merck & co v. apotex inc.
A-724-94
Apotex Inc. (Appellant) (Defendant)
v.
Merck & Co. Inc. and Merck Frosst Canada Inc. (Respondents) (Plaintiffs)
Indexed as: Merck & Co. v. Apotex Inc. (C.A.)
Court of Appeal, Stone, MacGuigan and Robertson JJ.A."Toronto, March 21, 22, 23 and 24; Ottawa, April 19, 1995.
Patents " Infringement " Appeal from trial judgment allowing patent infringement action, dismissing counterclaim for declaration composition, use claims invalid " Respondents' patent for enalapril, enalapril maleate issued in 1990 " Appellant purchasing bulk enalapril maleate prior thereto " Repurification of some lots not complete before patent issued " Other lots purchased after patent issued, but manufactured before supplier's licence extinguished by statute " Patent Act, s. 56 giving person who acquired invention for which patent afterwards obtained right to use, sell specific article " Any form of invention may be used or sold " Right to "use" article including right to sell things produced with article " Appellant having right to manufacture, sell tablets produced from bulk, but no right to use product acquired after licence extinguished " Product requiring purification not "purchased or acquired" as title not passing until product in deliverable state " Patent may include claims to compounds and compositions, provided not separate inventions.
This was an appeal from the trial judgment allowing the patent infringement action and dismissing the counterclaim for a declaration of invalidity of the composition and use claims. The respondents' patent, which includes claims for the invention of enalapril and enalapril maleate, issued in Canada on October 16, 1990. Enalapril, when combined with a carrier into tablets or liquid dosage form, produces a drug for the treatment of hypertension and congestive heart failure. The patent also includes claims for pharmaceutical compositions including the compounds, and claims for the use of the compounds as antihypertensives. Enalapril maleate has been marketed under the trade name "Vasotec" in the United States since 1985 and in Canada since 1987. Apotex purchased enalapril maleate in bulk form from two Canadian manufacturers, Delmar and Torcan, most of which was shipped before the grant of the patent. However, certain lots required repurification, a process which was not completed before the issuance of the patent. After the issue of the patent Apotex acquired a further lot of enalapril maleate which had been manufactured while Delmar still had a compulsory licence. Patent Act, section 56 provides that a person who, before the patent application is open to public inspection, has acquired "the invention for which a patent is afterwards obtained" has the right to "use and sell to others the specific article or . . . composition of matter patented and so purchased . . . without being liable to the patentee".
The Trial Judge held that (1) tablets produced from bulk enalapril maleate acquired before the issue of the patent were not protected by section 56 because they were a new and different product not in existence when the patent issued; (2) the enalapril maleate requiring repurification was not "purchased or acquired" by Apotex; (3) Apotex had no right to produce tablets after Delmar's licence was extinguished by statute because it had not acquired the enalapril maleate before the patent was issued. Finally, he held that the composition claims were valid as they met the requirements of Patent Act, section 34 for specifications in a patent. He held that it did not matter whether Merck was uncertain about (1) the dosage forms, (2) an effective amount of the active ingredient, or (3) in specifying a pharmaceutically acceptable carrier because section 34 is not concerned with sufficiency of the inventor's knowledge, but with whether the information provided in the specification is sufficient to explain the functioning of the invention to a person skilled in the art. He held a person skilled in the art could work out a dosage amount, and the specification was adequate for determining the ingredients to be mixed with the active compound in a pharmaceutically acceptable carrier. He concluded that no inventive ingenuity was required in determining an effective amount or a pharmaceutically acceptable carrier.
The issues were whether the appellant was entitled under section 56 to use and sell its "Apo-Enalapril" tablets manufactured from the bulk enalapril maleate purchased before the patent issued; whether it had acquired the enalapril maleate requiring purification before the patent issued; whether it had an implied licence to produce dosage form enalapril maleate from the licensed powder acquired after the issue of the patent; whether there was novelty or inventiveness in the composition claims and whether the invention was incomplete because Merck had not determined an effective amount or a pharmaceutically acceptable carrier by the date of its patent application.
Held, the appeal should be allowed, except in relation to the enalapril maleate unperfected at the time the patent issued and that purchased after Delmar's licence was extinguished by statute.
Per MacGuigan J.A. (Stone and Robertson JJ.A. concurring): The right to use or sell the "specific article" is independent of the form in which the invention is purchased: any form of the invention may be used or sold within the immunity conferred by section 56. The right to "use" an article encompasses the right to use and sell products that are subsequently created by applying the article to its intended use. It follows that the right to use a chemical compound encompasses the right to use and sell compositions that are created by applying the compound to its intended use. The fact that the use of a chemical compound results in its incorporation into the subsequently created products is immaterial. Moreover, there would really be no worthwhile protection allowed by section 56 if the owner could not put it to the only use for which it is usable without being liable for infringement. The invention was not simply chemical molecules of enalapril. The claims describe several compounds, compositions and specific uses, all aspects of the same invention. Inherent in the compound, and in the patent, is the purpose and utility of the compound of enalapril. It is the intention of the inventor, as inscribed in the patent, which protects the appellant under section 56, given that the law is not one based on form, but on the scope of the whole invention. The appellant's creation, use and sale of enalapril maleate tablets was within the immunity granted by section 56 for the use of the bulk compound.
The enalapril which required purification had not been "purchased or acquired" by Apotex within the meaning of section 56. A product is not "purchased or acquired" until the purchaser has obtained title to it. Title cannot pass until the product is in a deliverable state. If the seller was not satisfied that the product could be delivered, Apotex did not acquire the product.
The Trial Judge correctly held that Apotex had no right to use the bulk enalapril maleate acquired after Delmar's licence was extinguished by statute.
As long as there is no separate invention in the compositions, there is no rule that claims to compounds and claims to compositions including them cannot be combined in a single patent. A variety of aspects of an invention may be claimed within a single patent. The Trial Judge carefully weighed the evidence before concluding that no inventiveness was required in order to determine an "effective amount" or a "pharmaceutically acceptable carrier" and this conclusion was reasonably open to him on the evidence. In the absence of palpable and overriding error, it was not open to the Court to interfere with the Trial Judge's findings.
statutes and regulations judicially considered
Patent Act, R.S.C. 1952, c. 203, s. 41.
Patent Act, R.S.C. 1970, c. P-4, s. 41(1).
Patent Act, R.S.C., 1985, c. P-4, ss. 2 "invention", 10 (as am. by R.S.C., 1985 (3rd Supp.), c. 33, s. 2), 27(1) (as am. idem, s. 8), 28 (as am. idem, s. 10), 34, 39(1) (as am. idem, s. 14), 56 (as am. idem, s. 22).
Patent Act Amendment Act, 1992, S.C. 1993, c. 2, s. 12.
Sale of Goods Act, R.S.O. 1990, c. S.1, s. 19 (as am. by S.O. 1993, c. 27, Schedule).
cases judicially considered
applied:
Libbey-Owens-Ford Glass Co. v. Ford Motor Co. of Canada, Ltd (No. 2), [1969] 1 Ex. C.R. 529; (1969), 57 C.P.R. 155; 40 Fox Pat. C. 149; affd [1970] S.C.R. 833; (1970), 14 D.L.R. (3d) 210; 62 C.P.R. 223; Lido Industrial Products Ltd. v. Teledyne Industries Inc. et al. (1981), 57 C.P.R. (2d) 29; 39 N.R. 561 (F.C.A.); leave to appeal refused [1981] 2 S.C.R. ix; (1981), 59 C.P.R. (2d) 183n.
distinguished:
Shell Oil Co. v. Commissioner of Patents, [1982] 2 S.C.R. 536; (1982), 142 D.L.R. (3d) 117; 67 C.P.R. (2d) 1; 44 N.R. 541; revg (1980), 54 C.P.R. (2d) 183 (F.C.A.).
considered:
Nekoosa Packaging Corp. et al. v. AMCA International Ltd. et al. (1994), 172 N.R. 387 (F.C.A.); Reeves Brothers Inc. v. Toronto Quilting & Embroidery Ltd. (1978), 43 C.P.R. (2d) 145 (F.C.T.D.); Diamond Shamrock Corporation v. Hooker Chemicals & Plastics Corp. et al. (1982), 66 C.P.R. (2d) 145 (F.C.T.D.); Consolboard Inc. v. MacMillan Bloedel (Sask.) Ltd., [1981] 1 S.C.R. 504; (1981), 122 D.L.R. (3d) 203; 56 C.P.R. (2d) 146; 35 N.R. 390; Rohm & Haas Co. v. Commissioner of Patents, [1959] Ex. C.R. 153; (1959), 30 C.P.R. 113; 18 Fox Pat C. 140; Commissioner of Patents v. Farbwerke Hoechst Aktiengesellschaft Vormals Meister Lucius & Bruning, [1964] S.C.R. 49; (1963), 41 C.P.R. 9; 25 Fox Pat. C. 99; Gilbert (Jules R.) Ltd. v. Sandoz Patents Ltd. (1970), 64 C.P.R. 14 (Ex. Ct.); affd sub nom. Sandoz Patents Ltd. v. Gilcross Ltd., [1974] S.C.R. 1336; (1972), 33 D.L.R. (3d) 451; 8 C.P.R. (2d) 210; Application No. 132,421, Re (1976), 52 C.P.R. (2d) 220 (Pat. App. Bd. and Comm'r Pat.); Agripat S.A. v. Commissioner of Patents (1977), 52 C.P.R. (2d) 229 (F.C.A.); Tennessee Eastman Co. et al. v. Commissioner of Patents, [1974] S.C.R. 111; (1972), 8 C.P.R. (2d) 202; Imperial Chemical Industries Ltd. v. Commissioner of Patents, [1986] 3 F.C. 40; (1986), 9 C.P.R. (3d) 289 (C.A.).
