Date: 20090915
Docket: T-1610-08
Citation: 2009 FC 914
Ottawa, Ontario, September 15, 2009
PRESENT: The Honourable Mr. Justice Zinn
BETWEEN:
MERCK-FROSST - SCHERING PHARMA
GP
and SCHERING CORPORATION
Applicants
and
THE MINISTER OF HEALTH and
NOVOPHARM LIMITED
Respondents
REASONS FOR ORDER AND ORDER
[1]
Novopharm
Limited (Novopharm) seeks to set aside and reverse the Order of Prothonotary Milczynski
dated August 13, 2009, dismissing its motion for leave to serve and file reply
evidence.
[2]
It is well
established that the Court should not interfere with discretionary orders of a
prothonotary, such as that under appeal, unless the questions raised are vital
to the final issue in the case or the order is "clearly wrong" in the
sense that the exercise of discretion was based upon an incorrect principle of
law or upon a misapprehension of the facts. In that event, the Court must
exercise its discretion anew.
[3]
The motion
did not deal with any matter vital to the final issues and accordingly my
analysis is restricted to determining whether the Prothonotary’s Order was
clearly wrong in the sense
that the exercise of discretion was based upon an incorrect principle of law or
upon a misapprehension of the facts.
[4]
This
application was commenced on October 12, 2008, by the Applicants under the Patented
Medicines (Notice of Compliance) Regulations (the Regulations). Novopharm
has applied for approval to market a generic version of the drug EZETROL®
ezetimibe which the Applicants assert is covered by Canadian Patent 2,172,149
(the ‘149 Patent).
[5]
As appears
to have become common-place in NOC matters, both parties rigorously avoided
specificity in the early stages of the proceeding. Novopharm filed a Notice of
Application (NOA) with the Minister that was aptly described by the Applicants
to have been “very broad” and which cited 223 pieces of prior art which were
claimed as relevant to the ‘149 Patent. The Applicants responded with a Notice
of Application that Novopharm aptly describes as being “devoid of substance.”
Although it contains some 48 paragraphs relating to the specifics of the NOA,
it is not much of an exaggeration to say the response to the NOA could have
been reduced to a single paragraph, paragraph 25 of the application, which
reads as follows:
Each and every allegation in
the NOA is unjustified. Each and every matter of opinion alleged in the NOA is
wrong. Each and every fact alleged is false. Each and every assertion of law
is incorrect. Each and every conclusion, inference or step of logic is
incorrect and unsupported by the basis alleged.
[6]
The
sequencing of evidence was ordered reversed from the usual practice; Novopharm served
its Rule 307 evidence before the Applicants served their Rule 306 evidence.
Novopharm served three affidavits: the affidavit of Dr. John Sutherland, an
expert, and two non-expert affidavits. The Applicants served 7 affidavits:
the affidavits of 5 experts Dr. Antonio M. Gotto, Dr. Neal Castagnoli, Dr. John
Clader, Dr. Leslie Z. Benet and Professor Mark Wentland, and two non-expert
affidavits.
[7]
Novopharm
sought leave to file one affidavit in reply to the affidavits of the
Applicants’ experts. Its motion was accompanied by an affidavit of a law clerk
employed by the Respondent’s counsel in which she swears as follows at
paragraph 16:
I am informed and verily
believe that the document attached as Exhibit “J” to my affidavit constitutes
the reply evidence Dr. Sutherland will attest to if leave to file reply evidence
is granted.
[8]
Exhibit
“J”, the proposed reply evidence, is an unsworn affidavit of Dr. John
Sutherland. Paragraphs 1 to 3 are relevant for the purposes of this appeal.
1. I am the same John D.
Sutherland who swore an affidavit on April 6, 2009. I have reviewed the
following affidavits, all of which I received only on July 6, 2009:
(a) The Affidavit of Mark
Wentland, sworn July 3, 2009.
(b) The Affidavit of Leslie J.
Benet, Ph.D., sworn July 2, 2009.
(c) The Affidavit of Dr. John
Clader (Inventor), sworn June 26, 2009.
