Pfizer Canada Inc. successfully resisted Apotex’s appeal of the Federal Court’s dismissal of Apotex’s motion for summary judgment for invalidity based on a failure to pay the correct “final fee” owing prior to patent grant. The Federal Court of Appeal upheld the lower court’s decision and held that alleged infringers of a patent cannot rely on administrative defects occurring prior to patent issuance to invalidate a patent post-issuance.

Pfizer was represented by Norton Rose Fulbright Canada LLP in this matter.

Case: Apotex Inc v Pfizer Canada Inc et al, 2017 FCA 201 (Court File Nos. A-78-16)

Drug: XALATAN® (latanoprost)

Nature of case: Appeal from dismissal of motion for summary judgment to invalidate a patent

Successful party: Pfizer Canada Inc.

Date of decision: October 2, 2017

Background

As we reported, the Federal Court dismissed a motion for summary judgment brought by Apotex that sought to invalidate Canadian Patent No. 1,339,132 (the 132 Patent) in a section 8 action brought by Apotex, with a counterclaim for infringement by Pfizer. The Federal Court substantially relied on the Federal Court of Appeal’s decision in Corlac Inc v Weatherford Canada Inc, 2011 FCA 228 (Weatherford).

On appeal, the Federal Court of Appeal once again rejected Apotex’s arguments, finding they were unsupported by a purposive interpretation of the Patent Act informed by the case law and the evolution of the Patent Act.

Weatherford and Dutch Industries

The FCA in this case addressed two cases relied on by the parties: Weatherford, and Dutch Industries Ltd v Canada (Dutch Industries). It found that Dutch Industries was distinguishable, and agreed with the principles set out in Weatherford.

Dutch Industries was an application for judicial review, and the decision addressed whether or not the Commissioner of Patents had the authority to accept top-up payments for deficient fees in respect of both a patent application and an issued patent.

The court in Dutch Industries found that the commissioner had no discretion to accept top-up payments for deficient fees; however, Dutch Industries did not address the validity of the issued patent as the fees for the issued patent were held to have been made correctly. Further, Dutch Industries was not an action for infringement or impeachment of a patent, and as such the court did not consider whether section 59 provided a basis to void an issued patent on the basis of non-payment of application fees.

The FCA distinguished Dutch Industries as it did in Weatherford. It also reaffirmed the distinction between patent applications and issued patents, and agreed that Weatherford supported that non-compliance with section 73 of the Patent Act was not a basis to invalidate a subsequently issued patent. Rather, section 73 provides for certain requirements during the prosecution of a patent application and its effects are extinguished upon patent issuance.

History of the Patent Act

The court found that the history of the Patent Act sections at issue in the appeal (s. 27, 59, and 73) further supported that Parliament did not intend for all forms of non-compliance with the Patent Act to be a basis to invalidate an issued patent. In particular, the Patent Act uses explicit wording when it intends that matters relating to a patent application can void an issued patent. No comparable wording is found within section 73.

The court also found that both sections 27 and 59 have existed in the Patent Act in substantially the same form since 1869. Accordingly, the court felt bound by the long line of cases starting in 1927 that declined to invalidate patents for non-compliance with administrative requirements relating to the underlying patent applications. Further, the court was troubled by the disproportionate consequence of patent invalidity many years after a payment default of several hundred dollars. It confirmed that courts will apply the law even if it leads to absurd results, but only if it is impossible to interpret the law another way. The court found this not to be such an instance.

This decision confirms that non-compliance with administrative provisions of the Patent Act that do not underlie the heart of the patent bargain, cannot be relied upon by potential infringers as a basis to invalidate patents in the absence of express language to the contrary in the Patent Act.

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