Date: 20090629
Docket: T-703-08
Citation: 2009 FC 675
Ottawa, Ontario, June 29,
2009
PRESENT: The Honourable Mr. Justice Barnes
BETWEEN:
ELI
LILLY CANADA INC.
Applicant
and
NOVOPHARM LIMITED and
THE MINISTER OF HEALTH
Respondents
and
ELI LILLY and
COMPANY LIMITED
Respondent/Patentee
REASONS FOR ORDER AND ORDER
[1]
This
is an appeal by Novopharm Limited (Novopharm) from a decision of
Prothonotary Mireille Tabib by which its motion under ss. 6(5)(b) of the Patented
Medicines (Notice of Compliance) Regulations, SOR/93-133 (NOC Regulations) was
dismissed and the motion by Eli Lilly Canada Inc. (Lilly) to amend its
underlying Notice of Application was allowed.
a.
Background
[2]
Novopharm’s
motion was an attempt to summarily end Lilly’s application for prohibition on
the ground that that application was legally and factually frivolous.
Novopharm takes the position that its proposed olanzapine product would
demonstrably not infringe Lilly’s Patent No. 2,214,005 ('005 Patent) for olanzapine.
The basis for Novopharm’s assertion of non-infringement is that its olanzapine
product will not be made with substantially pure Form II, the compound
protected by Lilly’s '005 Patent.
[3]
Lilly
sought to amend its Notice of Application to include a claim that Novopharm’s
Notice of Allegation (NOA) contained the deceptive and misleading allegation
that the proposed olanzapine product would be made from Form I olanzapine. Lilly’s
expert witness, Dr. David E. Bugay, has deposed that his testing of
Novopharm’s product has shown that it is comprised of olanzapine in its
ethanol-water solvate form and not Form I. For its part, Novopharm argued
before the Prothonotary and again before me that whether its olanzapine product
is made from Form I or not is entirely irrelevant to the issue of infringement,
which can only turn on whether its product contains substantially pure Form II olanzapine.
Novopharm maintains, as well, that Lilly’s evidence of the potential for
Novopharm’s product to convert to Form II is no more than speculation and
manifestly insufficient to establish infringement.
The Decision
Under Review
[4]
The
Prothonotary dismissed Novopharm’s motion on the strength of a finding that it
was not “plain and obvious” that the impugned allegation was an indivisible and
material part of its NOA declaration. In the following passage she then found,
with some apparent reluctance, that the legal significance of a false or
defective NOA was not a settled issue and that it should not be resolved summarily:
I am further not satisfied that it is
plain and obvious that the demonstrable falsity of a statement made in a notice
of allegation as to what the product will contain is not sufficient to hold the
notice of allegation, as it relates to non-infringement, to be defective and
thus justify the issuance of a prohibition order. The jurisprudence certainly
alludes to that possibility (Pfizer Canada Inc. v. RhoxalPharma Inc.
(2005) 40 C.P.R. (4th) 306). Novopharm’s argument, drawn from its analysis of
various other precedents, is to the effect that falsity of an allegation cannot
vitiate the notice of allegation unless it is “material”, in the sense that it
is determinative of whether the allegation is justified, or in the sense it
must have been designed or at least have had the effect of materially
misleading the Applicant. These arguments are all very compelling;
unfortunately, as there has been no judicial determination of the validity of
those arguments, one way or another, it is certainly not appropriate for the
Court to venture to make that determination on a preliminary motion and without
the benefit of a full evidentiary record and argument.
[5]
The
Prothonotary then went on to find that nothing useful would be served by
summarily resolving the issue of whether Lilly’s evidence of the potential for
infringement by conversion was sufficient to justify the hearing of its
application for prohibition.
II. Issues
[6]
Does
the Prothonotary’s decision contain a reviewable error?
III. Analysis
[7]
It
is clear from the Prothonotary’s decision that she correctly applied the “plain
and obvious” test to the motion before her. The authorities dictate that on a
motion to dismiss under ss. 6(5)(b) of the NOC Regulations it must be
shown that the proceeding “is so clearly futile that it has not the slightest chance
of succeeding”. This form of early relief is exceptional and it will be denied
in the presence of a debatable issue of fact or law: see Sanofi-Aventis
Canada Inc. v. Novopharm Ltd., 2007 FCA 163, 59 C.P.R. (4th) 416 (F.C.A.)
at paras. 32 to 34.
