The Federal Court of Appeal has provided a detailed review of the proper approach to identifying palpable and overriding errors of fact or mixed fact and law in an appeal concerning the obviousness of two patents. The Court of Appeal concluded that when viewed as a whole, there was no reviewable error in the judgment and dismissed the appeal.
The underlying action concerned a claim by Teva Canada Limited (Teva) for damages under section 8 of the Patented Medicines (Notice of Compliance) Regulations (the Regulations) concerning a generic version of VELCADE (bortezomib). The defendants, Janssen Inc. (Janssen) and Millennium Pharmaceuticals, Inc. (Millennium), argued that Teva was not entitled to damages because sales of its generic product would have infringed certain patents. These patents were also asserted by Janssen, Millennium, and co-plaintiffs in a counterclaim for a declaration of infringement. In response, Teva sought declarations that all of the claims in issue were invalid. The Federal Court found the claims of two of these patents invalid for obviousness.
On appeal, Janssen, Millennium, and their co-appellants sought to overturn the trial judgment on the basis that Locke J. (as he then was) did not apply the correct legal test for obviousness.
The Court of Appeal found that, on fair reading of the Locke J.’s reasons, the proper legal test for obviousness was applied. As such, there was no error of law. The Court of Appeal also found that the appellants’ arguments were focussed on adverse findings of fact and mixed fact and law, which may only be overturned in the event of a palpable and overriding error.
The Court of Appeal rejected the argument that Locke J. had made palpable and overriding errors in his obviousness analysis, including allegations that the analysis was conducted with hindsight or by cherry-picking from the prior art. Although the appellants cited evidence upon which Locke J. could have found in their favour, the Court of Appeal concluded that preferring one line of evidence over another is the exclusive prerogative of the trial court.
In rejecting the specific errors alleged by the appellants, the Court of Appeal stated that the existence of a palpable and overriding error should not be demonstrated by parsing individual paragraphs of the judgment rendered in first-instance, but rather by treating it as a whole. Deficiencies in the reasons such as imprecise wording or phrases read in isolation did not constitute errors, but rather were a by-product of the trial judge’s efforts to distill the complex facts it into comprehensible reasons. An inquiry into palpable and overriding error overlooks matters of form and gets at the substance of what the trial court did.
Moreover, reasons which fail to mention particular evidence do not necessarily indicate that such evidence was not taken into consideration by the trial judge. There is a rebuttable presumption that the first-instance court reviewed and considered all of the evidence before it. By reviewing the reasons as a whole, it may be possible to discern what the trial court considered and decided, and why — even if it is not explicitly stated.
As the appellants did not succeed in raising an error of law, nor did they identify any palpable and overriding error in the Court’s reasons, the appeal was dismissed.
The case is: Millennium Pharmaceuticals Inc. v Teva Canada Limited, 2019 FCA 273