Date: 20101222
Docket: T-1169-01
Citation: 2010 FC 1264
BETWEEN:
APOTEX
INC.
Plaintiff
and
MERCK & CO., INC.,
MERCK FROSST CANADA LTD.
and MERCK FROSST CANADA & CO.
Defendants
AND
BETWEEN:
MERCK & CO. INC. and
MERCK FROSST CANADA LTD.
Plaintiff by Counterclaim
and
APOTEX INC. and
HER MAJESTY THE QUEEN IN RIGHT OF
CANADA, as represented by the
ATTORNEY GENERAL OF CANADA
Defendants by Counterclaim
PUBLIC REASONS FOR JUDGMENT
(Confidential Reasons for Judgment issued
on December 9, 2010)
SNIDER,
J
I. Introduction
[1]
The Defendant, Merck
Frosst Canada Ltd. (Merck Canada), held rights to Canadian Patent No.
1,161, 380 (the '380
Patent), through the patent
holder Merck & Co. Inc. (Merck & Co.). The '380 patent, which related to a process for manufacturing
the drug lovastatin, was issued in 1984 and expired in 2001. In 1993, the
Plaintiff, Apotex Inc. (Apotex), attempted to enter the market with a generic
version of lovastatin and, to that end, applied to the Minister of Health (the
Minister) for a Notice of Compliance (NOC) pursuant to the relevant provisions
of the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133,
as amended by SOR/98-166 [the PMNOC Regulations or the Regulations].
An NOC is required before a drug can be marketed in Canada. Apotex alleged that it would not infringe the '380 Patent, as it would not use a process to
produce lovastatin that would fall within the scope of the '380 Patent.
[2]
As permitted by the Regulations,
on June 1, 1993, Merck Canada filed an application with this Court to
prohibit the Minister from issuing an NOC to Apotex. A key feature of the PMNOC
Regulations is the imposition of a statutory stay on the “first person”
(Merck Canada, in this case) upon the filing of an
application for prohibition. The statutory stay remains in place until a
determination can be made as to whether the “second person” (Apotex, in this
case) is justified in its claim that its generic drug would not infringe the
disputed patent. Pursuant to s. 6(1) of the Regulations, the Minister
was automatically prohibited from issuing an NOC for up to 30 months.
[3]
In a sequence of
events described later in these reasons, the statutory stay expired on December
1, 1996 without any hearing to determine whether Apotex’s allegations were
justified. In an oral decision rendered March 26, 1997, Justice Rothstein (then
a judge -with the Federal Court, Trial Division) refused to extend the time
period or issue a prohibition order (Merck Frosst Canada Inc. v. Canada (Minister
of National Health and Welfare) (1997), 128 F.T.R. 210, 72 C.P.R. (3d) 453 [Merck
FCTD 1997]). The Minister then issued the NOC for lovastatin to Apotex on
March 27, 1997. Finally, in a judgment, delivered April 21, 1999, the Federal
Court of Appeal dismissed the appeal of Merck FCTD 1997, on the basis
that the question was moot (Merck Frosst Canada Inc. v. Canada (Minister of
National Health and Welfare) (1999), 240 N.R. 195, 165 F.T.R 92 (note) [Merck
FCA 1999]).
[4]
Following this
sequence of litigation, two actions were commenced:
1.
Merck Frosst Canada
Inc. (predecessor to Merck Canada) and Merck & Co. commenced an action
against Apotex and Apotex Fermentation Inc. (AFI) for patent infringement
(Court File T-1272-97). The statement of claim was filed on June 12, 1997.
2.
By statement of claim
filed June 29, 2001, Apotex sought compensation from Merck & Co., Merck
Canada and Merck Frosst Canada (collectively referred to as Merck) under
s. 8 of the PMNOC Regulations (Court File No. T-1169-01).
