Docket: T-1478-15
Citation: 2016 FC 651
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BETWEEN:
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JANSSEN INC.
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Applicant
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and
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CELLTRION
HEALTHCARE CO., LTD. AND MINISTER OF HEALTH
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Respondents
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and
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THE KENNEDY
TRUST FOR RHEUMATOLOGY RESEARCH
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Respondent Patentee
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REASONS
FOR JUDGMENT
HUGHES J.
[1]
This proceeding arises from the provisions of
the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 (PMNOC
Regulations) wherein the Applicant Janssen Inc. (Janssen) seeks an Order
prohibiting the Minister of Health from issuing a Notice of Compliance to the
Respondent, Celltrion Healthcare Co., Ltd until the expiry of Canadian Letters
Patent No. 2 261 630 (the 630 patent). These reasons are briefer than I would
otherwise have given since they must be given before June 10, 2016.
[2]
In particular the matters before me arise from a
motion made by Celltrion under the provisions of subsection 6(5)(b) of the PMNOC
Regulations before Prothonotary Aalto of this Court to have this
Application dismissed on the ground that it is redundant, scandalous, frivolous
or vexatious or is otherwise an abuse of process in respect of the 630 patent. On
May 10, 2016 the prothonotary gave an Order with Reasons, which was amended May
26, 2016. The Order reads:
1. The motion is granted and this
application is struck.
2. This Order is stayed for 30
days from the date of the Order.
3. Celltrion is entitled to their costs of this motion and
proceeding. Unless the parties can agree, Celltrion shall file its submissions
on costs limited to 3 double spaced pages plus draft bill of costs within 15
days following the expiry of the stay. Janssen shall deliver their submissions
limited to 3 pages double spaced within 10 days thereafter. Celltrion shall
have 10 days to file reply submissions limited to 1 double spaced page.
[3]
The matter has now come before me in the form of
several motions which are:
1. A motion by Janssen appealing that part of the prothonotary’s Order
granting Celltrion’s motion and striking the application.
2.
A motion by Janssen requesting that I
vary paragraph 2 of the prothonotary’s Order to read: “This
Order shall not take effect until all appeals are exhausted and this Order
becomes final.”
[4]
There was a further motion brought by Celltrion
to permit the introduction of a second affidavit of Bon Joong Kim into the
record. It is unclear whether this affidavit is already in the record. The prothonotary
did not deal with this matter. I spoke to Counsel for the parties stating that
I did not believe that it was necessary for me to deal with this motion. They
agreed.
[5]
Further, at the end of all the submissions by
all Counsel at the hearing before me one of the Counsel for Celltrion rose and
requested that I make certain orders respecting a stay or delay of any Order I
would make herein on certain terms, some of which were unclear. I said that I
would not hear such a request as it should have been made in writing just like
all the other motions, and should not have been raised following the conclusion
of all submissions by Counsel.
I.
Background
[6]
In order to give some context to these
proceedings, especially as to timing issues, some background is needed.
[7]
The 630 patent issued on December 4, 2012 from
an application filed in the Canadian Patent Office with an effective filing
date of August 1, 1997. The term of the 630 patent will expire twenty years
from the effective filing date, that is, on August 1, 2017, some thirteen and a
half months from now.
[8]
Celltrion received from the Minister of Health
on January 15, 2014, a Notice of Compliance to sell a drug in Canada which it
calls INFLECTRA (active ingredient called infliximab) for treatment of certain
specific aliments namely rheumatoid arthritis, ankylosing spondylitis, psoriac
arthritis and plaque psoriasis ( collectively referred to as the RD indications).
Celltrion filed its application for this Notice of Compliance on November 14,
2012 which is before the 630 patent issued therefor Celltrion did not
have to address that patent as Janssen could not have, at that time, listed the
patent under the PMNOC Regulation.
[9]
Janssen has since brought a regular patent
infringement action against Celltrion alleging infringement of the 630 patent,
Celltrion denies infringement and challenges the validity of the patent. This
action is scheduled to be heard by this Court starting September 12 of this
year, that is, in about three months.
