Date: 20060705
Docket: T-737-06
Citation: 2006 FC 846
Ottawa, Ontario, July 5, 2006
PRESENT: The Honourable Mr. Justice Mosley
BETWEEN:
APOTEX INC.
Applicant
and
THE MINISTER OF HEALTH
Respondent
REASONS FOR ORDER AND ORDER
[1] This is an appeal by Apotex Inc., from the order of Prothonotary Milczynski dated June 12, 2006 in which the prothonotary declined to grant a protective order requested by the applicant until it had given notice to and named all of the proper and necessary parties as respondents to its application. Prothonotary Milczynski adjourned the motion for a protective order until a date to be fixed and ordered Apotex to remedy the deficiency in notice within twenty days of the date of the order.
[2] The underlying application, filed April 26, 2006, is for an order to compel the respondent Minister to process Apotex' Abbreviated New Drug Submission ("ANDS") for a drug product, which the applicant has thus far described as "Product X. Apotex has represented to the Minister that the submission does not attract the application of the Patented Medicine (Notice of Compliance) Regulations SOR/93-133, as amended, (the "NOC Regulations"). The Minister has taken the position that those regulations ought to apply and has refused to issue a notice of compliance.
[3] The ANDS process allows a drug manufacturer to avoid having to prove the safety and efficacy of a new drug where the drug is comparable to a "Canadian reference product," as defined in section C.08.001.1 of the Food and Drug Regulations, C.R.C., c.870. In essence, a Canadian reference product is a bioequivalent drug of proven safety and efficacy. In these proceedings, Apotex has not identified the name of its drug and has disclosed neither the Canadian reference product it relies upon, nor its manufacturer.
[4] Apotex contends that it has not disclosed this information as to do so would severely prejudice its competitive position vis-à-vis other drug manufacturers. It asserts that all drug manufacturers take steps to protect their development strategies for bringing drug products to the market in Canada and that the Minister treats the ANDS process as highly confidential. Apotex submits that it is entitled to a broad protective order to litigate its dispute with the Minister, including withholding the name of the drug product and the Canadian reference product from the public record so as to prevent prospective competitors from learning of its plans.
[5] Rule 151 of the Federal Court Rules, 1998, SOR/98-106 as amended, permits the Court, in its discretion, to treat some material as confidential, and restrict access thereto, notwithstanding the public interest in open and accessible court proceedings. The tension between the open court principle and the interest of parties to protect information was addressed by the Supreme Court of Canada in Sierra Club of Canadav. Canada (Minister of Finance) [2002] 2 S.C.R. 522, 2002 SCC 41">2002 SCC 41 [Sierra Club]. A two-part test was laid out in that decision. The confidentiality order must be necessary to prevent a serious risk to an important interest because reasonably alternative measures will not prevent the risk and the salutary effects of the order must outweigh its deleterious effects including the effects on the public interest in open and accessible court proceedings.
[6] Apotex submitted the affidavit of its Chair and Chief Executive Officer, Dr. Bernard Sherman to provide an evidentiary foundation for the issuance of the protective order. Dr. Sherman asserts, among other things, that if a protective order is not granted, Apotex will be forced to disclose secret and valuable confidential information to its prejudice.
[7] In declining to grant the requested order, Prothonotary Milczynski stated that she was not satisfied that Apotex had ensured that every person who may be directly affected had been served in accordance with Rule 303(1) of the Federal Court Rules, 1998 or that it would be appropriate to consider the motion until the matter of the proper parties to the underlying application was resolved.
[8] The standard of review on the appeal of a prothonotary's decision is that set out in Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425, 149 N.R. 273 (F.C.A.), as clarified by Décary J.A. in Merck & Co. v. Apotex Inc., [2004] 2 F.C.R. 459, 2003 FCA 488 at paragraph 19:
Discretionary orders of prothonotaries ought not be disturbed on appeal to a judge unless: (a) the questions raised in the motion are vital to the final issue of the case, or (b) the orders are clearly wrong, in the sense that the exercise of discretion by the prothonotary was based upon a wrong principle or upon a misapprehension of the facts.