[8]
I
very much doubt that a factual allegation in a NOA that is later shown to be
untrue but which is not relevant to the issue of infringement will, of itself,
provide a basis for an order of prohibition. Nevertheless, the importance of
the NOA to the first party’s decision to bring an application for prohibition
and the corresponding requirement for accuracy cannot be ignored: see Hoffmann-La
Roche Ltd. v. Canada (Minister of National Health
and Welfare) (1996), 70 C.P.R. (3d) 206, [1996] F.C.J. No. 1333 (F.C.A.).
In the result, it is not beyond debate that a deliberately misleading NOA could
lead to the grant of that relief. Whether or not the decision in Pfizer v.
Rhoxalpharma, 2005 FC 487, [2005] F.C.J. No. 818, was intended to go that
far is not entirely clear to me but the statement made at para. 41
supports Lilly’s position on this motion. I agree with the Prothonotary,
therefore, when she held that there has not yet been a judicial determination
of the validity of this argument and that it should not be resolved on a motion
like this one without the benefit of a full evidentiary record.
[9]
While
I agree with Novopharm that there are some arguable weaknesses with
Dr. Bugay’s affidavit evidence, for present purposes that evidence must be
accepted at face value. I must assume for instance that his methodology was
scientifically sound and that his evidence about the potential for conversion
of Novopharm’s olanzapine product will be accepted.
[10]
Nonetheless,
Novopharm asserts that Dr. Bugay’s evidence amounts only to speculation or
at the very least would be insufficient to meet the burden required to
establish infringement. Novopharm relies upon the Federal Court of Appeal
decision in Pfizer Canada Inc. v. Novopharm Ltd., 2005 FCA 270, 42
C.P.R. (4th) 97. Pfizer was a case which examined the sufficiency of
Novopharm’s NOA concerning Pfizer’s azithromycin product and the decision was made
on the merits. Novopharm takes comfort, though, from the Court’s description
of expert evidence adduced by Pfizer concerning conversion as being
insufficient to establish infringement. That evidence indicated that the
proposed Novopharm product might convert into the substance that was
protected by Pfizer’s patent – evidence which the Court described as having
“little probative value”. Novopharm argues in this proceeding that Dr. Bugay’s evidence
on conversion is no better than what the Court considered in Pfizer and
that the inevitable outcome will be the same. I was, therefore, urged to
examine Dr. Bugay’s evidence carefully and critically and not to burden
Novopharm with the requirement of proceeding further with this application on
the merits. Novopharm also relies upon the decision in Novopharm v.
Sanofi-Aventis Canada Inc., 2007 FCA
167, 59 C.P.R. (4th) 24 (F.C.A.) where a similar motion was allowed and where
an argument by Sanofi that evidence of infringement might emerge through
cross-examination was dismissed as speculative.
[11]
The
problem with Novopharm’s interpretation of the Pfizer decision, above, is
that the Court’s unfavourable characterization of Pfizer’s evidence was based
on its assessment of all of the evidence about the possibility of conversion:
see paras. 25-28. Here I would not characterize Dr. Bugay’s evidence as
speculative which, to my thinking, is evidence which carries no probative value
whatsoever. Rather, Dr. Bugay’s evidence stands essentially unchallenged
and it is of some probative significance. Novopharm’s concern is really one
which goes to the weight of that evidence and whether it is sufficient to
establish anything more than the mere possibility of conversion. This is a
point of disagreement which necessarily involves the weight to be ascribed to
evidence or whether certain inferences should be drawn from that evidence and
it is, therefore, not something which should be resolved on a motion under ss.
6(5)(b).
[12]
On
the basis of the above, it must follow that the Prothonotary’s order allowing
Lilly’s amendment cannot be impeached. This appeal is therefore dismissed with
costs payable to Lilly.
ORDER
THIS COURT ORDERS that this motion is dismissed with costs payable to Eli Lilly
Canada Inc.
“ R. L. Barnes ”
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