Ab Hassle v. Minister of National Health and Welfare, docket T-1712-95

    

BETWEEN:

     T-1712-95

     AB HASSLE and ASTRA PHARMA INC.,

     Applicants,

     - and -

     THE MINISTER OF NATIONAL HEALTH

     AND WELFARE, and APOTEX INC.

    

     Respondents.

AND BETWEEN:

     T-421-96

     GLAXO GROUP LIMITED, and

     GLAXO WELLCOME INC.

     Applicants,

     - and -

     THE MINISTER OF NATIONAL HEALTH

     AND WELFARE, and APOTEX INC.

     Respondents,

AND BETWEEN:

     T-998-96

     HOFFMANN-LA ROCHE LIMITED, and

     SYNTEX PHARMACEUTICALS INTERNATIONAL LIMITED

     Applicants,

     - and -

     THE MINISTER OF NATIONAL HEALTH

     AND WELFARE, and APOTEX inc.

     Respondents.

     REASONS FOR ORDERS

MacKAY J.

     These applications relate to proceedings under the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 (the "Regulations"), which came into force March 12, 1993. They were heard at the same time with the respective applicants seeking similar relief in regard to similar activities of the respondent Apotex Inc.

     In each case, the Court is asked to declare a second or further notice of allegation, delivered by Apotex Inc. pursuant to s.5 of the Regulations, to be void and of no effect, and an order is also sought permitting the applicants to withdraw proceedings they have initiated by originating notices of motion under the Regulations, with costs payable by Apotex.

     In the alternative the applicants seek an order staying the proceedings until after final disposition of any appeal initiated in each case from previous decisions of the Trial Division which found that a prior notice of allegation by Apotex, in relation to each of the same drugs as are here involved, was not justified. In each of those previous proceedings, the Minister was prohibited from issuing a Notice of Compliance ("NOC") to Apotex for the drug in issue. In each case, the decision of the Trial Division was the subject of appeals by both parties. Cross-appeals in Court file A-264-96, relating to the decision rendered by Madame Justice Reed in the earlier parallel Hoffmann-La Roche Limited case, T-1898-93, were set down to be heard soon after hearing these applications, but at that time, perfecting of the appeals was incomplete in regard to the appeals from orders of prohibition granted in the earlier Glaxo application (appeals in file A-705-95, from the Order of Mr. Justice Richard in file T-2025-93) and the earlier AB Hassle application (appeal files A-394-96 and A-398-96, from the Order of Mr. Justice Richard, granted on consent, in file T-1446-93).

     Under the process established by the Regulations, one who seeks an NOC to market a prescription drug and who seeks to compare that drug with a drug already approved for sale under an NOC, is required to file a notice of allegation to the effect that the drug proposed to be marketed will not infringe any patent listed as used for the product originally licensed for sale. If the original marketer holding an NOC makes application to this Court for an order prohibiting issue of an NOC to the party seeking a second NOC, no second NOC will issue until 30 months after the application to the Court, or until a decision of this Court finding the allegation, that there will be no infringement, is justified. If the Court does not so find, it will grant the application for prohibition, precluding issue of an NOC until expiry of any existing patent.

     That process was followed in each of these cases in prior proceedings. In each, the Court found, in regard to the respective applicants' originating notices of motion for prohibition, that the original notice of allegation by Apotex was not justified and an order issued prohibiting the grant of an NOC to Apotex for marketing of a specified drug. In each case, the order prohibited issue of an NOC, the licence for sale of the drug, until expiry of designated existing patent or patents held by the respective applicants.

     Thereafter, Apotex served on each of the applicants a further notice of allegation concerning the basis for its claim that its manufacture, use or marketing of the drug in question would not constitute infringement of the applicants' claimed patent rights. That led each of the applicants to file a second originating notice of motion for an order prohibiting the Minister from issuing an NOC, that is, at the time the originating notice of motion was filed, an order in the same terms already sought and not yet determined in one case, or already ordered in the other two. The interlocutory applications now before the Court and dealt with in these Reasons concern the second round of proceedings initiated by the applicants in relation to the second or further notice of allegation by Apotex.

     I pause to describe the specific facts in each application before turning to the issues and arguments generally applicable in all three applications.

