Docket: T-1888-15
Citation:
2016 FC 336
Ottawa, Ontario, March 21, 2016
PRESENT: The Honourable Mr. Justice Barnes
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BETWEEN:
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GILEAD
SCIENCES, INC.,
GILEAD SCIENCES
CANADA, INC., AND BRISTOL-MYERS SQUIBB &
GILEAD SCIENCES
LLC
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Plaintiffs
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and
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TEVA CANADA
LIMITED
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Defendant
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ORDER AND REASONS
[1]
The Defendant, Teva Canada Limited, has moved
under Federal Courts Rule 51 appealing the order of Prothonotary Mireille Tabib
by which she declined to strike out the Plaintiffs’ (collectively “Gilead”)
Statement of Claim in its entirety. Although Prothonotary Tabib struck
some of Gilead’s pleadings, she allowed the action to continue on the basis of
amended allegations of a likely future (quia timet) infringement. Teva
contends that this aspect of the decision was made in error and that the action
should be dismissed in its entirety.
[2]
Teva does not dispute that Prothonotary Tabib
identified the correct legal test for maintaining a quia timet
proceeding as described in the following passage from Connaught Laboratories
Limited v Smithkline Beecham Pharma Inc, 158 FTR 194, [1998] FCJ No 1851:
20 From the foregoing authorities, I
derive the following criteria for allegations that must be evident on the face
of a statement of claim initiating a quia timet proceedings alleging patent
infringement: the statement of claim must allege a deliberate expressed
intention to engage in activity the result of which would raise a strong
possibility of infringement; the activity to be engaged in must be alleged to
be imminent and the resulting damage to the plaintiff must be alleged to be
very substantial if not irreparable; and, finally, the facts pleaded must be
cogent, precise and material. It is not sufficient that they be indefinite or
speak only of intention or amount to mere speculation.
[3]
It is in the application of the above test to
the facts that Teva asserts that an error was made.
[4]
I agree with Teva that for an issue of this
type, the applicable standard of review on appeal under Rule 51 is whether a
palpable and overriding error was made. A “palpable”
error is one that is obvious and “overriding”
error is one going to the core of the outcome of the case: see Bayer Inc v
Fresenius Kabi Canada Ltd, 2016 FCA 13, [2016] FCJ No 43 and Imperial
Manufacturing Group Inc v Décor Grates Inc, 2015 FCA 100, [2015] FCJ No
503.
[5]
The errors Teva asserts are that Prothonotary
Tabib wrongly ignored the temporal aspect of the test for imminent harm and
misapplied the requirement that there be a “virtual
inevitability” of future harm. Teva argues that inasmuch as Teva’s
medicinal product is on patent hold and a Notice of Compliance [NOC] could not
be issued before the Gilead blocking patent (the 619 Patent) is either declared
invalid or expires, the test of imminence was not made out. These arguments are
more fully set out in the following passages from Teva’s Written
Representations:
22. Prothonotary Tabib has held that
approvability satisfies the imminence criterion in the test for a quia timet
action for infringement, notwithstanding that on the facts as pleaded, the
alleged infringement may not occur at all and certainly could not occur for at
least 18 months.
However, without the proposed
amendments, Gilead’s statement of claim suffers from the same fatal defect as
Novartis’ did: Absent allegations to the effect that Teva’s application for an
NOC is approvable and that an NOC will issue as soon as the 619 Patent expires
or is declared invalid, the statement of claim lacks sufficient materials facts
to show that the infringement is imminent; the infringement remains
speculative, contingent upon whether and when Health Canada might approve the
submissions for an NOC. ... I am satisfied that the discovery evidence, and the
amendments proposed, are sufficiently cogent, precise and material to satisfy
the criterion of imminence...
Order of Prothonotary Tabib dated
January 8, 2016 at ¶27-28, TMR, Tab 2.
