Date: 20021105
Court File: T-472-02
Neutral citation: 2002 FCT 1143
Ottawa, Ontario, this 5th day of November, 2002
Present: THE HONOURABLE JUSTICE SIMON NOËL
BETWEEN:
BIOVAIL CORPORATION and
GALEPHAR P.R. INC.
Applicants
and
THE MINISTER OF NATIONAL HEALTH
AND WELFARE
and RHOXALPHARMA INC.
Respondents
REASONS FOR ORDER AND ORDER
[1] This is a motion on behalf of the applicants Biovail Corporation and Galephar P.R. Inc. ("Biovail") for:
a) An Order pursuant to Rule 51 of the Federal Court Rules, 1998, reversing the decision of Prothonotary Lafrenière dated September 19, 2002 denying the applicants' motion for an Order:
ii) requiring the respondent RhoxalPharma Inc. ("Rhoxal"), pursuant to section 6(7) of the Patented Medicines (NOC) Regulations, SOR/93-133 (the "Regulations"), to produce, or make available for inspection by Biovail all portions of any New Drug Submission filed by Rhoxal that discloses, discuss or refers to the controlled release formulation of diltiazem referred to in the NOA("NOA") delivered by Rhoxal and/or for which Rhoxal is allegedly seeking a NOC ("NOC");
- ii) requiring the Minister to verify that any portions of any New Drug Submission produced correspond fully to the information in any such New Drug Submission;
- iii) requiring Rhoxal to produce any portions of the Abbreviated New Drug Application ("ANDA") of Andrx Pharmaceuticals Inc. ('Andrx") and other documents in the possession, custody or control disclosing the formulation alleged by Rhoxal to have been the "subject of the proceedings" in the U.S. litigation referred to in the NOAdelivered by Rhoxal; and
- iv) allowing Biovail to file responding or reply evidence to the portions of any New Drug Submission produced by Rhoxal, and to the portions of any ANDS filed by Andrx produced by Rhoxal;
- b) granting such an Order;
- c) the costs of this motion; and
d) such further and other relief as this Honourable Court may deem just.
[2] The motion is also for:
a) An Order permitting the applicants to file evidence in reply to the opinion evidence of Dr. Weiner dated June 28, 2002;
- b) costs of this motion; and
- c) such further and other relief as this Honourable Court may deem just.
[3] This last part of the motion was already before Prothonotary Lafrenière, however the new supporting affidavit of Ms. Dina Khairo dated September 17, 2002 was not before the Prothonotary when the applicant's motion was argued, therefore I decided to refer the said part of the motion to Prothonotary Lafrenière.
[4] Furthermore, the order for the production of any portions of the ANDA of Andrx Pharmaceuticals Inc. ("Andrx") is moot since counsel for Rhoxal draw the attention of the Court to paragraph 5 of the affidavit of Mr. L. Arsenault dated August 22, 2002 (Motion Record of Biovail (MRB), Book 3, Tab 14) which says that Rhoxal does not have a copy of the ANDA of Andrx, nor is Andrx a party to these proceedings or a party under Rhoxal's control. Therefore, this part of the motion became academic since Rhoxal did not have any control on the information requested. Counsel for Biovail agreed to the situation as presented.
[5] All that remains to be dealt with is the decision of Prothonotary Lafrenière that denies Biovail an Order to divulge all portions of any New Drug Submission that refers to diltiazem as referred in the NOAof Rhoxal, to require the Minister to verify the said disclosure and to permit Biovail to respond or file reply evidence to the portions of any New Drug Submission produced by Rhoxal.
THE FACTS:
[6] Biovail is the exclusive licensee of Canadian patent no. 2,111,085 entitled Extended Release Form of Dilitiazem relating to the drug diltiazem (the '085 patent). The '085 patent was placed on the patent register by Biovail.
[7] On July 24, 2001, Rhoxal forwarded a first NOA to Biovail.
[8] On August 31, 2001, Rhoxal sent to Biovail excerpts from its ANDS comprising a list of ingredients and manufacturing instructions.
[9] By application dated September 12, 2001, Biovail initiated proceedings to prohibit the Minister of Health (the Minister) from issuing a NOC to Rhoxal in connection with its 120mg, 180mg, 240mg, 300mg and 360mg diltiazem hydrochloride capsules until the expiration of the '085 patent.