(d) The Affidavit of Neal
Castagnoli, Ph.D., sworn July 2, 2009.
2. I disagree with a number of
the statements made in those affidavits, but have been asked by counsel for
Novopharm to restrict my comments to matters that I could not have anticipated
before reviewing these affidavits. I have limited the evidence that follows,
accordingly.
3. My evidence directly responds
to the following:
(a) Dr. Wentland’s comparison of
in vivo activity of the cis series compounds with their otherwise identical
trans counterparts in the 007 Patent;
(b) Conclusions of Dr. Wentland,
Dr. Benet and Dr. Castagnoli which are based on the skilled person having
hindsight knowledge of the ezetimibe structure or invalid assumptiopns about
the C4 substituent;
(c) Dr. Wentlan’s assertion that
the skilled person would have relied upon logP calculations in respect to the
compounds of the 007 Patent;
(d) Comparisons, examples and
assertions of Dr. Wentland, Cr. Benet and Dr. Castagnoli pertaining to the
skilled person’s expectations about benzylic hydroxylation and the N1 phenyl
group at the para-positions;
(e) The assertions of Dr. Benet
and Dr. Castagnoli that the skilled person would have assumed metabolites were
inactive; and
(f) The assertion of Dr. Benet
and Dr. Castagnoli that the skilled person would have considered (1) phase II
biotransformation in designing a compound and (2) that the possibility of
glucoronidation would have taught away from a para-substituted C4 phenyl
ring.
[9]
The “007
Patent” referenced in the affidavit is a reference to Canadian Patent
2,114,007. Novopharm, in its NOA, asserts that claims 1, 2, 4, 5, 7 and 9 of
the ‘149 Patent are inevitably anticipated by the 007 Patent.
[10]
In
considering the motion to file reply evidence, the Prothonotary correctly set
out the relevant test as enunciated in Pfizer
Canada v. Canada (Minister of Health),
2007 FC 506, Eli Lilly Canada v. Apotex Inc., 2006 FC 953, and other
decisions of this Court. The test has four components as follows:
(i)
whether the further
evidence serves the interests of justice;
(ii)
whether the further
evidence assists the Court in making its determination on the merits;
(iii)
whether granting the
motion will cause substantial or serious prejudice to the other side; and
(iv)
whether the reply
evidence was available and/or could not be anticipated as being relevant at an
earlier date.
[11]
Novopharm
submits that the decision of the Prothonotary was clearly wrong in the
following respects:
(i)
She based
her decision on a wrong principle by requiring sworn evidence from Dr.
Sutherland as to why the evidence proposed in reply was not available and could
not have been anticipated in his affidavit in chief;
(ii)
She based
her decision on a wrong principle by holding that reply evidence that
contradicts or critiques the Applicants’ evidence does not constitute proper
reply evidence; and
(iii)
She based
her decision on a misapprehension of the facts, finding that “the proposed
reply seeks to contradict or critique the Applicants’ evidence, and have the
‘last word’ on the points of critique aimed at Dr. Sutherland’s original
affidavit, when in fact the proposed response does not merely address the
points of critique but new purported facts and matters raised by the Applicants
for the first time in their evidence.
[12]
The
Prothonotary makes much of the fact that the proposed reply evidence was
contained in an unsworn affidavit of Dr. Sutherland and that he had not sworn
an affidavit swearing that the proposed reply evidence was not available and/or could not be
anticipated by him as being relevant at an earlier date:
It should be noted from the outset that
the proposed reply affidavit of Dr. Sutherland was not sworn, and was before
the Court as an exhibit to the affidavit of a law clerk for counsel for
Novopharm. There was also no affidavit from Dr. Sutherland upon which the
Court could assess some of the factors to be taken into consideration on a
motion under Rule 312, in particular whether the evidence proposed in reply was
available and could or could not be anticipated in the first round, and whether
the proposed reply evidence would be of assistance to the judge hearing the
application on its merits. By shielding Dr. Sutherland from cross-examination,
the Court is left on this motion with Novopharm’s arguments on these points.
