Date: 20080131
Docket: T-1351-07
Citation: 2008
FC 129
Ottawa, Ontario, January 31, 2008
PRESENT: The Honourable Mr. Justice Hughes
BETWEEN:
SANOFI-AVENTIS
CANADA INC.
Applicant
and
THE MINISTER OF HEALTH,
THE ATTORNEY GENERAL OF CANADA and
LABORATOIRE RIVA INC.
Respondents
REASONS FOR ORDER AND ORDER
[1]
This is a
motion which is brought within an application made by Sanofi-Aventis Canada
Inc. to prohibit the Minister of Health from issuing a Notice of Compliance
under the Food and Drug Regulations, C.R.C., c. 870 as amended, to the
Respondent Laboratoire Riva Inc. The Respondents Riva and the Minister joined
in a motion heard by Prothonotary Aalto to dismiss the application before it
was heard on the merits. The Prothonotary did so, dismissing the application on
two bases, first that the Applicant lacked standing and second that there was
no matter or decision that could properly be the subject of review under
section 18.1 of the Federal Courts Act, R.S.C. 1985, c. F-7.
[2]
The
Prothonotary’s decision is one that is vital to the issues in the proceeding
since it terminates the proceeding. All parties are in agreement, therefore,
that I should consider the matter de novo. Thus, I will approach the
matter afresh and not concern myself with whether the Prothonotary erred in
respect of one point or another. Having so considered the matter, I find for
the Reasons given herein that the decision of the Prothonotary should be set
aside and the motion dismissed, with costs to be dealt with by the Judge
hearing the application.
[3]
A motion
to strike an application is treated differently than a motion to strike an
action. An application is dealt with more summarily than an action and, in many
respects, a motion to strike an application can consume just as much of the Court’s
resources as would be consumed were the application to be heard on its merits.
The savings to the parties and the Court in respect of an early determination by
a motion to strike are usually far less in respect of an application than in
respect of an action.
[4]
In
determining whether an application should be struck, the Court takes the kind
of approach as considered by the Federal Court of Appeal in Apotex Inc. v.
Canada (Governor in Council), 2007 FCA 374 at paragraph 14, which is, to
examine the issue of standing first to see if there is a clear-cut issue in
that regard. If the answer is yes, then the application is dismissed, there is
no need to consider the merits. As the Court of Appeal said in Laboratories
Servier v. Apotex Inc., 2007 FCA 350 at paragraph 34, if the answer is no,
the Court will thereafter examine the merits of the application but only to the
extent of determining if there is some issue “worth considering”. These two
decisions had not been released before Prothonotary Aalto made his decision.
[5]
These
decisions can be illustrated by repeating what that Court said in Apotex,
supra at paragraph 14:
14 As a result, I conclude
that the Motions Judge erred by commencing his analysis with a preliminary
determination on the question of standing. The Motions Judge failed to explicitly exercise his discretion to make a
preliminary determination of standing, as permitted in Finlay v.
Canada (Minister of Finance),
[1986] 2 S.C.R. 607,
33 D.L.R. (4th) 321
at paragraph 16 and Sierra Club, supra, at paragraph 26. If a judge does not exercise
her discretion to consider a preliminary question of law at the outset, then
all legal issues considered in a motion to strike must be subsumed within the
legal test for a motion to strike. Thus, absent a clear exercise of judicial discretion,
it is not correct to make a final decision on standing and then decide on the
motion. Rather, the legal standard to grant a motion to strike must inform all
legal questions.
and what that Court said in Servier,
supra at paragraph 34:
34 At paragraph 39 of its
written submissions, Apotex submits, rightly in my view, that "if the
responding party has put a conflicting interpretation 'worth considering', it
is not plain and obvious that the claim will not succeed". Although it is
clear the Motion Judge correctly understood the "plain and obvious"
test enunciated in Hunt, supra, she did not answer the question of whether or not
Apotex's proposed interpretation was "worth considering" or whether
it had any chance of success. Rather, she reached her own conclusion on the
disputed point of statutory interpretation. That, in my view, constitutes an
error on her part. I therefore turn to the issue of whether or not Apotex's
proposed interpretation has any chance of success.
[6]
An example
of this approach is the case of Rothmans of Pall Mall Canada Ltd. v. Canada
(Minister of National Revenue), [1976] 2 F.C. 500 where the Court, on a
motion to strike an application, determined that the applicant lacked standing
to seek the relief requested thus the application was struck out. An example as
to how the matter may turn out otherwise is exemplified by the decision of
Supreme Court of Canada in Finlay v. Canada (Minister of Finance), [1986] 2 S.C.R. 607.
There, having determined that the applicant did have standing, the Court
considered whether it was “plain and obvious” that the application would not
succeed. They decided it was not “plain and obvious” thus, it would be up to
the Judge hearing the application on its merits to make a determination.
[7]
A review
of the factual background is necessary in the present case. Much of that can
be found in a recent decision of Justice Mactavish of this Court in Sanofi-Aventis
Canada Inc. v. Pharmascience Inc., 2007 FC 1057 which I am informed is
currently under appeal but to which I refer for its thorough factual analysis.
