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Court of Appeal permits Janssen to amend its plea, dissolves STELARA injunction and orders new trial

The Federal Court of Appeal ("FCA") has ordered a new trial in the STELARA litigation. As reported in the January 20, 2014 issue of IP Update — Canada, earlier this year Justice Hughes of the Federal Court concluded that Janssen Inc (Janssen)'s antibody drug STELARA (ustekinumab) infringed AbbVie's patent for the use of an antibody with certain characteristics for the treatment of psoriasis, and that the patent was valid (2014 FC 55). Following a second trial, Justice Hughes granted AbbVie an injunction (2014 FC 489, reported in the June 2014 edition of Rx IP Update).

On October 28, 2014, the Federal Court of Appeal granted Janssen’s appeal of a pre-trial Order denying its request to plead further prior art references, consequently set aside the lower Court’s decision declaring the subject patent to be valid and infringed, and remitted the matter back to the trial court for a hearing before a new judge (2014 FCA 242). The injunction was also set aside (2014 FCA 241).

Janssen’s appeal from the order dismissing its motion to amend

In allowing Janssen’s appeal, thus permitting Janssen to plead further prior art references, the FCA held that the Judge did not give sufficient weight to all relevant considerations. In so holding, the FCA acknowledged that the Judge relied on relevant factors, such as timeliness, the extent to which amendments would delay a trial and the extent to which a position taken by the party seeking the amendment would require the other party to change its position; however, it found the Judge failed to consider other important factors including that the party seeking an amendment must demonstrate that prejudice to the other party can be compensated in costs and that allowing the amendment is in the interests of justice. As the Judge failed to fully consider these criteria, there was a legal error and the FCA considered the matter de novo and arrived at a different conclusion.

Of particular importance to the FCA was that the Judge failed to give proper weight to the interests of justice, indicating that “it would have served the interests of justice that all the relevant prior art be before the Judge to allow him to fully address the issue of obviousness especially in a case where Janssen was not on a fishing expedition for “the” piece of prior art that would support its position” (indeed, the parties’ experts knew of the existence of one of the references and agreed it formed part of the common general knowledge and it was alleged that AbbVie’s expert was an author of another reference). In considering the criteria to be met, and finding that Janssen’s motion to amend should be allowed, the FCA cautioned that the decision whether or not to grant an amendment is to be conducted on the facts of each case.

To Continue the Trial or Start Fresh

Despite AbbVie’s request that the matter be remitted only on the issues of obviousness and overbreadth, the FCA held that the matter should be retried on all issues because: (i) all issues were decided by the Judge; (ii) the finding of infringement was contingent on the finding of validity; (iii) issues of infringement and validity were intertwined; and (iv) to do otherwise would require the FCA to “transform itself into a court of first instance” and “receive and assess the evidence, including the fresh evidence, and draw conclusions on what findings may be affected by the new documents.” A new trial date has not yet been set.

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