Date: 20080627
Docket: A-147-08
Citation: 2008 FCA 230
CORAM: NADON
J.A.
PELLETIER
J.A.
RYER
J.A.
BETWEEN:
SEPRACOR INC.
Appellant
(Respondent)
and
SCHERING-PLOUGH CANADA INC.
SCHERING CORPORATION
Respondents
(Applicants)
- and -
PHARMASCIENCE INC. and THE MINISTER OF
HEALTH
Respondents
(Respondents)
REASONS FOR JUDGMENT
PELLETIER J.A.
[1]
The
issue in this appeal is how persons who are named as respondents to an
application governed by Part V of the Federal Courts Rules, S.O.R./98-106
(the Rules), are to proceed when they do not oppose the application but
nonetheless wish to take part in the proceedings. This particular case deals
with the Patented Medicines (Notice of Compliance) Regulations (PM(NOC)
Regulations), S.O.R./93-133, but the principle involved is one of broad
application.
[2]
This
issue arises in the context of Sepracor Inc.'s appeal (Sepracor) from the
decision of the Federal Court, reported as Schering-Plough Canada Inc. v.
Pharmascience Inc., 2008 FC 359, 65 C.P.R. (4th) 90, in which
Sepracor's purported notice of appearance was struck out for non-compliance
with Rule 305 and Form 305 because it indicated that Sepracor intended to
participate in the application instead of opposing it. It is common ground that
Sepracor intended to participate in the application by supporting the position
taken by the applicants.
THE FACTS
[3]
Schering-Plough
Canada Inc. and Schering Corporation (collectively Schering) commenced an
application for prohibition pursuant to subsection 6(1) of the PM(NOC)
Regulations in response to a notice of allegation served on Schering-Plough
Canada Inc. in its capacity as the holder of the notice of compliance with
respect to the drug in issue (and thus the "first person" within the
meaning of the PM(NOC) Regulations). Schering Corporation is the owner of one
of two patents listed on the patent register with respect to the drug for which
Pharmascience seeks a notice of compliance with respect to its generic version of
that drug. Sepracor is the owner of the second patent. Schering-Plough Canada
Inc. and Schering Corporation are related corporations and are represented by
the same counsel. Sepracor is unrelated to either of the other two corporations
and is separately represented.
[4]
Subsection
6.(4) provides as follows:
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6.(4) Where the first person
is not the owner of each patent that is the subject of an application
referred to in subsection (1), the owner of each such patent shall be made a
party to the application.
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6.(4) Lorsque la première
personne n’est pas le propriétaire de chaque brevet visé dans la demande
mentionnée au paragraphe (1), le propriétaire de chaque brevet est une partie
à la demande.
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[5]
In
this case, the patentee Schering Corporation was named as an applicant but
Sepracor, which is also a patentee, was named as a respondent in the
application for prohibition. It was required to be named as a respondent for
two reasons, both of which are found in Rule 303 of the Rules, which provides
as follows:
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303.(1) Subject to subsection
(2), an applicant shall name as a respondent every person
(a) directly affected
by the order sought in the application, other than a tribunal in respect of
which the application is brought; or
(b) required to
be named as a party under an Act of Parliament pursuant to which the
application is brought.
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303.(1)
Sous réserve du paragraphe (2), le demandeur désigne à titre de défendeur
:
a) toute personne directement touchée par
l’ordonnance recherchée, autre que l’office fédéral visé par la demande;
b) toute
autre personne qui doit être désignée à titre de partie aux termes de la loi
fédérale ou de ses textes d’application qui prévoient ou autorisent la
présentation de la demande.
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[6]
Both
of these criteria apply to Schering Corporation as well, a matter to which I
shall return.
[7]
Not
surprisingly, the Federal Court found that Sepracor was properly named as a
respondent, and that finding is not challenged.
[8]
Having
been served with the notice of application, Sepracor responded by filing a notice
of appearance which said "The Respondent, Sepracor, intends to participate
in this application." Pharmascience then brought a motion to strike
Sepracor's notice of appearance on ground that it did not comply with Rule 305
and its associated form. Rule 305 provides as follows:
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305. A respondent who
intends to oppose an application shall, within 10 days after being served
with a notice of application, serve and file a notice of appearance in Form
305.
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305. Dans les 10 jours
après avoir reçu signification de l’avis de demande, le défendeur, s’il
entend s’opposer à la demande, signifie et dépose un avis de comparution,
établi selon la formule 305.
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[9]
Form
305, entitled 'Notice of Appearance', simply provides that "The respondent
intends to oppose this application."
