Ratiopharm Inc. v. Canada (Health)

Ratiopharm Inc. v. Canada (Health) Court (s) Database Federal Court of Appeal Decisions Date 2007-02-23 Neutral citation 2007 FCA 83 File numbers A-76-06 Decision Content Date: 20070223 Docket: A-76-06 Citation: 2007 FCA 83 CORAM: NOËL J.A. NADON J.A. MALONE J.A. BETWEEN: RATIOPHARM, A DIVISION OF RATIOPHARM INC. Appellant and THE MINISTER OF HEALTH, ABBOTT LABORATORIES and ABBOTT LABORATORIES LIMITED Respondents Heard at Ottawa, Ontario, on February 13, 2007. Judgment delivered at Ottawa, Ontario, on February 23, 2007. REASONS FOR JUDGMENT BY: NOËL J.A. CONCURRED IN BY: NADON J.A. MALONE J.A. Date: 20070223 Docket: A-76-06 Citation: 2007 FCA 83 CORAM: NOËL J.A. NADON J.A. MALONE J.A. BETWEEN: RATIOPHARM, A DIVISION OF RATIOPHARM INC. Appellant and THE MINISTER OF HEALTH, ABBOTT LABORATORIES and ABBOTT LABORATORIES LIMITED Respondents REASONS FOR JUDGMENT NOËL J.A. [1] This is an appeal from the judgment of Campbell J. of the Federal Court (2006 FC 69) granting Abbott Laboratories and Abbott Laboratories Limited’s (collectively, “Abbott” or “the respondents”) application under the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 (“PMNOC Regulations”) for an order prohibiting the Minister of Health (“the Minister”) from issuing a Notice of Compliance (“NOC”) to Ratiopharm (or “the appellant”) until after the expiration of Canadian Patent No. 2,393,614 (“the ‘614 Patent”). [2] The prohibition order was issued with respect to clarithromycin, the active medicinal ingredient in Abbott’s Biaxin tablets. The appellant seeks to have this order set aside alleging, inter alia, that Campbell J. misconstrued the ‘614 Patent, and that in any event he erred in failing to hold that this patent was invalid on the ground of obviousness. RELEVANT FACTS [3] The ‘614 Patent is a formulation patent entitled “Antibacterial Clarithromycin Compositions and Processes for Making Same”. The alleged invention disclosed in the ‘614 Patent is the abridgement of the clarithromycin composition by removing components (i.e., excipients) from the non-abridged composition. [4] An excipient is an inert, non-medicinal ingredient that is added to a pharmaceutical formulation to give the formulation desired properties. Excipients include diluents, binders, lubricants, disintegrants, glidants, and colouring agents. [5] The commercially-available, non-abridged clarithromycin composition is marketed by Abbott under the name Biaxin. This non-abridged formulation is described in the ‘614 Patent as follows: The currently commercially-available, non-abridged clarithromycin composition consists essentially of the following components: clarithromycin, colloidal silicon dioxide, D&C yellow dye No. 10, extra-granular sodium croscarmellose, extra-granular microcrystalline cellulose (Avicel® PH-102), intra-granular sodium croscarmellose, intra-granular microcrystalline cellulose (Avicel® PH-101), magnesium stearate powder, povidone, pre-gelatinized starch, 200 proof alcohol, stearic acid, talc, and water. [6] Claim 1 of the ‘614 Patent (also referred to as the “abridged composition”) is the only claim in issue. It reads: An abridged antibacterial composition consisting essentially of clarithromycin, water, an intra-granular excipient, and an extra-granular excipient, in which the intra-granular excipient consists essentially of povidone, sodium croscarmellose, and microcrystalline cellulose, and the extra-granular excipient consists essentially of sodium croscarmellose, microcrystalline cellulose, colloidal silicon dioxide, and impalpable magnesium stearate powder. [7] In construing Claim 1, Campbell J. placed particular emphasis on the dependent claim set out in Claim 3 which reads: The composition of Claim 1 which is essentially ethanol-free. [8] Ratiopharm is seeking a NOC for 250 mg and 500 mg clarithromycin tablet formulations for oral administration. In its abbreviated new drug submission, Ratiopharm has made reference to Abbott’s Biaxin tablets in respect of which the ‘614 Patent has been listed on the patent register maintained under the PMNOC Regulations. [9] On January 9, 2004, Ratiopharm filed a Notice of Allegation (“NOA”) pursuant to section 5 of the PMNOC Regulations in respect of the ‘614 Patent. In its NOA, Ratiopharm alleged: Claim 1 requires an intra-granular excipient consisting essentially of povidone, sodium croscarmellose and microcrystalline cellulose. The term “consisting” is used to specify the constituent elements in the claimed combination to the exclusion of all other elements, and in particular to the exclusion of all elements that are present in the so called “non-abridged” composition described at page 2, lines 17 to 22 of the ‘614 Patent that are not included in the claimed combination. The intra-granular excipient of the ratiopharm clarithromycin product also contains