The AB Hassle and Astra Pharm Application (T-1712-95)

     In this case, Apotex by letter of April 27, 1993 wrote a notice of allegation to the applicant Astra Pharma Inc., the only holder of an NOC for marketing in Canada of Omeprazole. That notice, respecting six patents listed in Astra Pharma's patent list, alleged that no claim for the medicine itself and no claim for the use of the medicine would be infringed by Apotex making, constructing, using or selling Omeprazole capsules, an allegation pursuant to paragraph 5(3)(b) of the Regulations. The basis for the allegation, in relation to patents numbered 1127158 and 1129417 (the "3158 and 3417 patents"), the only ones relevant for these proceedings, was said to be that Apotex would obtain a supply of raw materials under an agreement with Novopharm, which was said to have a compulsory licence under the two patents in issue, a licence that would continue after the Regulations came into effect.

     By Originating Notice of Motion, (Court file T-1446-93), pursuant to subsection 6(1) of the Regulations the applicants AB Hassle, as the owner of the Omeprazole patents, and Astra Pharma Inc., as licensee and holder of an NOC for sale of the medicine in Canada, applied for an order prohibiting the Minister from issuing an NOC to Apotex in respect of the medicine Omeprazole until after expiry of their existing patents.

     By a second letter, of June 17, 1993, Apotex wrote to Astra Pharma Inc. referring to its first letter of April 27, 1993 and setting out "a further Notice of Allegation" pursuant to paragraph 5(3)(b) of the Regulations, which related to patents of the applicants other than the 3158 and 3417 patents.

     By motion dated June 28, 1993 the applicants, AB Hassle and Astra Pharma, applied for an order limiting Apotex in the proceedings to the legal and factual bases asserted in its Notice of Allegation of April 27, and precluding Apotex from relying on any further Notice of Allegation other than the one dated April 27, 1993. An Order in the terms sought was granted by Mr. Justice Dubé on June 29, 1993. The Order specifically directed that Apotex was limited to the legal and factual bases asserted in its Notice of Allegation of April 27, 1993 and it was precluded from relying on any further Notice. A notice of appeal concerning that Order was filed by Apotex (Court file A-439-93), an appeal which was not perfected when this application was heard.

     By Order dated May 3, 1996, my colleague Mr. Justice Richard prohibited the Minister from issuing an NOC to Apotex in respect of Omeprazole (Court file T-1446-93). That order, granted on consent, without prejudice to the parties' rights on any appeal, prohibited the Minister "from issuing an NOC to Apotex in respect of the medicine Omeprazole until after the expiration of the 158 and 417 patents" and it dismissed the applicants' application in respect of the other four patents claimed on its patent list. Thereafter, both parties filed appeals from the Order of Richard J., the applicants in Court file A-394-96 and Apotex in Court file A-398-96. Thus from the original proceedings appeals were outstanding when these matters came before me.

     Meanwhile, before the initial round of proceedings was completed by the Order of Richard J. in May 1996, on June 23, 1995, Apotex by letter wrote "a further Notice of Allegation" pursuant to paragraph 5(3)(b) of the Regulations concerning "Omeprazole Capsules 20 mg and 40 mg". That new allegation led to these proceedings. It should be noted that the same New Drug Submission ("NDS") by Apotex was before the Minister, as its application for an NOC, when the original and when the later notice of allegation was submitted to Astra Pharma, the licence holder, and comparable circumstances of a single underlying NDS application exist in the proceedings initiated by the other applicants.

     With respect to the '157 and 3417 patents, the June 1995 Notice of Allegation alleges no claim for the medicine itself and no claim for use of the medicine would be infringed by Apotex making, constructing, using or selling capsules containing omeprazole. The basis for that allegation is said to be that the 3417 patent contains no claim for the medicine itself and no claim for the use of the medicine. Further, with respect to both the 3158 and the 3417 patents, the allegation states that Apotex now has available Omeprazole made by a process that does not infringe any claim of those patents, and Apotex proposes to use only that process. Apotex offered, in accord with relevant jurisprudence, to disclose details of the process when a protective order or agreement is in place. Thus far no details of that process have been provided.

     Thereafter on August 10, 1995 the applicants filed a second Originating Notice of Motion (this file T-1712-95), seeking a second order to prohibit the Minister from issuing an NOC to Apotex in respect of Omeprazole, including capsules of 20 mg and 40 mg until after expiry of the 3158 and 3417 patents. In addition to that originating Notice of Motion, filed while the first Originating Motion seeking similar relief was still awaiting disposition, the applicants now seek an order declaring that the letter of June 23, 1995 from Apotex, described as "a further Notice of Allegation" is void and of no effect, and an order permitting the applicants to withdraw the proceedings initiated by the second Originating Notice of Motion.

