Merck & Co. v. Apotex Inc., 2004 FC 1723

Date: 20041209

Docket: T-2792-96

Citation: 2004 FC 1723

Montréal, Quebec, December 9, 2004

Present:           Richard Morneau, Esq., Prothonotary

BETWEEN:

                                                           MERCK & CO., INC.,

MERCK FROSST CANADA & CO.,

SYNGENTA LIMITED,

ASTRAZENECA UK LIMITED and

ASTRAZENECA CANADA INC.

                                                                                                                                             Plaintiffs

                                                                                                          (Defendants by Counterclaim)

                                                                           and

                                                                  APOTEX INC.

                                                                                                                                           Defendant

                                                                                                                (Plaintiff by Counterclaim)

                                            REASONS FOR ORDER AND ORDER

[1]                CONSIDERING the motion by the Defendant and Plaintiff by Counterclaim (Apotex Inc.) for an order relieving it from the implied undertaking rule and to vary the Protective Order issued in this case on July 24, 2000;

[2]                CONSIDERING that said relief is required since Apotex intends to use the Canadian Patent Application Serial Number 518,336 and its Prosecution File History (the "518,336 Application") for the purpose of a Notice of Allegation under the Patented Medicines (Notice of Compliance) Regulations ("Regulations") in respect of the Canadian Letters Patent 1,276,559 (the "559 Patent") listed on the Patent Register maintained under the Regulations for the medicine lisinopril/hydrochlorothiazide (the "Proposed Notice of Allegation");

[3]                CONSIDERING more particularly that Apotex seeks essentially to assert in the Proposed Notice of Allegation that the 576,716 Application, which brought the 559 Patent, is for the same invention as covered by the 518,336 Application - which had been abandoned by Merck & Co., Inc. ("Merck") - and therefore that the 576,716 Application and the 559 Patent are null, void and of no effect;

[4]                CONSIDERING that the Court is satisfied upon the evidence submitted by Apotex in the motion herein that Apotex intends and can assert in the Proposed Notice of Allegation, inter alia, that by reason of the 518,336 Application, the 559 Patent is invalid;

[5]                CONSIDERING that this use by Apotex of the 518,336 Application is for a collateral purpose (which purpose cannot at this juncture and for the purpose of this motion be considered clearly irrelevant);

[6]                CONSIDERING that the need therefore for the motion at bar arises from the fact that there are two legal impediments preventing Apotex from using for its collateral purpose the 518,336 Application in its Proposed Notice of Allegation; those impediments being the implied undertaking rule and the Protective Order issued in this case on July 24, 2000;

[7]                CONSIDERING the teachings found, inter alia, in Merck & Co. v. Apotex Inc. (1997), 1 C.P.R. (4^th) 58 and in Gleadow v. Nomura Canada Inc. (1996), 44 C.P.C. (3d) 133 with respect to the relevant elements regarding the implied undertaking rule and the teachings found in A.B. Hassle v. Canada (Minister of National Health and Welfare), [2004] F.C.J. No. 455; affirmed [2004] F.C.J. No. 1008 (F.C.A.) with respect to variance to a protective order;

[8]                CONSIDERING that in weighing the competing interests of Apotex and Merck (including here those of the AstraZeneca plaintiffs who oppose, similarly to Merck, the granting of the Apotex motion), the following considerations at the end of the day militate in favour of granting Apotex relief from the implied undertaking rule:

-           said relief will not result in any dissemination of the 518,336 Application beyond those parties who already in the present case have access to said application (it is assumed here that the Minister of Health, who will receive proof of service of the Notice of Allegation and who would be a party to any proceeding brought pursuant to the Regulations, is not a competitor of Merck and has no interest in the confidential information, that is the 518,336 Application);

-           said relief will not of and by itself result in legal proceedings being commenced by Apotex against a third party;

-           there are overlapping issues between the proceedings herein and the ones involved in the Proposed Notice of Allegation as far as the 518,336 Application is concerned;

-           contrary to the situation present in Merck and Co., Inc. v. Apotex, supra, Apotex in the Proposed Notice of Allegation proceeding would not be able to compel production of the 518,336 Application.

[9]                CONSIDERING in addition that as far as the Protective Order is concerned, the material paragraph that comes into play is paragraph 11 therein, and since said paragraph simply reiterates essentially the obligation that is imposed by the implied undertaking rule, the same considerations as above militate in favour of varying said paragraph 11 so as to permit Apotex to use the 518,336 Application in its Proposed Notice of Allegation;

[10]            CONSIDERING for the purpose of the instant motion that the Court is satisfied that if Apotex cannot use the 518,336 Application in its Proposed Notice of Allegation, then it would not be able to advance a full and complete argument as to why its allegations of invalidity are justified. Apotex therefore would be seriously impeded in its efforts to obtain a Notice of Compliance for its lisinopril/hydrochlorothiazide product and to bring it on the market at, most likely, a lower price;

[11]            CONSIDERING that the prejudice to Apotex, if the relief it seeks is not granted, outweighs the prejudice elaborated upon by Merck and the AstraZeneca plaintiffs both in written and oral representations;

[12]            CONSIDERING that Apotex has met its burden of proof with respect to the motion under study;

                                                                       ORDER

IT IS HEREBY ORDERED AS FOLLOWS:

1.          Apotex is at liberty to use the Canadian Patent Application Serial Number 518,336 and its Prosecution File History for the purpose of a Notice of Allegation under the Patented Medicines (Notice of Compliance) Regulations in respect of the Canadian Letters Patent 1,276,559 listed on the Patent Register maintained under the Regulations for the medicine lisinopril/hydrochlorothiazide (the "Proposed Notice of Allegation").

2.         Paragraph 11 of the Protective Order issued in this case on July 24, 2000 is varied so as to permit Apotex to use the 518,336 Application in its Proposed Notice of Allegation.

3.          Costs are in the cause.

                                                             FEDERAL COURT

                                                      SOLICITORS OF RECORD

DOCKET:

STYLE OF CAUSE:

T-2792-96

MERCK & CO., INC.

MERCK FROSST CANADA & CO.

SYNGENTA LIMITED

ASTRAZENECA UK LIMITED and

ASTRAZENECA CANADA INC.

                                                                         Plaintiffs

                                        (Defendants by Counterclaim)

and

APOTEX INC.

                                                                      Defendant

                                              (Plaintiff by Counterclaim)

PLACE OF HEARING:                                Montréal, Quebec

DATE OF HEARING:                                  November 29, 2004

REASONS FOR ORDER:                          RICHARD MORNEAU, ESQ., PROTHONOTARY

DATE OF REASONS FOR ORDER:         December 9, 2004

APPEARANCES:

SOLICITORS OF RECORD: