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Court of Appeal primes Supreme Court of Canada to revisit appellate review of claim construction and prohibition against methods of medical treatment

On May 4, 2015, the Federal Court of Appeal released its Reasons for Judgment in an appeal in a prohibition application involving Bayer, Cobalt and a generic version of the oral contraceptive YAZ (drosperinone + ethinyl estradiol). As previously discussed here, the Applications Judge had previously granted a prohibition application in respect of Canadian Patent 2,382,426 but dismissed Bayer’s application for a prohibition order in respect of Canadian Patent No. 2,179,728. Both parties appealed the unfavourable result below.

426 Patent

The Applications Judge below had construed the relevant claim to not be limited to micronized drosperinone. The Application Judge further held that Cobalt’s allegation of non-infringement, based exclusively on an incorrect claim construction, was not justified.

The Court of Appeal, citing the decision of the Supreme Court of Canada in Whirlpool, confirmed that that under current jurisprudence claim construction is to be reviewed on the standard of correctness. Applying this standard, the Court of Appeal concluded there was no grounds to set aside the Applications Judge’s construction, or his finding that Cobalt’s allegation of non-infringement was not justified.

Nevertheless, in the interest of the sound development of the law, the Court of Appeal provided certain observations regarding the proper scope of appellate review of claim construction for the Supreme Court of Canada to consider in a future case. Noting that the Court nearly always reads a patent through the “goggles supplied by experts”, the Court of Appeal suggested that the more deferential standard of palpable and overriding error will often apply where claim construction is based on the assessment of expert evidence. The Court of Appeal further suggested that the appropriate standard of review should distinguish between “letters patent” and the patent specifications:

[23] In considering the standard of review, it seems to me there is much to be said for drawing a distinction between “letters patent” and patent specifications: William L. Hayhurst, “The Distinction Between ‘Letters Patent’ and Patent Specifications: How Did We Get Where We Are?” (2006), 57 C.P.R. (4th) 161. Under this approach, “letters patent” under the Interpretation Act include only the certificate bearing the seal of the Canadian Intellectual Property Office issued to an inventor upon approval of her application. The patent application – as it existed Page: 8 immediately prior to approval – instead becomes the patent specification and is not to be considered “letters patent” under the Interpretation Act.

[24] This distinction has the practical effect that only the certificate – the “letters patent” – will necessarily be reviewed for correctness. Interpretations of the specification may be then be reviewed on the basis of palpable and overriding error when they are heavily dependent on expert testimony, as they usually are. The specification remains a legal document, but even legal documents may be subject to review on a deferential standard: Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633

The Court of Appeal, following its own decision in South Yukon Forest Corporation, also refused Cobalt’s invitation to reweigh the evidence on obviousness holding that this was not the role of an appellate court:

[52] In this Court, Cobalt basically invites this Court to re-weigh the evidence already considered by the Federal Court. In its submissions, it parsed the Federal Court’s reasons, attacking them by taking us to the minutae of the evidence.

[53] On appeal, that is not our job. The standard of review is palpable and overriding error….

728 Patent

The Applications Judge below had concluded that 2 mg of drosperinone is the dose equivalent of 75 μg of gestodene as claimed in claim 8. Since Cobalt’s proposed product contains 3 mg (and not 2 mg) of drosperinone, the Court of Appeal held that the Applications Judge had made no reviewable error in finding Cobalt’s allegation of non-infringement to be justified.

Although not necessary in light of its finding on non-infringement, the Court provided the following observations on the eligibility of claims directed to methods of medical treatment for a case where the issue is squarely raised on the facts:

[101] The current law in this Court is that methods of medical treatment are not patentable: Novartis Pharmaceuticals Canada Inc v. Cobalt Pharmaceuticals Company, 2013 FC 985, 440 F.T.R. 1 at paragraphs 70-101, endorsed by this Court at 2014 FCA 17, 459 N.R. 17, in very brief reasons based on the particular arguments made. The provenance of this is Tennessee Eastman Co. et al. v. Commissioner of Patents, [1974] S.C.R. 111, 33 D.L.R. (3d) 459, a decision based on former subsection 41(1) of the Patent Act, now repealed. In his blog, “Sufficient Description,” Professor Norman Siebrasse has forcefully advanced arguments of policy and logic against the current position. In my view, this calls for full consideration by this Court or the Supreme Court in a case where the issue is squarely raised on the facts.

A copy of the Court of Appeal’s Reasons for Judgment dismissing both appeals may be found here.