Bayer prevails in drospirenone/ethinyl estradiol infringement action against Apotex and Cobalt
September 26, 2016

by Urszula Wojtyra

On September 9, 2016, Justice Fothergill of the Federal Court released a decision finding that Apotex Inc. and Cobalt Pharmaceuticals Company each infringed Bayer’s valid patent for an oral contraceptive composition combining drospirenone and ethinyl estradiol (Bayer’s YAZ and YASMIN) (2016 FC 1013). Apotex markets MYA (approved on the basis of a comparison to YAZ) and ZAMINE (approved on the basis of a comparison to YASMIN) and Cobalt marketed ZARAH (approved on the basis of a comparison to YASMIN).

The patent at issue, 2,382,426 (426 patent), is titled “Pharmaceutical Combination of Ethinylestradiol and Drospirenone for Use as a Contraceptive”. The Court described the invention as the discovery that it was possible to administer a low dose of ethinyl estradiol and drospirenone in a micronized or other rapidly dissolving form and achieve good bioavailability as a contraceptive, even though drospirenone was acid sensitive and had previously only been formulated with an enteric coating.

The 426 patent had previously been the subject of litigation pursuant to the Patented Medicines (Notice of Compliance) Regulations (PMNOC) against both Apotex and Cobalt regarding their products that referenced Bayer’s YAZ. Bayer obtained an order prohibiting the issuance of a Notice of Compliance (NOC) to Cobalt (Bayer Inc v Cobalt Pharmaceuticals Company, 2013 FC 1061, affirmed 2015 FCA 116, previously reported here and here). In the PMNOC application against Apotex, the applications judge found Apotex’s allegation of non-infringement justified. As a result, Apotex obtained an NOC for its MYA tablets (Bayer Inc v Apotex Inc, 2014 FC 436, as reported here).

In 2013, the Federal Court dismissed Bayer’s prohibition application against Cobalt with respect to a different patent, as reported here, and Cobalt received an NOC for ZARAH. Bayer then discontinued its prohibition application against Apotex, which allowed Apotex to obtain its NOC for ZAMINE. 

Effect of previous PMNOC litigation

The Court first dealt with whether, as a matter of comity or stare decisis, it was bound by previous findings of fact and law made either by the Federal Court of Appeal or by the applications judge in the context of the PMNOC litigation. Finding that the law on this point is not entirely settled, the Court held that it would adhere to the patent construction by the earlier Courts unless a party provided good reason not to. This applied to construction of the claims, the inventive concept and the promise of the patent. Ultimately, the Court followed the prior construction in all three aspects of patent construction.

Blinding of experts

In considering the expert evidence, the Court considered whether the expert evidence provided on behalf of Apotex should be preferred over that provided by Bayer’s experts as Apotex’s experts reached their conclusions “blind” to the nature and content of the patent and the legal positions of the parties. As recently reported, the ‘blinding’ of experts in PMNOC applications has met with both favour and neutrality. Here, the Court held that while the fact of ‘blinding’ may be persuasive and helpful in weighing evidence where there are credibility concerns, it is not a reason to prefer one expert’s opinion over another’s as the Court’s principal concern is the substance of the opinion and the reasoning that led to it.

Validity

The Court rejected all of Apotex’s alleged grounds of invalidity, and Cobalt had agreed to be bound by the Court’s validity determination in the Apotex proceeding.

Regarding the assertion of obviousness, the Court found that it may have been ‘worth a try’ for the skilled person to test whether a low dose of drospirenone as a contraceptive would offer good bioavailability in vivo when administered without an enteric coat, but that this testing would not have met the necessary test of ‘obvious to try.’

Apotex was likewise unsuccessful in its assertion that the 426 patent lacked novelty on the basis of public Phase 3 clinical trials pre-dating the patent filing. According to the Court, the clinical trials did not disclose the invention as “[m]ere disclosure to the public is not sufficient. The disclosure must be of a kind that enables discovery of the subject matter defined in the claim, through reverse engineering if necessary.” The Court was not persuaded that even if some tablets from the clinical trial found their way into the hands of a skilled person, this would enable the skilled person to reverse-engineer the invention, without inventive hindsight. The Court therefore concluded that the subject matter of the claims was not disclosed. Further, the Court also agreed with the PMNOC applications judge that there was an experimental use exception to public disclosure, and that such an exception applied here.

The Court found no merit in any of Apotex’s assertions of invalidity on the basis of overbreadth (which rested on a mischaracterization of the inventive concept), insufficiency (a skilled person could have adapted the single concentration dissolution test to other concentrations) and utility (seeing no reason to depart from the PMNOC application judge’s characterization of the promised utility, and being satisfied that the utility was demonstrated or soundly predicted by two of the examples in the patent).

Infringement

Regarding infringement, the only issue was whether the allegedly infringing products contained drospirenone particles.

Apotex argued that its product was a molecular dispersion, and therefore had no drospirenone particles. The Court assessed the technical evidence of testing conducted during the litigation, drew inferences from Apotex’s supplier’s regulatory filings, and concluded that Apotex’s product was infringing.

With regards to Cobalt, the Court found that Cobalt had made a binding admission in its pleadings that its product had drospirenone particles. Cobalt had abandoned its appeal of a prothonotary’s order denying it leave to amend its pleadings, and therefore the trial judge found that to be final. Cobalt was, however, allowed to lead evidence in support of its position that only a small fraction of its product contained drospirenone particles. The Court disagreed, finding that Cobalt’s tablets contain drospirenone that is at least 90% in the form of particles.

Remedy

The Court granted Bayer a declaration of validity and infringement by Apotex and Cobalt, as well as an order enjoining Apotex and Cobalt from further infringement, and delivery up of any infringing goods. As none of the parties had made submissions regarding the election between damages and an accounting of profits, the Court requested written submissions. Bayer was also entitled to its costs, but these were reduced because it had belatedly abandoned reliance on certain claims of the patent and certain controversial expert testing.

Epilogue

After judgment had been rendered, Apotex sought a stay of the judgment pending the appeal. Bayer did not object, subject to certain conditions. On September 7, 2016, the Court stayed the judgment regarding the injunction and delivery up/destruction insofar as it applied to Apotex, and required that Apotex meet certain conditions including expediting its appeal. Cobalt has also appealed.

The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.

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