23. This is an error of law.
This approach strips away the temporal aspect to the test for imminence and is
directly contrary to the established jurisprudence teaching that imminence
indicates a “virtual inevitability” that the event will occur or that there is
a high probability that the harm “will in fact” occur. Furthermore, the
Prothonotary’s finding that being on patent hold means an NOC will issue
contradicts the jurisprudence from both the Federal Court and the Federal Court
of Appeal stating that there is no legal significance to being on patent hold
and that this does not mean an NOC will issue.
[6]
There is no doubt on the evidence that Teva has
declared a clear intention to come to market with its competing version of
Gilead’s tenofovir disoproxil product as soon as it can obtain a NOC. This
could occur if the Court invalidates the 619 Patent following the impeachment
trial now scheduled to commence in late November, or, failing invalidation,
when the Patent expires on July 25, 2017.
[7]
Teva says, nonetheless, that there is no
guarantee that a NOC will issue and, even if it does, a potential infringement
a year or more away is not an “imminent infringement”.
[8]
The Prothonotary drew an inference that Teva’s
ANDS had been approved by the Minister and was on patent hold. In the absence
of contrary evidence from Teva, that inference is unassailable. I accept
Teva’s point that the issuance of a NOC is not inevitable but, at the same
time, the likelihood of that event is not a matter of speculation. The question
to be answered is whether the issuance of a NOC to Teva in these circumstances
was sufficiently likely that Teva would then be positioned to act on its stated
intention to immediately enter the market.
[9]
Prothonotary Tabib referred to “a strong possibility of infringement” which is
consistent with the language found in Connaught Laboratories Limited,
above, and in several other authorities. In Zoocheck Canada Inc v Canada,
2008 FC 540, [2008] FCJ No. 714, Justice Russel Zinn adopted “a high probability that the apprehended harm will in fact occur”
as the test for imminence in the grant of a quia timet injunction. In Canadian
Civil Liberties Assn . Toronto Police Service, 2010 ONSC 3525, [2010] OJ No
2715, Justice D. M. Brown surveyed several authorities on point and noted the
following language: “a high degree of probability that
the harm will in fact occur”, “proof of imminent
danger”, “proof that the apprehended damage,
will, if it comes, be very substantial” and “a
very real likelihood” of harm. In a situation where the Teva product
has been contingently approved by the Minister and where Teva has unequivocally
stated that, on receipt of a NOC, it will enter the market, the conclusion that
a strong possibility of infringement was present cannot be characterized as an
error, let alone a palpable and overriding error.
[10]
I also do not agree with Teva that Prothonotary
Tabib wrongly conflated the temporal aspect of imminence with the likelihood of
a NOC issuing followed by an infringement. Clearly she recognized the temporal
requirement in the following passage:
[31] Finally, I am satisfied that the
probability that infringement will occur in July 2017 is sufficiently imminent
to justify a quia timet action. The purpose of a quia timet
action is to stop an event before it happens. Given that streamlined
infringement actions may now be heard and determined in two years, it is
neither premature nor pointless to institute such an action 22 months before
the occurrence of the event to be avoided. To ask that a plaintiff wait until
the event is so imminent that there is not enough time to reasonably bring the
proceeding to conclusion would be to doom such actions to failure to achieve
their goal or to impose unreasonably tight schedules on the parties and the
Court.
[11]
At the same time the requirement of imminence
in the temporal sense may be relevant in the determination of the likelihood of
a future event. A potential event that is more distant in time may be an event
that is less likely to occur. Furthermore temporal imminence appears to be a
subordinate consideration in a case where the likelihood of future harm appears
high: see Canadian Civil Liberties Assn v Toronto Police Service, above,
at para 88.
[12]
As things presently stand, the action should be
permitted to proceed as it is framed. Of course, if circumstances change, the
Court can always reconsider the viability of the proceeding.
[13]
Costs in the amount of $4,500.00 are payable to
Gilead.
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