[5]
Both actions were
heard together in a trial that commenced on February 1, 2010. These Reasons
pertain only to the issues in Court File No. T-1169-01. In this action, Apotex
claims that, pursuant to s. 8 of the PMNOC Regulations, that it is
entitled to relief for having been kept out of the lovastatin market for the
period between April 30, 1996 and March 27, 1997. Separate Reasons for
Judgment and Judgment have been issued contemporaneously with these Reasons in
Court File T-1272-97.
II. Issues
[6]
In this action, the
following issues arise:
1.
Which version of s. 8
of the Regulations should be applied: the 1993 version, or the 1998
version?
2.
Under either version
of s. 8, is Apotex entitled to compensation and, if so, for what period?
[7]
For the reasons that
follow, I conclude that the 1993 version of the PMNOC Regulations apply
to the case at bar and that Apotex is not entitled to any compensation under s.
8 of the 1993 Regulations.
[8]
After the parties had
presented final oral argument in this trial, the Federal Court of Appeal
rendered its decision in Apotex Inc. v. Syntex Pharmaceuticals International
Ltd., 2010 FCA 155, 84 C.P.R. (4th) 409 [Syntex FCA], a
decision which affirmed an earlier decision of Justice Roger Hughes in Apotex
Inc. v. Syntex Pharmaceuticals International Ltd., 2009 FC 494, 76 C.P.R.
(4th) 325 [Syntex FC]. In view of the extensive references to
Syntex FC in this action, I gave the parties an opportunity to provide
written submissions on the applicability of Syntex FCA to the case at
bar. The reasons that follow take those submissions into consideration.
III. Analysis
Issue #1: Which
version of the PMNOC Regulations – the 1993 or 1998 version – is applicable to
the claims made by Apotex in this action?
[9]
The PMNOC
Regulations were first enacted effective March 12, 1993 – I refer to these
as “the 1993 version” or the “1993 Regulations”. The first amendment to
those Regulations, SOR/98-166, came into force March 11, 1998 – I
refer to the amended Regulations as “the 1998 version” or the “1998
Regulations”. Of direct relevance to this action are the changes that were
made to s. 8.
[10]
Section 8 of the 1993
version of the PMNOC Regulations reads as follows:
8(1)
The first person is liable to the second person for all damage suffered by
the second person where, because of an application of paragraph 7(1)(e),
the Minister delays issuing a notice of compliance beyond the expiration of
all patents that are the subject of an order pursuant to subsection 6(1).
(2)
The court may make such order for relief by way of damages or profits as the
circumstances require in respect of any damage referred to in
subsection (1).
|
8(1) La première personne est
responsable envers la seconde personne de tout préjudice subi par cette
dernière lorsque, en application de l’alinéa 7(1)e), le ministre
reporte la délivrance de l’avis de conformité au-delà de la date d’expiration
de tous les brevets visés par une ordonnance rendue aux termes du paragraphe
6(1).
(2) Le tribunal peut rendre toute
ordonnance de redressement par voie de dommages-intérêts ou de profits que
les circonstances exigent à l’égard de tout préjudice subi du fait de
l’application du paragraphe (1).
|
[11]
Section 8 of the 1998
version of the PMNOC Regulations reads as follows:
8. (1) If an
application made under subsection 6(1) is withdrawn or discontinued by the
first person or is dismissed by the court hearing the application or if an
order preventing the Minister from issuing a notice of compliance, made
pursuant to that subsection, is reversed on appeal, the first person is
liable to the second person for any loss suffered during the period
(a) beginning on the date, as
certified by the Minister, on which a notice of compliance would have been
issued in the absence of these Regulations, unless the court is satisfied on the
evidence that another date is more appropriate; and
(b) ending on the date of the
withdrawal, the discontinuance, the dismissal or the reversal.
(2) A second person may, by action against a first person, apply
to the court for an order requiring the first person to compensate the second
person for the loss referred to in subsection (1).
(3) The court may make an order under this section without
regard to whether the first person has commenced an action for the
infringement of a patent that is the subject matter of the application.
(4) The court may make such order for relief by way of damages
or profits as the circumstances require in respect of any loss referred to in
subsection (1).
