Life sciences in Canada: 2024 year in review

The Canadian life science sector saw several significant developments in 2024. This article highlights key decisions, guidance and regulatory changes that impacted the patent landscape over the past year.

1. Guidance from the Federal Court of Appeal

2. Patented Medicine Prices Review Board (PMPRB) developments

3. Federal Court decisions

4. Other guidance provided by the Courts

5. Regulatory considerations

1. Guidance from the Federal Court of Appeal

Pharmascience Inc v Janssen Inc, 2024 FCA 23: The Federal Court of Appeal addresses the law on methods of medical treatments

Pharmascience’s appeal argued that the Federal Court erred in upholding the validity of Janssen’s patent listed against its INVEGA SUSTENNA® (paliperidone palmitate). Pharmascience argued the patent should be invalidated as unpatentable subject-matter for being directed to a method of medical treatment. The claims at issue were directed to the use of a fixed time and fixed dosage regime for administration of paliperidone palmitate.

After reviewing the law, the Court of Appeal stated:

[37] To summarize, whether or not a patent claim to a dosing regimen relates to a method of medical treatment cannot be based exclusively on whether its dosing and schedule is fixed or not. The proper inquiry remains whether use of the invention (i.e., how to use it, not whether to use it) requires the exercise of skill and judgment, and the burden remains on the party challenging the patent. It is difficult to provide more detailed guidance than this for parties involved in future litigation and courts faced with allegations of invalidity of patent claims due to unpatentable subject matter, namely methods of medical treatment. Such allegations will generally turn on the particulars of the case and the evidence on the record.

The Court dismissed Pharmascience’s appeal finding the Federal Court did not err in its decision. Pharmascience has since been granted leave to appeal to the Supreme Court of Canada (Pharmascience Inc. v. Janssen Inc., et al., 2024 CanLII 88324 (SCC)), with a hearing expect in late-2025 at the earliest.

Read the full decision here.

Pharmascience Inc v Janssen Inc, 2024 FCA 10: Purchase of a patented product and subsequent use in a patent process constitutes direct infringement; and

Apotex Inc v Janssen Inc, 2024 FCA 9: A generic manufacturer’s product monograph can be sufficient to establish infringement by inducement

The Federal Court of Appeal was also seized of two further appeals relating to the patent listed against INVEGA SUSTENNA® product. The appeals arise from separate motions for summary judgment where the Federal Court found that Pharmascience and Apotex would infringe Janssen’s patent by inducement.

In both decisions, the Court reaffirmed the Corlac test for inducing infringement:

There is a three “prong” test for inducement: (1) direct infringement by a third party; (2) the inducer influenced the third party to the point that the infringing act would not have occurred without the influence; and (3) the defendant knew that its influence would bring about the infringing act [Corlac Inc. v. Weatherford Canada Ltd., 2011 FCA 228 [Corlac]].

In its appeal, Pharmascience argued that the Federal Court incorrectly determined that the first step of the Corlac test was met. Pharmascience had argued that since it would not be selling a 75-mg dose of paliperidone, an essential element of the claimed dosage regime, it could not induce infringement as the purchaser had an implied license from the seller of the 75-mg dose to use that dose in any manner after its purchase. This implied license would include a dosage regime in combination with Pharmascience’s offered dosages of paliperidone, even if that dosage regime infringed the claims. Pharmascience, maintained this argument on appeal.

The Court of Appeal dismissed Pharmascience’s appeal. The Court of Appeal stated that there was no reason to conclude that either Janssen or its customers would have assumed there to be an implied license to the use of a patented dosage regime as a result of the sale of a non-patented component of the patented dosage regime.

The Court of Appeal relied upon MacLennan and Angelcare, stating that “In both cases, the patented invention constituted a combination invention and therefore, the sale of a mere component of it was insufficient to grant the implied right to use the entire combination. To grant an implied licence, the sale of the entire combination had to occur, or at least, as in Slater Steel, the parties’ intended use of the component at the time of sale contemplated its use in the patented combination.”^[1]

Read the full Pharmascience decision here.

In the corresponding Apotex appeal, Apotex argued that the Federal Court incorrectly determined that the second step of the Corlac test was met. Apotex had argued that dosing is based on a physician’s skill and judgment, as opposed to the language of the product monograph. Additionally, Apotex argued that physicians would not be sufficiently influenced by the Apotex product monograph due to physicians existing familiarity with Janssen’s INVEGA SUSTENNA® product, as the Apotex product monograph was essentially a copy of the Janssen product monograph. The Federal Court disagreed and found that Apotex would influence third parties to infringe, relying on the finding of fact that patients would receive the claimed dosage regime because of Apotex’s product monograph, which recommends the claimed dosage regime.