[13]
The
Prothonotary later describes the consequences of filing an unsworn proposed
reply affidavit:
In respect of whatever might be
considered to be “new” in Dr. Sutherland’s proposed reply, it is also not
clear in Novopharm’s record by way of admissible evidence, why Dr. Sutherland
could not anticipate or include the information in his original affidavit.
Having shielded him from cross-examination on these points, and relying upon
unsworn assertions, the Court cannot adequately weigh the factors on this
motion and find that Novopharm is not splitting its case. (emphasis added)
[14]
In large
measure the Prothonotary adopted the submissions of the Applicants on these
issues as set out in paragraphs 5 to 7 of their Memorandum on the motion before
the Prothonotary.
[15]
The
Applicants submit that although the Prothonotary pointed out that there was no
admissible evidence of Dr. Sutherland’s subjective view as to whether or not he
could have anticipated the evidence as being relevant at an earlier date, she
did go on to do an objective assessment as to whether the evidence was “new”.
[16]
With great
respect to the Prothonotary, I find that she placed far too great an emphasis
on the fact that the affidavit was not sworn and that her analysis as to the
newness of the proposed reply evidence was flawed.
[17]
Contrary
to the view expressed by the Prothonotary, an affidavit in which the affiant
states that the evidence proposed in reply could not have been anticipated earlier
as being relevant is of marginal, if any, value. It is unlikely to warrant any
greater weight than an affidavit from the opposite party, such as was provided
in this case, in which an affiant swears that the evidence proposed in reply
could have been anticipated. In this respect, I agree with the comment of
Prothonotary Tabib in Solvay Pharma Inc. et al. v. Apotex Inc. et al.
(T-427-06, June 15, 2007), quoted by Prothonotary Aalto in Astrazeneca
Canada Inc. et al. v. Novopharm Limited et al., 2009 FC 902:
I would add, as a general
comment, that the bald statement by any expert that he or she could not have
anticipated a certain approach or argument, or that a certain approach or
argument is not in the notice of allegation, should be accorded very little
weight, if any. To the extent the matter can be assessed on the plain reading
of the notice of allegation and affidavits by a lay person, then a bald
statement by an expert to the contrary will not carry weight. To the extent
the assessment cannot be made without an expert’s assistance, then a bald
statement is of no assistance in understanding or justifying the subtle
distinctions that apparently need to be made.
[18]
What is
required is an analysis of the materials filed and proposed to determine on an
objective analysis whether the proposed reply evidence could reasonably have
been anticipated as relevant. That was not done in this case as the learned
Prothonotary permitted form to rule over substance.
[19]
It is
certainly true that the proposed reply affidavit of Dr. Sutherland was unsworn;
however, that is not an uncommon or objectionable way of proceeding in such
motions. Therefore, that fact alone ought not to have been fatal to Novopharm’s
application. Moreover, the unsworn affidavit was an exhibit to a sworn
affidavit that attested that if reply evidence was allowed, it would be sworn,
served and filed in the form that was before the Prothonotary. Accordingly, it
was entitled to be given more consideration than a mere unsworn statement
alone.
[20]
Although
the burden was on Novopharm to show why reply evidence was required, the
Applicants do not appear from the record to have indicated any desire to
cross-examine Dr. Sutherland on the proposed affidavit prior to the motion. It
is simply inappropriate to suggest, as it was, that he was “shielded from
cross-examination” by Novopharm.
[21]
The focus
of the Prothonotary’s decision, and of the Applicants in opposition to the
motion, was that the proposed reply evidence failed to meet the fourth test set
out above at paragraph 10. No submissions were made before me that the first
three tests had not been met and based on my review of the proposed evidence
and the record, I am satisfied that the proposed reply evidence does meet the
first three parts of the test for the reasons set out in paragraphs 12 to 16 of
Novopharm’s Memorandum filed on the motion before the Prothonotary.
[22]
When
examining whether the proposed evidence is proper reply evidence that was not available and/or could not be
anticipated as being relevant at an earlier date, the following two step
analysis is required.