Briefly, Sanofi-Aventis markets a drug containing the medicine ramipril as an
active ingredient. It has authority in respect of patents allegedly directed
to that drug and has, as an innovator or “first party” as it is called under
the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 as
amended (NOC Regulations) obtained a Notice of Compliance (NOC) and
Supplementary Notices of Compliance (SNOC) in respect of that drug.
[8]
Various
generic drug companies, often referred to as “second parties” under the NOC
Regulations have sought to market their generic versions of Sanofi-Aventis’s
ramipril drug in Canada. As a result these generics
have engaged the NOC Regulations by serving Notices of Allegation on
Sanofi-Aventis and, in turn, Sanofi-Aventis has commenced proceedings under
those Regulations in this Court. Among such generics are Pharmascience and
Apotex. Pharmascience under the NOC Regulations sent a Notice of Allegation
challenging the validity of certain Sanofi-Aventis patent rights.
Sanofi-Aventis commenced proceedings and ultimately prevailed including on
appeal. Apotex also asserted invalidity of those patent rights and in its NOC
proceeding it won on grounds not alleged by Pharmascience. Pharmascience then
sent another Notice of Allegation to Sanofi-Aventis raising the new grounds of
invalidity that Apotex had risen. Justice Mactavish in the decision previously
referred to determined that Pharmascience could not rely on the new grounds
since it previously had an opportunity to contest validity and had lost. It
should have put its best foot forward at the beginning.
[9]
In the
meantime, Pharmascience and Riva had entered into an arrangement known as
cross-referencing or X-REF. Under such an arrangement, one drug company for
the purpose of securing a Notice of Compliance for its drug product will simply
cross-reference the application of another drug company and assert that its
drug product (including such things as labels, packaging and monograph as well
as the composition and ingredients of the drug itself) is identical to that
which it has cross-referenced except for things such as trade-name. It is a
form of “piggy-backing” done with the assent of the referenced drug company so
that, in the case of a generic, if the referenced drug is demonstrated to the
satisfaction of the Minister to be bioequivalent to an innovator’s drug that
already has an NOC, then both generics will get their own NOC for their version
of the drug. All of this presupposes however that there is no intervening
situation raised by the NOC Regulations.
[10]
Justice
Lemieux of this Court discussed this situation in GlaxoSmithKline Inc. v. Canada (Attorney General), 2004 FC 1302 in referring to
the affidavit of Ms. Bowes, an official from the branch of the Minister (TPD)
dealing with these matters at paragraphs 24 and 25:
24 Anne Elizabeth Bowes
deposes when a manufacturer of a currently marketed drug licences another
manufacturer to sell the identical drug in Canada under a different name, the
licencee is required to file an administrative new drug submission and such
submission must be "cross-referenced" i.e. that it be a certification
that all aspects of the drug product to be approved are identical to that of the
previously approved product (the cross-referenced product) except for the
manufacturer's name and/or product name.
25 She adds a cross-referenced submission includes
an explicit authorization from the manufacturer of the previously approved
product in which its consent to the cross-reference is provided. She also
confirms the only other essential element to a cross-referenced submission is
the filing of a copy of the proposed product monograph ("PM") for the
product to be approved.
[11]
In the
present case, Riva has cross-referenced Pharmascience’s application. Sanofi-Aventis
does not assert that these parties are “privies”. If fact, Justice Harrington
of this Court found that they were not privies on the evidence before him in
another case, Sanofi-Aventis Inc. v. Laboratoire Riva Inc. (2007), 2007
FC 532 at paragraphs 21 to 30.
[12]
In the
present case, Riva appears to have been in discussions, through counsel, with
the Minister who appears originally to have taken the position that the
Minister would not issue an NOC to Riva since Pharmascience, whose application
Riva had cross-referenced, was prohibited by Court Order from proceeding with
its application until the relevant Sanofi-Aventis patent rights had expired.
This caused Riva to commence judicial review proceedings Court File No.
T-896-07. Evidently discussions between counsel continued. On June 21, 2007
counsel for the Minister wrote a letter to counsel for Riva reversing the
Minister’s position. The relevant text that letter says:
I write in response to your
letter of June 14, 2007 in which you asked that the Minister of Health
reconsider the decision which is the subject of the above-noted application for
judicial review.
As discussed, I can advise you
that Health Canada did revisit the matter and
has, in fact, revised its position with respect of the eligibility of
Laboratoire Riva Inc. to receive a notice of compliance for its
‘cross-referenced’ new drug submission.
In particular, Health Canada is no longer of the view that
Riva cannot receive a notice of compliance until such time as the Pharmascience
submission to which Riva’s product is ‘cross-referenced’ is itself approved.