[10]
Celltrion, in its application for a Notice of
Compliance filed on November 14, 2012, sought a Notice which included not only
the RA indications, which were ultimately approved as aforesaid, also but for
use in treating diseases related to various forms of inflammatory bowel disease
such as Crohn’s Disease, fistulising Crohn’s Disease and Ulcerative Colitis
(the IBD indications). The IBD indications were not approved in Celltrion’s
original application. Therefore Celltrion filed a supplementary application in mid-2015
with the Minister of Health seeking approval for use of INFLECTRA in treating
the IBD indications (sometimes referred to by Celltrion as the SNDS indications).
By the time this 630 patent had been granted and listed by Janssen under the
provisions of the PMNOC Regulations. Thereafter Celltrion was required
to address the 630 patent under those Regulations. Respecting its IBD
indications, Celltrion sent a Notice of Allegation to Janssen on or about July
20, 2015 which triggered the present proceedings brought about by a Notice of
Application filed by Janssen on September 2, 2015.
[11]
These proceedings are Case Managed by
Prothonotary Aalto. He ordered production of certain materials to be made by
Celltrion but otherwise no evidence intended to be used in the ultimate hearing
of these proceedings has been filed by any party.
[12]
On November 23, 2015, Celltrion brought a motion
under subsection 6(5)(b) of the PMNOC Regulations requesting that
Janssen’s Application herein be dismissed. It filed in support of its motion
affidavits from Bon Joong Kim, Dr. Stephen Sullivan, and Kelsie Edwards.
Janssen opposed the motion and, in its Memorandum of Fact and Law requested
that the motion be dismissed and such further and other Order that the Court
deems just. It said:
110. Celltrion has not met it burden,
which is to show that for every legal and factual issue in this motion, it is
certain to succeed and Janssen has no chance of success. Janssen therefore
respectfully requests: (a) an Order dismissing Celltrion’s motion with costs
payable forthwith on a Column V scale, with all disbursements; and (b) such
further and other Order that this Honourable Court deems just.
[13]
Janssen cross-examined Celltrion’s affiants Kim
and Sullivan and filed the affidavits of Donald Elrich, Janet Pope and Jane P. Costas
, each of whom was cross-examined.
[14]
The Case Management Judge, Prothonotary Aalto,
heard the motion on February 17, 2016 and on May 10, 2016 rendered his Order
with Reasons, Amended on May 26, 2016 as aforesaid.
[15]
Counsel are agreed that at no time, during the
hearing before Prothonotary Aalto or otherwise did any party, nor did the
prothonotary, raise the issue of a stay of any Order to be granted. The matter
was never raised nor addressed.
[16]
I will now turn to the motions before me.
II.
Janssen’s Motion on Appeal to Set Aside the
Prothonotary’s Order Dismissing the Application
[17]
Prothonotary Aalto dismissed Janssen’s
Application for a prohibition Order under the PMNOC Regulations in its entirety.
Janssen wants that Order to be set aside on this appeal.
[18]
Subsection 6(5) of the PMNOC Regulations
states that “the court” may dismiss an application. This means that either a
Prothonotary or a Judge may hear and determine such a motion. In this case it
was a Prothonotary. While there is well developed jurisprudence as to how a
Judge hearing an appeal from an Order or Judgment of a Prothonotary is to
approach such an appeal it is clear that, in cases such as this, where the
Order brings about a final determination of the matter, particularly when, as
in the case here, the matter has been determined largely on a question of law,
that the Judge hearing the appeal should approach the matter de novo.