The Court of Appeal dismissed Apotex’s appeal and noted that, as a factually suffused issue, Apotex did not establish any palpable and overriding error.

In addressing Apotex’s arguments, the Court stated that “[i]t is important to bear in mind that the ultimate act of direct infringement in the present case could be either by a prescriber (e.g. a physician or a nurse practitioner) or by a patient,” and that “[i]t is also important to understand that inducing patent infringement can occur even where there is no direct contact between the inducer and the direct infringer.”

As such, the Court of Appeal stated that is was open for the Federal Court to conclude a sufficient level of inducement was present due to the product monograph “even if the practices of prescribing physicians were to remain unchanged following the introduction to the market of Apotex’s generic version of INVEGA SUSTENNA, [as] the fact would remain that activities by patients (and by prescribers) that had previously been non-infringing (because the drug was sourced from Janssen) would be infringing once the drug was sourced from Apotex.”

Read the full Apotex decision here.

Bayer Inc v BGP Pharma ULC, 2024 FCA 29: Minister has sole jurisdiction for decisions under section 5 of the PM(NOC) Regulations; new owner of currently filed drug submission maintains benefit of previously delivered NOA

The Federal Court of Appeal dismissed Bayer’s appeal of a judicial review brought before the Federal Court regarding a decision by the Minister of Health. In the underlying decision, the Minister determined that BGP Pharma was entitled the benefits of section 5 of the Patented Medicine (Notice of Compliance) Regulations (the “PM(NOC) Regulations”), including prior service of the Notice of Allegation, by way of transfer of ownership of the underlying drug submission.

The Court of Appeal stated that the correct standard of review, reasonableness, was selected by the Federal Court as decisions under section 5 of the PM(NOC) Regulations lie solely with the Minister, and, as opposed to section 6 of the PM(NOC) Regulations where the Federal Court’s role is the first instance decision-maker, there is no concurrent jurisdiction of the Federal Court under section 5.

Read the full decision here.

Agracity Crop & Nutrition Inc. v UPL NA Inc, 2024 FCA 133: Disclosure requirement for anticipation is a difficult test to meet

Agracity appealed the decision of the Federal Court that held the respondent’s patent valid and infringed and awarded the respondent a disgorgement of profits. Agracity appealed the Court’s decisions with respect to anticipation and obviousness. The patent at issue is directed toward the discovery that flucarbazone sodium, a previously disclosed herbicide, found to be a selective herbicide (i.e., selectively kills weeds with minimal damage to the desired crop).

On appeal, Agracity argued that a prior patent, which disclosed flucarbazone sodium as one of hundreds of herbicides, anticipated the patent at issue. The Court of Appeal dismissed this ground of appeal stating that “though flucarbazone sodium is among the many herbicides contemplated in the 486 and 636 Patents, and though these patents state that some of said herbicides are selective against certain weeds in certain cultures depending essentially on the amount used, this is not sufficient to meet the high bar of the disclosure requirement for anticipation.”^[2] The prior patent lacked disclosure of the inventive selectivity components claimed in the patent at issue and, therefore, the skilled person would not be led to the invention in every case and without possibility of error.^[3]

With respect to obviousness, Agracity argued that the Federal Court incorrectly construed the inventive concept of the claims, by not considering each claim individually in its reasons, and that it had comingled the tests of anticipation and obviousness. However, the Court of Appeal rejected these arguments and dismissed Agracity’s appeal with respect to obviousness.

Read the full decision here.

2. Patented Medicine Prices Review Board (PMPRB) developments

Galderma Canada Inc v Canada (Attorney General) 2024 FCA 208: FCA clarifies scope of PMPRB jurisdiction

In this decision the Federal Court of Appeal reversed the underlying decision of the PMPRB. In the underlying decision, the PMPRB demanded pricing information for Galderma’s DIFFERIN (0.1% alapalene) product for the years 2010-2016 despite the related patent expiring in 2009. The PMPRB asserted jurisdiction over this information as it determined Galderma’s 237 Patent, which was related to DIFFERIN XP (0.3% alapalene) and expired in 2016, was “related” to DIFFERIN XP under the PMPRB Regulations.

The Court of Appeal found that the 237 Patent (to 0.3% alapalene as found in DIFFERIN XP) was not capable of being “related” to DIFFERIN. The Court noted that the jurisprudence was clear in that the PMPRB does not have authority to compel information related to unpatented medicines. At paragraph 10, the Court stated,

[10] By making that order [to request pricing information regarding DIFFERIN for the years 2010-2016], the Board crashed through the constitutional, statutory and jurisprudential guardrails. Or to use the more orthodox, formal, administrative law language in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [2019] 4 S.C.R. 653, the Board exceeded the constraints acting upon it—some pretty clear, longstanding and well-established ones too. Thus, the Board’s order must be set aside.