referred to:
Apotex Inc. v. Canada (Attorney-General) (1993), 49 C.P.R. (3d) 161; 66 F.T.R. 36 (F.C.T.D.); affd [1994] 1 F.C. 742; 18 Admin. L.R. (2d) 122; 51 C.P.R. (3d) 339; 162 N.R. 177 (C.A.); affd [1994] 3 S.C.R. 1100; (1994), 176 N.R. 1; Lovell Manufacturing Co. and Maxwell Ltd. v. Beatty Bros. Ltd. (1962), 41 C.P.R. 18 (Ex. Ct.); Computalog Ltd. v. Comtech Logging Ltd. (1992), 44 C.P.R. (3d) 77; 142 N.R. 216 (F.C.A.); Zeneca Pharma Inc. v. Canada (Minister of National Health and Welfare) (1994), 54 C.P.R. (3d) 538 (F.C.T.D.).
authors cited
Fox, Harold G. The Canadian Law and Practice Relating to Letters Patent for Inventions, 4th ed. Toronto: Carswell, 1969.
APPEAL from trial judgment ((1994), 59 C.P.R. (3d) 133; 88 F.T.R. 260 (F.C.T.D.)) allowing the patent infringement action and dismissing the counterclaim for a declaration that the composition and use claims were invalid. Appeal allowed in part.
counsel:
Harry B. Radomski, Malcolm Johnston and Richard Naiberg for appellant (defendant).
G. Alexander Macklin and Emmanuel Manolakis for respondents (plaintiffs).
solicitors:
Goodman, Phillips & Vineberg, Toronto, for appellant (defendant).
Gowling, Strathy & Henderson, Ottawa, for respondents (plaintiffs).
The following are the reasons for judgment rendered in English by
MacGuigan J.A.: This is an appeal from a judgment of the Trial Division rendered on 14 December 1994 [(1994), 59 C.P.R. (3d) 133] in which the Trial Judge held, inter alia, that the appellant had infringed the respondents' exclusive rights under patent number 1,275,349 issued on 16 October 1990 (the patent) and that the appellant was not saved by section 56 of the Patent Act, R.S.C., 1985, c. P-4, as am. by R.S.C., 1985 (3rd Supp.), c. 33, s. 22 (the Act).
I
The respondent Merck & Co. Inc. (Merck) is a New Jersey corporation and is the owner of the patent. The respondent Merck Frosst Canada Inc. (Merck Frosst), an Ontario corporation, is a wholly owned subsidiary of Merck and is its exclusive licensee under the patent. The appellant Apotex, an Ontario corporation, is a manufacturer and distributor of generic pharmaceutical products.
The patent includes claims for the invention of certain compounds developed by Merck, known as enalapril and enalapril maleate. The latter compound is a stable salt of enalapril which, once combined with a carrier (consisting of pharmaceutically inactive excipients or adjuvants) into tablets or liquid dosage form, produces a composition suitable for dispensation as a prescription drug for the treatment of hypertension and congestive heart failure.1*ftnote1 Such formulations do not react with the active ingredient or cause it to degrade, but affect its dissolution and absorption rate in the human body. The Trial Judge found that the formulation of enalapril maleate into tablets can be performed by conventional means and does not involve an inventive step or any inventive ingenuity. The active ingredient enalapril maleate, when assimilated within the human body, is converted by the body into a diacid, enalaprilat, which acts to inhibit an enzyme known as the angiotensin converting enzyme (ACE) from producing a powerful vasoconstrictor substance responsible for an elevation in blood pressure within the body. The patent also includes claims for pharmaceutical compositions including the compounds, and claims for the use of the compounds as antihypertensives.
In 1983, Merck obtained a United States patent for its invention of enalapril, and in 1985, it was authorized by U.S. authorities to market enalapril maleate under the trade name "Vasotec". After receiving a Notice of Compliance (NOC) in 1987 from Health and Welfare Canada, Merck Frosst began marketing Vasotec in Canada, in four tablet strengths and in injectable liquid form. In 1993, Vasotec was the leading prescription product in sales value in Canada (sales of more than $150 million) and the second most valuable prescription drug in terms of sales across the world.
Apotex first became aware of enalapril maleate in the mid-1980's. In the ordinary course, Apotex might have sought a compulsory licence under the Act. However, this route was not available until Merck's enalapril was the subject of a patent in Canada. Moreover, Apotex knew that amendments to the Act were being discussed that could eliminate the compulsory licensing system and extend the rights of patentees.
As a result, Apotex began to purchase enalapril maleate in bulk form from two related Canadian manufacturers, Delmar Chemicals Inc. and Torcan Chemical Ltd. (collectively Delmar). Since the purchased enalapril maleate was (for the most part) manufactured before the issuance of Merck's patent, Apotex hoped that section 56 of the Act would enable it to use the purchased product without liability to Merck. Apotex purchased and stored the enalapril maleate in bulk form because bulk enalapril maleate has a very long shelf life. In tablet form, enalapril maleate has a shelf life of only two years.
In February 1990, Apotex applied for an NOC to market its version of enalapril maleate under the trade name "Apo-Enalapril". Even after the scientific and regulatory review processes were complete, the Minister delayed issuing the NOC for various reasons, including concerns about his authority to issue the NOC in view of the imminent passage of Bill C-91 [Patent Act Amendment Act, 1992, S.C. 1993, c. 2]. Apotex obtained an order of mandamus from Dubé J., requiring the Minister to issue the NOC: see Apotex Inc. v. Canada (Attorney-General) (1993), 49 C.P.R. (3d) 161 (F.C.T.D.). The NOC was finally issued on 2 September 1993, after Dubé J.'s order was upheld by this Court in a decision reported at [1994] 1 F.C. 742 (C.A); affd [1994] 3 S.C.R. 1100. In the meantime, Apotex marketed its Apo-Enalapril product in the Caribbean and the United States.
Apo-Enalapril tablets have been marketed in Canada since 2 September 1993, and are similar in size, shape, colour and concentration of enalapril maleate to the corresponding tablets of Vasotec. The respondents estimate that the amount of Vasotec sales lost to Apo-Enalapril tablets exceeds $100 million a year (Appeal Book I, at page 260).
On 20 September 1991 Merck and Merck Frosst brought an action against Apotex in the Trial Division, alleging infringement of their exclusive rights under the patent and seeking the following relief:
[cad183][rc] a declaration that the compound claims (1 to 5), the pharmaceutical composition claims (8 to 10), and the claims to the use of the compounds as antihypertensives (11 to 15) have been infringed by Apotex;
[cad183][rc] an injunction restraining any further infringement;
[cad183][rc] damages or an accounting of profits;
[cad183][rc] delivery up or destruction of all compositions that infringe the patent; and
[cad183][rc] interest and costs.
Apotex relied on the following defences:
[cad183][rc] Apotex's product was manufactured from bulk product made in Canada prior to the grant of Merck's patent. Therefore, section 56 of the Act provides a defence to the claim of infringement;
[cad183][rc] the composition claims (8 to 10) are invalid because they contain no inventiveness beyond that embodied in the compound claims (1 to 5);
[cad183][rc] claims 8 to 17 are invalid because the specification of the patent is deficient;
[cad183][rc] claims 8 to 17 are invalid because the discovery claimed is for a medical treatment and not for an invention as defined in the Act; and
[cad183][rc] claims 8 to 17 are invalid because they are redundant of each other.
By counterclaim, Apotex sought a declaration that claims 8 to 17 of the patent are invalid. The Trial Judge allowed the action and dismissed Apotex's counterclaim in a judgment based on careful and lucid reasons, though in my respectful opinion not in all respects correct.
II
Robertson J.A. for this Court in Nekoosa Packaging Corp. et al. v. AMCA International Ltd. et al. (1994), 172 N.R. 387, at page 395, has alerted trial judges against accepting the evidence of inventors themselves as to the correct construction of patents. The Trial Judge fell into that trap here in taking the evidence of one of the inventors, Dr. Patchett, a witness for the respondents, as determining the construction of the patent, on the ground that his interpretation was not challenged in cross-examination (Appeal Book I, at page 14). However, it seems that no harm was done as far as the chemistry of the invention was concerned, and the appellant did not choose to make an issue of the matter on this appeal.
I therefore set out, though as a mere description of the claims in the specification, some of the excerpts from Dr. Patchett recited by the Trial Judge, with Dr. Patchett's interpretation as to the respective positions of the parties excised (at pages 145-147):
23. Without going into detail on the structure or synthesis, Enalapril is a compound whose formula is specified by the chemical name:
N-(1(S)-ethoxycarbonyl-3-phenylpropyl)-L-alanyl-L-proline.