     In the alternative, the applicants seek an order staying these proceedings until final disposition of the appeal proceedings, A-394-96 and A-398-96, initiated following the first round of proceedings, with an extension of the time provided by paragraph 7(1)(e) of the Regulations for the Minister to refuse issue of an NOC, for a period equal to the stay. Even if I were so disposed, I am not sure that s-s.7(5) would here be applicable for there is no evidence before me that a party to this application failed to cooperate reasonably in expediting the application, the statutory ground upon which the Court may extend the time.

The Glaxo Group and Glaxo Wellcome (T-421-96)

     By letter dated June 29, 1993, Apotex wrote to the predecessor of Glaxo Wellcome Inc., as holder of an NOC relating to the medicine ranitidine hydrochloride. Pursuant to s-s.5(3) of the Regulations, the letter alleged that, with respect to all patents on the patent list filed by the NOC holder, no claim for the medicine itself or for the use of the medicine would be infringed by Apotex making, constructing, using or selling products containing the medicine. In relation to patents relevant in these proceedings Apotex alleged that patent 1202638 has claims for only a particular form of the medicine and processes for producing that form. It, like patents 1216240 and 1303993, for which Apotex outlined its interpretation of the claims, was said to contain no claim for the medicine itself or for use of the medicine.

     Glaxo Group Limited, as owner of the patents and the holder of the NOC for sale of ranitidine hydrochloride, then Glaxo Canada Inc., applied on August 17, 1993, pursuant to s.6 of the Regulations, for an order prohibiting the Minister from issuing the NOC sought by Apotex pending expiry of their patents in regard to the medicine (Court file T-2025-93). That application was determined by my colleague Mr. Justice Richard who, on October 27, 1995, issued an order prohibiting the Minister from issuing an NOC to Apotex in respect of ranitidine hydrochloride until expiry of the patents noted above, i.e., the '638, '240 and '993 patents. In respect of other patents on the applicants' patent list the application was dismissed. Both parties appealed from that order and the appeals (A-705-95) were pending when this application was heard.

     On January 3, 1996, Apotex wrote a further letter to Glaxo Canada Inc., described as "a further Notice of Allegation pursuant to Section 5(3)(b)" of the Regulations. That letter makes the same general allegation as previously made, that there will be no infringement of the applicants' patents by Apotex making, constructing, using or selling ranitidine hydrochloride in 75 mg. strength tablets. The basis for that allegation of non-infringement is described in somewhat different terms, as we shall see, from those used in the first notice of allegation of June 29, 1993.

     That further notice led to the originating notice of motion filed by Glaxo Group Limited and Glaxo Wellcome Inc. (the latter company now holding the NOC for sale of the medicine). The originating notice of motion seeks an order prohibiting issue of an NOC to Apotex. In the interlocutory application before the Court, the applicants seek the same relief as in the application by AB Hassle and Astra Pharma, that is, an order declaring the later notice of allegation void and permitting the applicants to withdraw from this proceeding with costs payable by Apotex, or in the alternative, that this proceeding be stayed pending determination of outstanding appeals from the Order of Richard J.

The Hoffmann-La Roche and Syntex Application (T-998-96)

     As in the other two cases, Apotex wrote, by letter of March 22, 1996, and served "a Notice of Allegation pursuant to section 5(3)(b)" of the Regulations, which was a second such notice. As in the case of the Glaxo Group application, the second notice was written and served after an order was issued, in this case by my colleague Madame Justice Reed, prohibiting the Minister from issuing to Apotex an NOC "with respect to its new drug submission pertaining to 750 and 1000 Sustained Release tablets of the medicine Naproxen, and to which the notice of allegation dated June 15, 1993 relates, until the expiration of Canadian Letters Patent 1,204,671".

     That Order was issued after Madame Justice Reed heard counsel for the parties and determined that the notice of allegation given by Apotex was not justified. That notice of allegation concerned a number of other patents on the applicants' patent list, but the Order of Reed J., which refers to other patents in its preamble, makes no provision concerning patents other than the '671 patent specified. Both parties appealed the Order, (in Court File A-264-96), an appeal which was heard a few days after this application was heard. That appeal was dealt with in relation to the Order concerning the '671 patent, and the appeal was dismissed by order on October 21, 1996. (See: Hoffmann-La Roche Ltd. v. Canada (Minister of National Health and Welfare), [1996] F.C.J. No. 1334, Court file A-264-96, October 21, 1996). As noted below, that decision by the Court of Appeal is considered in disposing of this interlocutory application, in regard to a stay of proceedings sought pending the outcome of the appeal in file A-264-96, or any appeals therefrom. As in the other two applications, by AB Hassle and Astra Pharma, and by the Glaxo Group, relief is also sought in this interlocutory application by way of an order that the later notice of allegation by Apotex is void and that the applicants be permitted to withdraw from these proceedings with costs.