[10] On September 24, 2001, Rhoxal withdrew its first NOA and requested that Biovail discontinue the proceedings which were rendered moot by the withdrawal. Biovail failed to discontinue the proceedings. On July 12, 2002, the Court forwarded to the parties a notice of status review. A motion for dismissal is presently pending.
[11] On January 31, 2002, Rhoxal sent to Biovail a second NOA alleging the non-infringement and the invalidity of the '085 patent. This NOAhas 16 pages.
[12] In its NOA, Rhoxal described its formulation as follows:
"The diltiazem and the sugar in the Rhoxal capsule are not in admixture. The claimed term 'admixture" requires that two or more items be commingled and interdispersed to obtain a homogenous product. The Phoxal product contain beads having a neutral and solid sugar core coated with multiple superimposed layers of a mixture of dilitiazem hydrochloride (a dilitiazem salt) and common adjuvants namely, ethylcellulose and polyvinylpyrrolidone, these multiple layers being topped with an enteric coat. Thus, sugar in the Rhoxal capsule is used as a solid support otherwise known as a "seed", on which other substances are layered by coating in a fluidized bed apparatus. Thus sugar is not in "admixture".
[13] By application dated March 19, 2002, Biovail initiated the present proceedings to prohibit the Minister from issuing a NOC to Rhoxal in connection with its 120mg, 180mg, 240mg, 300mg and 360mg diltiazem hydrochloride capsules until the expiration of the '085 patent.
[14] On April 8, 2002, at the request of Rhoxal, the Court issued a protective order in this matter.
[15] On April 18, 2002, after the protective order had been issued, Rhoxal forwarded to Biovail the detailed formulation, the description of the manufacturing process and the summary flow chart of the process used to make the Rhoxal capsules, documents which are all included in its ANDS. Rhoxal also consented to an extension of 15 days for the filing of Biovail's evidence. The description of the manufacturing process referred to batch records and proposed production batch records but did not include them;
[16] On April 30, 2002, counsel for Biovail acknowledged receipt of the documents mentioned above without noting that the documents forwarded were not complete.
[17] On May 2, 2002, Biovail filed its evidence on the merits consisting of the affidavits of Maria Susana Diaz and Dina Khairo.
[18] On May 30, 2002, Biovail acknowledged receipt of the signed consent referred to in the letter of April 18, 2002 and indicated that Biovail expected more detailed documents as part of the affidavit evidence.
[19] On July 2, 2002, Rhoxal filed its evidence on the merits consisting of two affidavits of Dr. Norman Weiner, the first on the issue of the invalidity and the second on the issue of non-infringement.
[20] On July 9, 2002, Biovail filed a motion seeking the production of the ANDS of Rhoxal and of the ANDA of Andrx, Rhoxal's supplier. Biovail also sought leave to file reply evidence.
[21] In support of its motion, Biovail produced the affidavits which it had filed on the merits i.e. the affidavits of Ms. Khairo and Ms. Diaz, both sworn on May 1, 2002. It also filed the affidavit of Nicholas Whalen, a student-at-law, sworn on July 9, 2002 as well as the affidavit of Heather Watts, one of the attorneys of Biovail, sworn on August 23, 2002;
[22] On September 19, 2002, Prothonotary Lafrenière dismissed Biovail's motion.
[23] I am now presented with the appeal of that decision.
THE ARGUMENT OF BOTH PARTIES
THE APPLICANTS
[24] Counsel for Biovail argued that the decision of the Prothonotary was appealable since the disclosure requested was the type of disclosure subject to section 6(7) of the Regulations and that such request can be made at any time.
[25] Counsel for Biovail added that the disclosure to be made should be verified by the Minister as per section 6(7) (b)13 of the Regulations.
[26] It is also submitted that since the documentation produced was not done under oath, it was not evidence to be considered by the Court. This argument was not before Prothonotary Lafrenière when he rendered his decision.
[27] If the Court grants the Order to disclose information, Biovail argued that it should be allowed to file reply evidence.