pre-gelatinized starch which is not among the claimed ingredients and accordingly does not consist essentially of the claimed ingredients. [10] In response to the NOA, Abbott filed an application pursuant to subsection 6(2) of the PMNOC Regulations for an order to prohibit the Minister from issuing an NOC to Ratiopharm in respect of its tablet formulations until the expiry of the ‘614 Patent. [11] Ratiopharm later advanced the further position that Claim 1 could be construed in an alternate fashion. Specifically, Ratiopharm submitted that the phrase “consisting essentially of” could be interpreted to include the specified ingredients as well as other ingredients that do not materially affect the characteristics of the product. [12] Finally, before Campbell J., Ratiopharm alleged that regardless of the construction given to Claim 1, Abbott’s abridged composition was invalid based on obviousness, and that accordingly no infringement could result from its proposed tablet formulations. FEDERAL COURT DECISION [13] At the beginning of his reasons, Campbell J. enumerated three substantive issues for determination: construction, infringement, and validity. On the first issue, Campbell J. held that the patent claims are to be given a purposive construction, and should be read from the perspective of a person skilled in the art to whom the patent is addressed (Reasons, paras. 39 and 40). [14] Applying this approach, he accepted Abbott’s contention that the term “consisting essentially of” in Claim 1 could not be read to mean “consisting only of” (Reasons, paras. 50 to 79). He said at para. 56: Given the definition of “abridged composition”, I find that clear meaning can be given to the words of Claim 1 as argued by Abbott. That is, taking into consideration all of the ingredients of the non-abridged composition, the abridged composition must include all of the ingredients listed in Claim 1, and, with respect to those that remain to choose from, at least one is not to be included. There are thirteen ingredients in the non-abridged composition when colour is excluded. Thus, after including all nine ingredients listed in Claim 1, those that remain from the non-abridged composition to choose from are: (1) pre-gelatinized starch; (2) 200 proof alcohol (ethanol); (3) stearic acid; and (4) talc. [15] Campbell J. went on to find that Ratiopharm’s product infringes the ‘614 Patent given Ratiopharm’s concession that its formulation comes within Claim 1 in the event that Abbott’s construction was found to be correct (Reasons, para. 83). [16] Campbell J. later explained that he would not deal with Ratiopharm’s alternative construction on the ground that it had not been alleged in the NOA (Reasons, para. 80). [17] With respect to the alleged invalidity on the basis of obviousness, Campbell J. found the ‘614 Patent to be inventive and brought an improvement over the prior art (Reasons, paras. 84 to 94). [18] He went on to issue the order of prohibition sought by the respondents as outlined in paragraph 1 above. [19] This is the decision under appeal. ISSUES [20] The issues, as defined by the Appellant, are as follows: a. Did the Applications Judge err in construing Claim 1 of the ‘614 Patent as meaning that the abridged composition must include all the ingredients listed in Claim 1, since at least one ingredient from the non-abridged composition is not included? b. Did the Applications Judge err in misapplying the test for obviousness, specifically: i. That there required evidence that persons skilled in the art would know from the prior art which location to put what excipients in an abridged formulation at attain bioequivalence to the non-abridged formulation of Biaxin? ii. In requiring that the skilled formulator necessarily arrive at the ‘614 Patent? iii. In requiring that the test for obviousness exclude routine testing? iv. In concluding that the testing required to arrive at the invention in the ‘614 Patent was not routine, but “intensively investigative”? c. Did the Applications Judge err in holding that Ratiopharm had the burden to prove, on a balance of probabilities, that the ‘614 Patent was invalid? ANALYSIS [21] In support of its allegation that Campbell J. misconstrued Claim 1, Ratiopharm contends that he made three identifiable errors. First, Ratiopharm alleges that Campbell J. erred in law in refusing to consider its alternative construction. Second, Ratiopharm contends that Campbell J. made a palpable and overriding error in his assessment of the significance of the colour in the non-abridged composition. Lastly, Ratiopharm argues that Campbell J. failed to perform his judicial function by placing unwarranted reliance on the opinions given by Abbott’s experts. According to Ratiopharm, these errors are such that this Court must conduct a de novo analysis of Claim 1. [22] Dealing with the first alleged