FCA Clarifies Threshold for Soundly Predicting Utility

Justice Locke, writing a unanimous decision for the Federal Court of Appeal in Sandoz v Janssen, 2023 FCA 221, dismissed Sandoz’s appeal of 2022 FC 715, agreeing in particular with the Trial Judge that the 770 Patent, for the use of macitentan in combination with a PDE5 inhibitor for treating pulmonary arterial hypertension (“PAH”), does not lack utility.

In the lower Court, Sandoz argued that the 770 Patent is invalid for lack of utility, overbreadth, insufficiency, and/or obviousness. The Federal Court concluded that invalidity had not been proven. Although utility had not been demonstrated at the time of filing the application for the 770 Patent, the requirements from 2002 SCC 77 (“Wellcome“) for soundly predicting utility were met:

  1. A factual basis for the prediction;
  2. An articulable and sound line of reasoning from which the desired result can be inferred from the factual basis; and
  3. Proper disclosure.

At the Court of Appeal, the focus was on Sandoz’s lack of utility argument. Sandoz argued the Trial Judge applied the wrong (lower threshold) test of Wellcome because she failed to mention 2010 FCA 197 (“Eli Lilly“), which explains the threshold requirement of prima facie reasonable inference of utility. Sandoz emphasized that the Trial Judge found long-term studies in humans with PAH were insufficient to provide more than preliminary evidence (rather than definitive evidence) that combination treatment would be effective. Sandoz argued that because the Court below based its conclusion on utility on rat studies that measured systemic blood pressure rather than pulmonary blood pressure, the Federal Court could not have had the prima facie reasonable inference of utility threshold in mind. Sandoz argued this was an error of law reviewable on the correctness standard.

The Court of Appeal commented that Eli Lilly was not purporting to change the legal test in Wellcome, but was attempting to glean, from Wellcome, the appropriate threshold for finding that a prediction is sound. Because the Federal Court was “clearly familiar with the teachings in Wellcome,” the Court of Appeal concluded the Federal Court did not overlook the guidance in Wellcome that the “teaching in a patent based on a sound predication must be solid, accurate and meaningful, and based on exact science (not speculation).”

The Court of Appeal explained that the Trial Judge’s use of the term “preliminary evidence” was made in the context of the obviousness analysis, not that of sound prediction. The two legal tests are different and common general knowledge may be sufficient to support a sound prediction, but not sufficient to find obviousness. Further, the rat studies’ measurement of systemic blood pressure rather than pulmonary blood pressure was not sufficient to prevent a sound prediction of utility. Thus, the factual considerations cited by Sandoz did not lead the Court of Appeal to conclude the Trial Judge applied a lower threshold for sound prediction than a prima facie reasonable inference of utility.

The Court of Appeal also concluded that Sandoz’ other invalidity arguments had no merit.

The full decision can be read here.