Justice Stratas of the Federal Court of Appeal addressed the matter in Bayer
Inc. v. Fresenius Kabi Canada Ltd., 2016 FCA 13 particularly at paragraphs
6 and 7:
[6] Housen would be
the controlling authority but for the fact that this is an appeal from a Rule
51 appeal. In appeals from a Rule 51 appeal, the standard of review is
different. We may interfere with the Federal Court’s decision where the Federal
Court had no grounds to interfere with the Prothonotary’s decision or, in the
event such grounds existed, if the decision of the Federal Court was arrived at
on a wrong basis or was plainly wrong: Z.I. Pompey Industrie v. ECU-Line N.V.,
2003 SCC 27, [2003] 1 S.C.R. 450 at paragraph 18, citing this Court’s decision
in Jian Sheng Co. v. Great Tempo S.A., [1998] 3 F.C. 418 (C.A.), per Décary
J.A., at pp. 427-28. In this case, when the Federal Court sat in appeal under
Rule 51 from the Prothonotary, it employed the standard of review in Aqua-Gem,
not the normal appellate standard of review in Housen.
[7] I have previously
suggested that these different standards of review have outlived their
usefulness and that the general standard of review for civil appeals set out in
Housen, above, should apply: Apotex Inc. v. Bristol-Myers Squibb Company, 2011
FCA 34, 91 C.P.R. (4th) 307 at paragraphs 6-9. In addition to the reasons I
offered in that case, I note that Housen postdates Aqua-Gem and, on its terms,
was intended to state the standard of review for all civil appeals: see
Imperial Manufacturing Group Inc. v. Decor Grates Incorporated, 2015 FCA 100 at
paragraph 22. As for the Supreme Court’s later articulation of the standard of
review in Pompey, above, the more recent Supreme Court case of Hryniak v.
Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87 may have overtaken it. There, the
Supreme Court encouraged courts to take steps to make procedures simpler and
more accessible. We have applied this philosophy elsewhere in our standard of
review jurisprudence with a view to simplifying and unifying as much as
possible the standard of review for civil appeals: Turmel v. Canada, 2016 FCA
9; Imperial Manufacturing, above.
[19]
Since the issues here essentially turn on
questions of law, I will approach the matter de novo.
[20]
Janssen’s Counsel raised several matters in his
memorandum and very ably argued the matter before me. Essentially Janssen’s
arguments are:
i.
It has a fairly arguable case to make as to the
constitution of the PMNOC Regulations, particularly subsection 5(2);
ii.
The evidence, presented on this motion, shows
that there is some possibility of infringement of the 630 patent.
iii.
Celltrion has a heavy burden to meet on a motion
to strike on Application under subsection 6(5)(b) of the PMNOC Regulations
and has not met that burden.
iv.
Given that it has a fairly arguable case to
make, the threshold for dismissing an application is sufficiently high such
that Janssen should be afforded an opportunity to make its arguments based on a
full record on a full hearing of the matter.
[21]
I will address those arguments:
(i) Construction
of Subsection 5(2) of the PMNOC Regulations
[22]
Subsection 5(2) of the PMNOC Regulations
reads as follows:
If a second person files a supplement to
a submission referred to in subsection (1) seeking a notice of compliance for a
change in formulation, a change in dosage form or a change in use of the
medicinal ingredient and the supplement directly or indirectly compares the
drug with, or makes reference to, another drug that has been marketed in Canada
under a notice of compliance issued to a first person and in respect of which a
patent list has been submitted, the second person shall, in the supplement,
with respect to each patent on the register in respect of the other drug,…
[23]
That subsection follows from subsection 4(1),
4(3) and 4(3)(c) of the PMNOC Regulations which provide that a party
such as Janssen may add a patents to the list of patent respecting a drug for
which there has been a change consisting of a new use:
4 (1) A first person who files or who has filed a new drug
submission or a supplement to a new drug submission may submit to the Minister
a patent list in relation to the submission or supplement for addition to the
register.
…
(3) A
patent on a patent list in relation to a supplement to a new drug submission is
eligible to be added to the register if the supplement is for a change in
formulation, a change in dosage form or a change in use of the medicinal
ingredient, and
…
(c) in
the case of a change in use of the medicinal ingredient, the patent contains a
claim for the changed use of the medicinal ingredient that has been approved
through the issuance of a notice of compliance in respect of the supplement.