[23]
The first
step is to ask whether the proposed evidence is properly responsive to the other
party’s evidence. It is responsive if it is not a mere statement of
counter-opinion but provides evidence that critiques, rebuts, challenges,
refutes, or disproves the opposite party’s evidence. It is not responsive if
it merely repeats or reinforces evidence that the party initially filed.
[24]
In my view
the Prothonotary over-stated the law when she held that “engaging in a debate, critique,
argument, rebuttal or disagreement is not proper reply – but may more properly
[be] the subject of cross-examination and/or argument.” The Prothonotary’s
statement is accurate only if there is nothing new in the evidence to which a
reply is proposed. If the evidence to which the reply is proposed relates to
evidence that is new and was not previously considered relevant by that first party,
then it may well be proper reply evidence.
[25]
If the
proposed evidence is found to be responsive, one must then ask whether it could have been anticipated as being
relevant at an earlier date. If it could have been anticipated earlier to be
relevant, then it is being offered in an attempt to strengthen one’s position by introducing new
evidence that could and should have been included in the initial affidavit. Such
evidence is not proper reply evidence as the party proposing to file it is
splitting his case. A party must put his best case forward for the other to
meet, he cannot lie in the weed and after the party opposite has responded file
additional evidence to bolster his case in light of the defence that has been
mounted. It is improper because it could have been filed in the initial
instance and the other party now has no opportunity to respond to it.
[26]
It can be a difficult
task to analyze whether the proposed reply evidence could have been anticipated
as relevant, particularly in NOC applications where there is such an abundance
of scientific evidence available that may or may not be relevant based on the
claims advanced by the second party as defined in the Regulations and the
defence submitted by the first party. In this respect, I whole-heartedly endorse
the following observation of Prothonotary Aalto in Astrazeneca at para.
15:
It is not for a
generic/respondent to speculate [where the filing of evidence has been
reversed] in its evidence as to every piece of evidence that an applicant may choose
to put forward to support its application. This is especially so, as noted,
where the notice of application contains mere denials.
[27]
In this
case the Prothonotary concluded that the proposed reply affidavit did in fact
address the six matters set out at paragraph 3 of Dr. Sutherland’s affidavit,
set out above, finding that it “relates the analysis to the Applicants’
evidence.” It was therefore found to be responsive. However, in my view, she
then failed to conduct a proper second step analysis.
[28]
The
Prothonotary saw the proposed reply evidence as seeking to contradict or
critique the Applicants’ evidence without first examining whether the areas
that it sought to contradict or critique were matters that Novopharm could not
have anticipated would be relevant.
[29]
Novopharm
is alleging that claim 21 of the ‘149 Patent is invalid under the Patent Act,
as obvious in light of the state of the art at the relevant time. It was
certainly foreseeable that the Applicants would file evidence disagreeing that
claim 21 was obvious. To the extent that the Applicants’ evidence is that Dr.
Sutherland’s analysis is faulty or misleading, that response and perhaps the
details of it are unlikely to generate proper reply evidence. In such a
circumstance, while arguably responsive, reply evidence in most instances would
not be proper as it would likely be a reiteration of previously made points or a
boot-strapping exercise.
[30]
However,
to the extent that the Applicants’ evidence is that claim 21 was not obvious and
they set out reasons why that is so, those reasons and the facts behind them
are likely to warrant reply evidence, as they are new. Further, where the
Applicants’ evidence is that Novopharm’s expert is wrong in his opinion and
they are not merely challenging his science but are raising new matters by way
of different science, different authorities, different assumptions, and the
like, that too at first blush will raise new matters that may require reply. While
this type of evidence may be said to respond to the evidence of Novopharm in a
very general and overarching manner, the detail of it may well be new. Novopharm
could anticipate that some science and argument would be put forward for the
inventiveness of the claim and challenging its expert’s evidence, however, it need
not deal with every argument it can anticipate being put forward because,
until the Applicants put forward their evidence Novopharm has no way of knowing
which of the possible arguments and supporting evidence it may have anticipated
are truly relevant. To require it to do so earlier will result in lengthy
affidavits containing many irrelevant paragraphs of “anticipatory evidence”.