THE RESPONDENT
[28] Rhoxal submitted that the only issue was whether Biovail demonstrated that the Prothonotary erred in that his discretion was based upon a wrong principle or upon a misapprehension of the facts and it was of the opinion that it was to be answered by the negative.
[29] Rhoxal argued that:
a) It had on two occasions given to Biovail the pertinent information which included a detailed description of the formulation and of the manufacturing process including a summary flow chart of the process to make Rhoxal's capsules;
b) The documentation given are copies of documents included in Rhoxal's ANDS and represent the product for which it is seeking a NOC;
c) The documentation could have been produced as evidence by Biovail subject to the terms of the protective order; and
d) The documentation did not have to be produced under oath because there is no obligation on Rhoxal to produce any affidavits at all in prohibition proceedings.
[30] Rhoxal contends that Biovail did not demonstrate that the documentation requested was relevant to the determination of the issues and that no affidavit nor any arguments were filed to that effect.
[31] Rhoxal also submitted that the Prothonotary did not err in refusing leave to file further evidence.
THE STANDARD OF REVIEW APPLICABLE TO APPEAL OF DISCRETIONARY DECISION OF A PROTHONOTARY
[32] Macquigan J.A. in Canada v. Aqua-Gem Investments Ltd. [1993] 2 C.F. at page 425 (462) explained what was the standard of review to be applied by a motion judge when reviewing a discretionary decision of a Prothonotary:
"Following in particular lord wright in Evans v. Bartlarn [1937] A.C. 473 (H.L.) at page 484 and Lacourcière J.A. in Stoicevski v. Casement (1983) 43 O.R. (2nd) 436 (Div. CT) discretionary orders of Prothonotary ought not to be disturbed on appeal to a judge unless:
a) They 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, or
b) They raise questions vital to the final issue of the case
THE EVIDENCE BEFORE THE COURT
[33] A Court, in reviewing a decision of the Prothonotary, must only use the evidence that was before the Prothonotary when the decision was made. In the case Jones River Corp. of Virginia v. Hallmark Cards Inc. [1997] 72 C.P.R. (3rd) 157 at page 168, Madam Justice Reed clearly explained the role of a judge in such a situation:
"As I understand counsel's explanation of the Associate Senior Prothonotary's decision, it is that the order requested was refused because there was no proper evidence before the Associate Senior Prothonotary demonstrating that the United States proceeding existed and was parallel to the present proceeding, nor was there evidence demonstrating that the documentation that was sought was relevant to the present proceeding. It was not argued that this decision by the Associate Senior Prothonotary was in error. Counsel for the plaintiff sought to file with the Court an affidavit to supply the missing evidence. He took the position that an appeal of a Prothonotary's decision to a judge is a proceeding de novo and, therefore, I was entitled to accept this evidence and render the decision the Associate Senior Prothonotary would have made had he had that evidence before him.
I do not interpret the role of a judge on an appeal of a prothonotary's order in that way. Whatever may be the difference, if any, between the Chief Justice's description on page 453 of Canada v. Aqua-Gem, supra, and that of the majority of the Court at page 463, the latter governs. It clearly contemplates that the judge will exercise his or her discretion de novo, on the material that was before the prothonotary, and not engage in a hearing de novo based on new materials"
THE EVIDENCE FROM BIOVAIL BEFORE THE PROTHONOTARY
[34] Biovail filed four affidavits in support of its motion presented to the Prothonotary:
a) the affidavit of Diana Khairo sworn on May 1, 2002.
b) the affidavit of Susana Diaz, student at law, sworn on May 1, 2002 for the purpose of filing exhibits.
c) the affidavit of Nicholas J. Whalem, student at law, sworn July 9th, 2002, for the purpose of filing the first confidentiality agreement dated August 28, 2001 and a letter from counsel for Biovail to counsel for Rhoxal dated May 17, 2002.
d) the affidavit of Heather E.A. Watts sworn August 23, 2002, for the purpose of filing letters dated April 18, April 30, May 30, July 10, August 7, 2002 and explaining why the motion was not heard until August 26, 2002.
[35] The four affidavits as filed did not deal specifically with the requirements of subsection 6(7) of the Regulations.