[10]
Phamascience
moved to strike Sepracor's Notice of Appearance for non-compliance with Rule
305. In doing so, it relied upon two decisions of judges of this Court sitting
as motions judges under Rule 369: Society of Composers, Authors and Music
Publishers of Canada v. Canadian Assn. of
Internet Providers, 2001 FCA 4, 10 C.P.R. (4th) 417 (Socan),
per Stone J.A. and Canadian Tire Corp. v. Canadian Bicycle Manufacturers
Assn., 2005 FCA 408, 344 N.R. 207 (Canadian Tire), per Evans J.A. Mr.
Justice Beaudry of the Federal Court granted the motion.
[11]
The
substance of Beaudry J.'s decision is found in the following two paragraphs:
[21] The real
issue before the Court is not whether the notice of appearance should be
struck, set aside or rejected because of a technical defect to Form 305, but
rather whether Sepracor may make representations in support of the applicant,
Schering-Plough, by virtue of the fact that it modified the notice of
appearance to reflect its real interest. It is my opinion that Sepracor may
not.
[22] I agree
with Pharmascience's contention that Canadian Tire, above, finds
application in the case at bar; following the decision of the Federal Court of
Appeal, Sepracor may not file and serve a modified notice of appearance in
order to make submissions that further the position of the applicant,
Schering-Plough. Only a respondent who intends to oppose the application may
file and serve a notice of appearance.
[12]
The
motions judge went on to hold that if Sepracor wished to make representations
in support of the application it could seek intervener status or apply to be
joined as an applicant.
SUBMISSIONS OF THE
PARTIES
[13]
Sepracor
appeals from the decision of the Federal Court on the basis that it erred in
following Canadian Tire. Sepracor argues that since only a "first
person" may apply for an order of prohibition to prevent the Minister of
Health from issuing a notice of compliance to a generic drug manufacturer, a
mere patentee, such as Sepracor, is not entitled to be an applicant. It can
therefore only participate in these proceedings as a respondent, as the combination
of subsection 6.(4) of the PM(NOC) Regulations and Rule 305.(1) require it to
do.
[14]
Sepracor
disagrees that it can only take part in the proceedings by being made an
intervener or added as an applicant because, despite the striking of its notice
of appearance, it remains a party to the application and as such, has full
rights of participation: Aventis Pharma Inc. v. Aportex Inc., 2004 FC
570, 32 C.P.R. (4th) 124, at paragraph 19.
[15]
Sepracor
says that the only effect of striking its notice of application is simply to
deprive it of the right to notice of any further proceedings in the
application, by reason of Rule 145:
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145. Subject to subsection
207(2), where a person has been served with an originating document and
(a) has not
filed a notice of appearance or a defence within the time set out in these
Rules, or
(b) has no
address for service,
no further documents
in the proceeding need be served on the person prior to final judgment unless
the Court orders otherwise.
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145. Sous réserve du
paragraphe 207(2), lorsqu’une personne a reçu signification d’un acte
introductif d’instance et qu’elle se trouve dans l’une des situations
suivantes, la signification des autres documents dans le cadre de l’instance
n’est requise que si la Cour l’ordonne :
a) la personne
n’a pas envoyé d’avis de comparution ni déposé de défense dans le délai prévu
par les présentes règles;
b) elle n’a
pas d’adresse aux fins de signification.
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[16]
In
the end, Sepracor says that its modification of Form 305 is simply a practical
workaround to deal with a situation which was not contemplated by the drafters
of the Rules, particularly in the context of the PM(NOC) Regulations.
[17]
Pharmascience's
position is that it is entitled to rely upon the law as it is set out in Socan
and Canadian Tire. It disputes Sepracor's claim that it is not entitled
to be an applicant given that Schering Corporation, the other patentee, is an
applicant in this application.
[18]
Pharmascience
maintains that Sepracor can only support the application by applying to be made
an applicant, as per Canadian Tire, where its participation will be
subject to some limits to ensure that there is no duplication of evidence or of
cross-examination of witnesses. In the course of argument, the Court pointed
out that similar orders, including provisions as to the order of filing records
and leading evidence, could be made in the name of procedural orderliness even
if Sepracor was a respondent and inquired why it mattered to Pharmascience
whether Sepracor was an applicant or a respondent so long as procedural
orderliness and fairness were maintained. Counsel for Pharmascience was not
able to provide an answer beyond saying that its client was entitled to rely
upon the law as stated in Canadian Tire.
