Conor Medsystems, Inc. v The University of British Columbia

REASONS FOR JUDGMENT 1 The principal invention the subject of the patents in suit is a tubular stent coated with paclitaxel or an analogue or derivative. There are also dependent and related claims. Paclitaxel (or taxol) is a drug used in the treatment of certain forms of cancer. It inhibits cell division and migration. The patents in suit have a claimed priority date of 19 July 1993 and stand in the names of both respondents. In this action, the applicant, which is a United States corporation, impeaches the validity of the patents on the usual grounds, viz that the inventions are not novel and that they are obvious. 2 The applicant has its own stent which it says it began developing in 2002. It is based upon a stent designed by John Shanley (who founded the applicant), which is the subject of a US patent that has been assigned to the applicant. The applicant's stent is also capable of delivering drugs, including paclitaxel. The applicant (by an affidavit from its Chief Executive Officer, Mr Litvack) says that its stent is "dramatically different" from the respondents'. It concedes that it has a sample of the respondents' stent but says that it did not obtain that stent until its own had been designed and was being used in clinical trials. The applicant (again through Mr Litvack) says that it obtained the respondents' stent "for the purpose of measuring in a test system the rate and duration of taxol release". 3 Now, the issue that has arisen is whether the applicant should make discovery of documents which relate to: its evaluation of the patents in suit; its decision to use paclitaxel on a stent; copying directly or indirectly of the invention the subject of the patents in suit; and obtaining or acquiring samples of the respondents' stent and its evaluation. The respondents contend that such documents are discoverable on the question of obviousness. 4 A patent will be obvious if it could have been accomplished by a person familiar with the art to which the patent relates in light of the common general knowledge as at priority date: Patents Act 1990 (Cth), s 18(1)(b)(ii) in combination with s 7(2). To determine obviousness the court must: (1) determine the scope and content of the prior art; (2) determine the level of ordinary skill in the art; (3) examine the differences between the claimed invention and the prior art, putting itself in the position of the person skilled in the relevant art; and (4) having examined the differences decide whether the invention is obvious. 5 The test for obviousness is easy to state. Unfortunately, the test is often difficult to apply. Advances in science and technology now require the judge to deal with elusive chemical formulae, complicated mechanical structures and intricate electronic circuitry. Many judges have trouble coming to grips with new innovations and are likely to either underrate or overate the difficulties in making new discoveries. More and more they rely on experts called by the parties. The problem is that these experts are "virtually the retained partisan assistants of counsel": 2 Wigmore on Evidence s563 at 762 (4th ed, Chadbourn rev. 1979). 6 So, courts have developed signposts, or secondary indicia, of inventiveness that are based on economic and motivational factors. These so-called secondary considerations provide the judge with assistance by way of inference only and their probative weight will vary from case to case. On the other hand, they offer a foundation for decision-making which is easier to apply than following the science and is useful, provided the judge recognises that very often secondary tests will be a weak basis upon which to found a conclusion. Secondary considerations can have another advantage. They can "prevent a court from slipping into an impermissible hindsight analysis" and can be used as a check on results based on the evidence of experts: Vandenberg v Diary Equipment Co., 740 F.2d 1560, 1567 (Fed Cir, 1984). A cautious judge may find secondary considerations to be of assistance only in a close case when something is required to tip the scales. 7 The courts have developed several secondary considerations, the principal ones being the following (in no order of importance). First, that the invention is the successful solution of a long-felt want. Here the underlying premise is that the driving force behind innovation is necessity or improvement and that problems in the prior art would not persist if the solution were obvious. The evidence that is required to fulfil this criterion is (a) the existence of the problem and its duration; (b) the nature of the efforts to solve the problem; and (c) the actual successful solution by the patentee. In Safety Car Heating & Lighting Co., Inc. v General Electric Co., 155 F.2d 937, 939 (2nd Cir, 1946) Judge Learned Hand put the matter this way: "Courts, made up of laymen as they must be, are likely either to underrate, or to overate, the difficulties in making new and profitable discoveries in fields with which they cannot be familiar, and, so far as it is available, they had best appraise the originality involved by the circumstances which preceded, attended and succeeded the appearance of the invention. Among these will figure the length of time the art, though needing the invention, went without it: the number of those who sought to meet the need, and the period over which their efforts were spread: how many, if any, came upon it at about the same time, whether before or after: and - perhaps most important of all - the extent to which it superseded what had gone before." 