(5) In
assessing the amount of compensation the court shall take into account all
matters that it considers relevant to the assessment of the amount, including
any conduct of the first or second person which contributed to delay the
disposition of the application under subsection 6(1).
|
8. (1) Si la demande
présentée aux termes du paragraphe 6(1) est retirée ou fait l'objet d'un
désistement par la première personne ou est rejetée par le tribunal qui en
est saisi, ou si l'ordonnance interdisant au ministre de délivrer un avis de
conformité, rendue aux termes de ce paragraphe, est annulée lors d'un appel,
la première personne est responsable envers la seconde personne de toute
perte subie au cours de la période :
a) débutant à la date, attestée par le ministre, à laquelle un
avis de conformité aurait été délivré en l'absence du présent règlement, sauf
si le tribunal estime d'après la preuve qu'une autre date est plus
appropriée;
b) se terminant à la date du retrait, du désistement ou du rejet
de la demande ou de l'annulation de l'ordonnance.
(2) La seconde personne peut, par voie d'action contre la
première personne, demander au tribunal de rendre une ordonnance enjoignant à
cette dernière de lui verser une indemnité pour la perte visée au paragraphe
(1).
(3) Le tribunal peut rendre une ordonnance aux termes du présent
article sans tenir compte du fait que la première personne a institué ou non
une action pour contrefaçon du brevet visé par la demande.
(4) Le tribunal peut rendre l'ordonnance qu'il juge indiquée
pour accorder réparation par recouvrement de dommages-intérêts ou de profits
à l'égard de la perte visée au paragraphe (1).
(5) Pour
déterminer le montant de l'indemnité à accorder, le tribunal tient compte des
facteurs qu'il juge pertinents à cette fin, y compris, le cas échéant, la
conduite de la première personne ou de la seconde personne qui a contribué à
retarder le règlement de la demande visée au paragraphe 6(1).
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[12]
The 1998 Regulations
included transitional provisions in s. 9 of the amendments. Of particular
interest is s. 9(6):
TRANSITIONAL
PROVISIONS
9(6)
Section 8 of the Regulations, as enacted by section 8, applies to an
application pending on the coming into force of these Regulations.
[Emphasis added.]
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DISPOSITIONS TRANSITOIRES
9(6) L’article 8 du même règlement,
édicté par l’article 8, s’applique aux demandes qui sont pendantes à
la date d’entrée en vigueur du présent règlement. [Non souligné dans
l’original.]
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[13]
The first issue
before me turns on to the meaning of the word “pending” in s. 9(6) of the 1998
Regulations. As of March 11, 1998 – the coming into force of the 1998
Regulations – was Merck’s application for prohibition still pending? In
my view, it was not.
[14]
The sequence of
events leading up to the issuance of the NOC to Apotex and the subsequent Court
determinations can briefly be described as follows:
·
April 17, 1993 -
Merck filed patent lists for lovastatin pursuant to the Regulations.
·
April 19, 1993 -
Apotex forwarded a notice of allegations claiming non‑infringement of
Merck's relevant patent.
·
June 1, 1993 - Merck
commenced prohibition proceedings pursuant to subsection 6(1) of the Regulations.
·
September 6, 1995 –
Justice Richard, as he then was, extended the 30-month statutory stay to
December 1st, 1996 from December 1st, 1995.
·
October 23, 1996 –
Justice Dubé extended the statutory stay "until such time as a judgment is
rendered on the merits of the application for prohibition herein."
·
February 10, 1997 – The
Federal Court of Appeal allowed an appeal from the order of Justice Dubé and
quashed his order extending time. As a result, the statutory stay expired on
December 1st, 1996. As of that date, the Minister was no longer prohibited from
issuing a notice of compliance to Apotex.
·
February 13, 1997 -
Merck applied to the Federal Court for an extension order pursuant to
subsection 7(5) of the Regulations.