24. Enalapril Maleate is prepared by adding maleic acid to Enalapril or to a diastereomeric mixture containing Enalapril to form the pharmaceutically acceptable acid addition salt, Enalapril Maleate.
25. Enalapril in the form of its stable salt, Enalapril Maleate, when taken orally in tablet form, is absorbed largely through the lining of the small intestine into the blood stream and is then converted principally by the liver into the diacid, Enalaprilat, which acts as the ACE inhibitor leading to the indicated reductions in blood pressure.
26. Enalapril Maleate is a much more stable compound than Enalapril and it is this salt which is used in making tablets and capsules for oral administration to patients.
. . .
37. Claim 1 describes a class of compounds as well as the pharmaceutically acceptable salts of the recited compounds.
. . .
41. Claim 2 recites the specific chemical name and, thereby, the formula for Enalapril, which was found to be one of the most orally active species within the genus of claim 1. Enalapril Maleate is the Maleate salt of Enalapril and salt formation has no effect on the chemical identity of the Enalapril constituent. Accordingly, the chemical formula specified in Claim 2 is encompassed by the Enalapril Maleate salt.
42. Claim 3 recites the pharmaceutically acceptable acid addition salt of Enalapril. It will be noted that the chemical name which specifies Enalapril in Claim 3 is identical to that in Claim 2. Claim 3 does not limit the salt to maleate salt. It can be any pharmaceutically acceptable acid addition salt. In the case we are concerned with here, the maleate salt of Enalapril, namely: Enalapril Maleate.
43. Claim 4 recites the specific chemical name and, thereby, formula Enalapril Maleate . . . .
44. Claim 5 recites a name for what can be described as the diastereomeric mixture of the more active and the less active diastereomers of Enalapril. The more active diastereomer is known as the S-diastereomer as named in Claim 2 and that is the Enalapril used by Merck and Apotex in their tablets. Thus, Enalapril Maleate falls squarely within the chemical name and, thereby, formula of Claim 5.
. . .
46. Claim 8, as can be seen, is a claim to a pharmaceutical composition for reducing hypertension comprising an effective amount of a compound of Claim 1 and a pharmaceutically acceptable carrier . . . .
47. Claim 9 also recites a pharmaceutical composition for reducing hypertension comprising an effective amount of
N-(1(S)-ethoxycarbonyl-3-phenylpropyl)-L-alanyl-L-proline which is Enalapril in association with a pharmaceutically acceptable carrier . . . . Enalapril Maleate is the maleate salt of Enalapril for the reasons stated in paragraph 24 hereof . . . .
48. Claim 10 recites a pharmaceutical composition for reducing hypertension comprising an effective amount of N-(1(S)-ethoxycarbonyl-3-phenylpropyl-L-alanyl-L-proline which is Enalapril in association with a pharmaceutically acceptable carrier . . . . [T]he maleate salt is a pharmaceutically acceptable acid addition salt of Enalapril . . . .
49. Claims 11 to 15 describe the use of Enalapril as antihypertensive including the generic compounds of Claim 1 (including Enalapril) as an antihypertensive (Claim 11), the specific use of Enalapril as an antihypertensive (Claim 12), the use of a pharmaceutically acceptable acid addition salt of Enalapril (including Enalapril Maleate) as an antihypertensive (Claim 13), the specific use of the Enalapril Maleate salt as an antihypertensive (Claim 14), and the use of the R and S diastereomeric mixture, which includes Enalapril, as an antihypertensive (claim 15).
50. In my opinion, the language of all claims 11 to 15, either generally or specifically, recite the use of Enalapril and Enalapril Maleate as an antihypertensive . . . .
As I have said, there was no issue as to the chemistry of the invention, and, moreover, the appellant did not contend that its compound Apo-Enalapril did not infringe the patent's claims, apart from the saving effect of section 56, although it did raise issues as to the validity of composition claims 8-10 and of use claims 11-17.
Nevertheless, as the discussion of section 56 will show, there was a sharp division between the parties as to the correct construction of the patent. The Trial Judge treated the question as one of fact, whereas it is well established that it is one of law, or perhaps most accurately, of mixed fact and law: Lovell Manufacturing Co. and Maxwell Ltd. v. Beatty Bros. Ltd. (1962), 41 C.P.R. 18 (Ex. Ct.), at page 33; Computalog Ltd. v. Comtech Logging Ltd. (1992), 44 C.P.R. (3d) 77 (F.C.A.), at page 84. The Trial Judge therefore effectively reached no legal conclusion on construction.
III
The appellant contended that it is entitled under section 56 of the Act to use and sell its Apo-Enalapril tablets on the ground that it is simply using and selling enalapril maleate made in Canada that it purchased or acquired before the issuance of Merck's patent on 16 October 1990.
Under section 56, certain rights are provided to a person who, before the patent application becomes open to inspection by the public,2*ftnote2 Under s. 10 [as am. idem, s. 2] of the Act, a patent application normally becomes open to inspection by the public either 18 months after the date on which the application is filed, or, where the applicant is entitled to protection under a patent treaty, 18 months after the "priority date" of the application. If the conditions in s. 28 [as am. idem, s. 10] are met, and within the previous 12 months the applicant has filed an application for the patent in another country that grants reciprocal rights to citizens of Canada, then the priority date is the date on which such previous application was filed. has acquired "the invention for which a patent is afterwards obtained":
56. Every person who, before an application for a patent becomes open to the inspection of the public under section 10, has purchased, constructed or acquired the invention for which a patent is afterwards obtained under this Act, has the right to use and sell to others the specific article, machine, manufacture or composition of matter patented and so purchased, constructed or acquired without being liable to the patentee or the legal representatives of the patentee for so doing, but the patent shall not, with respect to other persons, be held invalid by reason of that purchase, construction or acquisition or use of the invention by the person first mentioned, or by those to whom that person has sold it, unless it was purchased, constructed, acquired or used before the date of filing of the application or, in the case of an application to which section 28 applies, before the priority date of the application, and in consequence whereof the invention was disclosed in such a manner that it became available to the public in Canada or elsewhere.
Prior to 1987, the relevant date for the purchase, construction or acquisition of the invention was the date on which the patent was issued. The Trial Judge correctly observed that the change in the wording of section 56 made no difference in the circumstances of this case, because Merck's patent did not become open to inspection by the public until it was issued. Consequently, like the Trial Judge, I use the phrase "before the issuance of the patent" in these reasons to refer to the relevant date for the purposes of section 56.
Most of the enalapril maleate acquired by the appellant was shipped by the supplier, before the grant of the patent. However, certain shipments required repurification, a process not completed before the issuance of the patent, and so the status of these shipments will have to be dealt with as a separate issue. With respect to the principal issue arising from the appellant's invocation of section 56, the respondents contended that the protection of section 56 applied only to the bulk product acquired, and not to the tablets manufactured from the bulk and sold. The Apo-Enalapril tablets were, respondents contended, a new and different product not in existence when Merck obtained its patent.
The Trial Judge accepted this contention of the respondents (at page 158):
My conclusion on this point is that use by Apotex to produce pharmaceutical tablets for the use claimed by Merck's patent, and sale by Apotex to others of APO-ENALAPRIL in tablet form, produced by it after the grant of Merck's patent from bulk enalapril maleate acquired prior to the issue of the patent on October 16, 1990, is not protected under s. 56 of the Act from claims for infringement by the plaintiffs.
An examination of this conclusion will involve both an analysis of the law on which he relied and the correct construction of the patent.
Turning first to the law, I note that the respondents submitted that in order to establish a section 56 defence in respect of a specific article or composition of matter, the appellant must show that the article in question is the specific one it acquired or purchased prior to the issuance of the patent. The common thread of all the cases, in the opinion of the respondents, is that the specific article must have been in existence in Canada or in transit to Canada at that time, and there can be no further manufacturing of the patented article.
On this understanding the right to use is given a restricted meaning, since the use cannot be one which amounts to manufacturing or processing, or in any way changes the form of the invention. The article may be used only in the form in which it existed at patenting, viz., the bulk form of enalapril maleate and not the tablet form into which it was transformed by the addition of a carrier. For the invocation of section 56, form is everything. The Trial Judge adopted this reasoning.
Aside from Zeneca Pharma Inc. v. Canada (Minister of National Health and Welfare) (1994), 54 C.P.R. (3d) 538 (F.C.T.D.), a decision on which the Trial Judge wisely decided not to rely, for the reasons which he gave, the case which is closest to the position of the respondent is Reeves Brothers Inc. v. Toronto Quilting & Embroidery Ltd. (1978), 43 C.P.R. (2d) 145 (F.C.T.D.), at page 163, in which Gibson J. held that "the key word in s. 58 [now section 56] is [cad096]specific[cad039]", and that the effect of that word was to require the party invoking section 56 to prove that replacement parts for a machine which had been modified by those components had also been purchased before the issuance of the patent.
The case on which the Trial Judge appears most to have relied, however, was Libbey-Owens-Ford Glass Co. v. Ford Motor Co. of Canada, Ltd (No. 2), [1969] 1 Ex. C.R. 529; affd [1970] S.C.R. 833, ironically the case that, especially in the reasons of Thurlow J. (as he then was) at trial, is the least supportive of his own holding.