Read the full decision here.

New PMPRB guidelines

Following its Phase 2 Consultations, the PMPRB released its latest Draft Guidelines on December 19, 2024. These guidelines are directed at administrative staff. The consultation period on these guidelines is open until March 19, 2025.

Once finalized, these guidelines set out an administrative review process that will be used by the PMPRB to identify which drugs should be subjected to an excessive pricing hearing. The guidelines discuss initial review, annual reviews, and in-depth reviews of drug pricing that will be performed by the PMPRB.

When a patented medicine is sold for the first time in Canada, the PMPRB will assessing the pricing of the drug through an initial review. All patented medicines in Canada will then be subject to annual reviews that will be used to determine if in-depth reviews are required. During the annual review, prices will be compared to international prices and the Consumer Price Index. 

Read the draft guidelines for administrative staff here.

3. Federal Court decisions

Takeda Canada Inc v Apotex Inc, 2024 FC 106: Patent not infringed

This was an action brought by Takeda under s 6(1) of the PM(NOC) Regulations alleging infringement of Canadian Patent No. 2,570,916 (the “916 Patent”) with respect to Apotex’s generic version of Takeda’s dexlansoprazole product, DEXILANT®. Apotex denied infringement and, in defence, asserted that thee 916 Patent was invalid.

The 916 Patent was directed to a new, oral dosage form of dexlansoprazole whereby the dexlansoprazole is released in two separate events (dual pulse release), to maintain a threshold blood plasma concentration of dexlansoprazole. The Apotex Product was a single type of dexlansoprazole mini-tablets inside a capsule. The Court found that the Apotex Product delivered dexlansoprazole in a continuous manner and, therefore, did not infringe the 916 Patent.

The Court also held that the 916 Patent did not sufficiently disclose the factual basis for its sound prediction of utility. The Court found that the examples provided in the patent on intravenous dosing were insufficient to ground the prediction that a dual pulse release would result in the sustained blood plasma concentration, as claimed.

The Court dismissed Apotex’s allegation of invalidity for anticipation and obviousness. With respect to anticipation, the Court found that the cited prior art document did not contain pharmacokinetic data such that it did not anticipate the 916 Patent that specifically claimed a threshold blood plasma level (a pharmacokinetic result). With respect to obviousness, the Court found the 916 Patent to be inventive as there was no motivation or starting point found in the state of the art for the person of skill to design a dosage form around a threshold plasma concentration and the relationship between plasma concentration and a desired pharmacological effect.

Read the full decision here.

Medexus Pharmaceuticals Inc v Accord Healthcare Inc, 2024 FC 424: Obviousness determinative of the issues

Patent licensees Medexus Pharmaceuticals and Medexus, and patent owner Medac GMbH (together, the “Plaintiffs”) brought this action for patent infringement against Accord Healthcare, a subsidiary of Intas Pharmaceuticals (together, the “Defendants”). The Plaintiffs manufacture and sell pre-filled syringes containing 50 mg/mL methotrexate solution for parenteral administration. The Plaintiffs alleged that Accord’s products, manufactured by Intas, a syringe pre-filled with a 50 mg/mL methotrexate solution and an injector device pre-filled with a 50 mg/mL methotrexate solution, infringe the asserted claims of Canadian Patent No. 2,659,662 (the “662 Patent”). Accord alleged various grounds of invalidity in defence.

Infringement was admitted and the Court found that the patent was invalid for obviousness. The 662 Patent was directed to the use of methotrexate in 50 mg/mL concentrations for the treatment of autoimmune diseases by subcutaneous injection. Some of the claims were directed to pre-filled syringes for this use.

The Court found the only inventiveness to the claims was the increased concentration of the methotrexate formulation that, in turn, allowed for smaller injection volumes. The Court accepted the Defendant’s characterization of the state of the art, that the skilled person would have known that (1) pre-filled syringes of methotrexate existed with lower concentrations; (2) methotrexate solutions of 50 mg/mL were stable; (3) up to 40 mg/mL dosages were used by injection to treat IADs; and (4) higher concentrations and dosages of methotrexate were used for cancer treatments.

As such, the Court found that the skilled person, able to pursue reasonable and logical enquiries, would be able to bridge the gap without inventive ingenuity to be able to provide a formulation for 50 mg/mL to reduce the total injectable volume making the asserted claims of the 662 Patent obvious and invalid

Read the full decision here.