[31]
I turn now
to consider the proposed reply affidavit evidence anew. In doing so, I
acknowledge that Dr. Sutherland may have repeated some assertions in his
initial affidavit in order that his proposed reply reads well. That is
unobjectionable. Further, it is appropriate to acknowledge that the Court is
not skilled in the science of chemistry as are the parties’ experts. Accordingly,
it is inappropriate at this early stage of the litigation to parse each
sentence or paragraph in detail to ascertain whether it is truly reply evidence.
In my view, at this stage, it is better to err on the side of inclusion in the
record especially as there has not yet been any cross-examination on these
affidavits. Accordingly, the following is my analysis of the proposed reply
under the six heading described by Dr. Sutherland.
Proposed Reply Evidence
(a) Proposed Paragraphs
4 – 6: Dr. Wentland’s comparison of in vivo activity of the cis series
compounds with their otherwise identical trans counterparts in the 007 Patent;
[32]
At
paragraphs 4 to 6 of the proposed reply affidavit, Dr. Sutherland responds to
paragraphs 72-74 of Dr. Wentland’s affidavit. In those paragraphs Dr. Wentland
responds to the assertion in Dr. Sutherland’s first affidavit that the ‘007
Patent would have led the skilled person to make a compound having a trans
configuration. Dr. Sutherland compares selected cis and trans compounds and
concludes that there is a general trend in the ’007 Patent favouring trans
compounds.
[33]
Dr.
Sutherland, in the proposed reply, asserts that Dr. Wentland’s conclusion that
trans compounds would not have been favoured is based on “incorrect facts”
relating to the number of pairs of compounds in the ‘007 Patent, the number of
pairs in which the cis compound has greater activity at either SC or CE than
the trans counterpart, the number of pairs in which the trans has greater
activity than the cis partner, the number of pairs in which the cis and trans
compounds have similar activity and the number of pairs in which both cis and
trans have no activity.
[34]
Novopharm
submits that it could not have been anticipated that in an attempt to
contradict Dr. Sutherland’s conclusion, Dr. Wentland would analyze only a
favourable subset of data, but represent that the data was complete.
[35]
I fail to
see anything “new” in the evidence of Dr. Wentland. Dr. Sutherland referred to
some pairs of cis/trans comparator compounds in his first affidavit and Dr.
Wentland responded by considering others. The validity of those choices and
the relevance to the parties’ arguments may be properly tested through
cross-examination. These paragraphs are not proper reply evidence.
(b) Proposed Paragraphs
7 – 16: Conclusions of Dr. Wentland, Dr. Benet and Dr. Castagnoli which are
based on the skilled person having hindsight knowledge of the ezetimibe
structure or invalid assumptions about the C4 substituent;
[36]
The
paragraphs of the Applicants’ experts’ affidavits to which Dr. Sutherland
proposes to reply directly respond to his assertion in his initial affidavit
where he does his cis/trans comparative analysis, concluding that it would have
been obvious to the skilled person to design a trans compound and that a
hydroxy substituent at the para- position of the C4 substituent was
optimal. Having reviewed the relevant paragraphs of the affidavits filed, I
find that Dr. Sutherland’s proposed reply cannot be said to be responsive to
“new” matters raised. Rather, the parties have engaged in a debate regarding
the C4 substituent that can be tested through cross-examination. There is no
proper foundation for reply evidence.
(c) Proposed Paragraphs
17 – 20: Dr. Wentland’s assertion that the skilled person would have relied
upon logP calculations in respect to the compounds of the 007 Patent;
[37]
Dr.
Sutherland proposes to reply to the assertion of Dr. Wentland at paragraph 69
of his affidavit that “the lipophilicity of a compound could have been easily
determined by calculating its logP using software that was available to the
skilled person in 1993” and that a skilled person might have attempted to
design a compound based on a computer-calculated logP value greater than that
of compounds 8F and 1L.