In particular, the Trial Judge found of "assistance" (at pages 156-157) the approach of Thurlow J., and set out the following passage from that Judge's opinion, at pages 556-557:
On this analysis of section 58 [56] I am accordingly inclined to the opinion that the words "article, machine, manufacture or composition of matter patented" are broad enough by themselves to embrace anything whether tangible or intangible which is patentable as an invention and that the scope of what the person referred to in section 58 may use and sell is limited only by the adjective "specific" and the subsequent expression "so purchased, constructed or acquired before the issue of the patent therefor." The effect of these words, as I see it, in respect to an "article" whether tangible or intangible, is to limit the use that may be made of the patented subject matter to use of the specific item of patented subject matter acquired before the patent issued.
While the section is worded somewhat clumsily, its meaning in this view would come to this:
"Every person who, before the issuing of a patent has purchased, constructed or acquired any invention (i.e., any new or useful art, process, machine, manufacture or composition of matter) for which a patent is afterwards obtained under this Act, has the right of using and vending to others the specific thing patented and so purchased, constructed or acquired before the issue of the patent therefor . . . " [Italics added by Thurlow J.]
From this passage the Trial Judge concluded that "Thurlow J.'s paraphrasing of then section 58 seems to me to be helpful" (at page 157) in clarifying that the immunity granted under section 56 would extend to the bulk form of the invention but not to "an aspect of the invention within a different form" (at page 158).
But, with respect, this seems to be precisely the opposite of Thurlow J.'s meaning, as is evident from the immediately ensuing statement in Libbey (at pages 557-559), which the Trial Judge does not set out:
This interpretation is, I think, supported by the consideration that the word "invention" would not fit well with the adjective "specific" in place of the several expressions used in section 58 [56] since the effect could be to authorize use of the patented invention in more ways than had been practised before the issue of the patent. The interpretation is also supported by the consideration that there seems no reason in principle why, when the section is applicable to every person who has acquired any "invention" prior to the issue of a patent therefor, the words "article, machine", etc., should not be regarded as intended to refer to anything falling within the scope of patentable subject matter. Otherwise, it seems odd that the draftsman should not have used the words "article, machine", etc., in the place where the word "invention" first appears in the section (this was the way section 7 of the United States Act of 1839 on which McClurg v. Kingsland (1843) U.S. 202, turned, was worded), as well as in the second place where the word "invention" appears.
Next there is the consideration that the reason for having such a provision in the law seems to apply with as much force in the case of a process or method invention as in that of any other kind of invention. The grant of an exclusive right to an invention for a limited period rewards a person, who has made the invention and has disclosed it to the public in the prescribed manner, for the benefit which thereby accrues to other members of the public. However, a member of the public who makes or acquires the invention, or some part of it, by himself before it becomes available to the public has, to that extent, no benefit to derive from the publication, yet, without a provision such as section 58 [56], he would be restrained from practising what he had learned and done by himself before the publication by the person to be rewarded for the information. MacLean, P., expressed the purpose of the section thus in Schweyer Electric & Mfg. Co. v. N.Y, Central Railroad Co., ([1934] Ex. C.R. 31 at page 65):
The section is confusing and its meaning should be clarified. This statutory provision appeared in chap. 34 of the Statutes of Canada for 1859, and also in chap. 24 of the Statutes of Canada for 1848-9; which statutes related to patents, and the meaning and purpose of the provision was, I think, more clearly expressed in those statutes than in sec. 50 [now s. 56] of the Patent Act. It seems to me that section means and was intended to mean, that if a person has acquired in some way or other, something which was the subject of an application for a patent by another who is presumably the first inventor, but for which a patent had not yet issued, he, the former, shall have a continuing right to use and vend the same notwithstanding the issue of the patent to the other person. That is the only interpretation I can put upon the section.
This consideration as well therefore inclines me to the view that the expressions used in section 58 [56] apply to the whole scope of patentable subject matter both tangible and intangible.
This view, moreover, coincides with that taken by the Supreme Court of the United States on the purpose of a corresponding provision of the United States patent law of 1839 in McClurg v. Kingsland ((1843) 42 U.S., 202), which, despite criticism that had been expressed in the meantime was reaffirmed by the same Court in Andrews v. Hovey ((1887) 123 U.S. 267; (1888) 124 U.S. 694). [Emphasis added.]
As I read this passage, Thurlow J. was equating the expression "article, etc." to the "whole scope" of the subject-matter of the patent. I note that nothing in Thurlow J.'s remarks suggests that the expression "specific article, etc." has a different meaning. It follows that the right to use or sell the "specific article, etc." is independent of the form in which the invention is purchased: any form of the invention may be used or sold within the immunity conferred by section 56.
This is not only my own perception. Gibson J. in Reeves (at page 164) stated of Thurlow J.'s view in Libbey:
As I understand also, the trial Judge in essence construed the words "article, machine, manufacture or composition of matter" to be synonymous with the word "invention" within the statutory definition of "invention" in s. 2 of the Patent Act, namely:
"invention" means any new and useful art, process, machine, manufacture or composition of matter, or any new and useful improvement in any art, process, machine, manufacture or composition of matter;
Thurlow J.'s broad interpretation of the phrase "specific article" was also drawn to the reader's attention in an editorial note to Libbey ((1969), 57 C.P.R. 155, at page 157).
Under another possible interpretation of Thurlow J.'s statement, his expression "anything falling within the scope of patentable subject matter" describes the kind of thing that is susceptible of being acquired, used and sold pursuant to section 56. More specifically, Thurlow J. may have been suggesting that anything that is patentable subject-matter, so long as it was acquired before the issuance of the patent, may be used and sold pursuant to section 56. This interpretation of Thurlow J.'s words ultimately leads to the same result, because of the broad meaning that Thurlow J. attributes to the word "use".
Thurlow J. granted immunity under section 56 not only for the tangible subject of the patent (the apparatus itself) but also for the intangible use of that apparatus to press curved glass windshields by the patented methods. As Hall J. pointed out on appeal, the use and sale of the output of the apparatus were also protected under section 56. Thus, Libbey demonstrates that the right to use and sell the product of a machine is part of the right to use the machine itself. More generally, the right to "use" an article encompasses the right to use and sell products that are subsequently created by applying the article to its intended use.
In my view, it follows that the right to use a chemical compound encompasses the right to use and sell compositions that are created by applying the compound to its intended use. The fact that the use of a chemical compound results in its incorporation into the subsequently created products is immaterial to the principle established in Libbey.
A liberal construction of "specific article" and "use" did not fit in with Gibson J.'s own approach and he drew what comfort he could from his belief that "the Supreme Court of Canada [on appeal in Libbey] did not construe the words in s. 58 [cad096]article, machine, manufacture or composition of matter[cad039] in any way to suggest that any of those words were synonymous with any other words" (at page 164). Similarly, in Diamond Shamrock Corporation v. Hooker Chemicals & Plastics Corp. et al. (1982), 66 C.P.R. (2d) 145 (F.C.T.D.), at page 150, Walsh J. adopted Gibson J.'s emphasis on the word "specific", stating that "[i]t is evident, and the jurisprudence so establishes, that s. 58 [56] must be strictly and restrictively interpreted",3*ftnote3 It is by no means evident to me, on policy grounds, that a patentee, who, under s. 27(1) of the Act is granted "an exclusive property in the invention," should have priority over a previous purchaser of the invention. Of course, the patentee should have due reward for inventiveness, but s. 56, as Thurlow J. pointed out in Libbey (at p. 553), goes back to 1869 in statutory form, and before that, in the patent law of the Province of Canada, to 1849, and was a statutory formulation of the common law right of a bona fide purchaser in good faith. On good faith Thurlow J. said in Libbey (at p. 554) that "[t]here are no doubt cases wherein a person is disqualified by his own dishonest conduct from asserting a right under the section but these, as I see it, depend on principles of equity rather than on principles of statutory interpretation." In the case at bar, despite several attempts by the respondents to question the appellant's conduct in this respect, the matter was finally disposed of by the learned Trial Judge (at page 162):
There is no evidence in this case of wrongdoing by Apotex, in its relations with the plaintiffs or with others. Dr. Sherman [the president of Apotex], apparently an aggressive entrepreneur, can hardly be criticized for doing what he was free to do in the acquisition of enalapril maleate prior to the grant of Merck's patent.
[ie]There was no appeal on this issue. and accordingly dismissed the defendants' application for judgment on the basis of section 56, since the pleadings did not establish whether the equipment in question had been altered or improved since installation.
But, in fact, the Supreme Court in Libbey threw no doubt on Thurlow J.'s approach, leaving his words untouched. All that Hall J. for the Court stated directly was as follows (at page 839):
In my opinion Thurlow J. was right in holding that s. 58 [now section 56] was a complete defence to the appellant's action for infringement. It is not necessary in this appeal to determine if the word "article" in s. 58 [now section 56] includes "process" because the respondent here had acquired the specific apparatus in issue in this litigation prior to the issue of appellant's patent. The patent in suit includes apparatus claims under which the respondent is entitled to the benefit of s. 58 [now section 56]. The immunity in respect of that specific apparatus necessarily includes immunity to use the apparatus under such method or process claims as may be included in a patent subsequently obtained for the apparatus. [Emphasis added].
