Date: 20060925
Docket: T-1965-05
Citation: 2006
FC 1135
Ottawa, Ontario, September 25, 2006
PRESENT: The Honourable Madam Justice Tremblay-Lamer
BETWEEN:
SANOFI-AVENTIS
CANADA INC.
Applicant
and
NOVOPHARM LIMITED and
THE MINISTER OF HEALTH
Respondents
and
SCHERING CORPORATION
Respondent/Patentee
REASONS FOR ORDER AND ORDER
[1]
This is an
appeal of an Order of Prothonotary Martha Milczynski, dated May 8, 2006, by
which she dismissed Novopharm’s motion for summary dismissal of the within
application brought under paragraph 6(5)(b) of the Patented Medicines
(Notice of Compliance) Regulations, SOR/93‑133 (the Regulations),
which empowers the Court to dismiss an application where it is redundant,
scandalous, frivolous or vexatious or is otherwise an abuse of process.
Novopharm asserted that the application was an abuse of process and that
the proceeding was barred from continuing on the basis of res judicata
or issue estoppel having regard to the decision in Aventis Pharma Inc. v.
Apotex Inc. et al. 2005 FC 1283, (2005), 43 C.P.R. (4th) 161
(F.C.) (the First Aventis ‘206 Application), aff’d 2006 FCA 64, (2006), 46
C.P.R. (4th) 401 (F.C.A.), leave to appeal ref’d, [2006] S.C.C.A. No. 136.
FACTS
The Main Proceeding
[2]
On February
12, 2005, Novopharm sent a Notice of Allegation (Novopharm’s NOA) to Aventis
pursuant to section 5 of the Regulations in relation to its 1.25 mg, 2.5 mg, 5
mg and 10 mg strengths of oral capsules of the drug ramipril and Canadian
Patent No. 1,341,206 (the ‘206 Patent).
[3]
Pursuant
to subparagraph 5(1)(b)(iii) of the Regulations, Novopharm’s NOA alleges (at
section 2.5, pages 6 to 16) that claims 1, 2, 3, 6 and 12 of the ‘206 Patent
are not valid and that claim 12 of the ‘206 Patent is not infringed. The
remaining claims are not relevant as they do not relate to the “medicine”,
ramipril.
[4]
In
particular, Novopharm’s NOA alleges, at section 2.5, pages 6 to 16, that the
‘206 Patent is invalid on the basis that:
(a) the
inventors had not tested all of the compounds claimed in claims 1, 2, 3, 6 and
12 as of either the priority date of the ‘206 Patent or the Canadian filing
date of the ‘206 Patent, and that therefore the inventors could not have
demonstrated utility for all of the claimed compounds in claims 1, 2, 3, 6 and
12; and
(b) the
inventors did not have a sound basis for predicting that all of the compounds
covered by claims 1, 2, 3, 6 and 12 would work as of either the priority date
of the ‘206 Patent or the Canadian filing date of the ‘206 Patent.
[5]
These same
allegations of invalidity based on a lack of sound prediction were held to be
justified by this Court in the First Aventis ‘206 Application. Novopharm’s NOA
cites all of the prior art cited in the Apotex NOA, and by Apotex’s
affiants, in the First Aventis ‘206 Application.
[6]
In response
to Novopharm’s NOA, Aventis commenced an application pursuant to the
Regulations, which seeks an order prohibiting the Minister from issuing a
Notice of Compliance (NOC) to Novopharm in relation to 1.25 mg, 2.5 mg, 5 mg
and 10 mg strengths of oral capsules of the drug ramipril until after the
expiry of the ‘206 Patent.
The First Aventis ‘206
Application
[7]
In the First
Aventis ‘206 Application, Court file no. T-1742-03, Apotex sent an NOA to
Aventis in relation to oral capsules of the drug ramipril (the Apotex NOA). The
Apotex NOA alleged that the ‘206 Patent was invalid due to a lack of sound
prediction with respect to the claims in the patent. This is also an allegation
made by Novopharm in Novopharm’s NOA.
[8]
In
response to the Apotex NOA, Aventis commenced the First Aventis ‘206 Application.