·
March 26, 1997 -
Justice Rothstein rendered oral judgment in Merck FCTD 1997, above,
dismissing Merck’s application for an extension of the statutory stay and
dismissing the prohibition application. He concluded that:
○
the Court is without
jurisdiction to issue a prohibition order under s. 6(2) of the Regulations
after expiry of the statutory stay; and
○
the Court is without
jurisdiction to extend time under s. 7(5) after expiry of the statutory stay.
·
March 27, 1997 – the
Minister issued an NOC to Apotex, allowing the entry of its generic lovastatin
onto the market in accordance with the terms of the NOC.
·
April 21, 1999 – the
Federal Court of Appeal, in Merck FCA 1999, above, dismissed Merck’s
appeal of Merck FCTD 1997, above, on the ground of mootness.
[15]
As noted above, the 1998
Regulations came into force on March 11, 1998 – one year after the NOC
was issued to Apotex, but one year before the decision in Merck FCA 1999,
above, was rendered.
[16]
Merck has relied on Syntex
FC, above, and Syntex FCA, above, to support its position that the
decision of Merck FCTD 1997, above, was final and therefore the
application for prohibition was not pending as of March 11, 1998.
[17]
The context of the
decision in Syntex FC, above, is as follows. An appeal of the decision
granting a prohibition order had been heard and decided prior to the 1998 Regulations
coming into force on March 11, 1998. The court process arose after that
date, was a motion by Apotex seeking an order setting aside the prohibition
order and dismissing the proceeding. Apotex was successful on this motion and
the prohibition order was set aside. Before Justice Hughes, Apotex argued that,
as of March 11, 1998, the application for prohibition was still “pending”
within the meaning of s. 9 of the 1998 Regulations. Justice Hughes did
not agree. At paragraph 39, above, Justice Hughes describes the finality of a
decision as follows:
In
most Courts, including this one, a judgment is final once it has been
determined and issued by the judge or Court hearing the matter. Such a judgment
is often subject to appeal and, if an appeal is taken, may not be considered
final until all appeals have disposed of the matter. In certain circumstances a
judgment may be amended where there are clerical errors or matters overlooked.
A judgment may also be revisited in cases of fraud or if some material fact,
not otherwise previously discoverable, comes to light. Nonetheless, once
issued, such a judgment is considered final.
[18]
Justice Hughes
concluded, at paragraph 43, that:
In
the present circumstances the prohibition Order of Reed J. as set out in the
Judgment issued by her on March 20, 1996 and affirmed by the Federal Court of
Appeal on October 21, 1996 was "final" before the amendments to the PMNOC
Regulations on March 11, 1998. There was, as of March 11, 1998, no
"pending" application within the meaning of section 9(6) of the 1998
amending provisions of those Regulations. The fact that the Judgment was
later varied and set aside does not mean that the matter was "pending"
as of March 11, 1998.
[19]
In Syntex FCA,
above, the Court of Appeal affirmed the conclusion that there was no
application pending for the purposes of s. 9(6) of the 1998 Regulations.
In paragraph 28, Justice Eleanor Dawson, speaking for the Court of Appeal
provided the following rationale:
In my view, the Judge correctly
interpreted the transitional provision. In the context of a legal proceeding,
the plain and ordinary meaning of the words “pending” or “pendantes” is a
proceeding that is not yet finished. Here, at the time of the 1998 amendments a
final order had been pronounced in the prohibition proceeding. Apotex had
made two allegations in respect of the ‘761 patent. They were, first, that the
patent did not fall within the scope of the Regulations and, second, that its
product would not infringe the patent. The Court had found both allegations to
be unjustified. That decision was affirmed on appeal. The Judge’s decision
properly gives effect to the dismissal on the merits of the prohibition proceeding.
[Emphasis added.]
[20]
I interpret this
paragraph to mean that an application judge’s decision in a prohibition
application is “final”; subsequent appeals or motions do not alter the finality
of that decision. In the case before me, the final decision in the prohibition
application was Justice Rothstein’s decision in Merck FCTD 1997, above.