Common Issues

     In these applications, the basic submissions of the respective applicants are essentially similar. It is argued that the Regulations do not permit a second notice of allegation, or a series of such notices, where the Court has already found that an allegation made under s.5 is not justified and has ordered the Minister not to issue an NOC to Apotex with respect to the drug in question in each case. Once that decision is made, it is urged that the issue of whether an order of prohibition lies is res judicata, that Apotex is estopped from submitting a further notice of allegation, and moreover, the Court is functus officio. These effects are applicable because, it is said, the issue determined previously by the Court is now raised again, the parties are the same, the relief sought is the same as that already ordered and the notice of allegation is raised in relation to the same new drug submission as was before the Minister when the earlier proceedings were completed.

     For Apotex, however, it is urged that, as a preliminary matter these interlocutory proceedings are not contemplated under the Regulations, and the applicants' motions should be dismissed. The process under the Regulations, in the nature of judicial review, is intended to be expeditious, without interlocutory motions intended simply to resolve issues that will be resolved when the merits of the matter are heard. Moreover, as a notice of allegation is not a document submitted to the Court and thus is not to be struck out by the Court (See: Pharmacia Inc. v. Canada (Minister of National Health and Welfare), (1994), 58 C.P.R. (3d) 207 at 209 (F.C.A.) per Stone J.A.), so too the Court ought not to declare a notice of allegation void. Finally, if the Court is to consider the interlocutory motions on their merits, Apotex urges in each case that the merits warrant dismissal of the applications.

Analysis

     The Regulations are silent about whether more than one notice of allegation may be given by a generic producer seeking to compare its drug with one already approved for sale in Canada under an NOC. Under s-s.5(1), a person seeking an NOC with respect to a drug that is compared with another for which an NOC has been granted, and for which a patent list has been filed, is required to state either that he accepts no NOC shall issue until the applicable patents expire, or to allege, inter alia, that "no claim for the medicine itself and no claim for the use of the medicine would be infringed by the making, constructing, using or selling by that person of the drug for which the submission for the notice of compliance is filed". Subsection 5(2) directs an amendment of such an allegation if, before an NOC is granted to a generic applicant, the party holding an NOC files an amended patent list. More than one allegation is contemplated by s-s. 6(2) which directs the Court, on application by the first person, holding an NOC, for an order prohibiting issue of a second NOC, "to make an order in respect of a patent that is the subject of one or more allegations if it finds that none of those allegations is justified". Yet that subsection does not specify whether more than one notice of allegation may be served or whether, as the applicants here would have it, all allegations, one or more, of the second applicant for an NOC, are to be made at the same time in one notice of allegation.

     The applicants rely upon jurisprudence of this Court. In Schering Canada Inc. v. McPherson Inc., (1994) 58 C.P.R. (3d) 14, Mr. Justice Rothstein, having earlier declined to grant an extension of time for the generic producer/applicant for an NOC to file materials beyond the time fixed by the Court's Rules, held that a second notice of allegation, almost identical to the first, was not a valid notice under s-s.5(1) of the Regulations, and it did not give rise to new prohibition proceedings. It was not contemplated by the Regulations. Rothstein J. based his conclusion, in part, on the principle of fairness where one party meets procedural requirements in timely fashion in accord with the Regulations and the Rules, and the other party does not, and having been denied an extension of time to comply, the latter should not to be permitted to restore his position simply by serving another notice of allegation similar to the first. A further basis for his conclusion was that the second notice of allegation gave rise to exactly the same application for prohibition with the same evidence by Schering as it had already filed in the original application before the Court, which application was outstanding and had not yet been disposed of the Court. The circumstances are somewhat different here, for when these applications were heard, the Court had disposed of the original applications and had issued orders prohibiting the Minister from issuing NOCs to Apotex for the drugs in question.

     In addition to finding the second notice of allegation was not contemplated by the Regulations, Rothstein J. also permitted Schering to withdraw from the proceedings initiated by it in response to the second notice of allegation.