Aventis sought an order prohibiting the Minister from issuing an NOC to Apotex
in relation to oral capsules of the drug ramipril until after the expiry of the
‘206 Patent. Schering was also a party to the first Aventis ‘206 application,
as was the Minister.
[9]
By Reasons
for Order and Order, dated September 20, 2005, my colleague Justice Anne Mactavish dismissed the First
Aventis ‘206 Application and held that the allegations of a lack of sound
prediction with respect to the ‘206 Patent were justified. Based on the
decision of Justice Mactavish it is clear that the claims at issue before her
in the First Aventis ‘206 Application were the same claims that are at issue in
the present application, namely, claims 1, 2, 3, 6 and 12 of the ‘206 Patent.
[10]
Aventis
appealed Justice Mactavish’s decision in the First Aventis ‘206 Application.
That appeal was dismissed by the Federal Court of Appeal on February 13, 2006.
Schering participated in the appeal as a respondent.
Prothonotary Milczynski’s
Decision
[11]
On March
15, 2006, Novopharm brought a motion to
dismiss the current application on the basis that it is barred by res
judicata or issue estoppel, that it is redundant, scandalous, frivolous or
vexatious, or otherwise an abuse of process.
[12]
The motion
was heard by Prothonotary Milczynski on May 5, 2006. By Order dated May 8,
2006, she dismissed Novopharm’s motion, without prejudice, on the basis that
the application of the doctrines of res judicata, issue estoppel and
abuse of process require that there be a final decision and that a decision is
only final and binding when all available reviews have been exhausted or
abandoned. In this regard, she relied upon the Supreme Court of Canada’s
decision in Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3
S.C.R. 77 at paragraph 46. In her reasons, Prothonotary Milczynski did not
question the merits of the motion, or the availability of the relief sought by
Novopharm. Her only concern was that the test for res judicata had not
been met as the decision in the First Aventis ‘206 Application relied upon by
Novopharm was not final as all appeals had not been exhausted given Aventis’
pending leave to appeal to the Supreme Court of Canada.
[13]
On April
18, 2006, over a month after Novopharm served Aventis and Schering with its
motion to dismiss this application, and over two months after the decision of
the Court of Appeal in the First Aventis ‘206 Application was rendered, Aventis
filed a motion to the Supreme Court of Canada for leave to appeal from the
decision of the Federal Court of Appeal in the First Aventis ‘206 Application.
[14]
The leave
to appeal to the Supreme Court was dismissed with costs and without reasons on
August 3, 2006: [2006] S.C.C.A. No. 136.
[15]
I note
that if ever there was any doubt on the finality of the decision at issue prior
to this determination, it is now clear that the decision is final.
[16]
"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." Merck & Co., Inc. v. Apotex Inc.,
2003 FCA 488, [2004] 2 F.C.R. 459 (F.C.A.) at para. 19.
[17]
In the
present case, the question raised in the motion is clearly one vital to the
final issue of the case. I agree with counsel for Novopharm that “for the test
as to relevance to the final issue of the case, the issue to be decided should
be looked to before the question is answered by the prothonotary,
whereas that as to whether it is interlocutory or final (which is purely a pro
forma matter) should be put after the prothonotary’s decision. Any other approach,
it seems to me, would reduce the more substantial question of “vital to the
issue of the case” to the merely procedural issue of interlocutory or final and
preserve all interlocutory rulings from attack (except in relation to errors of
law).” Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425 at
464-465.
[18]
Further, Prothonotary
Milczynski’s May 8, 2006 Order was in my view clearly wrong in finding that a
decision is only final for the purposes of paragraph 6(5)(b) of the Regulations
when all available appeals have been exhausted. I agree with Novopharm that the
Supreme Court of Canada’s statement in Toronto (City) v. Cupe, [2003] 3 S.C.R. 77 on which
the prothonotary relied, is obiter and cannot displace, the fundamental rule, which
in my view, is that a court order stands and is final and binding unless and
until it is reversed on appeal. (Wilson v. The Queen, [1983] 2 S.C.R. 594; Dagenais v. Canadian
Broadcasting Corp., [1994] 3 S.C.R. 835 at 871; Danyluk v. Ainsworth
Technologies Inc., [2001] 2 S.C.R. 460 at para. 19; Dableh v. Ontario
Hydro, [1994] O.J. No. 2771 (Ont. Gen. Div.) at para. 9). Further, the potential
for inconsistent judgments may be resolved with the possibility of obtaining a
stay of an execution of a judgment until the leave application from the Supreme Court
of Canada has
been decided. In the present case, however, the issue is moot as leave to
appeal has been denied by the Supreme Court of Canada.