[24]
Janssen’s Counsel submits that a party such as
Celltrion is obliged by subsection 5(2) of the PMNOC Regulations to
address a patent which relates to a drug whether or not the patent claims a new
or different use for the drug. In other words it is the drug, not the use, that
triggers compliance, hence a two year holding period, with the PMNOC
Regulations.
[25]
Prothonotary Aalto dealt with this argument at
paragraphs 20 to 26 of his Reasons. I agree with his reasoning and adopt it as
my own
[26]
The Supreme Court of Canada, Binnie J. for the
Court has given careful consideration to an argument such as Janssen raises, in
Bristol-Myers Squibb Co. v. Canada (Attorney General), [2005] 1 S.C.R. 533.
While the provisions of the PMNOC Regulations at the time and with which
he was dealing were somewhat different the approach to the matter is completely
analogous and pertinent to the interpretation argued by Janssen. Binnie J wrote
at paragraphs 53, 61 and 66 to 68:
53 Secondly, it is
not every use of the patented invention that will trigger the NOC Regulations. Section
55.2(4) is specifically directed to
preventing infringement by persons who use “the patented invention” for the
“early working” exception and the “stockpiling” exception set out earlier in
ss. 55.2(1) and 55.2(2). That is all the Governor in Council is
authorized to regulate. (The stockpiling exception was repealed by S.C.
2001, c. 10, s. 2(1); assented to June 14, 2001.)
…
61 The text of
s. 5(1.1) closely tracks the language of s. 4(1). It is a
reciprocal provision in the sense that s. 4(1) sets up the patent list
that the person subject to s. 5(1.1) must circumnavigate. Section
5(1.1) should therefore receive a similarly purposive interpretation. The
word “submission” should also be construed so as to fulfill the purposes laid
out in s. 55.2(4) of the Patent Act.
…
66 The broad interpretation urged
by BMS would lead to an absurd result. The “medicine” in the drug to
which the patent list relates need not itself be patented, or indeed owe
anything to the ingenuity of the “first” person. It could be a “medicine”
whose usefulness was discovered by somebody else (as in the case of paclitaxel)
or something in the public domain as common as penicillin. So long as
such “medicine” shows up as a component, however minor, in the chemical
composition of the drug to which the patent list relates, the “second person”
(including an innovator who is seeking to manufacture a new and useful drug) is
barred from proceeding to market by the automatic statutory freeze, and this
“bar” will continue for so long as the patent list holder can evergreen its
product by resort to patentable improvements to other components or additions,
be they ever so minor. This would stifle competition and innovation in
the pharmaceutical industry and produce a result at odds with what the
regulator was trying to achieve.
67 The “plain meaning” adopted by
the Federal Court of Appeal in this case would suggest that s. 5(1.1) is
ultra vires the regulation-making power which, as noted earlier, only
authorizes regulations “necessary for preventing the infringement of a patent
by any person who makes, constructs, uses or sells a patented invention in
accordance with subsection (1) [the ‘early working’ exception] or (2) [the
‘stockpiling’ exception — now repealed]”. While there are other
similarities between the Biolyse product and the BMS product, the decision of
the Federal Court under s. 5(1.1) rests entirely on the presence of
paclitaxel in both the BMS and the Biolyse products.
68 The interpretation put forward
by BMS should be rejected, based not only on the limiting language of
s. 55.2 of the Patent Act but on the more fundamental
objection that on such a view a “first person” could extend its monopoly far beyond
the scope of any possible quid pro quo its own skill and ingenuity have
contributed to the public.
[27]
Thus, in a case such as the present one, where a
patent claims a particular use of a drug it is that use that must be compared
with the intended use by the generic and not just the drug.
[28]
Here Janssen’s Counsel concedes that every claim
of the 630 patent claims the use of the drug for RA indications Celltrion
already has a Notice of Compliance for RA indications and needs not to address
those indications in its Supplementary application which is directed to IBD
indications and not RA.
[29]
Plainly and simply Janssen’s application is, to
use the words of subsection 6(5)(b) of the PMNOC Regulations, scandalous,
frivolous, vexations and an abuse of process respecting the 630 patent.
(ii) Does the
Evidence on the Motion Show Some Possibility of Infringement of the 630 Patent.
