TIP Group Conference 2014, Day 2: “Evergreening”

Disclaimer: Views expressed are solely those of Kane Denike and Anthony Creber, and do not represent the opinions or positions of Teva Canada, the Canadian Generic Pharmaceutical Association, or Gowlings.

On March 4, 2014, the second day of the 15th Annual Technology and Intellectual Property Group Conference, Dr. Kane Denike and Mr. Anthony Creber spoke on the topic of “evergreening.” Exactly what practices are captured by this term, and are they really all deserving of censure?

Dr. Denike is Director, Intellectual Property at the pharmaceutical company Teva Canada, and Chair of the intellectual property committee at the Canadian Generic Pharmaceutical Association. He quoted the Supreme Court of Canada’s definition of “evergreening” as “A patentee who can “evergreen” a single invention through successive patents by the expedient of obvious or uninventive additions prolongs its monopoly beyond what the public has agreed to pay” (Binnie J., Whirlpool [2000] 2 S.C.R. 1067). He then noted that the Oxford dictionary defines “expedient” as “a means of attaining an end, especially one that is convenient but considered improper or immoral”.

Dr. Denike that in the pharmaceutical context, “evergreening” originally referred to the practice of some “brand-name” or “innovator” pharmaceutical companies of using certain provisions in Canada’s Patented Medicines (Notice of Compliance) Regulations (PM(NOC) Regulations) to delay generic pharmaceutical companies’ ability to start selling generic versions of patented drugs. Thanks to changes to the regulations in 2006, these original pharmaceutical evergreening practices are no more – but, Dr. Denike said, evergreening-like practices persist.

The bulk of Dr. Denike’s talk focused on the many ways innovator companies can obtain new patents on already-patented drugs. These include adjusting the non-medicinal ingredients in drug’s formulation, patenting particle size, or patenting one or a few compounds from within a large class covered by a previous patent. Dr. Denike noted, however, that not all such subsequent patents are problematic. He highlighted patents on the new use of a old drug to treat a particular disease as usually being “good” patents.

He also noted continuing problems with the PM(NOC) Regulations that pose challenges for generic drug companies. Specifically, generic companies that successfully show their product does not infringe particular patents during proceedings under the PM(NOC) Regulations – as they may have to, to obtain necessary approvals to sell the drug – can nevertheless still be sued for infringing those same patents under the Patent Act.

Dr. Denike concluded with a discussion of two methods external to the patent system that he said are used by pharmaceutical patentees to extend their monopoly beyond what they are entitled to. First, some brand-name companies use data protection, which provides a period of exclusivity unrelated to patent protection, to extend monopolies for products which data protection was not intended to cover. Second, some pharmaceutical companies engage in lifecycle management, which often includes changing the formulation or dosage of a drug while it is in litigation under the PM(NOC) Regulations, such that even if the generic pharmaceutical company succeeds in the litigation, there is no longer a brand product it can be substituted for. In such cases, there is no market for the generic product.

Anthony Creber is a partner and leading patent litigator at Gowlings. He has appeared before the Federal Court, Federal Court of Appeal, and Supreme Court of Canada on matters including the patentability of life forms and the infringement of biotech patents. He generally acts for patentees, and represents many major pharmaceutical companies.

Mr. Creber objected to the term “evergreening,” arguing that “on-going innovation” is a more appropriate description of what actually occurs. He made the point that there is nothing wrong with multiple patents on a single drug, so long each patent is for some useful addition or change, pointing out that the definition of “invention” in the Patent Act includes “improvements,” and furthermore that improvements actually have their own section in the Act (s. 32). Moreover, he noted that anyone (not just the original patentee) can improve on a base invention, patent the improvement, and then prevent the original patentee from using the invention – or at least, the improved version. Thus, it is very important for a patentee to own all the patents related to its invention.

Mr. Creber also pointed out that additional patents on a drug covered by a base patent are a natural consequence of the drug development timeline: a class of compounds with particular bioactivity are discovered; additional research discovers a single compound within the class that has advantages over the others; then as further research is conducted on that compound a formulation is developed, new uses are discovered, and unique variations are identified. Each of these stages may involve a new invention or improvement worthy of a patent.

These stages may also take place over many years, so not all patents related to a single drug will be applied for at the same time, and, therefore, not all patents related to a single drug will expire on the same date; this inevitable side-effect of the drug development timeline, Mr. Creber said, is what is unfairly referred to as “evergreening.” He also reminded the audience that each improvement to a drug requires an investment of time and money, and that without that investment – incentivized by the patent system – valuable improvements would not occur.

Although in some respects Dr. Denike and Mr. Creber take very different positions on this issue, one point of agreement did emerge from the presentations: a patent on a patent-worthy improvement to an invention does not constitute evergreening. However, it was clear that in the complex world of pharmaceutical research, what constitutes a “worthy” improvement to a patented medicine is not an easy matter to decide.