Richard OwensThe Supreme Court’s decision to reverse the invidious “promise doctrine” in Canadian patent law is a welcome defence of intellectual property rights, writes Richard Owens.

By Richard Owens, July 7, 2017

Last week, the Supreme Court of Canada came out with a long-awaited decision in AstraZeneca v. Apotex, finally overruling the invidious “promise doctrine” in Canadian patent law. This isn’t just a good decision — it’s a great and important decision.

For any patent to be issued in Canada, it must be “useful.” Largely a formal requirement, only a “mere scintilla” of usefulness is required. For a drug, for instance, it must be said to effectively treat some condition.

So far so good. But the promise doctrine took this much further. If a patent was challenged, a court would read the patent disclosure (the descriptive part of a patent application) for “promises” of utility — inferences that can be very broad. If the patent were proven not to have lived up to these discovered “promises,” it would be invalidated, whether or not they were actually made as promises, and whether or not in good faith.

Since the promise doctrine was introduced, nearly 30 Canadian drug patents have been invalidated — here, and nowhere else. The promise doctrine has been decried around the world as a flaw in Canada’s patent system. It has sapped billions of dollars in drug sales from the Canadian market.

The doctrine grew gradually from a series of cases — and, as the court said, it grew out of confusion and misapprehension of the law and precedent. The court in AstraZeneca v. Apotex clearly stated that as far as the utility requirement of the Patent Act went, only a scintilla is required — the traditional test. The court went on to say that disclosure (the description of the invention) should not be confused with the utility requirement. Thus, even if more utility was disclosed in the description than actually proved to be the case for the invention, it should not invalidate the patent so long as there was some actual utility — a legally and logically correct result. The court did say, however, that improper disclosure could have an impact on the validity of the patent — but under the portion of the act related specifically to disclosure, not utility. That is what the decision did, well and unanimously — it was a nine-to-zero decision, without caveat or disagreement on, or ambiguity in, the result.

Since the promise doctrine was introduced, nearly 30 Canadian drug patents have been invalidated

What the case doesn’t do is the many bad things of which it is accused. A handy recitation of these errors appears in an opinion piece by McGill University professor Richard Gold in Monday’s Globe and Mail. Let’s examine some of them.

  • The court threw away a negotiating point for Canada in NAFTA talks. It is hardly the court’s responsibility to conduct trade talks. Should a bona fide litigant be denied justice so the court can hand the federal government a bargaining chip? That’s an appalling contention. Doctrine isn’t determined in the abstract but with profound impact on real people. The Supreme Court is responsible for justice, and to correct bad law. It did what it is supposed to do. Moreover, the decision had the incidental benefit of removing a major trade irritant.
  • The decision means stronger patent laws, which means more foreign patents that will block Canadian inventors. In fact, Canadian inventors, far from being blocked, benefit from their ability to patent under these same laws — more so than foreign patent-holders, actually, since more Canadian companies are smaller enterprises. Patents are incentives, not obstacles. Stronger patent laws make for more, not less, innovative societies. Moreover, patents for foreign holders encourage investment in and technology transfer to Canada.
  • Canada has become an outlier by allowing false promises. Again, not so. The promise doctrine made us an outlier. Canada has returned to the international fold by requiring that patents have only the usual “scintilla” of utility. And the court certainly did not open the door to irresponsible disclosure in a patent application. The scope of the monopoly in a patent remains the claims, not the description (where the extra promises were found), and the act has means to deal with false disclosure.
  • Small Canadian companies will lack leverage to work around foreign patents. No. The research is absolutely clear that smaller firms benefit most from strong patent rights — that is where their leverage with larger firms comes from.
  • Most patents in Canada are held by foreign firms. So what? Since the rest of the inventing world is always bigger than any single jurisdiction, most patents everywhere are held by foreign firms. We welcome their patents as they welcome ours. That’s how it works. Should we hate foreign inventors for some reason? Gold alleges that foreigners can now “flood this country with more patents.” Let them. Anyway, no floodgate has opened — the case merely assures that more patents will be upheld, as they should be. We should be glad to see foreigners bring more inventions to our shores, so Canadians can benefit from them, but it won’t happen because of this case.

In AstraZeneca v. Apotex, we see the court at its best — finding a logical and doctrinally sound path through a difficult legal question, and establishing a very clear precedent for the future. Let’s hope for many more such decisions from a court that has not always been as friendly to intellectual property as it might.

Richard C. Owens is a Senior Munk Fellow at the Macdonald-Laurier Institute and an adjunct professor at the University of Toronto Faculty of Law.