[30]
Janssen refers to evidence provided in
cross-examination of one of its affiants, Dr. Pope who treats patients with
rheumatoid arthritis (RA) at questions 153 to 157:
153. Q. And of the 25 or so
patients that you say you treat with Remicase how many of them have Crohn’s
disease?
A. That
I’m treating in RA…
154. Q. Yes.
A. …with
Remicase? I know one patient has Crohn’s and rheumatoid arthritis. And it’s
actually GI is treating her with Remicade. I had her before she got Crohn’s on
a different biological drug and she developed Crohn’s. She was on Etanercept
which does not working Crohn’s, so she was switched over to Remicade by the GI
doctor. So I wouldn’t be a prescribing physician of biological drugs in
Crohn’s.
155. Q. So one of the 25
patients?
A. Well,
that’s one I can think of.
156. Q. Okay. And how many of
the Inflectra patients have Crohn’s?
A. Of
my two or three?
157. Q. Yes.
A. Zero.
[31]
There is lacking any evidence to show that
Celltrion, whether in its proposed product monograph, which is in the record,
or otherwise induced any doctor or patient to use the product at issue to treat
both RA and IBD indications in the same patient.
[32]
The Federal Court of Appeal in AB Hassle v.
Canada (Minister of National Health and Welfare, 2002 FCA 421 has addressed
a situation such as that presented here. It held that a generic cannot be prevented
from obtaining a Notice of Compliance solely on the basis that it will sell the
drug where there was a likelihood that someone may use it for a patented use.
Mere sale of the drug, without more does not trigger the PMNOC Regulations.
Sexton JA, for the Court, wrote at paragraphs 56 and 57:
[56] The Appellants relied on the
following passage from Genpharm at paragraphs 47 to 50 to argue that Genpharm
should be applied to the present appeal:
The point is that use claims referred to
in subparagraph 5(1)(b)(iv) contemplate use, not just by the generic producer,
but by patients as well, and that infringement will result by patients using a
medicine sold by a generic producer, even if there is no inducement or
procurement by the generic producer.
The scheme of the Regulations seems
obvious. If a generic producer sells a product and infringement by anyone using
the product results, that is the infringement the Regulations are intended to
preclude. There is no suggestion that the generic producer must have induced or
procured patients or others to infringe the patent.
For this reason, I am satisfied that in
the case of use claims, it is not necessary for a patentee to demonstrate that
a generic producer's actions will induce or procure patent infringement by
patients or others. Provided that the generic producer cannot establish that no
claim for the use of the medicine would be infringed by patients or others by
its selling of its product, it will not satisfy the justification test in
subsection 6(2) of the Regulations and a prohibition order must be made.
In this case, if a patient used the
Genpharm product for osteoporosis, the use claims of P & G's 376 Patent
would be infringed. It would be Genpharm's selling of its product that would
result in the infringement. Here, the evidence is overwhelming that it is not
only probable, but inevitable, that Genpharm's Gen-etidronate product would, if
notices of compliance issue, be used for the treatment of osteoporosis in the
cyclical regimen that constitutes the invention under the 376 Patent. [my
emphasis]
It should be emphasized, however, that
the Court made these statements after having concluded that the evidence in
Genpharm overwhelmingly demonstrated that the actions and intentions of
Genpharm would inevitably lead to an infringement. Because no such conclusion
can be reached in the case before us, the Genpharm case can be distinguished on
that basis. I do not view Genpharm as being authority for the proposition that
mere sale by a generic, without more, of a medicine subject to a use patent is
sufficient to constitute infringement for the purpose of subparagraph
5(1)(b)(iv).
[57] Thus Apotex cannot be prevented
from obtaining a NOC solely on the basis that it will sell omeprazole. If it
were otherwise, then serious policy issues would arise. If there was any
likelihood that a patient would consume a generic product for a patented use,
then the generic product would not be approved. This would prevent new uses
from being approved for existing drugs because there is always the possibility
that someone somewhere will use the drug for the prohibited, patented purpose.
