Docket: A-312-15
Citation:
2016 FCA 13
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CORAM:
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STRATAS J.A.
DE MONTIGNY J.A.
GLEASON J.A.
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BETWEEN:
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BAYER INC. and
BAYER INTELLECTUAL PROPERTY GmbH
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Appellants
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and
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FRESENIUS KABI
CANADA LTD. and
THE MINISTER OF
HEALTH
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Respondents
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REASONS FOR JUDGMENT OF THE COURT
(Delivered from the Bench at Ottawa, Ontario, on January
19, 2016).
STRATAS J.A.
[1]
Bayer Inc. and Bayer Intellectual Property GmbH
appeal from the order dated June 26, 2015 of the Federal Court (per
Justice Strickland): 2015 FC 797.
[2]
In the Federal Court, Bayer applied for an order
under the Patented Medicines (Notice of Compliance) Regulations,
SOR/93-133 prohibiting the Minister of Health from issuing a notice of
compliance to Fresenius Kabi Canada Ltd. (formerly Pharmaceutical Partners of
Canada Inc.) for its proposed moxifloxacin hydrochloride product for injection
until three of Bayer’s patents, including Canadian Patent No. 2,378,424,
expired. Among other things, Bayer contended that Fresenius was infringing or
was inducing the infringement of its ’424 Patent.
[3]
Prothonotary Lafrenière struck all portions of
the application as it concerned the ’424 Patent: 2015 FC 388. On the facts, he
found that it was plain and obvious that Fresenius was neither infringing nor
inducing the infringement of Bayer’s ’424 Patent. Bayer appealed under Rule 51
to the Federal Court, submitting that Fresenius’ product monograph for its
proposed moxifloxacin hydrochloride product induced the infringement of its
’424 Patent. The Federal Court, following (at paragraph 41) the standard of
review set out in Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C.R.
425, 149 N.R. 273, engaged in de novo review. In that de novo
review, the Federal Court reached the same result as the Prothonotary for
substantially the same reasons.
[4]
Bayer now appeals to this Court.
[5]
This Court is sitting on appeal from the order
of the Federal Court made under its appellate jurisdiction from Prothonotaries
under Rule 51. The parties both submit that the standard of review is palpable
and overriding error. They cite the Supreme Court’s decision in Housen v.
Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235.
[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.
[8]
We have not received full argument on this
point. Accordingly, for the purposes of this case we shall apply the standard
set out in Jian Sheng, above. As will be evident from the reasons that
follow, we would reach the same result if we were to consider this appeal on
the basis of the standard of review in Housen.
[9]
In our view, Bayer’s appeal must fail. Bayer has
not persuaded us that the Federal Court had grounds to interfere with the
Prothonotary’s decision. Bayer has not demonstrated that the decision of the
Federal Court was arrived at on a wrong basis or was plainly wrong.
[10]
At paragraphs 43-51 of its reasons, the Federal
Court set out the applicable principles of law on inducement. As it noted (at
paragraph 43), the parties did not dispute these principles. In this Court, the
parties do not dispute them. Thus, the decision of the Federal Court was not
arrived at on a wrong basis.
[11]
At paragraphs 53 of its reasons and following,
the Federal Court applied these principles to the facts before it. In our view,
in doing so, it was not plainly wrong. It found as a factual matter that the
product monograph in question does not instruct or direct that Fresenius’
product is to be co-administered or co-administered with 0.9% sodium chloride
(at paragraphs 59-61). It also found that a general reference to sodium
chloride in the product monograph was obligatory and fell short of inducement
(at paragraphs 64-65). That was a factually-suffused finding in circumstances
where the Federal Court had instructed itself properly on the principles
relating to inducement.
[12]
Finally, the Federal Court found that the
product monograph in this case spoke for itself, the expert evidence tendered
by Bayer commenting on the product monograph was irrelevant, unhelpful, and
speculative (at paragraphs 58-64), and so (at paragraph 70) it distinguished
cases such as AB Hassle v. Genpharm, 2004 FCA 413, aff’g 2003 FC 1443
and Abbott Laboratories Limited v. Canada (Ministry of National Health and
Welfare), 2007 FCA 251, aff’g 2006 FC 1411. In our view, the Federal Court
did not err in principle in making these findings and was not clearly wrong in
making them on the facts of this case.
[13]
Bayer submitted that the Federal Court applied
too low a test for striking out the application under paragraph 6(5)(b)
of the Regulations insofar as it concerned the ’424 Patent. In our view, the
Federal Court was entitled to assess whether the evidence offered in support of
the application was relevant or could conceivably support the application: see,
e.g., Pfizer Canada Inc. v. Novopharm Limited, 2008 FCA 263 at
paragraph 3. The Federal Court found that it was neither relevant nor could it
conceivably support the application and, accordingly, dismissed the application
insofar as it concerned the ’424 Patent. Again, we see no error in principle on
the part of the Federal Court in making these findings and it was not clearly
wrong in making them on the facts of this case.
[14]
Therefore, despite the able submissions of Mr.
Davis, we shall dismiss the appeal with costs. Counsel agreed that costs shall
be fixed in the amount of $2,500, all inclusive.
"David Stratas"
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