However, Hall J. significantly immediately added (at pages 839-840):
The question in this case is with respect to the extent of the meaning of "using" and it arises because with respect to "vending" the right of the owner of the specific machine or other thing is expressed as that of vending it, not as that of vending its output. However, it is obvious that in the case of a machine designed for the production of goods, there would really be no worthwhile protection allowed by s. 58 [now section 56] if the owner could not put it to the only use for which it is usable without being liable for infringement.
Some indication that, in the Patent Act, "using" a patented article includes the manufacture of goods to be vended is found in s. 23 reading as follows:
23. No patent shall extend to prevent the use of any invention in any ship, vessel, aircraft or land vehicle of any other country, entering Canada temporarily or accidentally, if such invention is employed exclusively for the needs of the ship, vessel, aircraft or land vehicle, and not so used for the manufacture of any goods to be vended within or exported from Canada. [Emphasis added.]
This broad interpretation of using, although focussing on that word rather than on the "specific article" phrase, indicates the Court's adoption of more than a narrowly literal approach to section 56. The use and sale of the product of a machine, particularly if production is the only possible use of the machine, is accorded protection under section 56 as a use of the machine itself. This is, as a minimum, Thurlow J.'s fullest meaning as I have outlined it above. In my view, use must be given the same sense in the case of a chemical invention.
Moreover, in answer to the contention that infringement of the process claims and the apparatus claims should be considered separately, Hall J. added (at page 841):
The established practice of the Patent Office of allowing both apparatus and process claims or process and substance claims in a single patent indicates that process claims are apt to be considered, in a proper case, as being only different aspects of a single invention covering either an apparatus or a substance. With an infringement of either kind of claim will give rise to a right of action, this does not mean that such a patent covers two inventions. Although it is expressly provided that a patent is not rendered void by reason of the fact that it contains more than one invention, this is certainly not to be presumed. In the present case, appellant has in no way shown that the method claims constitute a separate invention distinct from the apparatus claims.
It should also be noted that s. 58 provides protection with respect to the "invention" and also refers to the "patent". I fail to see on what basis this should be read otherwise than as relating to the invention as a whole and to the patent as a whole. Nothing indicates that this should rather be read as relating to each particular claim or to each particular group of claims instead.
It seems to me that these words of Hall J. adopt what is effectively Thurlow J.'s "whole invention" approach to section 56 in an even wider perspective: a patent should not be read so as to isolate its particular claims but in relation to the agglomerate of claims as a whole, because what is in the claims is already inherent in the invention. Moreover, there is also the practical consideration that "there would really be no worthwhile protection allowed by s. 58 [now section 56] if the owner could not put it to the only use for which it is usable without being liable for infringement".
I do not see this holding as being subsequently limited by this Court's decision in Lido Industrial Products Ltd. v. Teledyne Industries Inc. et al. (1981), 57 C.P.R. (2d) 29, leave to appeal refused [1981] 2 S.C.R. ix, where section 56 was invoked to support the exemption of shower heads from patent protection. The majority of the Court (per Urie J.A.) held that section 56 affords protection for units already in Canada prior to the issuance of the patent, and also for a shipment in transit to Canada, but not with respect to the large quantity of shower heads as to whose existence at the time of the issuance of the patent there was no evidence. Thurlow C.J., dissenting in part, would have applied section 56 whether the specific devices were in existence or not, "since the appellant, prior to the issue of the patent, had ordered them, had committed itself irrevocably to pay for them and was entitled to receive and accept them when delivered" (at page 40). In the course of his reasons Thurlow C.J. in effect affirmed his earlier reasons in Libbey in stating that "[a]s I read it, s. 58 [now section 56] applies at the time when a person other than the patentee makes, constructs, uses or sells the invention that has been patented " (at page 40, emphasis added).
Thurlow C.J. also emphasized that "[t]he historical development of the section militates against a narrow construction" (at page 36), analogizing it to what Dickson J. (as he then was) wrote in Consolboard Inc. v. MacMillan Bloedel (Sask.) Ltd., [1981] 1 S.C.R. 504, at page 518; (although it should be noted that section 56, unlike section 34, is not "the product of amendment over a period of many years"):
It cannot be said that s. 36 [now section 34] of the Act is happily phrased. It gives the impression of a mélange of ideas gathered at random rather than an attempt to enunciate, clearly and concisely, a governing principle or principles. This is perhaps understandable in that the section is the product of amendment over a period of many years. The language simply does not lend itself to a tight, literal interpretation. It is, and should be treated as, a parliamentary pronouncement, in general terms, of that which must be set forth by the applicant to the world before being qualified to receive the grant of monopoly under a patent.
Consequently, Thurlow C.J. held that "there is no justification in the language of the section for importing into it at any point of its text the words in [cad096]Canada[cad039]" (at page 35).
The majority agreed with him on this point, disagreeing only as to the necessity for the shower heads to be in existence somewhere. Urie J.A. stated (at page 54):
It is my view that because of its evident purpose s. 58 [56] contemplates that the particular articles or machines must actually be in existence at the date of the grant to fall within its purview. As I see it, their actual existence at that date is essential to the application of the section.
At the same time Urie J.A. was careful to limit his disagreement with the Chief Justice. He wrote (at page 54):
. . . I am substantially in agreement with what he has said with respect to s. 58 [56] of the Patent Act, R.S.C. 1970, c. P-4, differing with him only in one respect . . . .
Where I differ with the Chief Justice is in respect to the undelivered shower heads.
Other than on this question of actual existence, which requires an interpretation of the words "purchased, constructed or acquired", I cannot see any limitation on the Thurlow interpretation of section 56, which I believe stands as a highly persuasive precedent for this Court.
Applying the law therefore, to the particular invention, I note that much energy was expended by the parties on the issue of whether the invention in tablet form was a different product from the invention in bulk form. Both parties were agreed that the active ingredient in the tablets was enalapril maleate, unchanged chemically from the bulk form. The disagreement was over the consequences for section 56 of the addition of other products to present the drug to the public in usable form. But whether the article or composition of matter was essentially the same or so different as to amount to different articles, the invention was always the same.
In my view, the appellant was in error in contending that the invention was simply chemical molecules of enalapril. Chemically speaking, that was so. But the specification of the patent, properly construed, asserts more than that. In this respect, the Trial Judge was entirely right when he wrote (at page 156):
. . . the patent . . . claims more than a molecule with a chemical formula. Rather, the claims describe several or many compounds, and several compositions, and specific uses for them, all aspects of the same invention. Enalapril may be the essence of each claim, but the claims, and the patent for the invention, are more than the chemical molecule of enalapril or of enalapril maleate.
Inherent in the compound, and indeed in the patent, is the purpose and utility of the compound of enalapril.
Where the Trial Judge went wrong, I respectfully suggest, was thus in his interpretation of the law and in his application of that law to the facts. His conclusion on this point is set forth as follows (at pages 157-158):
Here the invention claimed under the patent is enalapril in a variety of aspects, represented by various compounds and compositions, for the use claimed. It is that invention in the aspect of the compound enalapril maleate in bulk form which was here acquired by Apotex. That form of the composition of matter subsequently patented is what the defendant acquired prior to the issue of the Merck patent. To use that composition of matter, even as intended by the inventor, to produce a composition that is in the form of a prescription medicine which includes some of that matter with other ingredients, which combination may also be an aspect of the invention within a different form, for the use claimed in the patent, is in my view to go beyond the words "the specific . . . composition of matter patented and so purchased". In my opinion, to sell the composition of matter in the new and different form resulting from Apotex's own tabletting process goes beyond the immunity granted by s. 56. It extends the right to sell to a composition of matter now in a form or aspect of the invention different from that which was acquired prior to the grant of the patent to Merck. [Emphasis added].
It is the intention of the inventor, as inscribed in the patent, which protects the appellant under section 56, given that the law is not one based on form but on the scope of the whole invention. In consequence, the appellant's creation, use and sale of enalapril maleate tablets was within the immunity granted by section 56 for the use of the bulk compound.
Counsel for the respondents sought to buttress his argument by drawing an analogy between enalapril maleate and a piece of cloth. In the respondents' analogy, Apo-Enalapril tablets are akin to a suit manufactured from the cloth and, although there is no chemical change in the cloth as it is made into a suit, the final garment is not the same "specific article" as the cloth. I do not see how this consideration advances the respondents' argument. My analysis of section 56 has led me to the conclusion that "specific article" refers to anything coming within the scope of the patent. At the same time, I have concluded that the right to "use" an article includes the right to use and sell things produced with the article. Thus, the purchaser of a subsequently patented piece of cloth would have the right to make the cloth into a suit. Similarly, the appellant had the right to manufacture enalapril maleate tablets from the bulk powder acquired before the issuance of the patent, and to use and sell the tablets so produced.
This conclusion will, I believe, be strengthened in the subsequent consideration of the composition and use claims of the patent, which will reveal even more clearly the interrelatedness of the whole patent.
IV
I have already referred to the fact that certain shipments of enalapril maleate required repurification, a process that was completed after the issuance of the patent.