This would result in a real injustice: since a generic company cannot possibly
control how everyone in the world uses its product, the prevention of the
generic from marketing the product would further fortify and artificially
extend the monopoly held by the patent holders. The patent holder would,
therefore, effectively control not just the new uses for the old compound, but
the compound itself, even though the compound itself is not protected by the
patent in the first place. The patent holders, as a result, would obtain a
benefit they were not meant to have. In the end, society would be deprived of
the benefit of new methods of using existing pharmaceutical medicines at a
lower cost.
[33]
Justice Mactavish made similar finding in her
decision in Lundbeck Canada Inc. v. Ratiopharm Inc., 2009 FC 1102 at
paragraphs 367-369:
[367] Based upon all of the above
considerations, the applicants argue that because of the nature of the Canadian
market for memantine, infringement of the ’492 patent will inevitably occur as
physicians will prescribe, pharmacists will dispense, and patients will use
ratiopharm’s memantine product in combination therapy.
[368] This may well be the case. Indeed,
the circumstantial evidence suggests that ratiopharm’s ratio-MEMANTINE product
may indeed end up being used in combination with acetylcholinesterase
inhibitors for the treatment of Alzheimer’s disease, thereby infringing the
’492 patent. ratiopharm may expect this to happen. However, it is ratiopharm’s
actions and not its expectations that are the issue before me.
[369] The parties agree that the fact
that there may be downstream infringement is not enough, on its own, to show
infringement by inducement. Indeed, as Justice Gauthier observed in Aventis
Pharma Inc. v. Pharmascience Inc. 2006 FC 861, 51 C.P.R. (4th) 161, even if it
can be shown that infringement by others “is highly probable, if not
inevitable”, that will not be enough to establish that an allegation of
non-infringement is not justified: see para. 31.
[34]
I find that there is insufficient evidence to
conclude that there is any basis for a finding of infringement by Celltrion of
the 630 patent.
(iii) Celltrion’s
Burden
[35]
Janssen argues that Celltrion has a very heavy
burden to meet in securing a dismissal of an application under subsection
6(5)(b) of the PMNOC Regulations. I agree, but the burden is not an
impossible one. I will address this matter further in issue (iv) which follows,
however I am satisfied that Celltrion has met that burden.
(iv) If
the Case is Fairly Arguable, Should the Matter go to a Further Hearing?
[36]
There is no doubt that applications under the PMNOC
Regulations were intended to proceed in a summary fashion and, were that
the case, a Court should be inclined not to entertain motions to dismiss before
a full hearing. Regrettably applications under these Regulations have
become, quite literally, a nightmare for the parties and the Court. Masses of
evidence by way of affidavits, exhibits, transcripts of cross-examination and
otherwise fill boxes submitted in the record. Finely tuned arguments pursuing
the minutest and arcane points of law are put forward by extremely able and
aggressive Counsel. The Court is required, within a few weeks or even days, to
deliver Judgment together with or followed by thorough Reasons. Therefore,
unlike many other types of summary applications, there is a good incentive to
determine whether the case is appropriate for early disposition provided that
early disposition is clearly established as appropriate. The Court should not
incentivize such applications as routine.
[37]
The Supreme Court of Canada in Hryniak v.
Mauldin, [2014] 1 S.C.R. 87 has asked for a culture change whereby the Court’s
resources should be applied in a proportionate way as to achieve a fair and
just result, a trial or full hearing is not always required. Karakatsanis J.
for the Court wrote at paragraphs 31 to 33 (albeit in regard to Ontario summary
judgment rules but the principles are equally applicable here):
[31] Even where proportionality is
not specifically codified, applying rules of court that involve discretion
“includes . . . an underlying principle of proportionality which means taking
account of the appropriateness of the procedure, its cost and impact on the
litigation, and its timeliness, given the nature and complexity of the
litigation”: Szeto v. Dwyer, 2010 NLCA 36, 297 Nfld. & P.E.I.R. 311, at
para. 53.