[19]
I agree
with Novopharm that, from a policy perspective, a flexible application of the
doctrine of abuse of process is appropriate due to the summary nature of the
proceedings and the 24‑month time period in which they must be
conducted. If litigants were required to await the outcome of leave
applications to the Supreme Court of Canada, it would only encourage such
applications, would create unnecessary duplicative litigation and would
effectively permit parties to sidestep the intent of paragraph 6(5)(b) of the
Regulations.
[20]
In light
of the above, I will review the matter de novo.
2. Test for Paragraph 6(5)(b)
[21]
Paragraph
6(5)(b) of the Regulations provides as follows:
|
6(5)
In a proceeding in respect of an application under subsection (1), the court
may, on the motion of a second person, dismiss the application
[…]
(b)
on the ground that the application is redundant, scandalous, frivolous or
vexatious or is otherwise an abuse of process.
|
6(5)
Lors de l’instance relative à la demande visée au paragraphe (1), le tribunal
peut, sur requête de la seconde personne, rejeter la demande si, selon le
cas :
[…]
b) il conclut qu’elle est
inutile, scandaleuse, frivole ou vexatoire ou constitue autrement un abus de
procédure.
|
[22]
I agree
with Novopharm that as a matter of statutory interpretation, it is clear that
the legislature did not intend to restrict the Court’s ability to dismiss
proceedings under paragraph 6(5)(b) to cases where the traditional test for res
judicata or issue estoppel (the latter being one form of res judicata)
has been met.
[23]
This Court
has generally held that in order to strike out a proceeding for being
redundant, scandalous, frivolous, vexatious or otherwise an abuse of process,
the moving party must show that the case is “so clearly futile that it has not
the slightest chance of success”. This test has been applied several times in
s. 6(5)(b) cases: Pfizer Canada Inc. v. Apotex Inc. (1999), 1 C.P.R.
(4th) 358 (F.C.T.D.) at paras. 28-32; Bayer Inc. v. Apotex Inc. (1998),
85 C.P.R. (3d) 334 (F.C.T.D.) at paras. 23-24; AB Hassle v. Apotex Inc.,
2001 FCT 530, (2001), 12 C.P.R. (4th) 289 (F.C.T.D.) at para. 28; AstraZeneca
AB v. Apotex Inc. 2002 FCT 1249, (2002), 23 C.P.R. (4th) 213
(F.C.T.D.) at para. 11.
[24]
When
dealing with a paragraph 6(5)(b) motion, the courts have also applied the
“plain and obvious” test such that an application will be dismissed where it is
“plain and obvious” that the applicant has no chance of success: Apotex Inc.
v. Merck Frosst Canada Inc. (1999), 87 C.P.R. (3d) 30 (F.C.A.) at paras.
5-6; GlaxoSmithKline Inc. v. Apotex Inc., 2003 FC 1055, (2003), 29 C.P.R.
(4th) 350 (F.C.) at paras. 12-13.
[25]
Novopharm
submits that in this application Aventis and Schering are attempting to
re-litigate the same issue that was already fully litigated and decided by
Justice Mactavish, namely whether the ‘206 Patent is invalid on the basis of a
lack of sound prediction. The Court has already made a determination of this
issue and Aventis and Schering should not be permitted to re-litigate the same question
again, as this
would constitute an abuse of process.
[26]
The
doctrine of abuse of process was discussed at length by the Supreme Court of
Canada in Toronto (City) v. Canadian Union of Public Employees (C.U.P.E.),
Local 79, [2003] 3 S.C.R. 77. I recently reviewed the doctrine and the
Supreme Court’s decision in Aventis Pharma Inc. v. Apotex Inc., 2005 FC
1504, [2005] F.C.J. No. 1843 (F.C.)(QL) at paragraphs 28 to 29:
28 The doctrine provides the Court
with an inherent and residual discretion to prevent the misuse of its
procedure. The doctrine is flexible and is "unencumbered by the specific
requirements of res judicata": C.U.P.E., supra, at para. 42.
