Apotex Inc v Pfizer Inc, 2017 FCA 201
The validity of a patent can be challenged on administrative grounds in a manner just as effective as challenging the patentability of the invention. In this case, Apotex Inc. (“Apotex”) argued that the failure to pay the proper final fee for the issuance of Canadian Patent No. 1,339,132 (“the ‘132 Patent”), owned by Pfizer Canada Inc. (“Pfizer”), invalidated the patent. The Federal Court of Appeal (“FCA”) upheld the Federal Court’s ruling against Apotex.
FCA construed the text of the Patent Act, as it existed on September 30, 1989 (“the 1989 Act”), in light of the scheme and object of the legislation and the true purpose of the relevant provisions. The FCA concluded that a mutual error, made by the applicant and the Patent Office, to fulfill a prescribed fee requirement, will not render a patent void.
The ‘132 Patent, entitled “prostaglandin derivatives for the treatment of glaucoma or ocular hypertension”, describes the small molecule drug latanoprost marketed by Pfizer as XALATAN and was initially filed in 1989. 
Erroneously, the patent agent handling the ‘132 Patent had only paid a total of $350 for the final fee prior to patent issuance, when the correct amount was $700 at the time pertaining to patent applications filed by large entities.  The FCA noted that the final fee for small entities at the time was $350, but “one will never know exactly how the errors occurred”.  The FCA considered this deficient payment an inadvertent mutual mistake on the part of the applicant and the Patent Office.  Notwithstanding, the patent was granted in 1997. 
The fact that there was an under-payment of an administrative fee was adduced in the context of a motion arising from a Patented Medicines (Notice of Compliance) Regulations proceeding instituted by Apotex in 2013, concerning their generic drug product that allegedly infringed the ‘132 Patent.  The only issue before the FCA on this appeal was whether the failure to pay the proper final fee invalidated the ‘132 Patent pursuant to the 1989 version of the Patent Act. 
For reference, the relevant provisions in the 1989 Act are as follows:
59 The defendant, in any action for infringement of a patent may plead as matter of defence any fact or default which by this Act or by law renders the patent void, and the court shall take cognizance of that pleading and of the relevant facts and decide accordingly. [Emphasis added]
73 (1) Where the prescribed fees stated to be payable in a notice of allowance of patent are not paid within six months from the date of the notice, the application for patent is thereupon forfeited. [Emphasis added)
Simple and Literal Interpretation of the 1989 Act Would Lead to Absurd Results
Apotex advocated for a simple and literal interpretation of the 1989 Act such that “any failure to meet any requirement of the Act” would be sufficient to invalidate a patent.  Specifically, the application for the ‘132 patent was forfeited under subsection 73 (1) due to the failure to pay the proper final fee, and this failure constitutes a “fact or default” under section 59 to render the patent void. 
The FCA rejected Apotex’s approach, and considered instead the words of the 1989 Act in light of the context of the legislative provision and the legislative purpose.  The FCA found that the object of subsection 73 (1) was to collect fees for patent applications and to eliminate “deadwood” in the patent system.  The legislator did not envisage section 73 to cover an already issued patent – this was inferred from the fact that subsection 73 (2) allows for a forfeited patent application to be “restored and a patent granted”. 
In addition, the FCA found that the legislator did not intend, under section 59, for an alleged infringer to be able to raise a default, in defence of a patent infringement claim, based on an error that occurred during patent application process, prior to the issuance of the patent. [48-50] Jurisprudence indicates that courts have consistently held that the facts and defaults that can be raised are those relating to the patentability of the invention,  and that defects in the administrative process before patent issuance could not be relied upon by an alleged infringer to render a patent void. [55-59]
Thus, the FCA concluded that “It would be absurd in the overall context of the 1989 Act to construe section 59 as enabling an alleged infringer to void a patent (here a successful pharmaceutical patent worth millions if not billions of dollars) say ten years later or even after its expiration, on the basis that the petitioner was a few pennies short.” 
As the FCA noted, this “is the first and most likely the last case”  under section 73 of the 1989 Act. It was essentially an unsuccessful attempt by a generic drug-maker to invalidate an innovator’s patent over a triviality. It is not surprising that courts are reluctant to recognize new grounds of patent invalidity, especially on an administrative basis where a minor error was made that CIPO did not detect, particularly where the error was not solely the fault of the applicant or inventor. The FCA took the additional step of pointing out that courts should be careful before adopting a statutory interpretation in dealing with patent validity when it may put Canada at odds with its trading partners.