     Following that decision, the Court of Appeal determined, per Stone J.A., in Pharmacia, supra at p. 209

:...While a notice of allegation does play an important role in the ultimate outcome of litigation of this nature, it is not a document by which the judicial review application may be launched under S.6 of the regulations. That document was put in as a piece of evidence by the appellants; it originated with the application filed before the Minister. Because it is not a document that was filed with the Court but with the Minister, in our view the notice of allegation is beyond the reach of the Court's jurisdiction in a judicial review proceeding. That being so, the court, in our opinion, lacks jurisdiction to strike out the notice of allegation.

     That is now a well-established understanding in proceedings under the Regulations. I agree with the submission of Apotex that this precludes the first form of the relief here sought by the applicants, i.e., a declaration that the second, or further, notice of allegation, in each case, is void and of no effect.

     If the Court may not strike out the notice because it is before the Court only as a matter of evidence and not a document required to be filed in the Court under the Regulations, it is equally beyond the Court's authority to declare the notice "void and of no effect". The time for considering the weight to be given to any evidence is when the evidence as a whole is considered, at the hearing of the originating notice of motion, not in interlocutory proceedings.

     It is true that after the decision in Pharmacia Inc., supra, in another case involving Schering Canada Inc. et al v. Nu-Pharm Inc and the Minister of National Health and Welfare, (unreported Court file T-1708-95, June 24, 1996), Mr. Justice Muldoon echoed Rothstein J. in the earlier Schering case, supra. Muldoon J. there was dealing with a third notice of allegation served by Nu-Pharm upon Schering in circumstances involving the same parties, concerning the same patents for the same drug, and with reference to the same new drug submission, as had earlier been the basis of the proceedings before Rothstein J., and at a time when the original application by Schering for an order of prohibition was still outstanding. While he indicated that declaratory relief similar to that here sought "should be granted ex debito justiciae and for the better administration of the Laws of Canada", Muldoon J. there stayed proceedings in the matter until after final determination of the proceedings between the same parties in the original application, still outstanding, in this court. That decision is said to support the applicants' view that second and subsequent notices of allegation are not contemplated by the Regulations, but I am persuaded that the circumstances in both Schering decisions are distinguishable. In both those cases, the original application for prohibition was still outstanding when the second notice of allegation was served, and the original application was still pending in the court when the second came forward in interlocutory proceedings.

     In the AB Hassle and Astra Pharma case before me, the second notice of allegation by Apotex, by letter dated June 23, 1995, was served before the disposition of the first application, by the same applicants, for an order of prohibition by order of Mr. Justice Richard in May 1996. That latter determination, made before this application was heard, distinguishes this case from the circumstances of the Schering cases.

     The applicants also rely on Madame Justice Reed's decision in disposing of the first application in the Hoffmann-La Roche Limited case (unreported, T-1898-93, March 20, 1996 (F.C.T.D.)). In that case she had been urged by counsel for Apotex that if she should find against his client, that is, that the allegation under s.5 of the Regulations was not justified, any order then issued should be without prejudice to that party's opportunity to file with the Minister another notice of allegation. The learned judge declined to do so, commenting:

"With respect to the second proposition, that the order of prohibition against the Minister should be expressed to be without prejudice to the respondent's right to file new notices of allegation, I do not think that option is open to me. Subsection 6.(2) of the Regulations requires that issuing of an order of prohibition if the allegations are found not to be justified":

         [s-s. 6(2) is then quoted]

Subsection 55.2(5) of the Patent Act provides that section 55.2...as well as the Regulations made thereunder, prevail over any other Act of Parliament or set of regulations. Therefore, the mandatory nature of subsection 6.(2) of the Regulations would not seem to leave the option which is suggested open to me. In addition, the notice of allegation is part of the new drug submission which is before the Minister. It is not under the control of this Court. Whether that document can be amended, or withdrawn, is a matter to be dealt with by the Minister in accordance with the rules applied to material filed as part of a new drug submission and in accordance with the rules normally applied to the withdrawal or substitution of the submission as a whole.

     In my view, Madame Justice Reed's comments are not more persuasive in support of the applicant's argument, that only a single notice of allegation is contemplated under the Regulations, than they are in support of the respondent's argument, that it is not within the jurisdiction of the Court to declare a further notice of allegation to be void.