Whereas issue estoppel focuses "on the motive or status of the parties,
the doctrine of abuse of process concentrates on the integrity of the
adjudicate process": C.U.P.E., supra, at para. 51. As
explained by Layden-Stevenson J. in AB Hassle, supra, at para.
94:
While critics have argued that when the
doctrine of abuse of process is used as proxy for issue estoppel it obscures
the true question, while adding nothing but a vague sense of discretion, that
is not so. In all of its applications, the primary focus of the doctrine of
abuse of process is the integrity of the adjudicative function of courts. The
focus is less on the interests of the parties and more on the integrity of judicial
decision making as a branch of the administration of justice. When the focus is
properly on the integrity of the adjudicative process, the motive of the party
who seeks to relitigate cannot be a decisive factor. [emphasis added]
29 Abuse of process has a strong
public policy dimension. Arbour J. in C.U.P.E., supra, stated
that the policy grounds for both issue estoppel and abuse of process are
essentially the same. At pages 103‑104, she quoted from D. J. Lange, The
Doctrine of Res Judicata in Canada (2000) at pp. 347-48:
The two policy grounds, namely, that
there be an end to litigation and that no one should be twice vexed by the same
cause, have been cited as policies in the application of abuse of process by
relitigation. Other policy grounds have also been cited, namely, to preserve
the courts' and the litigants' resources, to uphold the integrity of the legal
system in order to avoid inconsistent results, and to protect the principle of
finality so crucial to the proper administration of justice.
[27]
There is
no dispute that in the NOA giving rise to this proceeding, Novopharm alleges
that the ‘206 Patent is invalid on the basis of a lack of sound prediction. There
is also no dispute that this allegation relating to the ‘206 Patent was already
found to be justified by Justice Mactavish and the Federal Court of Appeal in
previous proceedings. The central issue to be decided in the present application,
specifically whether the ‘206 Patent lacks sound prediction, has thus already
been fully litigated by Aventis and Schering.
[28]
In my view, whether one
characterizes the particular kind of abuse as redundant, scandalous, frivolous
or vexatious, it is an abuse of process for Aventis and Schering to re-litigate
the very issue that was decided in the First Aventis ‘206 Application. One of
the purposes of the Regulations is to reduce unnecessary litigation. It would
be contrary to the purposes of the Regulations to allow a first person to re-litigate the same
issues in subsequent litigation, and thereby benefit from additional 24‑month
injunction periods with each “re-litigation". Such an attempt to challenge
a determined matter by seeking a second prohibition under the Regulations on
precisely the same issue is undeniably an abuse of process.
[29]
Furthermore,
barring narrow exceptions, such
re-litigation is
an inefficient use of judicial resources, denigrates the integrity of the
justice system and violates the principle of finality which is crucial
to the proper administration of justice. In order to ensure the just and
expeditious resolution of cases, courts must guard against repetitious
litigation which wastes the time and resources of both litigants and the courts,
and threatens the principle of finality.
[30]
Aventis and Schering submit that
while Justice Mactavish’s decision was upheld by the Court of Appeal, it is
trite law that any decision in a section 55.2 proceeding is not a final
determination of validity or infringement. Indeed, there may subsequently be a
full trial centred on the validity issue. In this regard, Schering cites
Justice Mactavish’s decision in the First Aventis ‘206 Application, at paras.
19, 23-24 aff’d by F.C.A., at paragraph 7. Firstly, I note that the
purpose of her statements, as well as the purpose of those of the Court of
Appeal, was to caution against equating NOC proceedings to actions for the
determination of patent validity or infringement. Moreover, while what Schering
asserts is true, this does not change the fact that to bring an application
under the Regulations in response to an NOA, the allegations of which have been
found to be justified in a previous case on the same basis, is in my opinion an
abuse of process. Simply because the Novopharm NOA raises additional support
for the sound prediction argument does not change the fact that Justice
Mactavish’s decision on sound prediction will stand (particularly since it
was upheld by the Court of Appeal) and that the same result would have to
be reached in the current application.