error, the allegation made by Ratiopharm in its NOA is that the composition in Claim 1 is limited solely to the ingredients recited in the claim. The alternative contention advanced later is that the phrase “consisting essentially of” is broad enough to include other ingredients that did not materially affect the characteristics of the purported invention. [23] Ratiopharm argued before Campbell J. that although the alternative construction was not in its NOA, Abbott had sufficient notice of it and indeed led no evidence to the effect that they were misled. However, the record reveals that Ratiopharm first advanced this alternative construction in its responding expert evidence that is after Abbott had filed its expert evidence. Abbott’s expert (Dr. Amidon) states in his reply affidavit that the alternative construction is new and not in the NOA. [24] In my view, Campbell J. correctly discounted the alternative construction put forth by Ratiopharm since it complied neither with its NOA, nor with section 5 of the PMNOC Regulations. In particular, it seems to me that the facts underlying the alternative construction go beyond those laid out in the NOA. It assumes that contrary to what was initially alleged, Claim 1 covers more than the constituent elements which are specifically mentioned. In AB Hassle v. Apotex Inc., 2002 FCT 931 at paragraph 63, the Federal Court stated: [63] The NOA must provide all of the facts the generic producer intends to rely upon in subsequent prohibition proceedings and it cannot rely on facts that exceed those laid out in the NOA. The NOA must address all of the patent claims that describe the basic invention or else its NOA will be defective and not in compliance with section 5 of the Regulations. See Genpharm Inc. v. The Minister of Health and Procter and Gamble Pharmaceuticals Canada Inc. 2002 F.C.A. 290 (F.C.A.), per Rothstein J.A. at paragraphs 22 to 25: [22] However, the notices of allegation and the detailed statement of legal and factual basis for the allegation must provide all the facts the generic producer intends to rely upon in subsequent prohibition proceedings. It cannot rely on facts that exceed those laid out in its detailed statement. See Merck Frosst Canada Inc. v. Canada (Minister of Health), (2002), 12 C.P.R. (4th) 447 at paragraph 19 per Stone J.A. [23] The requirement of subparagraph 5(1)(b)(iv) that the generic producer “... allege ... that no claim for the medicine itself and no claim for the use of the medicine would be infringed ...” necessarily implies that the detailed statement must provide the legal and factual basis for the allegation that none of the patent claims will be infringed. [24] I do not say that it is necessary for the generic producer to address each and every dependent patent claim if the basic claim or claims that describe the invention are addressed in the detailed statement. However, it is not open to the generic producer to ignore patent claims that describe the basic invention. If it does so, it will not be providing facts demonstrating that "no claim for the use of the medicine would be infringed", and its notice of allegation will be defective and not in compliance with section 5. […] [25] More recently, this Court in AB Hassle v. Apotex Inc., [2006] F.C.J. No. 203; 2006 FCA 51, reiterated (at para. 4) that the NOA (together with the detailed statement) is the document that frames the debate in a subsequent prohibition proceeding, and that a second person cannot, in response to a first person’s application for a prohibition, present evidence and argument relating to an issue that is outside the scope of the NOA. [26] Using another approach, the appellant argues that the court is entitled to adopt a construction of a claim that differs from the one put forth by the parties (Appellant’s Memorandum, para. 34; Whirlpool Corp. v. Camco Inc., 2000 SCC 67 at para. 61), and that, to that extent, no construction can be said to be irrelevant. [27] No doubt this is so if the record is capable of supporting the new construction. But, Campbell J. notes in this case that the alternative construction is based on conflicting opinions given by Ratiopharm’s own experts on the proper interpretation of the phrase “consisting essentially of” (Reasons, para. 78). He points to Dr. Miller’s affidavit which states that the alternate construction is “one that a Skilled Formulator would unlikely adopt” and is “contrary to the formulator’s intuition” (Miller Affidavit, AB. Vol. X, Tab M, p. 2007-2008). Given this record, it was reasonably open to Campbell J. not to give the alternative construction further consideration (Reasons, para. 80). [28] The second error relates to the colour of the non-abridged composition. Relying on the evidence of one of the experts produced by Abbott (Dr. Byrn), Campbell J. found that the colour in the non-abridged