     In my view, the weight or significance to be attached to the second notice of allegation must await determination when the merits of the applicants' second originating motion for prohibition is heard with full argument. That is consistent with the preliminary argument of Apotex, that the process under the Regulations, in the nature of judicial review, is intended to be expeditious, without numerous interlocutory proceedings, with opportunity for all matters at issue to be dealt with when the originating notice of motion is heard. The nature of proceedings under the Regulations, and the underlying intent that matters be dealt with expeditiously, without numerous interlocutory applications, as emphasized in Pharmacia Inc. v. Canada (Minister of National Health and Welfare), (1994) 5 C.P.R. 209 at p. 214 - 216, per Strayer J.A., in my view, supports the principle that the weight of a second notice of allegation is a matter for the Court hearing the application for prohibition.

     Moreover, as I find the Court is without authority to declare the second notice of allegation void in the circumstances of this case, the second order sought by the applicants, that they be permitted to withdraw this proceeding, is, I expect, no longer of interest to them. The matter of separating the orders sought was not dealt with, but proceeding with the second order sought would raise the prospect of Apotex, having provided to the Minister evidence of its having served a notice of allegation, not being formally opposed by the applicants in its continuing application for an NOC. This Court declines to order that withdrawal of the proceedings is permitted, without any argument or discussion about the effects of such an order if it were granted without having first declared the further notice of allegation to be void or of no effect.

     That disposes of the applicants' motions except for the alternative relief sought, i.e., an order staying these proceedings until after final determination of appeal proceedings commenced with regard to the order, in each case, to prohibit the grant of an NOC.

     A stay of proceedings could only be warranted in these applications if the usual tests for a stay of proceedings are met, or if there is a basis to conclude the proceedings are an abuse of the Court's process. Under paragraph 50(1)(b) of the Federal Court Act, R.S.C. 1985, c. F-7 as amended, the court may order a stay of proceedings "in the interest of justice". The accepted tests for a stay are those set out in [1987] S.C.R. 110">Manitoba (A.G.) v. Metropolitan Stores (MTS) Ltd., [1987] S.C.R. 110, [1987] 3.W.W.R.1, 38 D.L.R. (4th) 321, 25 Admin. L.R. 20, 46 Man. R. (2d) 241, 73 N.R. 341 (S.C.C.), as elaborated by [1994] S.C.R. 311">RJR - MacDonald Inc. v. Canada (A.G.) [1994] S.C.R. 311, 54 C.P.R. (3d) 114, 111 D.L.R. (4th) 385, 16 N.R. 1.

     Among the requirements is that there be evidence of irreparable harm to the applicants, in this case in the period between the hearing of this application and the determination of appeals from the Order prohibiting issuance of an NOC, and no evidence is here adduced that would support a finding of irreparable harm. Thus, there is no basis for ordering a stay on the usual tests.

     It is urged by the applicants that the principle of res judicata is here applicable and that it is an abuse of the Court's process to permit the proceedings to continue at this stage, pending the result of the appeals initiated. Among other factors the applicants urge that the same issue as raised in these proceeding, that is, whether an order of prohibition should issue to preclude granting of an NOC in relation to the omeprazole, or other drug relevant in the other applications, has already been determined. I am persuaded by the argument on behalf of Apotex, however, that the issue before the Court in the original application, as in this one, is whether the particular notice of allegation in evidence before the Court is justified. If the court is not satisfied that it is, then an order of prohibition, directed to the Minister, is the relief the court is bound to issue.

     Thus the principle of res judicata in its narrow sense, that is, that the issue has already been determined by the court, could only be applicable if essentially the same notice of allegation is before the Court as has already been determined not to be justified. In both the AB Hassle and Astra Pharma (T-1712-95) and Glaxo Group Limited (T-998-96) applications the second notice of allegation is said by Apotex to be different from the first, and I am persuaded that this is so.

     In the former case, the legal and factual basis for the claim by Apotex that it would not infringe the relevant patents of Astra Pharma was that it would use omeprazole only as supplied by Novopharm which was said to have a compulsory licence. When, in other cases, the agreement relied upon by Apotex for supply of the drug by Novopharm was determined to be a sublicence and contrary to terms of Novopharm's compulsory licence, Apotex then served its further notice of allegation claiming:

"...we now have available to us omeprazole made by a process that does not infringe any claim of [the] patents. If this claim is accepted we will use only this material.

In accordance with the relevant jurisprudence, we will provide disclosure of details of the process when a protective order or agreement is in place.

In my view, that clearly sets out a basis for an allegation of non infringement that is different from the original allegation previously determined, on consent, not to be justified, although further facts may be required to be disclosed, as Apotex has undertaken to do under protective order or agreement, if the new allegation is ultimately to be established.

