Federal Court of Appeal questions patent law principles

In Cobalt v Bayer (2015 FCA 116) the Federal Court of Appeal explicitly called into question two central principles of Canadian patent law: the standard of review for claim construction and the patentability of methods of medical treatment. Cobalt v Bayer is largely unremarkable in its outcome. It concerned two appeals from a prohibition application made under the Patented Medicines (Notice of Compliance) Regulations pertaining to two patents listed by Bayer on the Patent Register for its YAZ® birth control product. As between the parties, and based on Cobalt’s allegations, at first instance Justice Hughes found that Bayer’s ‘426 patent was infringed and valid, while its ‘728 patent was not infringed and invalid (2013 FC 1061). The Federal Court of Appeal upheld the first-instance court's conclusions in these respects.

Standard of review for claim construction
Claim construction was a central issue in Cobalt’s appeal of the decision with respect to the ‘426 patent. Cobalt argued that claim construction was to be reviewed on a correctness standard as it is a question of law. The court accepted this proposition, with the caveat that any review of expert evidence was to be performed pursuant to a standard of palpable and overriding error (2015 FCA 116 at paragraphs 12-15).

In obiter, Justice Stratas’s majority opinion questioned the standard of review to be applied in cases where expert evidence plays a significant role in the claim construction exercise. He questioned whether the standard should be elevated to a more deferential approach in such a situation. Discussing this, the judge asked:

"How are appellate judges supposed to cleave off those aspects of claim construction that flow from the trial judge’s appreciation of expert evidence from the words of the claim per se? Can appellate judges really second-guess the trial judge, who, often over many days, has been educated in the relevant art and has seen and evaluated the experts? Who are the appellate judges to review on the basis of correctness, stepping into the shoes of the trial judge and imposing their own views of the matter?" (2015 FCA 116 at paragraph 20.)

The judge also noted that there is a growing acceptance in the United States for deference to be accorded to the interpretations of patents reached by experts, citing the US Supreme Court’s Teva v Sandoz decision (2015 FCA 116 at paragraph 22, citing No 13-854, 574 US __ (2015)). Further, he offered a practical workaround to what has been considered the basis of the correctness standard: that a patent is a 'law' or 'regulation' under the Interpretation Act, and thus that a correctness standard is mandated. In particular, the judge noted that a distinction can be drawn between 'letters patent' – which includes only the actual certificate bearing the seal of the Canadian IP Office – and the specification of the patent. Applying this distinction, the judge argued that the specification need not be termed a 'regulation' under the Interpretation Act.

In concurring reasons, Justice Pelletier declined to endorse Stratas’s position with respect to these obiter remarks on construction as they were not necessary for the disposition of the appeal.

Methods of medical treatment
Canadian courts have held that claims to method of medical treatments are not patentable, with the leading case being the Supreme Court’s decision in Tennessee Eastman v Commissioner of Patents ([1974] SCR 111). However, Tennessee Eastman justified the prohibition on claiming methods of medical treatment through reference to former Section 41(1) of the Patent Act, which has now been repealed. Given the Supreme Court’s repeated holding that patent law is wholly statutory (eg, see Plavix SCC, 2008 SCC 61 at 12), the value of Tennessee Eastman and the subsequent jurisprudence on the patentability of methods of medical treatment is questionable.

In apparent recognition of this, and referencing Professor Siebrasse’s blog, the Federal Court of Appeal noted that a full consideration of the method of medical treatment doctrine would be merited by the Federal Court of Appeal or the Supreme Court in a future case where the issue was raised squarely on the facts.

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