With respect to these shipments, both sides profess allegiance to the holding of Urie J.A. in Lido (at page 54), which I have already quoted:
It is my view that because of its evident purpose s. 58 [56] contemplates that the particular articles or machines must actually be in existence at the date of the grant to fall within its purview. As I see it, their actual existence at that date is essential to the application of the section.
Accordingly, shower heads shipped by the foreign supplier in accord with the contract of purchase fell within the purview of section 56 but not those as to which there was an absence of evidence that they were in existence before the patent issued.
In the case at bar, three lots were packaged by Delmar in September 1990 (lots numbered P-65478, P-65479, P-65480) but were subsequently found by its quality control staff not to meet its standards for purity. In each case the lot was reprocessed by suspension in water, followed by heating with agitation, cooling, centrifuging and washing with water and ethyl acetate.
The appellant urged that the enalapril maleate in these lots was in existence on the patent date of 16 October 1990, even though it was not found by Delmar to be adequately purified and packaged for delivery until after that date, on the chemical process perspective that the enalapril maleate molecules remained undisturbed during the purification process, which consisted solely of the removal of water. In other words, even in the impure state enalapril maleate existed.
The Trial Judge stated his view as follows (at pages 159-160):
That may be an appropriate description of the chemical processes here followed. Nevertheless, I am persuaded, as the plaintiffs submit, that the enalapril maleate delivered to Apotex in these three lots could not be said to be in existence for purposes of the statutory immunity until the product was considered by Delmar to be of such a quality that the manufacturer would ship it under the contract for purchase by Apotex. Only when it was deemed to be of proper quality could it be considered to be purchased or acquired by Apotex within the meaning of s. 56. Since it was not judged by the supplier in these cases to be of that quality until after the issue of the patent to Merck in mid-October, 1990, each of those lots of bulk enalapril maleate could not be said to be in existence at that date.
I agree with the Trial Judge that the three lots of enalapril maleate had not been "purchased or acquired" by Apotex, within the meaning of section 56. In my view, purchasers cannot be said to have "purchased or acquired" a product until they have obtained title to it. Since we were shown no evidence of a contrary intention in the contract between Apotex and Delmar, title could not pass to Apotex until the product was in a deliverable state: see section 19, Rule 5 of the Sale of Goods Act, R.S.O. 1990, c. S.1 [as am. by S.O. 1993, c. 27, Schedule]. In circumstances where the seller itself thought that the product was unsuitable for delivery, I do not think this court should conclude otherwise.
It is true, as Apotex submitted, that enalapril maleate was in existence even before the lots were repurified. Moreover, as I have pointed out, the form taken by an invention is not governing for the purposes of section 56. Thus, if Apotex had purchased or acquired enalapril maleate in any form, whether pure bulk powder, tablets, or some other combination of enalapril maleate and another substance, it could be said to have acquired Merck's invention within the meaning of section 56. However, in the case at bar, the product which Apotex sought to purchase or acquire was pure powder. If the seller was not satisfied that the product met that description and could be delivered, Apotex could not be said to have acquired the product.
There was a further lot of enalapril maleate which Apotex acquired from a foreign customer of Delmar after the issue of the patent. Delmar was granted a compulsory licence on 24 April 1992 to manufacture enalapril or enalapril maleate in Canada, with royalties to Merck. That licence ceased to have effect by section 12 of the Patent Act Amendment Act, 1992, S.C. 1993, c. 2, and was extinguished as of 14 February 1993. Subsequently on 10 March 1993 Apotex purchased 44.9 kilograms of bulk enalapril maleate which Delmar had manufactured under licence and sold to its foreign customer. The appellant submitted that, as the acquirer of licensed enalapril maleate powder, it had an implied licence from Merck to produce dosage form enalapril maleate from the powder.
The Trial Judge held that there was no infringement in Apotex's producing the final dosage form from bulk product it held only on consignment, during the time when Delmar's licence was in effect under the law. There was no cross-appeal by the respondents on this holding.
The Trial Judge continued (at page 164):
On the other hand, Apotex has no right, derived from or under the compulsory licence to Delmar, to produce tablets for use as an antihypertensive from the 44.9 kg of bulk enalapril maleate purchased in March, 1993, after the licence to Delmar was terminated by statute. That result is not based on extinguishment of any rights Delmar may have had, under the license, in accord with the statutory amendment which terminated its license effective February 14, 1993. Rather, it is based on the lack of any right in the defendant to use the invention after the grant of the patent. It had not acquired this lot of enalapril maleate before the grant of Merck's patent and so has no claim to immunity by reason of s. 56 of the Act.
Again, I am in agreement with the conclusion of the learned Trial Judge, though I should prefer to rest my conclusion on the extinguishment of Delmar's rights and so of any right in the appellant, rather than on a return to section 56, which I am not at all certain is in play on this point.
V
Considering that the appellant's pleas as to the validity of the composition and use claims were only an alternative defence to the claim of infringement, I am of the opinion that this might well have been the termination of the case, had not the appellant also sought by counterclaim a declaration that the composition and use claims of the patent (claims 8-17) are invalid. I believe that this invocation of declaratory relief makes it incumbent upon the Court to proceed to consider this matter.
The appellant's attack on the validity of these patent claims is based on several grounds, which will appear as they are dealt with. The first and most serious challenge to validity relates to the absence of any claim to novelty or inventiveness in the composition claims (8-10). The leading case in this area is Shell Oil Co. v. Commissioner of Patents, [1982] 2 S.C.R. 536. In Shell Oil the appellant was seeking a patent on certain chemical compositions comprising chemical compounds mixed with adjuvants or carriers. For its own reasons the appellant had elected to proceed with its composition claims, without having sought to patent its compound claims. The appellant admitted that there was nothing inventive in mixing the compounds with appropriate inert adjuvants, and emphasized that part of the invention was the discovery of the usefulness of the compounds as plant growth regulators. The composition claims had been disallowed by the examiner, who was upheld by the Commissioner of Patents and by the Federal Court of Appeal at (1980), 54 C.P.R. (2d) 183. All three adjudicators thought that they were compelled to this result by the pre-existing case law. However, the Supreme Court reversed. Wilson J. for the Court stated of the patentability of new uses for old compounds (at page 549):
It is not, in my view, necessary in the case of the discovery of a new use for an old compound that the combination of the compound with the adjuvant be itself novel in any sense other than that it is required in order to give effect to this particular use of the compound. This is not a case where the inventive ingenuity is alleged to lie in the combination; the combination is simply the means of realizing on the newly discovered potential of the compounds. This is a case where the inventive ingenuity is in the discovery of the new use and no further inventive step is required in the application of the compounds to that use, i.e. in the preparation of the appropriate compositions.
In relation to new compounds, Wilson J. stated (at page 552):
I agree with counsel for the appellant that these [pre-existing] cases did not establish a broad principle that compositions containing new compounds mixed with an inert carrier were not patentable. They did establish, however, that no inventive ingenuity is involved in mixing a compound with a carrier. Accordingly, if the compound is patented, there is no invention in the composition.
There is no question that the Court did not consider that, in taking this position, it was overruling the pre-existing cases, including two of its own decisions. In order to follow Wilson J.'s reasoning we must look to these earlier cases: Rohm & Haas Co. v. Commissioner of Patents, [1959] Ex. C.R. 153; Commissioner of Patents v. Farbwerke Hoechst Aktiengesellschaft Vormals Meister Lucius & Bruning, [1964] S.C.R. 49; Gilbert (Jules R.) Ltd. v. Sandoz Patents Ltd. (1970), 64 C.P.R. 14 (Ex. Ct.); affd sub nom. Sandoz Patents Ltd. v. Gilcross Ltd., [1974] S.C.R. 1336; Application No. 132,421, Re (1976), 52 C.P.R. (2d) 220 (Pat. App. Bd. and Comm'r Pat.); affirmed on appeal, [sub nom. Agripat S.A. v. Commissioner of Patents] (1977), 52 C.P.R. (2d) 229 (F.C.A.).
In Rohm & Haas the patent application claimed a fungicidal composition having as an active ingredient certain salts that had previously been patented. Cameron J. stated (at pages 163-64):
I am of the opinion, however, that when a claim to a compound has been allowed, a claim to a fungicidal composition merely having that compound "as an active ingredient" is not patentable . . . . The utility of the compounds as fungicides is fully set forth in the specification of the patent which has been allowed; to name the compound as a fungicidal composition is merely to recite one of its inherent qualities.
Again, Cameron J. said (at page 164) that "the addition of a statement of use to a claim to a compound does not produce a substantially different claim". The invention had already been patented, and could not be patented again.
In Farbwerke Hoechst, the applicant sought eleven patents relating to an anti-diabetic composition. The Commissioner of Patents granted ten patents, each of which consisted of claim for a chemical process for producing the active ingredient and a claim for the ingredient as produced by that process. However, the Commissioner refused the eleventh application, which claimed the composition in a diluted form, mixed with an "orally ingestible pharmaceutically acceptable carrier". The Supreme Court, per Judson J., agreed that no patent should be issued for the diluted substance (at page 53):
A person is entitled to a patent for a new, useful and inventive medicinal substance but to dilute that new substance once its medical uses are established does not result in further invention. The diluted and undiluted substance are but two aspects of exactly the same invention. In this case, the addition of an inert carrier, which is a common expedient to increase bulk, and so facilitate measurement and administration, is nothing more than dilution and does not result in a further invention over and above that of the medicinal itself. If a patent subsists for the new medicinal substance, a separate patent cannot subsist for that substance merely diluted . . . . Further, the respondent has already received patent protection to the full extent allowed by the law. Invention may lie in a new, useful, and inventive process for producing a new medicinal substance, and the respondent has already obtained patents for such inventive processes and for the new product as produced by such processes. The process claims and process dependent product claims in these patents represent the full extent of the protection to which the respondent is entitled.