Moreover, given Justice Rothstein’s conclusion that the Court had no
jurisdiction, it is arguable that the expiry of the statutory stay, which
extinguished any further right of application, was the determinative date. Regardless,
both of these events occurred prior to the 1998 Regulations coming into
force.
[21]
Although I am of the
view that a right to an appeal or a pending appeal cannot change the finality
of the application judge’s decision, I note that Justice O’Reilly in Apotex
Inc. v. Merck & Co., 2010 FC 287, 82 C.P.R. (4th) 85 [Apotex
2010] came to a different conclusion. Justice O’Reilly was faced with the
same issue as is before me: which version of the Regulations applies?
[22]
In Apotex 2010,
above, Justice O’Reilly was faced with a prohibition order that was issued in
1995 (Merck Frosst Canada
Inc. v. Canada (Minister of National Health and Welfare) (1995),
65 C.P.R. (3d) 483, 106 F.T.R. 294), and that was affirmed by the Federal Court
of Appeal in 1996 (Merck Frosst Canada Inc. v. Canada (Minister of
National Health and Welfare) (1996), 197 N.R. 294, 67 C.P.R. (3d) 455).
However, the prohibition order was overturned by the Supreme Court of Canada on
July 9, 1998 (Merck Frosst Canada Inc. v. Canada (Minister of
National Health and Welfare), [1998] 2 S.C.R. 193, 80 C.P.R. (3d) 368).
Thus, as of the coming into force of the 1998 Regulations, the
parties were awaiting judgment of the Supreme Court of Canada on whether the
prohibition order would be upheld. Until that happened, according to Justice
O’Reilly, there had been no final determination of the application and, thus,
he concluded that the application was “pending” as of March 11, 1998.
[23]
However, as Justice
O’Reilly notes, at paragraph 16, that “the word ‘pending’ must take its meaning
from the context in which it is used”. The context of the matter before me is
very different from that in Apotex 2010, above. The determination of
Justice Rothstein in Merck FCTD 1997, above, as affirmed by the Court of
Appeal in Merck FCA 1999, above, leaves me with no doubt that Merck’s
application could not proceed any further once the statutory stay had expired. At
paragraph9, Justice Rothstein explains that:
It
is noteworthy that while the Regulations provide for automatic and then Court
ordered prohibition on the Minister from issuing a NOC, there is nothing in
Regulations that confers on the Court jurisdiction to order certiorari to quash
a NOC that may have been issued after expiry of the statutory stay but which
the Court ultimately finds is based on an allegation of non-infringement that
is found not to be justified. The implication of the silence of the
Regulations as to a remedy for a patentee if a NOC issues after expiry of the
statutory stay based on a non-justified allegation is that once the statutory
stay expires, the Court is without jurisdiction to grant any remedy under the
Regulations. [Emphasis added.]
Thus,
although Merck attempted to pursue an application for judicial review and an
appeal, both Courts refused to deal with the merits of the prohibition
application.
[24]
Stated differently,
Merck’s application was without legal foundation as of December 1, 1996, or
certainly no later than the date that the NOC was issued on March 27, 1997.
There was no remedy available to Merck under the Regulations after
December 1, 1996. I cannot see how an application could have been “pending” as of the 1998 Regulations coming into force.
[25]
Accordingly, even if
I accept that, in some circumstances (such as Apotex 2010, above),
an outstanding appeal may result in an application “pending” for purposes
of s. 9(6) of the Regulations, the facts before me do not support
such a conclusion. There was no application pending as of March 11, 1998. Therefore,
s. 8 of the 1993 Regulations apply to the case at bar.
Issue #2: Is Apotex entitled to damages under s. 8 of the
1993 Regulations?
[26]
Having concluded that
the 1993 Regulations apply to this action, I now turn to the
question of whether Apotex is entitled to any damages under s. 8 of the Regulations.
