IP lawyer: Canada joins the global mainstream on patent inutility

The Supreme Court of Canada has struck down the so-called ‘promise doctrine’, which should make it easier for patents to clear the utility bar. However, there are fears that litigants will use other avenues to challenge patent validity

Canada’s utility requirement has been more onerous than that of the rest of the world for several years now. Numerous patents covering blockbuster drugs have been invalidated by Canadian courts on the basis of inutility, with the courts adopting what has become known as the ‘promise doctrine’ to assess the patent’s utility. When faced with an inutility allegation, the courts would first determine the patent’s so-called promise and then assess whether that had been demonstrated or soundly predicted as of the filing date.

This led to much uncertainty for patentees, as it was not known to what promise a patentee would be held until the court issued its decision. Further, if the promised utility had been demonstrated before filing, it was not necessary for the patentee to produce evidence of that utility in the patent disclosure. However, if the patentee was relying on sound prediction, the courts often required it to disclose the factual basis for the prediction, as well as the sound line of reasoning from that factual basis to the prediction of utility.

This lack of clarity was highlighted by a recent decision in a case involving AstraZeneca and Apotex, where the Supreme Court of Canada considered and rejected the promise doctrine. It confirmed that a patent must have utility but unanimously held that the promise doctrine test is not the correct approach for courts to use when assessing patent utility. Instead, they should apply the following test:

  • Identify the subject matter of the invention as claimed in the patent.
  • Ask whether that subject matter is useful – is it capable of a practical purpose (ie, an actual result)?

In writing this decision, the Supreme Court tied in many of its own previous patent decisions, confirming that these could all be read consistently. In particular, it held that “for a patent to be valid, the invention it purports to protect must be useful”. In addition, the court affirmed that contrary to the promise doctrine, validity analyses should typically focus on the claims alone and consider the disclosure only where there is ambiguity in these. Further, the court confirmed that claims construction precedes validity considerations.

In confirming the unsoundness of the promise doctrine, the Supreme Court held that it improperly conflated Sections 2 and 27(3) of the Patent Act. This is contrary to the Supreme Court’s finding in Consolboard that Section 2 is a condition precedent to an invention, while Section 27(3) is a disclosure requirement, independent of the usefulness requirement.

The Supreme Court has thus held that the promise doctrine was excessively onerous in two ways:

  • it determined the standard of utility by reference to the promises expressed in the patent; and
  • if there were multiple expressed promises, it required that all be fulfilled for a patent to be valid.

The court held that a requirement for all promises to be met is punitive and has no basis in the Patent Act. Further, “such a consequence is antagonistic to the bargain on which patent law is based wherein we ask inventors to give fulsome disclosure in exchange for a limited monopoly”. A single use makes the subject matter of an invention useful. However, the promise doctrine risks an otherwise useful invention being deprived of patent protection.

The Supreme Court further confirmed that a mere scintilla of utility is sufficient for validity purposes. This utility can be established by either demonstration or sound prediction as of the filing date. The court held that the application of the utility requirement in Section 2 is to be interpreted in line with its purpose – to prevent the patenting of fanciful, speculative or inoperable inventions. Further, a patentee is not required to disclose the utility of the invention.

In considering the allegation that the promise doctrine prevents a patentee from overpromising, the Supreme Court held that numerous other sections of the Patent Act address this potential mischief. In particular, if the disclosure is not correct and full, or states an unsubstantiated use or operation of the invention, it may be found not to fulfill the requirements of Section 27(3). Further, if the overpromising in the specification amounts to an omission or addition that is willfully made for the purpose of misleading, it may result in the patent being void pursuant to Section 53.

This new direction from the Supreme Court appears to be more in line with international utility standards. Further, it brings Canadian utility law back to where it was before the promise doctrine became prominent. However, it remains to be seen how it will be implemented by the courts. Given this return to traditional Supreme Court doctrine on patent law, patentees can hope that this helps guide the courts. However, it appears that patent challengers will likely try to import the promise doctrine into allegations of insufficiency, made pursuant to Section 27(3), in addition to allegations of fraud pursuant to Section 53 of the Patent Act. Indeed, Apotex has brought a motion seeking either to amend the Supreme Court judgment to remand the case to the Federal Courts, or for a rehearing in the Supreme Court. These new lines of attack will have to be reconciled with the Supreme Court’s clear statements that the promise doctrine is antagonistic to the bargain theory of patents; that “the Promise Doctrine in its operation is inconsistent with the purpose of s. 27(3)”; and that “it is not good law”. Patent owners could face interesting times in their upcoming litigation.

Beverley Moore is a partner at Borden Ladner Gervais LLP, Ottawa, Canada

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