Markwell Clarizio LLP

Sandoz v. Janssen 2023 FCA 221: Threshold for Sound Prediction

The Federal Court of Appeal (Locke JA writing for the Court) recently confirmed the threshold for establishing a sound prediction of utility.

Sandoz v Janssen 2023 FCA 221

Canadian patent law requires that, to prevent the filing of patent applications based on speculation, utility must be either demonstrated or the requirements for a sound prediction must be met at the time of filing a patent application. This requirement stems from the 2002 Supreme Court of Canada decision in the well-known Wellcome Foundation case. The Supreme Court further held that an invention will be soundly predicted where there is:

  1. A factual basis for the prediction;
  2. An articulable and sound line of reasoning from which the desired result can be inferred from the factual basis; and
  3. Proper disclosure.

The Supreme Court did not, however, define the threshold required for sound prediction. In 2010, the Federal Court of Appeal (FCA) in Eli Lilly v Novopharm thoroughly reviewed the Wellcome Foundation decision and concluded that the threshold was “a prima facie reasonable inference of utility.”

The issue in the recent Sandoz case was whether the trial judge had set the threshold for sound prediction too low by not applying the prima facie reasonable inference standard. The FCA disagreed. It began by noting that, although the trial judge had not specifically used the words “prima facie reasonable inference”, she did quote extensively from the Supreme Court’s Wellcome Foundation case, including the passages relied on by the FCA in the Eli Lilly case for setting the prima facie reasonable inference threshold. Specifically, the FCA found that it “would be difficult to conclude that, despite having carefully reviewed so much of Wellcome, the [trial judge] overlooked the paragraphs that led to the “prima facie reasonable inference of utility” requirement.”

The FCA then went on to confirm that the “threshold is not high” because the terms “prima facie” and “reasonable inference” leave considerable space for a trial judge to find the standard is met based on specific facts of each case. Moreover, the fact that more experimentation was required after the filing date was of no consequence because the doctrine of sound prediction presupposes that further work remains to be done.

Finally, the FCA addressed the legal tension between the doctrines of obviousness and sound prediction as follows: “the legal tests for obviousness and for sound prediction are distinct and different; common general knowledge may be sufficient to support a sound prediction, but not sufficient to find obviousness.”