formulation is irrelevant in formulating an abridged composition. Dr. Byrn admitted in cross-examination that the dye was in the core of the non-abridged composition rather than an ingredient of a film coating. [29] However, Dr. Byrn was not asked whether this admission had an impact on his opinion as to the construction of Claim 1. As a result, it was open to Campbell J. to infer that it did not. [30] At the hearing of the appeal, Counsel for Ratiopharm contended that Campbell J. made a third error, of a palpable and overriding nature, when he construed specific passages of Dr. Amidon’s evidence during cross-examination as referring to ingredients incidental to the abridged composition (Reasons, para. 64). This issue as to what was said by Dr. Amidon during his cross-examination was the subject of extensive debate before Campbell J. After considering this evidence, Campbell J. rejected Ratiopharm’s contention that Dr. Amidon’s opinion pertained to ingredients which were of consequence to the abridged composition. Recognizing that the evidence was open to interpretation, it has not been shown that Campbell J.’s finding does not find support in Dr. Amidon’s testimony. [31] Beyond these three specific errors, the appellant contends that Campbell J. “abdicated his judicial function” by adopting unsubstantiated conclusions proffered by Abbott’s experts as to the proper construction of Claim 1. It is true that Campbell J. adopted in whole the construction proposed by Abbott’s experts. But it cannot be said that he thereby committed a reviewable error. Abbott’s proposed interpretation of Claim 1 (i.e., that the term “consisting essentially of” cannot be read to mean “consisting only of”) is consistent with Claim 3, which provides that Claim 1 can be read to include ethanol even though it is not in the listed ingredients in Claim 1. In contrast, the construction proposed by Ratiopharm in its NOA is that the composition in Claim 1 is limited to ingredients recited in the claim “to the exclusion of all other elements and in particular to the exclusion of all elements that are present in the so-called “non-abridged” composition” of which ethanol is one. [32] Ratiopharm argued by reference to the decision of Jacob L.J. in Ultra-frame (U.K.) Ltd. v. Eurocell Building Plastics Limited, [2005] EWCA (Civ) 761 at para. 41 (C.A.), that Claim 3 could not be read as allowing ethanol to be added pursuant to Claim 1. Counsel argued that on a purposive analysis Claim 1 and Claim 3 should be read as duplicate claims. [33] There is no doubt that claims can be repeated and that this will occur from time to time. However, the starting assumption must be that claims are not redundant, and only if a purposive analysis shows that claims are in effect duplicated can this construction be adopted. In this case, Claim 1 is an independent claim which, absent a contrary indication, must be read in a manner consistent with Claim 3 which is dependent on it (see Halford et al v. Seed Hawk Inc. et al, 31 C.P.R. (4th) 434, per Pelletier J. (as he then was) at paras. 92 to 98) . This is how Campbell J. read Claim 1. I can see no error in this regard. [34] Moreover, Abbott’s construction of Claim 1 is consistent with the “preferred embodiment” set out in the disclosure of the ‘614 Patent, namely the embodiment in which 200 proof alcohol, stearic acid, and talc have been omitted from the non-abridged formulation, while pre-gelatinized starch is included (A.B., vol. II, p. 84). As the respondents argue, this conforms with Abbott’s proposed construction which allows for the presence of starch and but is inconsistent with the constructions proposed by Ratiopharm, neither of which allow starch to be added. [35] In my respectful view, it has not been shown that Campbell J. erred when he held that the person skilled in the art would read Claim 1 of the ‘614 Patent as meaning that the abridged composition must include all the listed ingredients, with at least one ingredient from the non-abridged composition being excluded. [36] Turning to the issue of obviousness, the applicable test was set out in Beloit Canada Ltd. v. Valmet OY (1986), 8 C.P.R. (3d) 289, at 294: The test for obviousness is not to ask what competent inventors did or would have done to solve the problem. Inventors are by definition inventive. The classical touchstone for obviousness is the technician skilled in the art but having no scintilla of inventiveness or imagination; a paragon of deduction and dexterity, wholly devoid of intuition; a triumph of the left hemisphere over the right. The question to be asked is whether this mythical creature (the man in the Clapham omnibus of patent law) would, in the light of the state of the art and of common general knowledge as at the claimed date of invention, have come directly and without difficulty to the solution taught by the patent. It