ANALYSIS
[19]
Why
should a person who is required by law to be named as a respondent to an
application be required to seek an order naming them as an applicant (or as an
intervener) to the same application, as a condition of participating in that
application in support of the applicant's position? Socan and Canadian
Tire have held that the status of respondent is reserved to those who "truly"
oppose an application.
[20]
Since
Socan and Canadian Tire figure so prominently in this dispute, it
is appropriate to begin by clarifying their status. Both cases are decisions of
a single judge of this Court sitting as a motions judge under Rule 369. To that
extent, they are decisions of judges of this Court but they are not decisions
of the Court. This does not diminish their persuasive value but it makes clear
that there is no issue here of the Court being bound by its own jurisprudence.
As we shall see, one factor to be taken into account in assessing the weight to
be given to these cases is that a relevant rule was not brought to the Court's
attention.
[21]
The
Federal Court has dealt with this issue on a number of occasions. In Pfizer
Canada Inc. v. Apotex, 126 F.T.R. 225, 72 C.P.R. (3d) 379, a case decided
prior to the revision of the Federal Court Rules in 1998, Pfizer, the
first person in a PM(NOC) Regulations case, named the patentee as an applicant
in an application for prohibition. The sole respondent Apotex sought an order
that the two applicants be represented by the same counsel or, if they
declined, that the patentee be made a respondent. The Federal Court dismissed
the application, saying that the patentee was required to be a party and
nothing in the Rules would allow the Court to prevent it from retaining counsel
of its choice. On the other hand, the Court held that the two applicants would
have to "coordinate their efforts to avoid duplication
on any issue of fact and law which they wish to pursue so that a Second Person
is not put to the task and expense of responding to the same issue more than
once." (at paragraph 14).
[22]
In Apotex Inc. v. Canada (Minister of
Health), 186 F.T.R. 84, 4 C.P.R. (4th) 421, another case under
the PM(NOC) Regulations, the applicant Apotex consented to the addition of the
patentee of the drug in question as a respondent in its application (which
appears to have been in the nature of an application for mandamus). Apotex
argued that the patentee's rights of participation were limited to certain of
the relief sought. McGillis J. rejected this argument, saying that "As a
party, Bristol-Myers is therefore entitled to participate fully in exercising
all of the rights that accrue to a party in a proceeding." (see paragraph
5). McGillis J. went on to say that it was undesirable to seek to limit the
participatory rights of a party as this would simply lead to more interlocutory
motions.
[23]
In Aventis Pharma Inc. v. Apotex Inc.,
2004 FC 570, 32 C.P.R. (4th) 124 (Aventis Pharma), yet another
PM(NOC) Regulations case, Aventis Pharma Inc., the first party in an
application for an order of prohibition, named the patentee as a respondent in
the application. Aventis Pharma and the patentee were not related corporations
and were represented by separate counsel. The patentee filed evidence which
differed from that filed by Aventis Pharma in support of its patent. Apotex
claimed that this amounted to an abuse of process and sought to have the
evidence struck. Gauthier J. held that the patentee was both entitled to be
represented by counsel of its choice (and thus to participate in the
application as a respondent) and to fully present its case by filing evidence
which did not duplicate that of Aventis Pharma. She noted that "there may
be many good commercial reasons to explain why Schering may have a distinct
interest in defending the validity of certain claims which may be of lesser
importance to a licencee such as Aventis." (at paragraph 22). This comment
was repeated with approval by this Court in Merck & Co. v. Apotex Inc.,
2006 FCA 324, 55 C.P.R. (4th) 81, at paragraph 22.
[24]
It is interesting that none of these cases
refer to Rule 102, which appears in Part III of the Rules which is headed "Applicable
to all proceedings". Rule 102 provides as follows:
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102. Two or
more persons who are represented by the same solicitor may
join in one proceeding as plaintiffs, applicants or appellants where
(a) if separate
proceedings were brought by each of them, a common question of law or fact
would arise in all of the proceedings; or
(b) the relief
claimed, whether joint, several or alternative, arises from substantially the
same facts or matter.
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102. Deux
ou plusieurs personnes représentées par le même avocat
peuvent être jointes dans une même instance à titre de codemandeurs ou de
co-appelants dans les cas suivants :
a) si des
instances distinctes étaient engagées par chacune de ces personnes, les
instances auraient en commun un point de droit ou de fait;
b) les
réparations demandées, à titre conjoint, solidaire ou subsidiaire, ont
essentiellement le même fondement.
