In Eli Lilly Canada Inc. v. Apotex Inc. (2009 FCA 97), the Federal Court of Appeal (FCA) upheld the Minister of Health’s decision to issue a Notice of Compliance (NOC) to Apotex in respect of Eli Lilly’s osteoporosis drug containing the active ingredient raloxifene. The Federal Court (FC) had originally dismissed (2008 FC 142) Eli Lilly’s application to prohibit the Minister from issuing the NOC, pursuant to subsection 6(1) of the Patented Medicines (Notice of Compliance) Regulations (PM(NOC) Regs), until after expiry of Eli Lilly’s Canadian Patent No. 2,101,356 (‘356 Patent). In affirming the FC’s decision, the FCA confirmed that data underlying a sound prediction must be disclosed in a patent relying on that prediction.

At trial, the FC held that Apotex’s allegation that the ‘356 Patent lacked sound prediction because it lacked adequate disclosure were justified as were allegations that claims of the ‘356 Patent are broader than the disclosed invention for three claims, but not a fourth. Eli Lilly challenged the decision on the basis that the FC committed legal and factual errors in holding disclosure to be inadequate, that the FC breached a duty of procedural fairness by disposing of the application o the basis of a ground not alleged, and that the FC judge erred in adopting a sound prediction approach to the analysis.

Dealing first with whether the ‘356 patent was based on a prediction, the FCA noted that the FC’s finding on this issue is one of fact. After construing the claims, the FC turned to whether disclosure was adequate such that a person skilled in the art could practice the invention or soundly predict that it would work. The FC held that the ‘356 Patent disclosed that raloxifene had known estrogen treatment uses and it’s manufacture was known, that studies on rats fed raloxifene showed prevention of bone loss with minimal increase in uterine weight, and that contemplated studies on post-menopausal women were expected to show that raloxifene was effective in inhibiting bone loss. The FC also found that the prior art paralleled this disclosure. However, the FC noted that the ‘356 Patent merely claimed that raloxifene is appropriate for humans without supporting disclosures. On those findings, the FCA thought it clear that the ‘356 Patent was based on prediction since only a prediction could allow the link from the positive rat studies to successful treatment of women, particularly estrogen-deficient post-menopausal women suffering from bone loss.

Next, the FCA turned to whether underlying data is required to support a sound prediction. This argument arose because a Hong Kong study of 251 post-menopausal women upon which the sound prediction was predicated was not disclosed in the ‘356 Patent, with the result that “the underlying factual basis for the prediction and the sound line of reasoning that grounded the inventors’ prediction were not disclosed. Eli Lilly accepted at hearing that this study was required in order to make the predication a sound one.

Recalling the emphasis the Supreme Court of Canada (SCC) placed on the disclosure obligation in recent years and the three requirements for a sound prediction the SCC set out in Apotex Inc. v Wellcome Foundation Ltd. (2002 SCC 77) (AZT), the FCA held that there is a “heightened obligation to disclose the underlying facts and the line of reasoning for inventions that comprise the prediction” in sound prediction cases. “[W]hen a patent is based on a sound prediction, the disclosure must include the prediction.”

Since the FC made no legal error, the factual decision of whether or not a prediction is sound required a palpable and overriding error to justify intervention. Eli Lilly properly accepted that the undisclosed Hong Kong study was necessary to make the prediction underlying ‘356 Patent sound. On the facts, it was open to the FC to find that the ‘356 Patent did not provide any more disclosure than was available in the prior art, which did not yet provide a sound basis for the prediction.

The FCA also dismissed the argument that requiring underlying data modifies the disclosure requirement set out in Patent Cooperation Treaty because
Article 27(5) of this treaty contemplates the supremacy of national laws for substantive patentability conditions.

Finally, the FCA rejected the argument that the FC breached procedural fairness by disposing of the application on the basis of inadequate disclosure due to the failure to include the underlying data. In their Notice of Allegations, Apotex did in fact place the lack of a sound prediction, specifically the lack of disclosure of human data in the ‘356 Patent, in issue.