8 Another consideration is the commercial success of the innovation. Here the courts are prepared to infer unobviousness by reference to the industry's reaction to the invention. What is required is evidence of the substantial displacement of the prior art or the widespread adoption or imitation by competitors: see generally P L Costas, "Discovery and the Issue of Commercial Success in Patent Infringement Actions" (1963) 31 Federal Rules Decisions 215. More usually, however, commercial success or acceptance by competitors is merely an adjunct to the long-felt want test. In any event, care must be taken with this criterion because the commercial success of the innovation may have nothing to do with its merits but may be due to factors such as mass advertising and the like. 9 Commercial acquiescence in the utility of an innovation is also a relevant consideration. For example, the failure by competitors to challenge a patent, or the taking of licences from, and making payments of royalties to, the patentee can indicate that a patent has been evaluated by interested parties and deemed to be valid. Commercial acquiescence can be persuasive because "it embodies a practical judgment, a conclusion not forced or strained by the technicalities of science or the logomachy of the law": Universal Sewer Pipe Corporation v General Const. Co., 42 F Supp 132, 133 (ND Ohio, 1941). 10 Yet another secondary indicia, which is the issue the respondents wish to pursue by discovery, is whether the innovation has been copied. It is accepted that the production of a copy of a patented invention may give rise to the inference that the innovation is unobvious for if it were obvious there would be no reason to copy it. This was the view of Burchett J in F Hoffman-La Roche AG v Chiron Corporation (2000) 47 IPR 516. The same approach has been taken in the United States. See eg Vandenberg v Dairy Equipment Co., 740 F.2d 1560, 1567 (Fed Cir, 1984); Pro-Mold and Tool Company, Inc. v Great Lakes Plastics, Inc., 75 F.3d 1568 (Fed Cir, 1996); Syntex (USA) LLC v Apotex Inc., 407 F.3d 1371 (Fed Cir, 2005); Iron Grip Barbell Company, Inc. v USA Sports, Inc., 392 F.3d 1317 (Fed Cir, 2004). 11 Logically, however, the copying of an innovation, especially widespread copying, may also suggest that the copyist regards the patent for the innovation to be invalid. So, care must be taken not to take copying too far. This was recognised by the Full Federal Court in Elconnex Pty Ltd v Gerard Industries Pty Ltd (1992) 25 IPR 173, 183 where Lockhart J (with whom Wilcox J agreed) said that: "The fact of actual copying [can] in all circumstances [be] a neutral matter." Perhaps it is best to proceed on the basis that, without more, copying may be a weak indicator of non-obviousness. It will assume greater significance if evidence of copying is coupled with evidence of unsuccessful attempts to achieve the same advantage as the innovation by different non-infringing means. 12 There may be another problem with making use of copying. It is common enough in patent cases where the person alleging invalidity is in competition with the patentee to require that person to make discovery of his own research and development. Research and development conducted overseas is, however, of limited assistance. In Wellcome Foundation Limited v VR Laboratories (Aust) Pty Ltd (1981) 148 CLR 262 Aickin J explained (at 284-285): "It is important, particularly in relation to convention patents, to bear in mind that the common general knowledge which is material to the question of obviousness is common general knowledge in Australia and not the common general knowledge in the country of origin. No doubt occasions may occur where there may be no difference or no significant difference in the common general knowledge of the ordinary skilled worker in one country from that of his counterpart in another. However, that cannot be assumed and there is certainly no presumption that it is so. What must be proved is common general knowledge in Australia and the inventiveness or otherwise of the alleged invention must be judged against that background. Care must be taken to judge the foreign experiments and developments not against their own background but against the proved background of common general knowledge in Australia." Precisely the same comments can be made when, as here, if there be any copying, the copying occurred in another country. 13 With the foregoing principles in mind, I can dispose of the present application quickly. First, there is no point in requiring the applicant to discover documents concerning copying. Mr Litvack, the applicant's CEO, has deposed that "we [the applicant] did not rely on the work of any other group to determine the correct design or content of our stent". In the face of this evidence, an order for discovery regarding copying would be met with a "nil return". On the other hand, documents dealing with the applicant's evaluation of the patents in suit and the respondent's stent might disclose relevant information and so should be discovered. There will therefore be an order to that effect. 14 Finally, in relation to costs, as each side has had a measure of success, they should lie where they fall. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.