Eli Lilly & Co. et al. v. Apotex Inc.

• Jurisdiction: Federal Jurisdiction (Canada)
• Court: Court of Appeal (Canada)
• Judge: Sexton, Evans and Sharlow, JJ.A.
• Citation: 2010 FCA 240,(2010), 409 N.R. 173 (FCA)
• Date: 22 September 2010
• Subject Matter: PATENTS OF INVENTION

Eli Lilly & Co. v. Apotex Inc. (2010), 409 N.R. 173 (FCA)

MLB headnote and full text

Temp. Cite: [2010] N.R. TBEd. SE.027

Eli Lilly and Company and Eli Lilly Canada Inc. (appellants) v. Apotex Inc. (respondent)

(A-451-09; 2010 FCA 240)

Indexed As: Eli Lilly & Co. et al. v. Apotex Inc.

Federal Court of Appeal

Sexton, Evans and Sharlow, JJ.A.

September 22, 2010.

Summary:

Eli Lilly & Co. (Lilly U.S.) owned eight process patents relating to cefaclor, an antibiotic sold under the registered name of Ceclor®. Lilly U.S. and its Canadian subsidiary, Lilly Canada (the plaintiffs) sued Apotex Inc., a generic drug manufacturer, alleging that Apotex infringed the patents by using bulk cefaclor in its Apo-cefaclor product which was imported from overseas manufacturers who used infringing processes to make cefaclor.

The Federal Court, in a decision reported 351 F.T.R. 1, held that the plaintiffs had failed to prove that Apotex Inc. had infringed any of eight process patents when Apotex imported into Canada, after June 3, 1998, approximately 7,500 kg of the compound cefaclor for use in its antibiotic medicines. The court held that the plaintiffs had not proved that Apotex' Indian supplier, Lupin Laboratories Inc. (Lupin), had produced the bulk cefaclor from an intermediate compound (7-ACCA) made by a process covered by any of the Lilly patents. The compound cefaclor itself was no longer protected by a patent. The court also held that Apotex had infringed Lilly patents by importing bulk cefaclor before June 3, 2008, which had been produced outside Canada from an intermediate compound that Apotex' suppliers had made by a patented process. The plaintiffs appealed and Apotex cross-appealed.

The Federal Court of Appeal dismissed both the appeal and cross-appeal.

Patents of Invention - Topic 2888

Infringement of patent - Acts constituting an infringement - Of particular patents - Cefaclor - The plaintiff, Lilly U.S., owned eight patents relating to cefaclor, an antibiotic sold under the registered name of Ceclor® - Lilly U.S. and its Canadian subsidiary, Lilly Canada (the plaintiffs) sued Apotex Inc., a generic drug manufacturer, alleging that Apotex infringed their patent rights by importing bulk cefaclor into Canada and using it in the manufacture of its Apo-cefaclor product - The plaintiffs claimed that the cefaclor was made by an overseas manufacturer (Lupin) using processes which infringed the patents owned by Lilly U.S. - The Federal Court held that the plaintiffs established on a balance of probabilities that the cefaclor received by Apotex from Lupin between May 23, 1997 and June 3, 1998, infringed four of the patents (i.e, the cefaclor was made using a kinetic complex covered by the plaintiffs' patents) - However, the plaintiffs did not meet their burden in respect of cefaclor shipped to Apotex by Lupin after June 4, 1998 - The plaintiffs (Lilly) appealed, arguing that the trial judge had erred in finding that Lupin had changed from using a patented to a non-patented process after 1998 - The Federal Court of Appeal dismissed the appeal, where the trial judge made no error that warranted appellate intervention - See paragraphs 4 to 16.

Patents of Invention - Topic 2888

Infringement of patent - Acts constituting an infringement - Of particular patents -  Cefaclor - The plaintiff, Lilly U.S., owned eight patents relating to cefaclor, an antibiotic sold under the registered name of Ceclor® - Lilly U.S. and its Canadian subsidiary, Lilly Canada (the plaintiffs) sued Apotex Inc., a generic drug manufacturer, alleging that Apotex infringed their patent rights by importing bulk cefaclor into Canada and using it in the manufacture of its Apo-cefaclor product - The plaintiffs claimed that the cefaclor was made by an overseas manufacturer (Lupin) using processes which infringed the patents owned by Lilly U.S. - The Federal Court held that the plaintiffs established on a balance of probabilities that the cefaclor received by Apotex from Lupin between May 23, 1997 and June 3, 1998, infringed four of the patents (i.e, the cefaclor was made using a kinetic complex covered by the plaintiffs' patents) - However, the plaintiffs did not meet their burden in respect of cefaclor shipped to Apotex by Lupin after June 4, 1998 - Apotex appealed, claiming that by finding that the importation of cefaclor breached Lilly's rights under the Patent Act, the judge extended the scope of protection beyond the use of the claimed invention and gave an extraterritorial reach to the Act that Parliament should not be taken to have intended - The Federal Court of Appeal dismissed the appeal, stating that the trial judge made no legal error in the analysis of the state of the law in Canada on either of these issues - See paragraphs 17 to 20.

Patents of Invention - Topic 2889

Infringement of patent - Acts constituting an infringement - Importation of product made using process patented in Canada (infringement by importation) - Apotex appealed a trial judge's finding that it had infringed Lilly's process patents prior to 1998 by importing bulk cefaclor into Canada and using it in the manufacture of its Apo-cefaclor product where the cefaclor had been made by an overseas manufacturer using processes which infringed Lilly's patents - The Federal Court of Appeal dismissed the appeal - The court stated that "after thoroughly canvassing the relevant jurisprudence, the judge rejected Apotex' argument, holding that it has been settled law in Canada for over a hundred years that a process patent can be infringed by the importation, and use and sale in Canada, of a product manufactured abroad by another person using the patented process. She pointed out that the Supreme Court of Canada had recently endorsed the rule, known as the 'Saccharin doctrine' ... The Judge also rejected Apotex' alternative argument that, if relevant at all, the Saccharin doctrine should not apply if 'material changes' are made to the article produced by the patented process prior to the importation of the ultimate product. She applied ... the present law, which requires only that the patented process played an 'important part' in the manufacture of the imported product, and concluded that it did. We see no legal error in the judge's analysis of the state of the law in Canada on either of these issues" - See paragraphs 17 to 20.

Patents of Invention - Topic 2889

Infringement of patent - Acts constituting an infringement - Importation of product made using process patented in Canada (infringement by importation) - [See both Patents of Invention - Topic 2888 ].

Cases Noticed:

Saccharin Corp. v. Anglo-Continental Chemical Works, [1901] 1 Ch. 414 (Ch.D.), refd to. [para. 18].

Monsanto Canada Inc. et al. v. Schmeiser et al., [2004] 1 S.C.R. 902; 320 N.R. 201; 2004 SCC 34, refd to. [para. 18].

Counsel:

Anthony Creber and Isabelle Raasch, for the appellant;

H.B. Radomski, Sandon Shogilev and Myles Hastie, for the respondent.

Solicitors of Record:

Gowling Lafleur Henderson LLP, Ottawa, Ontario, for the appellant;

Goodmans LLP, Toronto, Ontario, for the respondent.

This appeal was heard in Ottawa, Ontario, on September 22, 2010, before Sexton, Evans and Sharlow, JJ.A., of the Federal Court of Appeal. The following oral decision was delivered for the court, from the bench, by Evans, J.A., on September 22, 2010.