[32] This culture shift requires
judges to actively manage the legal process in line with the principle of
proportionality. While summary judgment motions can save time and resources,
like most pre-trial procedures, they can also slow down the proceedings if used
inappropriately. While judges can and should play a role in controlling such
risks, counsel must, in accordance with the traditions of their profession, act
in a way that facilitates rather than frustrates access to justice. Lawyers
should consider their client’s limited means and the nature of their case and
fashion proportionate means to achieve a fair and just result.
[33] A complex claim may involve an
extensive record and a significant commitment of time and expense. However,
proportionality is inevitably comparative; even slow and expensive procedures
can be proportionate when they are the fastest and most efficient alternative.
The question is whether the added expense and delay of fact finding at trial is
necessary to a fair process and just adjudication.
[38]
Thus in this case while Janssen’s Counsel has
made several arguments, I find as has Prothonotary Aalto, that these arguments
are destined not to succeed. There is nothing further that could be presented
to the Court at a full hearing that would alter the conclusions reached here.
Dismissal of the Application is the appropriate remedy.
III.
Prothonotary Aalto’s Order Staying his
Order for 30 Days.
[39]
Prothonotary Aalto stayed his Order for 30 days.
There was a concern as to whether the time should be calculated from the date
of his original Order, May 10, 2016 or his Amended Order of May 26, 2016. In a
Direction to the parties he said that May 10, 2016 was the operative date.
[40]
Therefor the hearing of the matters before me
was held on June 8, 2016 and I have delivered these Reasons and my Judgment on
June 9, 2016.
[41]
While the result may seem harsh the point has
been made in other decisions that a party in Janssen’s position suffers no
irreparable harm (even if that were a criterion). Janssen, by instituting an
Application to the Court under the PMNOC Regulations gains a 24 month
delay in the issuance of a Notice of Compliance to a party such as Celltrion.
Dismissal of the application brings that delay to an end but leaves a party
such as Janssen with all the usual remedies such as a patent infringement
action. In fact Janssen has launched such an action and trial is scheduled to
begin three months from now.
[42]
Rothstein JA wrote in Janssen-Ortho Inc. v.
Canada (Minister of Health), 2004 FCA 168 at paragraph 6:
[6] In my opinion, this Court's
decision in Bristol-Myers Squibb Canada Inc. v. Canada (Attorney General),
[2001] F.C.J. No. 16 (C.A.), is dispositive of the matter. In that case, it was
decided that when an action for patent infringement is available, the inability
of a patent holder to access the automatic stay provisions in the Patent
Medicines (Notice of Compliance) Regulations did not constitute irreparable
harm. That is precisely the situation here.
[43]
As I have said, it is common ground that the
issues of a stay was not raised by Prothonotary Aalto, nor any of the parties.
[44]
Had the matter been raised, Prothonotary Aalto
would have had to consider the decision of Sharlow JA in Janssen-Ortho Inc.
v. Apotex Inc., 2009 FCA 250 where she held that, in circumstances under
the PMNOC Regulations the same as the circumstance here, where there has
been an Order dismissing an application there is nothing to stay; the Order
cannot be stayed. She wrote at paragraphs 18 to 22.
[18] Apotex points out, correctly,
that the order of Prothonotary Aalto is an order dismissing a claim that he
found to be unmeritorious. It does not require anybody to do anything. It
merely puts an end to Janssen’s attempt to stop the Minister from doing
something that she is required to do because of her statutory mandate, namely,
issuing a notice of compliance to Apotex upon being satisfied that the applicable
requirements of the Food and Drug Regulations, C.R.C., c. 870, have been met.
On that basis, Apotex argues that no stay is possible.
[19] Counsel for Janssen conceded
that he had been unable to find any case in which a court had granted a stay of
an order that does not require anything to be done, but he argues that such a
stay is possible as a matter of law. He points out that the expected exercise
by the Minister of her statutory mandate to issue a notice of compliance to
Apotex (assuming the applicable regulatory requirements are met) is an
inevitable outcome of the order of Prothonotary Aalto. The fact is, however,
that the Minister is compelled to act because of the Food and Drug Regulations,
not because of Prothonotary Aalto’s order.