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[25]
Pfizer was decided
before the 1998 revisions to the Federal Court Rules (as they then were) but the
respondent in that case clearly anticipated Rule 102 in seeking an order that
both applicants be represented by the same counsel. Pfizer makes it
clear that a party is entitled to the counsel of its choice. The consequence of
such a choice for a patentee in proceedings under the PM(NOC) Regulations, as
was recognized in Aventis Pharma, is that the patentee is then required
to participate in the application as a respondent. Pfizer may not have
been disposed of in the way it was had Rule 102 existed or, if it existed in
another form under the old Rules, had it been brought to the Court's attention.
More importantly, there is no indication that Rule 102 was brought to the
attention of the judges who decided Socan and Canadian Tire.
[26]
The
judges of the Federal Court have thus found, on substantive grounds, that a
patentee who is named as respondent in an application is entitled to support
that application without seeking to be named as an applicant. While separately
represented co-applicants were permitted in Pfizer, Aventis Pharma
suggests that the better course is that a patentee who is independently
represented should participate in the proceedings as a respondent. Rule 102
confirms this insight. The underlying premise is that a patentee's interest in
the proceedings is not necessarily identical with the applicant's, a
proposition which this Court has accepted. The patentee, as a necessary party
to the proceedings, is fully entitled to represent its independent interest in
the proceedings.
[27]
These
conclusions are at odds with the result in Socan and Canadian Tire. Since
Socan is essentially taken up again in Canadian Tire, it is
simplest to set out here the material portions of Canadian Tire, after
laying out a few background facts. Canadian Tire involved an application
for judicial review of a decision of the Canadian International Trade Tribunal
with respect to the importation of bicycles into Canada and the
damage which this caused to the Canadian bicycle industry. There were numerous
parties on both sides of the question. The Tribunal found for the Canadian
bicycle manufacturers and recommended the imposition of a surtax on certain
imported bicycles. Canadian Tire, as a vendor of imported bicycles, brought an
application for judicial review of the decision. Some of the foreign
manufacturers, whose goods were to be subject to the surtax, and who were named
as respondents to the application filed notices of appearance in which they
said that they intended to support the application. The principal respondent,
the Canadian Bicycle Manufacturer's Association, moved to have those notices of
appearance struck as irregular. The material portions of Evans J.A.'s reasons
are set out, at length, below:
8 The
domestic producers
say that rule 305 means that only a respondent who intends to oppose the
application may serve and file a notice of appearance. Since the notice of
appearance served and filed by the importers states that they "support the
Application", it does not comply with rule 305 and the Court should reject
it.
9 In support
of this interpretation of rule 305, the domestic producers rely on a decision
of Stone J.A. in Society of Composers, Authors and Music Publishers of
Canada v. Canadian Assn. of Internet Providers, [2001] F.C.J. No. 166, 2001
FCA 4, ("SOCAN"), in which he struck the records of two parties who
were not opposing an application, but advancing supportive arguments. He said
(at para. 11)
As I see it,
Rule 305 was intended to play a pivotal role in the overall scheme and
operation of the Part 5 rules. That Rule requires a named respondent to signify
by way of a notice of appearance an intention "to oppose an
application". This step allows the parties and the Court to know at an
early stage which of the named respondents will truly oppose the section 28
application. The service and filing of the notice of appearance ensure that any
respondent truly opposed to the application will be served with all further
documents in the proceeding and so enable effective participation. As I have
already stated, if no notice of appearance is filed, Rule 145(a)
disentitles a named respondent from being served with any further documents in
the section 28 proceeding.
10 The
importers make two responses. First, they say that SOCAN is distinguishable.
They argue that the respondents in SOCAN were interveners before the Copyright
Board, the administrative tribunal under review. Further, the respondents in
that case had filed notices of appearance which indicated that they intended to
oppose the application for judicial review, but then filed an application
record in support of the application for judicial review.
11 I do not
agree. These differences are not material to the rationale provided by Stone
J.A. for interpreting rule 305 to permit respondents to file a notice of
appearance only if they intend to oppose an application for judicial review.
The purpose of rule 305 is to enable the parties and the Court to know at an
early stage of the proceeding which respondents intend to oppose an
application, and thus to limit the serving and filing of application records
accordingly.
12 For the
purposes of rule 305, it is not relevant whether a respondent participated in
the proceeding of the tribunal under review as a party or as an intervener.
Similarly, it is not germane that, in the present case, the importers indicated
when they filed a notice of appearance that they supported the application.
