Canadian courts have turned patent utility requirements into a test of an inventor’s ability to predict the future
Over the last decade, it has become dramatically harder for pharmaceutical companies to protect their intellectual property rights in Canada. Since 2005, Canadian courts have invalidated over 25 patents — most of them for important, beneficial medicines — based on an unusual and uniquely stringent interpretation of patent law.
This controversial rule, often called the “promise utility doctrine” or “promise doctrine” has recently come under increased fire. In March, the Canadian Supreme Court agreed to review it in AstraZeneca Canada, Inc. v. Apotex, Inc., a case in which the lower court invalidated the Canadian patent for AstraZeneca’s widely used gastrointestinal reflux drug Nexium.
The promise doctrine of utility is Canada’s unique take on a standard requirement in patent law that an invention must be “useful” or “capable of industrial application.” The fact that these drugs are widely prescribed and used by people would seem to indicate their usefulness. Indeed, that fact alone would likely go a long way toward demonstrating usefulness or “utility” in most countries.
Canada’s utility doctrine is out of step with the rest of the world, and it is placing significant burdens on innovators
Not so in Canada, where the courts have turned utility into a test of an inventor’s ability to predict the future. Under the promise doctrine, patent owners must be able to demonstrate or “soundly predict” at the time they apply for a patent exactly how their inventions will be useful when fully developed as commercial products.
This test puts things backwards. An invention and the patent on it are only the first step on the way to a useful commercial product. Innovators rely on patents to secure the investment they need to fully test and commercially develop their inventions into products. Businesses and investors need a patent before spending money on the testing required to develop an invention into a safe and effective commercial product.
In most countries, the utility requirement is the least demanding of the requirements for getting a patent. Unlike Canada, other countries do not require a patent applicant to provide proof that the invention will actually fulfill its “promise.” They are much more lenient, speaking in terms of mere “plausibility” (Europe) or a utility that is “credible” or “not so vague as to be meaningless” (the U.S.). Preliminary testing, such as early stage research conducted on animals, usually suffices to establish credibility.
Canada’s utility doctrine is out of step with the rest of the world, and it is placing significant burdens on innovators. The consequences are particularly harsh for the pharmaceutical industry. Canadian courts have voided patents because the inventor did not have proof that widely prescribed medicines did not perform exactly as predicted in the original patent application. To compound this problem, the Canadian courts perversely forbid patent owners from proving that the patent actually has met its “promise” by submitting data that was developed in clinical trials after the application.
Canada is making impossible demands of pharmaceutical innovators. It’s not fair to ask innovators to know and demonstrate the exact usefulness of a drug when they apply for a patent. Innovators spend many millions of dollars getting that knowledge and proof through extensive clinical and other testing in order to perfect a drug and get government safety approval before marketing it. Innovators cannot make this investment without the security of patents to give them an opportunity to recoup their investment before competitors are allowed to copy their innovation.
The final test of a medicine’s usefulness is the open market.
Pharmaceutical innovators in Canada now face a Catch 22. One choice is to file their patent based on initial pre-clinical testing and risk having their patent subsequently revoked for not demonstrating the precise promise specified in the patent application. The other choice is to apply after undergoing lengthy clinical trials to demonstrate the promise, and risk the patent being denied in Canada and other countries for lack of novelty. It’s an unfair and galling situation.
Even beyond clinical trials, the final test of a medicine’s usefulness is the open market. If physicians consider the medicine useful, they will prescribe it, or government health-care systems will procure it. If the medicine lacks utility, then it will fall by the commercial wayside. Invalidating a patent on a drug that has made it through the patent office, experimental development, and regulatory approval thus serves no public purpose.
The bottom line for Canadian consumers is that the legal uncertainty provoked by the promise doctrine means that they are less likely to enjoy innovative products and the benefits and jobs they generate. Canadian judges and policy-makers need to restore certainty to Canada’s distorted patent system to ensure that innovators from Canada and around the world will continue to provide new medicines and other innovative products to Canadian consumers.
Philip Stevens is director of Geneva Network. Mark Schultz is Co-Founder and Senior Scholar at the Center for Protection of Intellectual Property at George Mason University School of Law, United States.