[31]
In light
of the decision in the First Aventis ‘206 Application, and because the Court of
Appeal’s decision is binding, it should come as no surprise that this
application will be dismissed on the very same grounds, and the NOA found to be justified
on the basis of sound prediction.
[32]
Aventis and Schering submit that
the evidence filed in this case addresses specific issues in the Novopharm NOA,
some of which are different than those raised in the Apotex NOA. They also
assert that they have different evidence in this application than they had in
the First Aventis ‘206 Application. As stated by Justice Dolores Hansen in Glaxo Group Ltd.
v. Canada (Minister of Health), 2001 FCT 16, [2001] F.C.J.
No. 159 (T.D.)(QL) at paragraph 16:
In Hofffman-LaRoche, supra,
the factors that led Rothstein J. to conclude there was an abuse of process are
analogous to the facts before me. The applicants and the patents are the same
in both proceedings, the Notices of Allegation are in all material respects
identical, and the issues were fully litigated in the first proceeding. The
only distinguishing aspect between the first and current applications is that
Glaxo believes it has a better evidentiary basis on which to litigate the
issues. Litigants who have already litigated a matter, but lost, should not
be permitted to re-litigate because they have acquired new evidence. This,
in my view, is an abuse of the Court's process. [Emphasis added]
[33]
In my view, Aventis
and Schering
are essentially attempting to revise and tweak the arguments which they had put
before Justice Mactavish and which she ultimately rejected when she dismissed
the First Aventis ‘206 Application. This kind of approach obviously cannot be
condoned. Significantly,
Aventis and Schering have not asserted that this allegedly “better evidence”
was unavailable at the time of the prior application. In my opinion, it seems
obvious that they are simply attempting to bolster the evidence presented on
the First Aventis ‘206 Application, which is a clear abuse of process and
impermissible.
[34]
Finally, Schering relies on two decisions,
both rendered by Justice Carolyn Layden-Stevenson, for the proposition that in order to
strike out an application under paragraph 6(5)(b), the second person must demonstrate that each of
the grounds advanced by the first person is futile: AstraZeneca AB, above,
at para. 7; AstraZeneca Canada Inc. v. Apotex Inc., 2002 FCT 1250 (2002)
23 C.P.R. (4th) 378 at para. 8.
[35]
I agree
with Schering that a paragraph 6(5)(b) motion should only be granted when the
second person has shown that the entire
application is futile. However, in the First Aventis ‘206 Application, Justice
Mactavish found, at paragraphs 174 to 177, that Apotex’s NOA was sufficient
with respect to the sound prediction issue. The NOA relating to this
application raises the same allegations that were raised in the First Aventis
‘206 Application with regard to the invalidity of the ‘206 Patent.
Specifically, both NOAs allege invalidity on the basis of a lack of sound
prediction and both ground these allegations on the same factual basis. Given that
Novopharm’s NOA is in all material respects identical to Apotex’s NOA
regarding the claim of sound prediction, the new application is clearly futile as
Justice Mactavish’s decision regarding the sufficiency of the NOA remains in
place. To reiterate, allowing Aventis to argue the sufficiency of the NOA, as it
intended to do, would amount to a re-litigation of that issue, which is an
abuse of process.
CONCLUSION
[36]
There is
no question that it is “plain and obvious” that Aventis has no chance of
success with respect to their current ‘206 application as the Federal Court is
bound to follow the decision of the Federal Court of Appeal in the First
Aventis ‘206 Application. In other words, the case is “so clearly futile that
it has not the slightest chance of success”.
[37]
In light
of the foregoing, the Order of Prothonotary Milczynski, dated May 8, 2006, will
be set aside, and the application dismissed, with costs, as an abuse of
process.
ORDER
THIS COURT ORDERS that
[1]
The motion
for appeal of Prothonotary Milczynski’s Order, dated May 8, 2006, is granted.
[2]
The NOC
application is dismissed as an abuse of process.
[3]
The whole
with costs.
“Danièle
Tremblay-Lamer”
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