13 The
second argument advanced on behalf of the importers is that, if not permitted
to file a notice of appearance, they will be denied their right to procedural
fairness, since they will have no opportunity to defend their interests, which
would be adversely affected if the application were dismissed. This is because,
unless they have entered a notice of appearance, they will have no right to
notice of any further steps or documents in the proceeding: rule 145. They say
that their perspective is different from that of the applicant, Canadian Tire,
and that they may have different arguments to make in support of the
application.
14 I do not
accept this argument. If the importers are concerned about ensuring that their
interests are fully canvassed, they may seek intervener status in Canadian Tire's
application pursuant to rule 109. Alternatively, they could have applied to be
joined as applicants.
[28]
The
primary conclusion which emerges from these two cases is that only a respondent
who opposes an application is entitled to file a notice of appearance because
of the requirements of Rule 305. The corollary of that position is that because
of Rule 145, the patentee is not entitled to further notice of any proceedings,
which may be interpreted as having the effect of precluding them from taking
any part in those further proceedings. (Indeed, we are told that the
prothonotary took that position in this case). On the other hand, there is no
Rule which provides that a person who has not filed a notice of appearance is
to be removed as a party. Indeed such a rule would be counter-intuitive since
the very purpose of naming persons with an interest as parties is to ensure
that they will be bound by the result, a purpose which cannot be achieved if
those persons are not parties. One is left with parties who do not have the
right to participate in a proceeding but who are nonetheless bound by the
result of that proceeding.
[29]
This
procedural dead end cannot be avoided by means of an order under Rule 145 that
the patentee be given notice of further proceedings since it is clear from Socan
and Canadian Tire that a respondent can only oppose an application. Canadian
Tire holds that those who seek to support the application must apply to be made
applicants or interveners. However, the patentee has the right to be
independently represented and thus may not be in a position to comply with Rule
102 which requires that co-applicants be represented by common counsel. This
could lead to anomalous results, such as in this case, where one patentee,
Schering Corporation is related to the applicant and has common counsel and
would therefore have the right to participate in the application while
Sepracor, which is not related to the applicant and is separately represented
because of its independent interest, could not participate in the application.
[30]
This
cannot be what the drafters of the Rules intended, though it may be the
unintended consequence of what they have written. Given that Rule 305 requires
that persons who have an interest in a matter be named as respondents without
regard to the nature of their interest, given, as well, that respondents who do
not file a notice of appearance lose the right to further notice of proceedings
(Rule 145), the Rules ought not to be read to effectively deprive certain
respondents of their right to participate. Rule 305 can be read as explicitly
requiring respondent who oppose an application to file a notice of appearance
in Form 305 and impliedly permitting respondents who do not oppose an
application to file a notice of appearance in a form which reflects their
interest.
[31]
Rule 5
allows the forms prescribed by the Rules to be modified according to the
circumstances:
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5. Where these Rules require that a form be
used, the form may incorporate any variations that the circumstances require.
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5. Les formules
prévues par les présentes règles peuvent être adaptées selon les circonstances.
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[32]
In the
circumstances, I am of the view that respondents who do not oppose an
application are entitled to file a notice of appearance by modifying Form 305,
to reflect their interest in the proceedings. The form used in this case "The
respondent Sepracor intends to participate in the application." seems to
me to be adequate for that purpose on the particular facts of this case. That
said, a notice of appearance which gave a more unequivocal statement of
position, such as "The respondent X intends to support the
application.", would be preferable.
[33]
In
filing such a notice of appearance, the respondent avoids the sanction of Rule
145 which, incidentally, refers only to a notice of appearance and not a notice
of appearance in any particular form. The respondent patentee is thus fully
able to represent its interest as befits someone who is intended to be bound by
the result.
[34]
It follows
from this that I would not require respondents who do not oppose an
application to apply to be added as applicants to that application or, even
less, as intervenors. I can see little advantage to a person who has the rights
and the status of a party to seek the limited and discretionary status of an
intervenor.
[35]
The
participation of the respondent in a capacity other than an opponent of the
application may raise issues of procedural fairness and procedural orderliness.
To the extent that case management is available, particularly in proceedings
under the PM(NOC) Regulations, those issues can be dealt with as they arise.
[36]
In
the result, I would depart from the reasoning in Socan and Canadian
Tire for the reasons set out above. I would allow the appeal with costs,
set aside the decision of the Federal Court and reinstate Sepracor's notice of
appearance.
"J.D.
Denis Pelletier"
"I
agree
M. Nadon J.A."
"I
agree
C. Michael Ryer J.A."
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