[20] Janssen relies on the following
excerpt from RJR – MacDonald Inc. v. Canada (A.G.), [1994] 1 S.C.R. 311 (per
Justice Sopinka and Justice Cory, writing for the Court) at page 329:
We are of the view that the Court
is empowered, pursuant to both s. 65.1 [of the Supreme Court Act] and r. 27 [of
the Rules of the Supreme Court of Canada], not only to grant a stay of
execution and of proceedings in the traditional sense, but also to make any
order that preserves matters between the parties in a state that will prevent
prejudice as far as possible pending resolution by the Court of the
controversy, so as to enable the Court to render a meaningful and effective
judgment. The Court must be able to intervene not only against the direct
dictates of the judgment but also against its effects. This means that the
Court must have jurisdiction to enjoin conduct on the part of a party in
reliance on the judgment which, if carried out, would tend to negate or
diminish the effect of the judgment of this Court.
[21] The Court would have entered the
motion for a stay even without its statutory authority. The following appears
at page 332:
Finally, if jurisdiction under s.
65.1 of the Act and r. 27 were wanting, we would be prepared to find
jurisdiction in s. 24(1) of the Charter. A Charter remedy should not be
defeated due to a deficiency in the ancillary procedural powers of the Court to
preserve the rights of the parties pending a final resolution of constitutional
rights.
[22] I am not persuaded that RJR –
MacDonald establishes that the order of Prothonotary Aalto in this case may be
stayed. What was being sought in RJR – MacDonald was a stay of a judgment of
the Quebec Court of Appeal declaring that certain provisions of the Tobacco
Products Control Act, R.S.C. 1985, c. 14 (4th Supp.) were valid. After the
judgment, regulations were enacted under Tobacco Products Control Act that, if
enforced, would impose costly obligations on the parties asserting the
constitutional challenge. It was in those circumstances that the Supreme Court
of Canada determined that it had the jurisdiction to stay the judgment of the
Quebec Court of Appeal, even though it was in form a declaratory judgment.
[45]
Similar remarks were made by Sharlow JA in Bristol-Myers
Squibb Canada Inc. v Canada (Attorney General), docket A-721-00, dated
January 9, 2001 and Boivin J (as he then was) in Apotex Inc. v
Sonofi-Aventis, docket T-644-09, December 16, 2011.
[46]
Therefore I will allow the appeal in respect of
this matter and set aside paragraph 2 of Prothonotary Aalto’s Order granting a
30 day stay.
IV.
Janssen’s Motion to Extend the Stay Until
All Appeals Have Been Disposed
[47]
As I have previously discussed, a stay is simply
not available in these circumstances. If it were I certainly would not grant a
stay in these terms requested by Janssen as the effect, as a practical matter
would be to keep this proceeding alive well past the statutory limit of two
years (September 2, 2017) and even after the expiry of the term of the 630
patent (August 1, 2017). Pragmatically no appeal can be heard by the Federal
Court of Appeal, together with a leave application to the Supreme Court of
Canada, before those dates.
[48]
Janssen cannot, in effect keeps its statutory
injunction alive, without ever addressing the merits of the case, by obtaining
the stay such as it wishes.
V.
Conclusion and Costs
[49]
In conclusion I affirm Prothonotary Aalto’s
Order dismissing the application and set aside that part of his Order granting
a stay. I will not grant a stay on any terms.
[50]
As to costs, both in respect of the motions
before me and before Prothonotary Aalto invite submissions of no more than five
(5) pages from Celltrion within ten (10) days from the date of this Order.
Janssen should submission of no more than five (5) pages within ten (10) days
from receipt of Celltrion’s submission. Upon my receipt of both submission I
will make a determination as to costs.
[51]
I commend all Counsel for their preparation of the
material and arguments made before me. I also commend Ryan Coe a judicial
assistant in the Toronto Federal Court Office in his prompt and attentive
preparation of these reasons.
"Roger T. Hughes"
Toronto, Ontario
June 9, 2016
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