4. Other guidance provided by the Courts

The following summarizes key take aways from additional decisions by the Courts relevant to life sciences litigation.

Glaxosmithkline Inc v Pharmascience Inc, 2024 ONSC 2366: “Sale” in pharmaceutical settlement agreement refers to “ex-factory sales” rather than “downstream sales”

As a result of long-standing patent litigation in respect of the GSK VALTREX® and generic challenges, GSK, Pharmascience and Apotex entered into a settlement agreement. As part of the agreement, if additional generics entered the market, namely Teva, Sandoz or Sorres, it would trigger a payment clause whereby Pharmascience and Apotex would owe GSK an amount specified in the contract. However, an exception clause would prevent this payment if one of Teva, Sandoz or Sorres were on the market by or entered the market within 3 months after a specific “Withdrawal Date,” and stayed on the market for no more than a 60-day period, as determined by the dates of the first and last sale of their valacyclovire product in Canada.

It was undisputed that Teva entered and directly sold its generic valacyclovire product before and including the specified “Withdrawal Date.” The ONSC determined that this triggered the payment clause. The dispute centered around if “first and last sale” meant the direct sales by Teva into the market, the “ex-factory sales,” which would mean the exception clause was operative, or if “first and last sale” meant the further downstream sales of the Teva product (i.e., from wholesalers to pharmacies, or pharmacies to patients), the “downstream sales,” which would mean the exception clause would not be operative and payment would be due to GSK.

As a matter of contractual interpretation, the ONSC found that to give effect to the settlement agreement, “first and last sale” only referred to “ex factory sales.” The ONSC stated that this was consistent with the other clauses in the contract and what would have been reasonable contemplated by the parties as the “downstream sales” would be outside of the control of any of the parties.

Read the full decision here.

Pharmascience Inc v Janssen Inc, 2024 FC 335 and Pharmascience Inc v Janssen Inc, 2024 FC 336: Privilege is not easily waived in discovery contexts

Pharmascience brought this appeal alleging that the Court erred in denying part of Pharmascience’s motion to compel answers from discovery (2024 FC 335). The motion to compel was brought in relation Pharmascience’s action for damages brought under section 8 of the PM(NOC) Regulations.

Notably, Pharmascience sought answers regarding settlement agreements and U.S. litigation. The Court upheld the underlying decision that refused to compel answers of questions regarding U.S. settlement agreements. The Court held that settlement privilege still applies to these agreements and surrounding negotiations

Pharmascience’s subsequent motion, 2024 FC 336, sought an order for a substitute representative be made available for examination for discovery. Janssen’s corporate representative retired and Janssen planned to use a different corporate representative for the permissible follow up and second round examinations for discovery. The Court found that there was no evidence Janssen’s new corporate representative was not incapable as serving as corporate representative, Janssen is entitled to choose its corporate representative for discovery, and that the motion was brought prematurely as Pharmascience had yet to examine Janssen’s new corporate representative. witness even being examined,[4] and wished to compel Janssen to produce one of its in-house lawyers as their discovery witness. However, this would have required a waiver of privilege, which Pharmascience did not establish.[5]

Pharmascience, in the same motion, also sought an order that would prevent Janssen from raising objections to questions asked in examination for discovery based on privilege as they have waived privilege from answers already given related to prior settlement agreements. The Court found that Janssen had not waived privilege and dismissed this part of the motion as well.

Read the motion to compel decision here.

Read the motion to substitute a discovery witness here.

Bayer Inc. v. Amgen Canada Inc., 2024 FC 1849: Delisting of patent due to it not specifying use in SNDS

Amgen brought this motion under section 6.07(1) of the PN(NOC) Regulations seeking a declaration that Bayer’s 276 Patent was ineligible to be listed on the Patent Register against Bayer’s drug EYLEA® (aflibercept). The Court applied the test set out in Abbott v Canada, 2008 FCA 354: (i) what use is claimed in the patent; (ii) what is the change in use approved by the NOC issued in response to the SNDS; and (iii) does the patent claim the very change in use approved by the NOC issued in response to the SNDS.

The Court granted Amgen’s motion, finding that: (i) the 276 Patent claimed the use of 2-mg aflibercept injections in patients with the claims SNPs; (ii) the change in use was to provide a treating physician with a second treatment option during year one; and concluded that the patent was ineligible for listing as (iii) the change of use was provided for all patients while the use in the patent was directed to only those patients with specific SNPs.

Read the full decision here.