The Court also recognized that the eleventh application could be rejected under former section 41 of the Act [R.S.C. 1952, c. 203] because it purported to claim a medicinal substance without reference to the chemical process for creating it. However, in effect this was another case establishing that, once a patent has been granted in respect of an invention, another patent will not be issued for something that is inherent in the same invention.
In Sandoz at trial in the Exchequer Court, Thurlow J. found that the discovery of the usefulness of the medicinal substance thiaridazine hydrochloride and the chemical procedure for producing it represented a patentable invention, but that pharmaceutical compositions consisting of a therapeutically acceptable amount of the substance associated with a carrier represented no additional invention. On appeal Pigeon J. (at page 1339) accepted this conclusion of Thurlow J. (set out at page 35):
These last-mentioned claims, as I see it, cannot stand as claims in respect of any inventive step involved in the mixture of a substance with a carrier since there is no invention involved in such a step. Vide Commissioner of Patents v. Farbwerke Hoechst A.G. (1964 S.C.R. 49).
I agree with this conclusion of the learned trial judge and this makes it unnecessary to consider the further reasons he advanced against the validity of claims 10 and 11.
However, the additional reasons of Thurlow J. are helpful with respect to our particular perspective (at pages 35-36):
Nor can they stand as claims in respect of the invention of thioridazine itself both because claims 1 to 9 represent the full extent of the protection to which the defendant is entitled in respect of that invention and because in the context of all the claims they tend to go further than the protection to which the defendant is entitled, as defined in s. 46 of the Patent Act, in respect of the invention of thioridazine and to monopolize, independently of the other claims, compositions containing thioridazine, and thus to restrict the use of thioridazine in a particular way even by one into whose possession it may lawfully come whether by express or implied or compulsory licence.
Moreover as worded claims 10 and 11 appear to me to include not only thioridazine, but any compound produced by the process therein referred to, whether thioridazine or some by-product of the process, and on this account as well to be open to the objection that no invention corresponding in scope to the claim was made. In my opinion, therefore, the objection succeeds as to claims 10 and 11 and these claims are invalid.
I find this significant because the claims disallowed in Sandoz were in the same patent application as the compound claimed, and in many cases, as Hall J. indicated in Libbey, such claims would be valid as relating to the invention as a whole. Nevertheless in Sandoz Thurlow J. decided that these claims are of broader scope than could be justified as aspects of the invention.
This issue is further defined in Application No. 132,421, Re, where the applicant for a patent argued that, although it could not get a second patent for composition claims, it was not precluded from including composition claims in an original application together with claims for the compound. However, the principal claim was for an acid as an insecticide, and the composition claims were for the compound in admixture with solid extenders, surfactants, or aerosol propellants and granules or pellets coated or impregnated with the product. The Commissioner of Patents stated (at page 224):
We accept the proposition that an applicant is entitled to claims of varying scope to define the invention . . . . This is so that if it should be found that the inventor has claimed the invention too broadly, his narrow claims will remain to provide protection for the narrower scope of the same invention to which he is properly entitled. That is not, however, the same as saying he is entitled to claims for subject-matter which can later be put forward as covering a different invention should the main claims fall. Claims must define the invention itself, and not go beyond it. Section 36(2) of the Patent Act, R.S.C. 1970, c. P-4, is statutory authority for that statement. [Emphasis in original.]
And again (at page 228):
The issue, then, is not whether the applicant is entitled to a variety of claims (he is), nor that the rejected claims are narrower than the allowed claims (they are). The issue is how far the applicant may go in claiming his invention, and whether the refused claims properly define the invention.
The Commissioner then held that the claims in question went beyond the invention, there being an additional invention in the claims. This Court affirmed the decision on the basis that the Commissioner had correctly interpreted the law.
As this summary of the cases suggests, it is easy to distinguish Shell Oil. In two of the authorities, the claims were refused because the invention had already been patented. In the other two cases, composition claims were disallowed because the accompanying compound claims fully described the invention. In other words, the composition claims in those cases could not be said to be an aspect of the invention. This is a long way from Shell Oil, in which only composition claims were being made and in which the application of the underlying compounds was novel in the inventive sense.
Wilson J. suggested the added distinction that the three cases before Agripat all fell within section 414*ftnote4 S. 41(1) [R.S.C. 1970, c. P-4) [later s. 39(1)], was amended by R.S.C. 1985, c. 33 (3rd Supp.), s. 14, and provided that "[i]n the case of inventions relating to substances prepared or produced by chemical processes and intended for food or medicine," the specification might include claims for the substance itself only "when prepared or produced by the methods or processes of manufacture particularly described and claimed or by their obvious chemical equivalents." Dr. Harold G. Fox, The Canadian Law and Practice Relating to Letters Patent for Inventions, 4th ed., 1969, at pp. 46-77, wrote:
The reason for the section is that it was designed to prevent the appropriation by a patentee of certain substances in such a way as to preclude other explorers in the same field from devising improvements in the preparation or the quality of the substances in question . . . .
When such a substance is claimed it must be claimed by reference to a claim for the process by which it is produced and that process claim must be valid.
and questioned the rationale of this Court's decision in Agripat (at pages 552-553):
It seems to me that Mr. Justice Heald was in error when he stated that the Farbwerke Hoechst line of cases "are indistinguishable on any valid ground from the case at bar" and that the Commissioner therefore "correctly . . . interpreted and applied the principles established in those cases" to Agripat. They were, in my view, distinguishable in a very material respect, namely, that they were all cases falling within s. 41 and Agripat was not. I do not think it is possible to read those cases without concluding that one of the reasons for the rejection of the composition claims in those cases was that to allow them would permit the applicants to avoid the impact of s. 41 in respect of substances clearly falling within it. I agree with counsel for the appellant that these cases did not establish a broad principle that compositions containing new compounds mixed with an inert carrier were not patentable. They did establish, however, that no inventive ingenuity is involved in mixing a compound with a carrier. Accordingly, if the compound is patented, there is no invention in the composition. That proposition, in my view, makes eminent good sense whether the substance is covered by s. 41 or not and I think it affords an adequate basis for the result reached by the Federal Court of Appeal in Agripat.
Agripat is, of course, distinguishable from the instant case in that no claim is being made for the compounds in this case. Is the appellant correct then in saying that it has a right of election?
This Court was obviously also in error in Shell Oil Co. v. Commissioner of Patents (1980), 54 C.P.R. (2d) 183 when, relying on its interpretation of the law, it decided the case on the ground that the inventive ingenuity resided in the chemical compound itself and that the adjuvants referred to in the specification were merely inert carriers. Wilson J., however, held that "[t]he central issue in this case . . . is not directly covered by any of these authorities" (at page 547).
She therefore held (at pages 553-555):
If I am right in my earlier conclusion in relation to the compositions containing the old compounds, namely that there is inventive ingenuity in the idea of using compounds having this particular chemical structure as plant growth regulators, then the appellant's invention in the case of the new compounds did not stop with the creation of the compounds and the patenting of the compounds would not give it protection for its idea. The mixture of the compounds with the appropriate adjuvants was necessary in order to embody the idea in practical form. It cannot therefore be said that in this case there is no inventive step involved in mixing the compounds with carriers appropriate for their application to plants. It is true, as counsel for the Commissioner submitted, that once it is decided that these compounds are to be applied to plants, no inventive step is involved in selecting the appropriate carriers; they are common knowledge in the field. But I think this is to miss the point. A disembodied idea is not per se patentable. But it will be patentable if it has a method of practical application. The appellant has shown a method of practical application in this case.
. . .
There is no question as to the practical utility of the appellant's discovery. It is no more a disembodied idea than the applicant's discovery of a method of equalization of thread consumption in Hickton's Patent. It is a newly discovered means of regulating the growth of plants and is accordingly a "new and useful art" having economic value in the field of trade, industry and commerce. I find no obstacle in s. 36 or any other provision of the Act to the grant of a patent to the appellant on these compositions.
It seems to me that the appellant is clearly right in arguing that Shell Oil is distinguishable from the earlier cases; in fact, it is in my opinion supportive of them. But the appellant is nevertheless unable to make out its case, which appears to be essentially based on this Court's reasoning in Shell Oil, which was overruled by the Supreme Court. At least after Shell Oil, it must be clear that the earlier cases do not stand for the proposition that a composition claim cannot survive with a compound claim, on the ground that it involves no inventive ingenuity. As long as there is no separate invention in the compositions, there is no rule that claims to compounds and claims to compositions including them cannot be combined in a single patent.
