only thing” they offer is utility). Whether this is a fair characterisation of the court’s comments can be debated. However, the court seems to have clearly proposed different disclosure requirements, depending on the subject matter of the patent. If so, this reasoning is problematic.
On a most basic level, the Patent Act, with very limited exceptions, does not establish different patentability requirements for different types of inventions. If such distinctions are appropriate, ironically despite the lack of statutory support, one might question how patents directed to new salts, polymorphs, and pseudopolymorphs of known compounds are to be addressed. Utility can also be considered the gravamen of these inventions, given the relative ease with which they are made compared to new molecules.
Furthermore, utility is arguably no less central to the value of a new compound than it is to the value of a new use for a known compound. Courts have held that where a patent claims a new compound, its utility must be set out in the disclosure. In essence, it is the discovery of the compound’s utility that completes the invention and warrants the grant of a patent. Whether the compound in question was already known or newly discovered is of, at most, secondary importance. If utility is only predicted at the time of filing, there seems to be no principled reason for suggesting that additional disclosure is warranted if the patent claims a new use for a known compound but not if it claims a new compound.
A Word of Advice
In light of these cases and others, the Canadian law of utility remains unclear. Fortunately, the Supreme Court will hear arguments on utility requirements, including the disclosure requirement in cases of sound prediction, when it revisits Sanofi-Aventis’ clopidogrel patent in November 2014 (Apotex v Sanofi-Aventis 2011). Until the Supreme Court clarifies the law of utility, patentees may be well served to follow some simple advice: promise less and disclose more.
Originally published in the September 2014 issue of Managing IP Magazine., IP Focus 2014 Canada, available at AIPPI 2014 Toronto.
Authored by: J. Bradley White, Brad Jenkins