[38]
Novopharm
submits that the suggestion from Dr. Wentland that quantitative analysis should
have been done is new and clearly falls outside Dr. Sutherland’s previous
affidavit evidence dealing with the ‘007 Patent and is not found in the cited
prior art on which Dr. Sutherland’s opinion was based. This appears to be
accurate. Accordingly, the proposed reply is responsive to new evidence and these
paragraphs are proper.
(d) Proposed Paragraphs
21 – 33: Comparisons, examples and assertions of Dr. Wentland, Dr. Benet and
Dr. Castagnoli pertaining to the skilled person’s expectations about benzylic
hydroxylation and the N1 phenyl group at the para-positions.
[39]
Dr.
Wentland references the molecules enalapril and lisinopril as examples of
compounds that do not undergo benzylic hydroxylation. Novopharm submits that
these examples from Dr. Wentland are new, clearly fall outside Dr. Sutherland’s
previous affidavit evidence and are not found in the cited prior art on which
Dr. Sutherland’s opinion was based. This appears to be accurate. Accordingly,
paragraphs 21 – 24 of the proposed reply are responsive to new evidence and are
proper.
[40]
Dr.
Sutherland also proposes to reply to Dr. Wentland and Dr. Castagnoli and
specifically to their reference to compound 5AA. Although Dr. Castagnoli
states in his affidavit that he is responding to “Dr. Sutherland’s evidence
regarding compound 5AA and other compounds contained on page 52 of his
affidavit”, it is not obvious to the Court that compound 5AA was referenced by
Dr. Sutherland in his first affidavit and thus paragraphs 25 - 30 appear to respond
to new evidence and are proper reply.
[41]
Dr.
Sutherland also wishes to reply to what he characterizes as Dr. Castagnoli
misconstruing his initial evidence regarding compounds 5D, 5, 5S, 5T, 7M and
7P. He may disagree with Dr. Castagnoli’s analysis and his understanding of
his previous evidence but that is a matter that may properly be explored in
cross-examination. It is not new and proposed paragraphs 31 – 32 are not the proper
subject of reply.
[42]
Dr.
Sutherland also wishes to reply to Dr. Wentland’s reliance on a paper written
in 1965. That authority appears to be raised for the first time by Dr.
Wentland and paragraphs 32-33 are proper reply evidence.
(e) Paragraphs 34 –
35: The assertions of Dr. Benet and Dr. Castagnoli that the skilled person
would have assumed metabolites were inactive.
[43]
I am
satisfied that the impugned paragraphs of the affidavits of Dr. Benet and Dr.
Castagnoli were responding to Dr. Sutherland’s initial affidavit evidence and
raise nothing new. Accordingly, paragraphs 34 and 35 are not proper reply
evidence.
(f) Paragraphs 36 – 46:
The assertion of Dr. Benet and Dr. Castagnoli that the skilled person would
have considered (1) phase II biotransformation in designing a compound and (2)
that the possibility of glucoronidation would have taught away from a
para-substituted C4 phenyl ring.
[44]
Novopharm
submits that these paragraphs are proper reply as Dr. Sutherland in his initial
affidavit discusses only Phase I biotransformation and Phase II only became
relevant when it was raised by the Applicants’ experts. I agree. It may be
that one could have anticipated that the Applicants’ experts might raise Phase
II, but until they did, that was mere speculation. It only became relevant
after it was raised. Accordingly, paragraphs 36-46 of the proposed affidavit
are relevant reply evidence.
[45]
In
summary, the following paragraphs of the proposed reply affidavit are proper
reply evidence and Novopharm is granted leave to file an affidavit from Dr.
Sutherland incorporating them: Paragraphs 1 – 3, amended as required to reflect
this decision, paragraphs 17 – 30, 32 – 33 and paragraphs 36 – 46.
ORDER
THIS COURT ORDERS that:
1. Novopharm
Limited is granted leave to file reply evidence consisting of: Paragraphs 1 –
3, amended as required to reflect this decision, paragraphs 17 – 30, 32 – 33
and paragraphs
36 – 46 of the proposed
affidavit of Dr. Sutherland.
2. Costs
of this appeal and the motion before the Prothonotary are to Novopharm, in any
event of the cause.
“Russel
W. Zinn”
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