As NAFTA renegotiations progress, the utility requirement of Canadian patent law will inevitably arise. Canada is the only G7 country listed in the US Trade Representative’s “Special 301 Report Watch List,”¹ which “identifies foreign trading partners where IP protection and enforcement... deteriorated or remained at unacceptable levels and where market access for Americans who rely on IP protection has been unfairly compromised.” The utility requirement accounts for the majority of the report’s discussion of Canada.

Section 2 of the Patent Act requires an invention to be “useful.” This utility requirement has diverged from international norms over the last 15 years, as courts imposed onerous standards that invalidated numerous patents for inventions of undeniable utility. A recent Supreme Court decision, however, has significantly mitigated this problem.

In 1981, Canada’s Supreme Court ruled that, “‘not useful’ ... means ‘that the invention will not work, either in the sense that it will not operate at all or, more broadly, that it will not do what the specification promises that it will do.’”² Thus, utility had a primary branch, similar to international standards and satisfied by any useful result, and a secondary branch, which would invalidate the patent for failure to deliver a promised result, even if it delivered other useful results.

This secondary branch of utility became known as the “promise doctrine.” It was rarely applied³ until 2002, when the Supreme Court’s AZT decision⁴ imposed new, onerous standards for the “what, where and when” of the required proof of utility: utility must be either demonstrated or soundly predicted.⁵ A sound prediction requires “proper disclosure⁶ in the patent of the factual basis and reasoning, and utility must be established by the priority date of the patent, without after-the-fact validation.⁷

When conflated with the promise doctrine, these new requirements armed the generic drug industry with a formidable new arsenal to attack innovative pharmaceutical patents for undeniably useful drugs. Although patentees could normally establish utility under the primary branch, this no longer mattered, because the generics could often persuade the court that some stray phrase in the patent promised a specific result, such as reduced side effects. If the promised result was not demonstrated or soundly predicted by the priority date, then the patent would be invalidated, even if the patentee could prove from post-filing evidence that the promised result is achieved.

Earlier this year, the Supreme Court of Canada revisited, and abolished, the promise doctrine. In AstraZeneca,⁸ the courts below found the patented drug useful for inhibiting acid reflux, but nevertheless invalidated the patent for failure to prove a secondary promise that the drug would work for a wider range of patients with less variation. On appeal, the Supreme Court of Canada struck down the promise doctrine and held that a single use related to the subject-matter of the patent, even a scintilla of utility, will suffice. The court also ruled that the patentee need not disclose the utility of the invention in the patent. Thus, the Supreme Court watered down the “what” and “where” of utility but reaffirmed the “when,” maintaining the prohibition against after-the-fact validation through post-filing evidence.

AstraZeneca should appease American concerns. The death of the promise doctrine ensures that patents for inventions proven useful from the outset will not be invalidated for failure to provide timely proof of some secondary advantage. The court’s ongoing prohibition against after-the-fact validation, however, continues to set Canada apart from many other countries, setting the stage for further discussion at the negotiating table.

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1. 2017 Special 301 Report (Washington:  Office of the United States Trade Representative, 2017), at p. 5. ustr.gov | ↩
2. Consolboard Inc. v. MacMillan Bloedel (Saskatchewan) Ltd. (1981), 56 C.P.R. (2d) 145 (S.C.C.) at 160. | ↩
3. Notable examples include Amfac Foods Inc. v. Irving Pulp & Paper, Ltd. (1986), 12 C.P.R. (3D) 193 (F.C.A.) and Leithiser v. Pengo Hydra-Pull of Canada Ltd. (1974), 17 C.P.R. (2d) 110 (F.C.A.). | ↩
4. Apotex Inc. v. Wellcome Foundation Ltd. (2002), 21 C.P.R. (4^th) 499 (S.C.C.), referred to herein as “AZT. | ↩
5. AZT, supra note 3 at paras. 55-56. | ↩
6. AZT, supra note 3 at para. 70.  This was a significant departure from prior Supreme Court rulings that the disclosure requirement of patent law “does not impose upon a patentee the obligation of establishing the utility of the invention”: Consolboard, supra note 1 at 158. | ↩
7. AZT, supra note 3 at para. 80.  The “priority date” means the earliest effective filing date of the patent application:  this can be either the actual Canadian filing date of the patent application, or the filing date of an application filed within one year before the Canadian filing date in a member country of the Paris Convention for the Protection of Industrial Property. | ↩
8. AstraZeneca Canada Inc. v Apotex Inc., 2017 SCC 36. | ↩