[9] Apotex does not suggest that the questions raised in this motion are vital to the final issue of the case, that being the question of the pertinence of the PM (NOC) Regulations to its AND submission. Rather it argues that Prothonotary Milczynski has "fallen into error of law" that no deference should be accorded her decision and the Court should decide the matter de novo.
[10] Apotex submits that there is no one directly affected by the application other than the Minister and that the Minister's objection is nothing more than a collateral attack on its Notice of Application. That attack should not have been entertained in response to Apotex' motion for a protective order and there is no evidentiary basis for the conclusion that Apotex is not in compliance with Rule 303(1). The Minister has submitted no evidence to show that a third party innovator exists, that it was marketing its brand of the medicine or that it would have standing to be involved in the application.
[11] The respondent acknowledges that an ANDS is ordinarily treated confidentially by both the Minister and the Courts. However, the respondent submits, it is apparent from the application itself that the rights of the manufacturer of the reference drug to which comparison is made in an ANDS, commonly an "innovator" pharmaceutical company, may be affected. The issue to be determined in the underlying application is whether the NOC Regulations apply. As that issue may affect the rights of a third party, every person directly affected by the application should be named as a respondent.
[12] The respondent points to two decisions of this Court, in respect of the NOC Regulations, in which the applicant generic had not disclosed the innovator's identity and was required to do so. In Apotex Inc. v. Attorney-General of Canada et al., (1994), 79 F.T.R. 235, 56 C.P.R. (3d) 261 (T.D.) Justice Simpson concluded that a patent holder has an interest which on its application may lead to the granting of party status in proceedings between the generic and the Minister and that it was necessary to so identify the patent holder so it could decide whether to take steps to participate.
[13] In Apotex Inc. v. Canada (Minister of Health(2000), 186 F.T.R. 84, 4 C.P.R. (4th) 421 (T.D.) the generic sought to use a foreign product not sold in Canada as the Canadian Reference Product and disclosed the innovator's identity only in the face of motions to intervene brought by several other companies and an industry association. Apotex then sought to have the participation of the innovator with the proprietary interest limited. Justice McGillis held that the innovator was entitled to unrestricted party status.
[14] I see no substantial difference between what Apotex seeks to achieve in the present matter and what it attempted to do in the case before Justice McGillis in 2000. It seeks to litigate its dispute with the Minister over the application of the NOC Regulations without the inconvenient intervention of an innovator company which may have proprietary rights over the Canadian Reference Product upon which it seeks to rely in its ANDS.
[15] The overarching principle at issue in this matter is that of the public interest in open and accessible court proceedings. The authority to grant a protective order is a discretionary exception to that principle. The commercial interests of the applicant are of secondary importance but can be accommodated where, as set out in Sierra Club, the salutary effects of a protective order outweigh its deleterious effects. When faced with a motion to grant such an order, a prothonotary has the responsibility to ensure, in my view, that the party seeking the exercise of the Court's discretion has served notice on all persons who may be directly affected by the underlying application.
[16] The motion for a protective order in this context cannot be isolated from the question of whether all of the necessary parties have been properly served notice of the underlying application as one effect of granting the order will be to prevent anyone who may have an interest from learning of the proceedings. I agree with the respondent that it was apparent that the proprietary interests of a third party innovator may be directly affected by the application and the motion. Given the nature of the regulatory scheme, evidence to establish this was not required.
[17] I am, therefore, not persuaded that the Prothonotary erred in the sense that the exercise of her discretion was wrong in principle or based upon a misapprehension of the facts and will not disturb her order. In light of the time required to present and consider this appeal, however, I will extend the time granted Apotex to remedy the deficiency in serving notice of its application to twenty days from the date of my Order. As the respondent has not requested costs, none shall be awarded.
ORDER
THIS COURT ORDERS that the appeal from the Order of Prothonotary Milczynski dated June 12, 2006, is dismissed without an award of costs. The Order of Prothonotary Milczynski is varied to provide that Apotex shall have twenty days from the date of this Order to remedy the deficiency.
"Richard G. Mosley"
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