As a result, should Riva ultimately be successful in the prohibition
proceedings ongoing in T-127-07, and otherwise meet all of its obligations
under the Patented Medicines (Notice of Compliance) Regulations, it will be eligible
to receive a notice of compliance, regardless of whether the Pharmascience
submission has fully complied with the NOC Regulations and received a notice of
compliance. I can also advise that Health Canada will soon be providing Riva with a
letter confirming that this is so.
In light of the above, I look
forward to receiving confirmation that Riva has discontinued the above-noted
application on a without costs basis.
[13]
Following
the date of that letter, Riva discontinued proceedings T-896-07. Other
proceedings referred to in that letter, T-127-07, are NOC proceedings brought
by Sanofi-Aventis against Riva respecting other alleged patent rights in the
drug ramipril. A hearing has taken place in this Court in mid-January 2008
before Justice Martineau and his decision is, at this time, under reserve.
There is reference in the letter of June 21, 2007 to a letter which the
Minister “will soon be providing to Riva” but that letter is not in the record
before me.
SANOFI-AVENTIS’ POSITION
[14]
Sanofi-Aventis’
position is that it seeks to challenge the position taken by the Minister,
reversing the earlier position, not to preclude Riva from obtaining an NOC until
Pharmascience had achieved its own NOC in respect of the cross-referenced
product. Sanofi-Aventis argues that just as an assignee or licensee of
Pharmascience should not be allowed to continue with an application for an NOC
that had been prohibited as a result of proceedings taken in this Court, so
equally should a cross-referenced generic be prohibited even if it were not
found to be a privy of the prohibited party. It points to a number of recent
decisions in the Federal Court of Appeal criticizing multiple NOC proceedings
once findings as to infringement and validity had been made even if the parties
are different (e.g. Sanofi-Aventis Canada Inc. v. Novopharm Ltd., 2007
FCA 163).
[15]
Sanofi-Aventis
relies on the decision of the Federal Court of Appeal in Ferring Inc. v.
Canada (Minister of Health), 2007 FCA 276 paragraph 5 where that Court
reversed a finding that I had made in the Trial Division reported at 2007 FC
300 at paragraphs 98 to 103, affirming that an innovator drug company or “first
person”, Ferring, had status to challenge a determination of the Minister that
certain generics were not “second parties” under the NOC Regulations. The
Federal Court of Appeal at paragraph 5 said:
“… Ferring Inc. did have standing
to challenge that decision because it was made by the Minister in the course of
his administration of the NOC Regulations.”
[16]
Sanofi-Aventis
says that the position taken by the Minister to allow Riva’s cross-referenced
application to proceed is a decision which directly affects Sanofi-Aventis
since it has patents listed in respect of that drug under the NOC Regulations
which it has already successfully defended against a challenge raised by
Pharmascience. It argues that the cross-referencing party Riva should not have
an opportunity to do so again.
RIVA’S /
MINISTER’S POSITION
[17]
Riva and
the Minister argue that no “decision” was made by the Minister, rather the
Minister simply advised Riva that Riva’s application for an NOC would continue unimpeded
by the negative finding against the cross-referenced drug of Pharmascience.
They say that, unlike Ferring, supra, the NOC Regulations have
not been engaged, only the Food and Drug Regulations.
[18]
They say
that Sanofi-Aventis can assert its rights, if any, under the NOC Regulations
once Riva’s application proceeds and Riva is required to serve a Notice of
Allegation. Only then, do they say, that the NOC Regulations would be
engaged. Until then, they say, the matter is simply one between the Minister
and Riva involving only the Food and Drug Regulations and,
Sanofi-Aventis has at best, only a commercial interest in the matter. Such
interest is, they argue, insufficient to give standing to Sanofi-Aventis citing
Aventis Pharma Inc. v. Canada (Minister of Health) 2005 FC 1396.
DISPOSITION
[19]
At this
time, I do not have to make a final determination on the issue of standing
unless it is clear and beyond any reasonable doubt that Sanofi-Aventis has no
standing to bring this application. I cannot make such a finding. There is
some argument to be made that the NOC Regulations have been engaged and that
Sanofi-Aventis’ first party rights may be affected. I do not say that
Sanofi-Aventis will succeed on that issue and expressly decline to make any
determination in that regard. At this time, all that needs to be said is that,
given that this is an application, not an action, the Court’s resources should
not be further expended on the matter by way of a motion to strike. Let the
matter be resolved at a hearing of the application itself.
[20]
The same
disposition applies to the issue as to whether there exists a “decision” or
“matter” as would come under the scope of section 18.1 of the Federal Courts
Act. A reversal of an earlier “decision” may arguably be said to be a
“decision”. Again, I decline to make any finding and leave the matter to be
argued at the hearing of the application
[21]
I repeat,
except in the clearest of cases, motions of this kind respecting an application
should be avoided.
[22]
I will
leave the disposition of costs to the Judge hearing the application.
ORDER
For the Reasons given:
1. The decision of
Prothonotary Aalto dated November 7, 2007 is set aside;
2. The motion to strike is
dismissed;
3. Costs are reserved to be
dealt with by the Judge hearing the application.
"Roger
T. Hughes"
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