5. Regulatory considerations

Patent Term Adjustment Regulations came into effect January 1, 2025

Amendments to the Patent Act and corresponding amendments to the Patent Rules, Patented Medicines (Notice of Compliance) Regulations, Certificate of Supplementary Protection Regulations, and the Patented Medicines Regulations came into effect on January 1, 2025 (see the Canada Gazette and the Order in Council) allowing for a Patent Term Adjustment, i.e. extension of the expiry of a patent due to prosecution delays from the Patent Intellectual Patent Office (CIPO).

To be eligible for a PTA the filing date of the patent must be on or after December 1, 2020, and the patent must have been issued after the later of (i) three years from the date examination was requested or (ii) five years after the national phase entry, division presentation, or filing date.

Patent applicants should be aware that the new Regulations subtract many days from the length of a PTA. One such subtraction is for any days taken to respond to CIPO notices, e.g. examiner reports (office actions), notices, etc.

Read our full summary here and our comments here.

Timing considerations for patent listing

EMD Serono v Canada (Health), 2024 FC 1848: Patents are added to the Register on the date the Minister finds it eligible for listing, not the date Form IVs are submitted

The timing of events leading to this judicial review of the Minister of Health’s decision is important:

March 7, 2023: EMD Sorono’s 419 Patent was granted.

March 16, 2023: EMD Sorono submits patent list (Form IV) to the Minister of Health and Health Canada for listing on the register against its drug MAVENCLAD®.

March 17, 2023: Health Canada screened the submitted patent list.

March 21, 2023: Health Canada conducted preliminary analysis eligibility for listing.

March 22, 2023: Apotex filed its regulatory submission for its generic version of MAVENCLAD.

March 23, 2023: Minister of Health informs EMD Sorono that its 743 Patent was added to the Register as of this date.

As a consequence of this timeline, Apotex was not required to address the 743 Patent in its NOA. EMD Sorono request that, and the Minister of Health declined to, adjust the date to either the date of submission or to March 21 – the date Health Canada recommended to the Minister the patent was eligible for listing – such that Apotex would have to address the 743 Patent in its NOA.

EMD Sorono brought this application for judicial review regarding the Minister’s decision to not adjust the date. EMD Sorono alleged that the Minister’s decision was unreasonable as (i) the submission date is the correct date to use; and (ii) there was unreasonable delay between the recommendation to list (March 21) and the actually listing (March 23).

Both grounds were rejected by the Court. First, the Court found that, as a matter of statutory interpretation, the correct date is the date the Minister approves the listing for the Register, not the submission date or when there is an internal recommendation to the minister. Second, the Court found that there was no unreasonable delay in the Minister finding the 743 Patent eligible for listing – a statutory assessment that the Minister must make.

Janssen Inc v Canada (Attorney General), 2024 FCA 66: CUSMA did not alter the definition of innovative drug

The Federal Court of Appeal dismissed Janssen’s appeal of the Federal Court’s decision to reject Janssen’s judicial review of the Minister of Health’s decision that Janssen’s nasal spray, SPRAVATO®, was not an innovative drug under the Food and Drug Regulations, and, consequently, not entitled to data protection.

In dismissing the appeal, the Court of Appeal stated that the Federal Court was correct in determining that the Canada-United States-Mexico Agreement (effective July 2020) does not alter the interpretation or definition of innovative drug as found in subsection C.08.044.1(1) of the Food and Drug Regulations, as established by the Court of Appeal’s jurisprudence.

Read the full decision here.

JAMP Pharma Corporation v Janssen Inc, 2024 Comp Trib 8: First leave application for abuse of dominant position fails due to lack of evidence

JAMP sought leave to file an application with the Competition Tribunal under section 103.1 of the Competition Act, alleging that Janssen was abusing its dominant position in the market with respect to its drug STELARA® (ustekinumab), contrary to section 79(1) of the Competition Act. JAMP alleged that Janssen had engaged in “sham” litigation, further abused its dominant position through marketing FINLIUS, and made misleading statements to consumers, among other allegations.

The Tribunal concluded that JAMP did not have to adduce evidence that its entire business was affected, based on the wording of section 79, “class or species of business.” This is distinguished from applications brought under section 75 or 77 where the applicant must adduce evidence that its entire business is affected under those sections. However, JAMP nonetheless failed to meet the required threshold for leave.

To be granted leave on this application, the Tribunal stated that JAMP had to adduce sufficient, credible, and cogent evidence that there is “reason to be believe” or that there is a “bona fide belief” that the applicant’s business is directly and substantially effected by the alleged conduct and that such conduct could be subject to an order under section 79. The legal threshold is less than a “balance of probabilities.” JAMP failed to meet this low evidentiary bar with respect to all its allegations and the application for leave was dismissed in its entirety.

Read the full decision here.