THE DECISION OF THE PROTHONOTARY
[36] Prothonotary Lafrenière, at page 4 and 5 of his Reasons for Order, stated:
"There is no dispute that a moving party must demonstrate that the disclosure requested is both required and important, or that the disclosure already made is inadequate. In my view, Biovail had failed to do so. First, it is not all clear that RhoxalPharma's affidavits contain any facts which could not have been reasonably anticipated by Biovail or which give rise to the request for further disclosure. Second, the fact that the ANDS of RhoxalPharma is the object of a protective order in another proceeding did not preclude Biovail from seeking at an earlier date an order for disclosure, assuming relevance could be established. Third, no explanation has been provided as to why Biovail chose to wait until after the filing of RhoxalPharma's evidence on the merits to request disclosure of the allegedly important and relevant information.
When Biovail initiated the application, it had RhoxalPharma's detailed NOA which describes RhoxalPharma's formulation. The NOA clearly sets forth RhoxalPharma's position on both infringement (its capsules do not contain beads containing a wetting agent) and invalidity (the claims are invalid in view of specific pieces of prior art). Moreover, when it filed its evidence, Biovail had the detailed formulation, the description of the manufacturing process and the summary flow chart of the process used to make RhoxalPharma capsules. Armed with this information and having elected to file its affidavit evidence, Biovail cannot be heard to argue that it did not have sufficient disclosure to adequately prepare its case."
THE ANALYSIS
[37] The issue is the following:
- Was the decision of Prothonotary Lafrenière clearly wrong, in the sense that the exercise of his discretion was based upon the wrong principle or upon a misapprehension of the facts or raise a question which is vital to the final issue of the case?
SUBSECTION 6(7) OF THE REGULATIONS
[38] Subsection 6(7) of the Regulations reads as follows:
(7) On the motion of a first person, the court may, at any time during a proceeding,
a) order a second person to produce any portion of the submission for a NOC filed by the second person relevant to the disposition of the issues in the proceeding and may order that any change made to the portion during the proceeding be produced by the second as it is made;
and
b) order the Minister to verify that any portion produced corresponds fully to the information in the submission."
(7) Sur requête de la première personne, le tribunal peut, au cours de l'instance :
a) ordonner à la seconde personne de produire les extraits pertinents de la demande d'avis de conformité qu'elle a déposée et lui enjoindre de produire sans délai tout changement apporté à ces extraits au cours de l'instance;
b) enjoindre au ministre de vérifier que les extraits produits correspondent fidèlement aux renseignements figurant dans la demande d'avis de conformité.
[39] The purpose of subsection 6(7) is to reduce litigations that are not helpful to the end purpose. [See SmithKline Beecham Pharma Inc. et al v. Apotex Inc. et al, 3, C.P.R. (4th) 22 at page 33, McGillis J.].
[40] In order to be able to justify the application of subsection 6(7) of the Regulations, a party must convince the Court on three matters:
a) That the request for disclosure is done in a timely manner; and
b) That the information already provided is not sufficient to deal with the issues at stake; and
c) That the disclosure of the required information is necessary because it is relevant to the disposition of the issues in the proceeding.
[41] Subsection 6(7) mentions that the motion can be made "at any time". This should not be interpreted literally. In order to satisfy a Court that the motion is presented in a timely fashion, it must establish that it is presented without delay. It must be kept in mind that the Minister is prohibited from issuing a NOC for a period of at least 24 months while the Court determines whether a second entry drug infringes or not the patents on the register of patents. The Court must be in a position to control the timing of such request.
[42] The first person must also present evidence demonstrating that the information provided by the second person is not sufficient to permit a determination of the issues in the proceedings.
[43] Finally, the first person must file evidence as to how the required information is relevant to dispose of the issues in the proceeding. Only then will the Court consider and decide on a balance of probabilities whether the required information will be disclosed.
[44] As mentioned above, subsection 6(7) of the Regulations can be triggered as long as the evidence before the Court supports the following:
a) Even if the motion can be presented "at any time", it must be made in a timely position and;
b) The information disclosed is not sufficient to deal with the disposition of the issues in the proceeding and;
c) The information requested, being any portion of the submission for a NOC, is relevant to the determination of the issues in the proceeding;
[45] In the case at bar, with regard to the first element of subsection 6(7) of the Regulations, there is no affidavit evidence filed by Biovail explaining why the motion was presented after the parties had filed their evidence in the main proceeding.