is a very difficult test to satisfy. [37] In this case, the Applications Judge after quoting the above passage, accepted Abbott’s submission (at paragraph 94 of his Reasons) to the effect that: The ‘614 Patent is an improvement patent and is inventive because it discloses, for the first time, which specific excipients, in which locations, are required to make the non-abridged composition and discloses which excipients can be removed and retained, to make an abridged composition. As Dr. Amidon emphasized, an abridged clarithromycin composition would be particularly challenging since clarithromycin is a class IV compound, is practically insoluble, has low permeability, an unpalatable taste, and is a large complex molecule with numerous functional groups which would pose degradation issues. This is far greater than the “scintilla of inventiveness” necessary to support the validity of the patent. [38] Ratiopharm takes issue with the contention that the ‘614 Patent involves the slightest degree of inventiveness. It argues that Campbell J. reached the conclusion that the patent was inventive on the erroneous assumption that the test for obviousness excludes routine testing. Reference is made to paragraph 99 of the reasons. [39] In my view, Campbell J.’s comment, at paragraph 99, that “testing is not allowed based on a consistent line of authority of this Court,” was articulated in the context of the exercise of hindsight (see Procter & Gamble Pharmaceuticals Canada Inc. v. Canada (2004), 32 C.P.R. (4th) 224 (F.C.T.D.) at 36, affirmed in 37 C.P.R. (4th) 289 (F.C.A.) at paras. 43-47). Campbell J. did not hold that the test for obviousness does not permit routine testing (i.e., confirming predictable qualities of known compounds). The express finding that he made is that the type of testing required in this case would not be “routine”, but “intensely investigative” (Reasons, para. 101). [40] The appellant further argues that Campbell J.’s finding that intense investigation was required is based on the erroneous assumption that Claim 1 required the abridged formulation to be bioequivalent to the non-abridged formulation. In this respect, Counsel for the appellant refers to paragraph 90 of the reasons, where Campbell J. appears to assume that bioequivalence is required. [41] However, when regard is had to the reasons, Campbell J.’s finding that intense investigation was required to arrive at the patented formulation is not tainted by this apparent misapprehension. It is based on the assertions of Dr. Miller (who had no such misapprehension) to the effect that extensive evaluation of the non-abridged formulation had to be conducted (Reasons, paras. 96 and 97) and that “the person skilled in the art would not known in advance of selecting candidates for removal and doing experiments, how many, if any, excipients could be removed, in what amount and in which combination” (Reasons, para. 98). [42] Counsel for Ratiopharm argued for the first time during the hearing of the appeal that Campbell J.’s assessment of Dr. Miller’s evidence was patently wrong. I have reviewed Dr. Miller’s evidence and in particular the evidence that he gave on cross-examination. In my view, Dr. Miller’s evidence allowed for the conclusion reached by Campbell J. [43] Finally, Ratiopharm submits that Campbell J. improperly placed the onus on Ratiopharm to prove, on a balance of probabilities, that the ‘614 Patent was invalid (Pfizer Canada Inc. v. Canada, 2006 FC 220, at paras. 10-11). The short answer is that this case was not decided on the basis of onus. Both sides filed extensive evidence and Campbell J. found in favour of Abbott on a balance of probabilities (see Bayer v. Canada (Minister of National Health and Welfare), (2000), 6 C.P.R. (4th) 285 (F.C.A.) at para. 9). [44] I would dismiss the appeal with costs. “Marc Noël” J.A. “I agree M. Nadon J.A.” “I agree B. Malone J.A.” FEDERAL COURT OF APPEAL NAMES OF COUNSEL AND SOLICITORS OF RECORD DOCKET: A-76-06 APPEAL FROM THE JUDGMENT OF THE FEDERAL COURT DATED JANUARY 24, 2006, NO. T-428-04 STYLE OF CAUSE: Ratiopharm, a Division of Ratiopharm Inc. v. The Minister of Health, Abbott Laboratories and Abbott Laboratories Limited. PLACE OF HEARING: Ottawa, Ontario DATE OF HEARING: February 13, 2007 REASONS FOR JUDGMENT BY: NOËL J.A. CONCURRED IN BY: NADON J.A. MALONE J.A. DATED: February 23, 2007 APPEARANCES: Mr. Glen A. Bloom Mr. David W. Aitken FOR THE APPELLANT No-one appearing Mr. Steven G. Mason Mr. Andrew J. Reddon Mr. David Tait FOR THE RESPONDENT (Minister of Health) FOR THE RESPONDENT (Abbott Laboratories) SOLICITORS OF RECORD: Osler, Hoskin & Harcourt LLP Ottawa, Ontario FOR THE APPELLANT Mr. John H. Sim, Q.C. Deputy Attorney General of Canada Ottawa, Ontario FOR THE RESPONDENT (Minister of Health) McCarthy Tetrault FOR THE RESPONDENT Toronto, Ontario (Abbott Laboratories)