Indeed, quite the contrary is the case. Within a single patent a variety of aspects of an invention may be claimed. It has thus been longstanding practice to permit different kinds of claims in the same patent. In this context the respondents point to the practice followed by the Patent Office since Shell Oil to accept claims to the use of a product in the form of compositions in which the product is an ingredient in the same application as claims to the product.
In my opinion the learned Trial Judge correctly concluded (at page 175):
Here the plaintiffs claim to rely upon the qualification underlying the decision of Wilson J. in Shell Oil, that is, the composition claims, while not inventive in themselves, are necessary to embody a claim for use of the compound in a practical form. Only in a practical form could the new compounds be used for the uses for which they are intended, uses claimed in other claims. That may be obvious, but in any event it was clearly stated in the testimony of Dr. Schwartz, an expert who testified on behalf of the plaintiffs.
In the Trial Judge's view the validity of the composition claims ultimately turned on the assessment of whether they meet the requirements of the Act, principally contained in section 34 for specifications in a patent. Section 34 reads as follows:
34. (1) An applicant shall in the specification of his invention
(a) correctly and fully describe the invention and its operation or use as contemplated by the inventor;
(b) set out clearly the various steps in a process, or the method of constructing, making, compounding or using a machine, manufacture or composition of matter, in such full, clear, concise and exact terms as to enable any person skilled in the art or science to which it appertains, or with which it is most closely connected, to make, construct, compound or use it;
(c) in the case of a machine, explain the principle thereof and the best mode in which he has contemplated the application of that principle;
(d) in the case of a process, explain the necessary sequence, if any, of the various steps, so as to distinguish the invention from other inventions; and
(e) particularly indicate and distinctly claim the part, improvement or combination that he claims as his invention.
(2) The specification referred to in subsection (1) shall end with a claim or claims stating distinctly and in explicit terms the things or combinations that the applicant regards as new and in which he claims an exclusive property or privilege.
The Trial Judge ultimately concluded as follows (at pages 182-184):
In the result, in regard to the defendant's allegations, I am not persuaded that claims 8, 9 and 10 of the plaintiff Merck's patent are invalid because they do not meet the specification requirements of s. 34 of the Act. Rather, I conclude that the specifications of the patent-in-suit do meet those statutory requirements.
. . .
In my opinion, the use claims 11 to 17 meet the requirements of s. 34(2) of the Act. They specify and fully describe the specific use of the compounds claimed in the patent, an antihypertensive, in a manner that cannot be misunderstood by one skilled in the art of formulating pharmaceutical compounds for prescription medicines. In the case of each claim that is the only use claimed for the compound concerned. It is clear that all other potential uses are not within the scope of the use claims.
My general conclusion in relation to Apotex's defence, and its counterclaim attacking the validity of the Merck patent claims 8 to 17 is that its defence to Merck's claims for infringement of claims 8 to 10 and 11 to 15 fails, and its counterclaim that claims 8 to 17 are invalid is to be dismissed.
In the course of coming to this conclusion, the Trial Judge had to deal with issues as to medical treatment, ambiguity, insufficiency, and redundancy. On the question of medical treatment, the Supreme Court held in Tennessee Eastman Co. et al. v. Commissioner of Patents, [1974] S.C.R. 111, that neither methods of medical treatment nor those of surgical treatment are contemplated in the definition of "invention" as a kind of process under section 2 of the Act. Tennessee Eastman was followed in this Court in Imperial Chemical Industries Ltd. v. Commissioner of Patents, [1986] 3 F.C. 40, with respect to a method for cleaning dental plaque or stains.
The question of whether a particular use amounts to a medical treatment is a factual one, which the Trial Judge resolved as follows (at page 176):
The invention, in my opinion, is not for a method or methods of medical treatment. The specification of the patent does not purport to describe such a method. It does describe a range of consumption of the compounds claimed which are perceived as useful as antihypertensives, i.e., in treating hypertension. Yet, the descriptive text of the specification acknowledges that administration of the products within the patent can only be determined for medical purposes by a person skilled in the art of prescribing medicines.
On the questions of ambiguity and sufficiency relating to subsection 34(1), it was argued by the appellant that: (1) at the time the original application for a patent was submitted in 1979 Merck had not yet developed the dosage form for any of the compounds claimed; (2) the Merck patent specification does not set out what constitutes an effective amount of the active ingredient in the composition claims; (3) the composition claims are not sufficient in specifying a pharmaceutically acceptable carrier.
In regard to the first issue, the Trial Judge found that it did not matter that Merck was not certain about some of the details of its invention at the date of its application, because the relevant date for compliance with section 34 is the date of the patent. A more fundamental reason why the appellant s argument could not succeed, is that section 34 is not concerned with the sufficiency of the inventor s knowledge. Rather, the issue is whether the information provided in the specification is sufficient to explain the functioning of the invention to a person skilled in the art. In other words, the analysis centres on what the inventor expressed in the specification, not on what the inventor knew.
On appeal, the appellant reformulated its argument on this issue. It argued that because Merck had not determined an effective amount or a pharmaceutically acceptable carrier by the date of its patent application, the invention was not complete at that date and the application was premature. However, this argument cannot succeed unless the Trial Judge erred in finding that there was no inventive ingenuity required in determining an effective amount or a pharmaceutically acceptable carrier. If every inventive step had been taken, and all that remained was to determine the dosage form through ordinary workshop effort, it cannot be maintained that the invention was incomplete at the date of the patent application.
The appellant's arguments on the second and third issues also depend on a challenge to the Trial Judge's findings of fact. On the second issue, the Trial Judge found that the term "effective amount" was sufficient to permit a person skilled in the art, here a combination of clinical physician and industrial pharmaceutical chemist, to work out a dosage amount. Therefore, the determination of the effective amount did not require an inventive step.
On the third argument the Trial Judge stated (at page 180):
Ultimately I accept the evidence of Dr. Schwartz, and I so find that for one skilled in the art of composing dosage forms the specification as here set out is in general adequate for determining the adjuvants or other ingredients to be mixed with the active compound in a pharmaceutically acceptable carrier. Whatever the shortcomings of the patent specifications may be said to be, the ultimate answer to the defendant's argument of this point, in my view, is clearly seen from the evidence of Dr. Sherman of Apotex. Even if he did not seek to rely on the specification set out in the patent, he did , by experimentation, albeit with some difficulty, develop a pharmaceutically acceptable carrier for enalapril maleate in Apotex's own APO-ENALAPRIL product. The carrier was different, on the evidence, from that developed by Merck, but there was no claim and no evidence that the carrier developed by Apotex was ineffective for the purpose intended, to provide a pharmaceutically acceptable carrier for concentrations of one of the compounds in the patent-in-suit for a prescription medicine product comparable to the Merck product and for the same use. Had Dr. Sherman not been so successful, this action would not have commenced. The circumstances of Apotex's own development belie any argument that one skilled in the art of tablet formulation could not exploit the invention upon expiry of the patent.
To succeed on any of these arguments, the appellant had to show that the underlying factual finding was based on some palpable and overriding error. This the appellant has not done. On the contrary, it is apparent from the Trial Judge's reasons that he carefully weighed the evidence before concluding that no inventiveness was required in order to determine an "effective amount" or a "pharmaceutically acceptable carrier", and this conclusion was reasonably open to him on the evidence. In the absence of a palpable and overriding error, it is not open to this Court to interfere with the Trial Judge's findings.
With respect to the requirements of subsection 34(2), the appellant argued that the composition claims were deficient in not including a reference to a difficulty encountered by both Apotex and Merck in formulating their respective products. Dr. Sherman testified that he had encountered the greatest difficulty of any product development in his experience. In particular, Dr. Sherman testified that one of the examples of a pharmaceutically acceptable carrier given in the disclosure of the patent, microcrystalline cellulose, in fact led to the unacceptable degradation of enalapril maleate. However there was also evidence before the Trial Judge, in the form of Dr. Schwartz's testimony on behalf of Merck, to the opposite effect. Again, the Trial Judge reached his conclusion on the evidence, and I was not persuaded by the appellant that on this or any other factual issue the Trial Judge had fallen into palpable and overriding error.
On redundancy the Trial Judge had this to say (at page 183):
I reiterate that I do not understand the jurisprudence, or the Act, to require each claim of a patent to be inventive in a manner independent from all other claims. Nor in this particular case are the use claims in any way redundant of the compound claims for the latter make no reference to use but simply claim the compounds set out in each of claims 1 to 7, relying for utility on that set out in the general description of the invention and in the use claims 11 to 17.
Again, I find no palpable and overriding error.
VI
In the result, the whole of the appellant's counterclaim fails. Nevertheless, the effect, especially of the analysis of Shell Oil, is to strengthen the appellant's case based on section 56, because of the emphasis on the interrelatedness of the various claims in a patent in the light of a "whole invention" approach.
The appeal should accordingly be allowed, except in relation to the three lots of enalapril maleate unperfected at the time of the issuance of the patent and the 44.9 kilograms of bulk enalapril maleate purchased in March 1993 after the licence to Delmar was terminated by statute. The counterclaim should be dismissed.
Because the appellant has succeeded in the greater part of its suit, it should receive its costs both here and below, but, in the light of its lack of complete success, in both cases only to the extent of 75%.
Stone J.A.: I agree.
Robertson J.A.: I agree.