[27]
For ease of
reference, I repeat s. 8(1) of the 1993 version of the PMNOC Regulations:
8(1)
The first person is liable to the second person for all damage suffered by
the second person where, because of an application of paragraph 7(1)(e),
the Minister delays issuing a notice of compliance beyond the expiration of
all patents that are the subject of an order pursuant to subsection 6(1).
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8(1) La première personne est
responsable envers la seconde personne de tout préjudice subi par cette
dernière lorsque, en application de l’alinéa 7(1)e), le ministre
reporte la délivrance de l’avis de conformité au-delà de la date d’expiration
de tous les brevets visés par une ordonnance rendue aux termes du paragraphe
6(1).
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[28]
Merck
submits that, by the express wording of s. 8, the second person – Apotex – is
only entitled to damages where the Minister delays issuing an NOC “beyond the
expiration of all patents that are the subject of an order pursuant to subsection
6(1)”. In this case, the '380 Patent was at all times, extant in the period in
which Apotex claims it was kept off the market by the application of s. 7(1)(e)
of the Regulations. The patent was issued on January 31, 1984, and was
in force until January 31, 2001. Thus, Merck argues, Apotex has no valid claim
for damages under s. 8.
[29]
Apotex
asserts that such an interpretation of s. 8 would be inconsistent with the
intent of the Governor-in-Council (GIC). The GIC’s intent is reflected,
according to Apotex, in the Regulatory Impact Assessment Statement (RIAS) that
accompanied the 1993 Regulations, which addresses the purpose of
subsection 8(1) of the Regulations as follows: “...the frequency and
costs associated with any such delays arising from these Regulations will be
minimized by the fact that such a patentee will be liable for all damage
suffered from the delay”. [Emphasis added.]
[30]
Apotex
provides an interpretation of s. 8 that, in its opinion, would give a meaning
to s. 8 that accords with the RIAS and that would permit Apotex to recover its
damages for being wrongly kept off the market. In Apotex’s submission, the
words “beyond the expiration of all patents that are the subject of an order
pursuant to subsection 6(1)” refer to the situation in which more than one
patent is on the patent list and prohibition orders have been issued for one or
more of the other patents. In Apotex’s view, the words do not relate to the
case at bar, in which only one generic company has commenced a s. 8 action.
Apotex further submits that since there are no other patents in this case, s. 8
permits recovery. Stated differently, Apotex is arguing that where there is
only one patent in issue, the words “beyond the expiry of all patents” are
simply inapplicable.
[31]
This issue was also
dealt with by Justice Hughes in Syntex FC, which was affirmed by the
Court of Appeal in Syntex FCA, above.
[32]
In Syntex FC,
above, and Syntex FCA, above, Apotex argued that it was entitled to
damages under s. 8 of the 1993 Regulations. In so asserting, Apotex
provided an interpretation of s. 8 that is not substantially different from
that argued before me in this trial. Indeed, counsel for Apotex confirmed that
the final argument on this issue was “the argument that went to the Court of
Appeal” in Syntex FCA, above. Unfortunately, that argument did not find
favour with the Court of Appeal.
[33]
In Syntex FC,
above, Justice Hughes carefully reviewed the principles of statutory
interpretation applicable to the thorny issue of what is meant by s. 8 of the 1993
Regulations. I will not repeat those principles; they are contained in paragraphs
65 - 68 of Syntex FC, above. In brief, words of a statute (including regulations)
are to be read “in their entire context and in their grammatical and ordinary
sense harmoniously with the scheme of the Act, the object of the Act and the
intention of Parliament” (see, for example, Rizzo & Rizzo Shoes Ltd.,
Re, [1998] 1 S.C.R. 27 at paragraph 21, 154 D.L.R. (4th) 193).
However, if the text is precise, unequivocal and detailed, the text of the
statute should play a dominant role in the interpretive process, rather than a
reliance on extra-textual evidence of legislative intent.
