Supreme Court of Canada Overturns the Promise Doctrine

In a unanimous decision, the Supreme Court of Canada overturned the Federal Court of Appeal's decision that held that the patent that claimed AstraZeneca's drug esomeprazole, a proton pump inhibitor sold under the name NEXIUM®, was invalid for lack of utility.¹ In doing so, the Court significantly pared back utility attacks against patents, expressly overturning the so-called "Promise Doctrine" and eliminating the enhanced disclosure requirement that had been associated with the doctrine of sound prediction.

What You Need To Know

• The Supreme Court has overturned the Promise Doctrine, holding it to be "unsound," "excessively onerous," "counter to the scheme of the [Patent] Act" and "not good law."
• The new approach to utility is a two-step analysis:
  • (1) what is the subject-matter of the invention as claimed?
  • (2) is it capable of a practical purpose or an actual result?
• To avoid speculative patents, the utility must still be demonstrated or soundly predicted by the time the patent is filed, but there is no enhanced disclosure requirement under section 2 of the Patent Act, including where utility is based on a prediction.
• Patents that will likely benefit from this decision will include patents pending before the Canadian Patent Office, patents issued and to be enforced, and patents whose validity is currently being litigated.

The Promise Doctrine has been a controversial component of Canadian patent law for over a decade.² The Patent Act requires an invention to be "useful." The Supreme Court of Canada has interpreted this requirement to mean that the invention must have a use, and that the use must have been demonstrated or predicted by the inventors prior to the patent being filed. The Promise Doctrine was used to answer the question "useful for what?" Although it has taken various different forms over the years, in its most extreme rendition, the doctrine turned any statement in the description portion of the patent about what the invention does or could do into a utility threshold that had to be met. The Promise Doctrine has been primarily applied in the pharmaceutical industry, where it was frequently used to invalidate patents claiming commercially successful drugs on the basis that they lacked utility.

In the AstraZeneca case, the Supreme Court held that the Promise Doctrine is "unsound," "excessively onerous," "counter to the scheme of the Act," and "not good law." ³ The Court held that the Promise Doctrine conflates section 2, which sets out the utility requirement for a claimed invention, and section 27(3), which sets out specific disclosure requirements for a patent as a whole.⁴ Although the Promise Doctrine has been used to import multiple promises into a claim, the Court confirmed that a "scintilla of utility will do" and a single use is sufficient to satisfy the utility requirement under the Act.⁵ The Court also noted that the doctrine undermines a key aspect of the Act and the patent bargain by discouraging inventors from disclosing as much as possible about their invention.⁶

In place of the Promise Doctrine, the Court set out a new approach to assessing utility that is far more faithful to both the Act and the patent bargain. The Court started from the proposition that, according to the Act, it is the "subject-matter of the invention as claimed in the patent" that must be useful. Accordingly, the correct analysis is a two-step process. First, courts must identify the subject-matter of the invention as claimed in the patent. Second, courts must ask whether that subject-matter is useful; i.e., whether it is capable of a practical purpose or an actual result.⁷ Although the Court abolished the Promise Doctrine, it maintained the rule that utility must either be demonstrated or soundly predicted by the time the patent is filed. However, the Court overturned a frequently criticized "enhanced disclosure" requirement that had been applied to patents where utility was based on a prediction, rather than a demonstration of utility.⁸ While this simple two-step test represents a "back to basics" approach to utility, it leaves the nuances of the test to be determined on a case-by-case basis by the next wave of Federal Court and Federal Court of Appeal decisions.

Given the significant role that the Promise Doctrine has played in invalidating patents over the last decade, this decision represents a major change in Canadian patent law.⁹ In overturning the Promise Doctrine the Court has reaffirmed the proper role of the utility requirement, which is to ensure that Canadians receive useful inventions in exchange for a patent monopoly.

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¹ AstraZeneca Canada Inc. v. Apotex Inc., 2017 SCC 36.

² Canada has been on the Office of the United States Trade Representative "watch list" multiple times for its perceived deficiencies in intellectual property protection, including due to the Promise Doctrine: https://ustr.gov/sites/default/files/301/2017%20Special%20301%20Report%20FINAL.PDF

³ Ibid. at paras. 36-38 and 51.

⁴ Ibid. at para. 44.

⁵ Ibid. at para. 55.

⁶ Ibid. at para. 51.

⁷ Ibid. at para. 54.

⁸ Ibid. at para. 58.

⁹ The Court's decision also takes a notably different approach to the Promise Doctrine from that taken by a NAFTA arbitral tribunal in Eli Lilly's NAFTA challenge. See Torys' bulletin on the tribunal here.