[46] On the second element of subsection 6(7), the only evidence filed that appears to indicate that the disclosure made was insufficient according to Biovail, is a letter addressed to Rhoxal dated May 30, 2002. However, no affidavit evidence was filed to explain why the disclosure was not sufficient.
[47] In respect of the third element of subsection 6(7), Biovail did not file any affidavit that would support the relevancy of the information required.
[48] I have noted that in the case of SmithKline Beecham Pharma Inc. et al. v. Apotex Inc. supra, the parties had filed affidavit evidence from experts to support their respective case and it is by assessing that type of evidence that Madam Justice McGillis on a balance of probabilities, decided that the request for disclosure should be granted.
[49] Biovail made a decision not to file affidavits in support of its subsection 6(7) motion.
[50] Prothonotary Lafrenière concluded that the motion could not be granted because there was not evidence or sufficient evidence to grant it.
[51] Biovail also submitted that because Rhoxal should have produced the ingredient list and manufacturing instructions for the Rhoxal capsules under oath rather than through a letter forwarded for settlement purposes the documentation was not evidence and could not be filed.
[52] Biovail did not refer the Court to any case law to support the above argument. I do not know of any such requirement that would oblige the second person to file documentation under oath when it considers that filing any documentation is not necessary for the presentation of the case (Merck Frosst Canada Inc. et al. v. Minister of National Health and Welfare et al. (55) C.P.R. (3d) 362 at p. 320).
[53] In the present proceeding, the NOA has been filed and each party has filed their affidavits. Biovail has the burden of proof under section 6 to disprove the allegations in the notice of allegation. It has to make its own case. Normally, motion for disclosure are presented before the filing of the evidence of the party requesting the production. Exceptionally, such motion can be made after the filing of evidence when new matters are brought up in the other party's evidence which was not foreseen and that some explanation is given for the delay.
[54] Biovail did not submit any reason nor evidence as to why the information already communicated was not sufficient, nor did it explain why the requested information was important and finally, it did not give an explanation for presenting the motion after having filed their own evidence on the merits.
[55] During the presentation of the oral submissions, Biovail did try to use the evidence on file to convince the Court that it had met the requirements of subsection 6(7) and on a good number of occasions counsel for Biovail was trying to add facts which were not in the motion record. As objected by counsel for Rhoxal, this testimonial approach cannot compensate for having decided not to file affidavit evidence in support of the motion.
[56] Having read the documentation, the written submissions and heard counsel and also after having carefully read the Reasons of Prothonotary Lafrenière, I can only conclude that he exercised his discretion in a rightful manner and based his decision on the evidence before him.
[57] For all these reasons, the motion in appeal from the Order by the Prothonotary Lafrenière dated September 19, 2002, is dismissed with costs.
THEREFORE THE COURT ORDERS THAT:
- The motion for an order permitting Biovail to file evidence in reply to the opinion evidence of Dr. Weiner dated June 28, 2002 is referred to Prothonotary Lafrenière.
- The motion of the applicants on appeal of the decision of Prothonotary Lafrenière dated September 19, 2002 is dismissed.
Costs of this motion to the Respondent Rhoxal in the cause.
"Simon Noël"
Judge
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-472-02
STYLE OF CAUSE : BIOVAIL CORPORATION and GALEPHAR P.R. INC. and THE MINISTER OF NATIONAL HEALTH and RHOXALPHARMA INC.
PLACE OF HEARING : Ottawa, Ontario
DATE OF HEARING : October 22, 2002
REASONS FOR ORDER : THE HONOURABLE JUSTICE SIMON NOËL
DATED : November 5, 2002
APPEARANCES :
Mr. Douglas N. Deeth FOR THE APPLICANTS
Marie Lafleur FOR THE RESPONDENT
SOLICITORS OF RECORD :
DEETH WILLIAMS WALL LLP FOR THE APPLICANTS
Toronto, Ontario
FASKEN MARTINEAU DuMOULIN LLT FOR THE RESPONDENT
Montreal, Quebec
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