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Canadian
Biotechnology & Pharmaceutical Law Bulletin
Volume 1 - January, 1996
This newsletter is not intended to constitute a legal opinion on any of the issues
discussed. Readers should seek professional legal advice on issues of concern to them - we
would be pleased to elaborate on any of the articles herein and discuss how it might apply
to specific problems. Contact us for more information.
Is It a Secret?
Trial judgment in drug companies trade secrets case set aside
Earlier this year, a Manitoba trial judge ruled that Jagroop Dahiya, a top
pharmaceutical biologist formerly in the employ of Apotex Fermentation Inc., was liable
for wrongful use of trade secrets belonging to his former employer. That decision has been
set aside by the Manitoba Court of Appeal, and sent back for a new trial.
Dahiya became employed with Apotex in December 1989 at which time a research agreement
was signed giving Apotex ownership of any inventions or patents that Dahiya might produce.
While at Apotex Dahiya developed a "DNA transformation process" (DTP).
Dahiya left Apotex in October 1991 and joined Novopharm Biotech. Dahiya helped
Novopharm to produce five kilograms of Lovastatin, a generic anti-cholesterol drug
patented by Merck in 1984, using the DTP process that he had developed at Apotex.
Apotex was notified of Dahiya's contract breach and decided to conduct a court-ordered
raid on Novopharm. It was thereby discovered that not only had Dahiya been using the DTP,
but that he also had laboratory notes detailing optimal growing conditions for fungus, and
a formula for growing fungus known as "Y-5". Additionally, Dahiya had shown
Novopharm's researchers a "hot toluene" extraction process used to collect
Lovastatin. All of this information had been developed at Apotex.
The trial court ruled that the DTP, the formula for the fungal-growing medium, the
laboratory notes, and the extraction process were all Apotex trade secrets that Dahiya was
under contract not to disclose. The Court also held Novopharm responsible for the
information leak in that the company did nothing to deter Dahiya from using this
information. Apotex was awarded $3.7 million and Novopharm received a world-wide
injunction barring it and Dahiya from Lovastatin research until January 1, 1998.
Mr. Justice Monnin of the Manitoba Court of Appeal has ordered the judgment against
Novopharm be set aside and the matter sent back to trial on the basis of new evidence. The
new evidence, which came to light a number of days after the trial judgment, revealed that
a U.S. patent had issued to Apotex on the Y-5 technology. Apotex had not revealed the
existence of the patent during the initial trial.
Novopharm argued in the Court of Appeal that since the formula was in the public domain
in the form of a patent document, it could not be a trade secret.
Apotex attempted to argue that they did not realize that the Y-5 formula was disclosed
in the patent filed April of 1993. The appeals judge did not accept this argument.
Apotex plans to appeal the decision.
Applying for Judicial Review of a Decision of the Commissioner of Patents:
Cangene Corporation v. Eli Lilly and Company et al., September 26,
1995 - Federal Court Trial Division, Jerome A.C.J.
HELD: There is no basis in the Patent Act nor any of the accompanying rules
which would give a third party standing to bring a judicial review application against a
decision of the Commissioner of Patents. The patent applicant's application and all of the
proceedings related thereto are confidential, and a decision of the Commissioner is not
available to anyone else without the express approval of the applicant. A voluntary
publication of the Commissioner's decision by the applicant cannot be considered a waiver
of the applicant's statutory rights, nor to confer any status on a third party.
Defining "Biotechnology"
Astra Aktiebolag et al. v. Aastra Corporation, et al., February 3,
1995 - Federal Court Trial Division, Jerome A.C.J.
This was an appeal from an order of Giles, A.S.P. which required the plaintiffs to
provide particulars of the word "biotechnology". The Court reviewed the standard
of review to be applied to a discretionary decision of a prothonotary along with the rules
governing particulars.
HELD: The Court referred to the decision of the Supreme Court of Canada in Pioneer
Hi-Bred v. Canada (Commissioner of Patents), [1989] 1 S.C.R. 1623, where the Court
found it necessary to define the type of biotechnological processes under consideration in
addressing the patentability of a life form. The term "biotechnology" does not
yet have well-defined boundaries and the term's definition, context and limitations must
be stated each time it is used.
Patented Medicines:
Removal of Process Patents from the Health Canada Notice of Compliance Patent
Registry
In 1993, amendments to the Patent Act resulted in a scheme whereby patentees
could list on a Health Canada patent registry, a Ministry distinct from the Patent Office,
their patents that involved medicines for which they were seeking a Notice of Compliance.
Subsequent parties seeking a Notice of Compliance for the same medicine had to demonstrate
to Health Canada that they were either a licensee of the relevant patents or did not
infringe those patents listed on the registry. If a third party could not do this, then
the patentee was contacted and allowed to seek an order prohibiting the Minister of Health
from issuing a Notice of Compliance, thereby effectively delaying a third party's entry
into the market.