[34]
In his application of
the principles of statutory interpretation to s. 8 of the 1993 Regulations,
at paragraph 71 Justice Hughes concludes:
A
reasonable interpretation of section 8 would be to impose a liability on a
first person if the cause of the delay in issuing a Notice of Compliance to a
second person was that the patent that was the subject of the proceeding had
"expired", that is by the natural end of its term, or by lapse such
as failure to pay maintenance fees, or by operation of law such as a
declaration of invalidity. If, for instance, the patent was declared invalid in
the context of the relevant NOC application itself, then it can be said that
the Minister had delayed in issuing the Notice of Compliance because the patent
must be considered to have "expired". The extent of the delay could
reasonably be considered to be the later of the day upon which the Minister
says that the Notice of Compliance would otherwise have been issued if it were
not for the application of the Court, or the filing date of that application
with the Court. The end date would be the date that the Notice of Compliance was
actually issued.
[35]
Aware of the
principles of statutory interpretation, Justice Hughes in Syntex FC,
above, provides three examples of how a patent could expire, and give rise to
the possibility of damages pursuant to s. 8 of the 1993 Regulations,
including:
(a)
by the natural end of
its term;
(b)
by lapse such as
failure to pay maintenance fees; or
(c)
by operation of law
such as a declaration of invalidity.
[36]
Having listed these
three examples, Justice Hughes continued on to describe the situation where a
patent is declared invalid in the context of NOC proceedings. The Court of
Appeal disagreed with this specific example for the simple reason that a patent
cannot be declared invalid in the context of the PMNOC Regulations.
Presumably, the Court of Appeal would have had no difficulty if Justice Hughes
had provided the example of a declaration of invalidity that resulted from an
action under the provisions of the Patent Act (rather than a proceeding
under the PMNOC Regulations). Beyond this criticism, the Court of Appeal
did not question the examples provided by Justice Hughes and accepted his
interpretation of s. 8 of the 1993 Regulations. Thus, I will accept the
interpretation of s. 8 of the 1993 Regulations as adopted by Justice
Hughes in Syntex FC, above, and not the complex interpretation proposed
by Apotex.
[37]
Apotex attempts to
distinguish the case at hand from the decision in Syntex FC, above, and Syntex
FCA, above, because, unlike the case before me, a prohibition order was
initially granted to Syntex. The Court of Appeal found that Apotex was
attempting to “reach back and apply the finding of invalidity in the action so
as to argue that the '671 patent had ‘expired’ within the meaning of section 8
of the 1993 version of the Regulations” (Syntex FCA, above, at
para. 36).
[38]
Apotex submits,
before me, that it is not attempting to “reach back”. Rather, Apotex, in its
further written submissions, argues:
In
the case at bar, Merck has failed to establish that Apotex’s allegations were
not justified. It was unsuccessful in its prosecution of the application for
prohibition. That is precisely the situation in which the Court of Appeal
observed that the 1993 section 8 was intended to provide redress to the
generic. In view of the foregoing, Apotex respectfully submits that the Court
of Appeal’s decision supports Apotex’s alternative plea for a remedy under the
1993 version of section 8 of the Regulations.
[39]
With respect, I do
not understand Syntex FCA, above, to be an endorsement of Apotex’s
position. As I read the decision, the Court of Appeal accepted that the “trigger”
for the application of s. 8 was the expiry of the patent that had been the
subject of the NOC proceedings and a delay by the Minister in issuing the NOC
beyond the expiry of that patent. Although, in the case at hand, Apotex is not
attempting to “reach back”, the situation remains that, as of the date of the
NOC, the '380
Patent had not expired. I
see nothing in either Syntex FC, above, or Syntex FCA, above,
that would change the interpretation of s. 8 of the 1993 Regulations that
was determined by Justice Hughes and endorsed by the Court of Appeal. I am
bound by that interpretation and Apotex’s argument must therefore fail.
[40]
As noted above,
Apotex argues that this interpretation is not keeping with the RIAS. This
argument was also made by Apotex in the context of Syntex FC,
above, and Syntex FCA, above, where the argument failed to find favour.