In the AB Hassle application (Court file T-1712-85), an additional argument was raised at the hearing as a result of the Order of my colleague Mr. Justice Dubé in the course of the first application for an order of prohibition. As we have seen, at an interlocutory stage, after filing and serving its original notice of allegation dated April 27, 1993, and after the applicants filed their originating notice of motion, on June 14, 1993, seeking an order prohibiting issue of an NOC, Apotex, on June 17, 1993, wrote again to Astra Pharma Inc. a letter described as "further to our Notice of Allegation of April 27, 1993 and...a further Notice of Allegation pursuant to Section 5(3)(b)" of the Regulations. This led, on motion by the applicants, to the Order of Dubé J., inter alia, that Apotex was precluded from relying on any further Notice of Allegation other than that dated April 27, 1993 in respect of the medicine omeprazole and the six patents listed on the applicants' patent list. As earlier noted, that order was appealed by Apotex but the appeal has not yet been determined.

In these subsequent proceedings the applicants rely on the Order of Dubé J. as a basis for asserting that the further Notice of Allegation of Apotex, of June 23, 1995 is void. In my view, that ground, which is not referred to in the second Originating Notice of Motion of the applicants, is not fairly before the Court for Apotex to deal with. (See: Pharmacia Inc. v. Canada Minister of National Health and Welfare, (1995), 60 C.P.R. (3d) 328 at 339-40, (F.C.T.D.) per Wetston J., upheld on appeal but without reference to this point (1995), 64 C.P.R. (3d) 450 (F.C.A.). Moreover, the Order of Dubé J., like the subsequent consent Order of Richard J., was made with reference to the circumstances before the Court at the time the Order was issued. Both antedate the serving by Apotex of its June 23, 1995 "further Notice of Allegation" and neither order is directed to that later notice of allegation.

In the Glaxo Group application, T-421-96, I conclude that, as in the AB Hassle and Astra Pharma matter, the later notice of allegation is different from that considered and found not to be justified, which led to the Order prohibiting issue of an NOC to Apotex, by my colleague Mr. Justice Richard on October 27, 1995 with respect to ranitidine hydrochloride and patents Nos. 1,202,638; 1,216,240; and 1,303,993. In respect of those patents, the original notice of allegation alleges that the first patent has claims for only a particular form of the medicine and processes for producing the particular form, with no claim for the medicine itself or for its use. The latter two patents, it was alleged contained claims "on particular drugs (dosage forms) but no claims for the medicine itself or the use of the medicine". The later notice of allegation, dated January 3, 1996, alleges that the first of the three patents, No. 1,202,638, claims only a particular form of the medicine known as form 2. Apotex undertakes that any 75 mg. tablets made and sold by it will not contain form 2 ranitidine hydrochloride, but only form 1, which it is alleged, will be the same as that used in other tablets sold by Apotex' related company in New Zealand, which has continued sales despite unsuccessful actions by affiliates of the applicants to stop those sales. As for the other two patents, it is alleged that they relate to an aqueous form only, a form which will not be infringed by Apotex tablets.

In the final application considered by me, that of Hoffmann-La Roche and Syntex, in file T-998-96, the Order of Madame Justice Reed, in Court file T-1898-93, on March 20, 1996 prohibited issue of "an NOC, with respect to Apotex' new drug submission concerning 750 and 1000 sustained release tablets of the Medicine Naproxen and to which the notice of allegation dated June 15, 1993, relates, until after the expiration of Canadian Letters Patent 1,204,671". That Order was appealed by both parties, and as earlier noted, the appeal by Apotex concerning the patent 1,204,671 was dismissed by the Court of Appeal on October 21, 1996. (See: Hoffmann-La Roche Ltd. v. Canada (Minister of National Health and Welfare), supra, Court file A-264-96, F.C.A.).

That decision of the Court of Appeal was rendered a few weeks following hearing of this application. Insofar as a stay is sought in proceedings before me in T-998-96, it was sought as an alternative, until after final determination of the appeal in A-264-96. My understanding is that Apotex has since made application for leave to appeal to the Supreme Court of Canada.

Essentially, the allegation of non-infringement, found by Reed J. not to be justified, was that patent 1,204,671 has claims only for particular dosage forms of the medicine in question, an allegation explained by reference to interpretation of the patent's claims, and that there was no claim for the medicine itself. Rather the patent is said only to claim a drug, Naproxen, when formulated with a particular composition. Apotex undertook that any tablets produced and sold by it would not infringe any claim of the patent, an undertaking which the Court of Appeal, reaffirming the position of Reed J., found not to be an allegation of fact.

