Canada's Supreme Court strips Viagra patent from Pfizer

OTTAWA Fri Nov 9, 2012 1:33am IST

A box of Viagra, typically used to treat erectile dysfunction, is seen in a pharmacy in Toronto January 31, 2008. REUTERS/Mark Blinch/Files

A box of Viagra, typically used to treat erectile dysfunction, is seen in a pharmacy in Toronto January 31, 2008.

Credit: Reuters/Mark Blinch/Files

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OTTAWA (Reuters) - Canada's Supreme Court struck down the patent on global pharmaceuticals giant Pfizer Inc's (PFE.N) Viagra erectile dysfunction drug on Thursday and opened the door to generic competition.

The court backed an appeal by Israeli-based Teva Pharmaceutical Industries Ltd (TEVA.TA) - the world's largest generic drug maker - which argued Pfizer had been too vague when filing its patent, which runs out in 2014 in Canada.

In a unanimous 7-0 verdict, the court said Pfizer had not provided enough details to identify the active ingredient in Viagra.

"Pfizer gained a benefit from the (Patent) Act - exclusive monopoly rights - while withholding disclosure in spite of its disclosure obligations under the act," Justice Louis LeBel wrote on behalf of the court.

"As a matter of policy and sound interpretation, patentees cannot be allowed to 'game' the system in this way ... (the patent) is invalid."

In the past, Pfizer has successfully defended patent lawsuits from Teva in the United States, Spain, Norway and New Zealand.

"Pfizer expects to face generic competition in Canada shortly. The company ... is disappointed with the court's ruling," the firm said in a statement e-mailed to Reuters.

Company spokeswoman Christina Antoniou, citing commercial confidentiality, declined to say how much the Canadian Viagra market is worth.

Pfizer's Canadian patent - which came into force in 1998 - was divided into seven parts and covered 260 quintillion different chemical compounds.

But only one of the compounds - sildenafil - was active and the court said the patent had not provided enough information to allow another company to produce Viagra.

"Pfizer had the information needed to disclose the useful compound and chose not to release it," the ruling said.

"Even though Pfizer knew that the effective compound was sildenafil at the time it filed the application ... it chose a method of drafting that failed clearly to set out what the invention was."

LeBel - who said "wilful intent to mislead has not been alleged or proven in this case" - noted that Pfizer's submission to the Supreme Court had offered no explanation for withholding the information.

Teva took the case to the Supreme Court after two lower courts in Canada ruled against it. No one at the firm was immediately available for comment.

Damien Conover, an analyst at Morningstar, said he expects the Canadian ruling to have minimal impact on Viagra sales in the United States, even though people are more likely to buy "lifestyle" drugs such as Viagra as generics than they are to buy generic life-saving drugs.

"But I think it'll be a minor impact. I can't say how much it will hurt (U.S.) sales, but it'll be minimal," Conover added.

Even Teva isn't expected to gain much, said Kevin Kedra, an analyst at Gabelli & Co. "I don't think this is something that will move the needle for either company," he said.

Viagra is Pfizer's sixth-biggest medicine, with annual sales of about $2 billion. Its sales have been crimped by competition from Eli Lilly and Co's longer-acting Cialis.

The case is 33951, Teva Canada Ltd against Pfizer Canada Inc et al.

(With additional writing by Jeffrey Hodgson, additional reporting by Debra Sherman; Editing by Jan Paschal, Andrew Hay and Peter Galloway)

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