Health Canada has recently issued a letter informing certain patent holders that they
will be removing process patents from the Health patent registry and will prevent their
inclusion in the future. This change in position is based upon recent decisions of the
Federal Court of Canada and the Federal Court of Appeal that appeared to indicate that
process patents were not to be included on any patent list that is submitted to Health
Canada for inclusion onto the patent registry.
Health Canada is having its patent registry audited by the Canadian Intellectual
Property Office (CIPO) to identify process patents. Patent holders who have listed process
patents on the registry are being informed in writing that the Drugs Directorate will
remove those patents in 30 calendar days from the date of receipt of written notification,
subject to any written representations that the patent holder may wish to make to CIPO
prior to that date. If no representations are made within the thirty day period, or if
CIPO remains of the view that the patent is a process patent after taking the submissions
into account, the patent will be removed from the registry.
This policy does not apply to patents that are the subject matter of cases before the
Courts, pursuant to the Patented Medicines (Notice of Compliance) Regulations.
PMPRB to Continue to Monitor Prices following 'Dedication'
The Patented Medicine Prices Review Board (PMPRB) is a quasi-judicial tribunal that
monitors and fixes the price at which patented medicines can be sold in Canada. The PMPRB
has recently stated concern with the pharmaceutical industry practice of 'dedication' of
patents. In an attempt to avoid the jurisdiction of the PMPRB the pharmaceutical companies
have tried 'dedicating' certain patents to the public domain, or abandoning them. The
argument then put forward by the pharmaceutical companies is that they cease to be
patentees within the jurisdiction of the Board.
The PMPRB suggest that the only reason for these dedications is to avoid the Board's
jurisdiction over the prices of patented drugs. In late 1995, the PMPRB announced that it
will continue to assert its jurisdiction in the period following the dedication of a
patent, until the patent would normally expire. This will apply to medicinal patents
issuing on or after January 30, 1995.
The Novelty of Combination Patents:
Cochlear Corp. v. Cosem Neurostim Ltée - October 13, 1995 - Federal
Court Trial Division, Joyal J.
This was an application on the grounds of patent infringement - the plaintiff held a
patent for a type of an implantable tissue-stimulating prosthesis which overcame deafness,
through a method of electrical stimulation. The defendant manufactured a very similar
system, which plaintiff contended was infringing their patent. The defendant argued that
their item was distinguishable, as well as that the applicant's patent should not have
been allowed because it was made up of a combination of previously known elements and as
such did not represent novel patentable subject matter.
HELD: A combination of a number of previously known elements, where not obvious to a
person skilled in the particular art at the time of the invention, was a novel and
patentable idea. The defendant's device operated in the same manner as and imitated in
substance the invention claimed in the plaintiff's patent, and given that the plaintiff's
patent was valid since it did consist of novel matter there was an infringement.
Microbiological Processes for Foods and Medicines:
Patent Act Section 39(1) expires, allowing consideration of product claims
The former section 39(1) of the Patent Act, which did not allow patent
applicants to claim the resulting products in conjunction with their microbiological food
and medicine processes, has expired. As such, the Patent Office is now considering
applications making claims which would have been barred by section 39(1), and applicants
who had applications held up in the Patent Office by virtue of the operation of this
section have been advised by the Patent Office that they may bring such applications to
the attention of their Examiner for further prosecution.
Canadian Plant Breeders' Rights
In December of 1994, Canada introduced 16 new categories of plants available for
protection under its Plant Breeders' Rights Act. These new categories include
Begonia, Blueberry, Clematis, Creeping Red Fescue, Impatiens, Kentucky Bluegrass, Lentil,
Maple, Mustard, Peach, Pelargonium, Plum, Raspberry, Spirea, Timothy and Viburnum. This
brings the total categories eligible for plant breeders' rights protection in Canada to
39.
Recent
Publications of Interest
- Margaret Swain and Randy W. Marusyk, "Biotechnology, Human Tissue and the Civil
Code of Quebec" (1995), 55 Revue du Barreau du Quebec 419.
- Margaret Swain and Randall Marusyk, "Canadian Biotechnology and Pharmaceutical
Patent Law", in International Intellectual Property Law: New Developments
(West Sussex: John Wiley & Sons, 1995).
- Randall W. Marusyk and Karen Laitner, "Suing A Canadian Company? Proceed With
Caution", in Global Law and Business, October 1995.
Other Issues
- Maintaining the distinctive character of your trademarks in the aftermath of the North
American free trade agreement.
- Laboratory practice - setting up a provable notebook system in order to maintain your
U.S. date of invention
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