The later notice of allegation, dated March 22, 1996, two days after the Order of Reed J., includes more detail concerning the claims under the patent in issue, an undertaking that any tablets formulated by Apotex will not fall within the scope of the claims, and that Apotex' formulation will be that earlier provided to the applicants' solicitors under a letter of January 29, 1996 in Court file T-1898-93, before Madame Justice Reed's decision, which should form part of the notice of allegation. In T-1898-93, Madame Justice Reed had declined to grant leave to Apotex to introduce evidence of its formulation, which when tendered to the applicants' solicitors in January 1996 had been declined, and her decision was upheld by the Court of Appeal in its decision of October 21, 1996.

In the result, as I compare the notices of allegation, that of June 15, 1993, which was determined not to be justified by Reed J., and that of March 22, 1996 which gives rise to the second application for an Order of prohibition to the Minister, in my opinion, they are essentially the same at this stage. Moreover, in view of comments of Stone J.A. for the Court of Appeal in considering the denial by Reed J. of leave to Apotex to adduce further evidence, I consider there is no likelihood of a grant of leave for the same purpose in this proceeding, T-998-96, should it be sought.

Thus the application of Hoffmann-La Roche and Syntex, here raises different considerations than in the two other files, for here the second notice of allegation is in essence the same as that already determined by Reed J., and upheld by the Court of Appeal, not to be justified. To permit a second round of proceedings, to determine an issue already determined by a judge of this Court and upheld by the Court of Appeal, would be an abuse of process. Yet that process is here initiated by the applicants, in accord with the Regulations, to preserve their interests in light of what can be deemed to be a frivolous action by Apotex, the filing of a second notice of allegation similar to one found not to be justified.

In these circumstances, the issues raised having already been determined so that the principle of res judicata applies, in my opinion, it is in the interests of justice that proceedings in Court file T-998-96, be stayed, permanently, unless by further order the Court were to permit the matter to proceed, if for example, the application by Apotex for leave to appeal to the Supreme Court of Canada, in relation to the order of the Court of Appeal, should ultimately prove successful. So long as the stay is in effect, the existing Order of Madame Justice Reed continues, prohibiting issue of an NOC to Apotex in respect of its NDS pertaining to 750 and 1000 sustained release tablets of Naproxen until expiry of the '671 patent.

There is one final argument of the applicants that warrants brief reference. It is urged that by the principle of res judicata, in its broad application, Apotex is estopped from raising in a second proceeding issues or grounds that it might have raised in the first proceedings which resulted in orders prohibiting issue of NOCs in the cases concerning the three drugs in issue. I am not prepared to apply that principle in circumstances where Apotex' notices of allegation are not a pleading before this Court, but rather are statements submitted to the Minister and to the holder of an NOC. The notices are not without legal significance, as has been noted elsewhere, but they come before this Court as a matter of evidence which the Court is to weigh in accord with the Regulations when the application for judicial review, seeking an order of prohibition, is heard.

I should note that while the Court may not direct the form or content of a Notice of Allegation, it may control any abuse of the process under the Regulations by its assessment of those notices, and by awards of costs if it be considered the process is abused or in cases where the action of a party which gives rise to the proceedings is deemed to be frivolous.

Conclusions

At this stage in these proceedings, in the AB Hassle and Astra Pharma application (T-1712-95) and in the Glaxo Group and Glaxo Wellcome application (T-421-96), it is my opinion that the applicants' motions, to bring the proceedings to an end by a declaration that the notice of allegation is void, and that they be permitted to withdraw the proceedings, or that a stay of proceedings be ordered, should be dismissed. In the application of Hoffmann-La Roche and Syntex (T-998-96), a stay is ordered in further proceedings, subject only to possible further order of the Court.

Costs remain to be determined by the hearing judge in files T-1712-95 and in T-421-96. In the third proceeding, T-998-96, which I order be stayed, costs of the applicants shall be paid by the respondent Apotex, since in the circumstances of this case, in light of the decision of the Court of Appeal (in file A-264-96), I find that the serving of a second notice of allegation by Apotex, similar to one already found not to be justified, is a frivolous step leading to proceedings by the applicants, initiated in accord with the Regulations, simply to preserve their interests. Continuing those proceedings would be an abuse of the Court's process, for the issues raised have already been determined by the Court.

Separate Orders, in accord with these Reasons, go with regard to the applicants' motions on the respective Court files. A copy of these Reasons shall accompany the Order on each file.

W. Andrew MacKay

___________________

J U D G E

O T T A W A, Ontario

January 8, 1997.