In my view, there are two reasons why the RIAS cannot be used to interpret the
1993 version of s. 8 in the manner proposed by Apotex. The first is that the
role of the RIAS cannot be used to change the clear words of a provision of the
Regulations. The second is that, contrary to the assertions of Apotex,
the RIAS itself is not entirely clear. It has been accepted by this Court that
the RIAS made be used as a “tool” in analyzing the legislative intent, as it
was prepared as part of the regulatory process: see, for example, Merck
& Co. v. Canada (Attorney General) (1999), 176 F.T.R. 21, [1999] F.C.J.
No. 1825 (QL) (F.C.T.D). However, in this case, where the RIAS itself is
unclear, it ought not to be utilized as a “tool” to oust the clear language of
a legislative provision.
[41]
In summary, adapting
the words of Justice Hughes at paragraph 71 in Syntex FC, above, the
cause of any delay in issuing an NOC to Apotex was not that the patent that was
the subject of the proceeding, the '380 Patent,
had “expired” is by the natural end of its term, or by lapse such as failure to
pay maintenance fees. Accordingly, there is no liability imposed on Merck. Apotex
is not entitled to damages pursuant to s. 8 the 1993 version of the Regulations.
IV. Merck’s
Counterclaim
[42]
In the pleadings, as amended,
Merck sought the following, by way counterclaim:
(a)
A declaration that s.
8 of the PMNOC Regulations, both as originally enacted and as amended by
S.O.R.98/166, are ultra vires the Governor in Council as not authorized
by the Patent Act, s. 55.2(4) and are thus void, inoperative and of no force
and effect;
(b)
A declaration that
the Plaintiffs would have infringed the
'380 Patent held
and registered by the Defendant in the relevant time period; namely, from April
26, 1996 to March 26, 1997; and
(c)
By way of set off in
respect of the amount claimed by the Plaintiffs herein damages ordered by the
Court in Court File No. T-1272-97 to be paid by Apotex Inc. to the Defendants.
[43]
In final argument,
Merck did not pursue the allegation that s. 8 of the PMNOC Regulations
is ultra vires. Further, because of my conclusions in this matter, there
is no need to consider the other two requested remedies. Accordingly, the
counterclaim by Merck will be dismissed.
V. Attorney
General of Canada
[44]
In the pleadings, Her
Majesty the Queen, as represented by the Attorney General of Canada, was named as
a Defendant by Counterclaim in this action. The Deputy Attorney General of Canada, on behalf of the Attorney General of Canada, filed a “Defence
of Her Majesty the Queen to the Counterclaim.” The sole issue involving the
Attorney General was the validity of s. 8 of the PMNOC Regulations.
Early in the trial (and as confirmed in final argument), it became clear that
Merck was no longer pursuing this aspect of its claim. The Attorney General did
not participate in the trial. The Counterclaim against Her Majesty the Queen,
as represented by the Attorney General of Canada will be dismissed.
VI. Conclusion
[45]
For these reasons,
the claim of Apotex will be dismissed, with costs to Merck. Moreover, the
Counterclaim of Merck against Apotex and the Attorney General will be
dismissed.
[46]
I expect that the
parties will be able to agree on the matter of costs. In the event that they
are unable to do so, I will remain seized of the matter. The parties may make
written submissions on those areas of costs about which they disagree, such
submissions to be no more than eight pages and to be served and filed within 30
days of the issuance of these reasons. The parties will have another 15 days in
which to serve and file reply submissions, not to exceed four pages.
POSTSCRIPT
[1]
These
Reasons for Judgment are un-redacted from confidential Reasons for Judgment
which were issued on December 9, 2010 pursuant to the Direction dated December
9, 2010.
[2]
The Court
canvassed counsel for the parties whether they had concerns if the reasons were
issued to the public without redactions. On December 15, 2010 and
December 16, 2010, in separate letters, the parties advised that there are no
portions of the confidential Reasons for Judgment that should be redacted.
“Judith
A. Snider”
Ottawa, Ontario
Public
Reasons for Judgment – December 22, 2010
Confidential
Reasons for Judgment – December 9, 2010