Apotex Inc. v. Canada (Minister of National Health and Welfare), docket T-2845-96

Date: 19980220

Docket: T-2845-96

BETWEEN:

     APOTEX INC.,

     Applicant,

     - and -

     MINISTER OF NATIONAL HEALTH AND WELFARE,

     JANSSEN PHARMACETICA naamloze vennootschap and

     JANSSEN PHARMACEUTICA INC.,

     Respondents.

     REASONS FOR ORDER

MULDOON, J.

[1]      This is an application, not by a patentee, not for prohibition but for mandamus and a few declarations, which is not brought pursuant to the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 (the regulations), but rather as a free-standing application for free-standing mandamus and judicial declarations.

[2]      Here, precisely, are what the applicant seeks:

1.      An order declaring that, in relation to the notice of allegation dated October 1, 1996 filed with the Minister of National Health and Welfare (Minister) and served upon the respondents on or about October 1, 1996, there is no restriction upon the Minister under the regulations from issuing Apotex a notice of compliance (NoC) in respect of its tablets of domperidone maleate;

2.      An order directing the Minister to process Apotex' new drug submission (NDS) for tablets of domperidone maleate without regard to any patent lists filed by the respondents, Janssen Pharmaceutica naamloze vennootschap and Janssen Pharmaceutica Inc. (together," Janssen"), pursuant to section 4 of the regulations;

3.      An order declaring that an order for prohibition issued pursuant to the regulations applies so as to prohibit the Minister from issuing a notice of compliance only in relation to the particular notice of allegation giving rise to the proceedings under the regulations in which the prohibition order was granted, and has no application to any other subsequent notice of allegation (NoA);

4.      An order declaring that the order of Mr. Justice Gibson, dated December 14, 1995, issued in Court File No. T-1453-93 does not apply to prohibit the Minister from issuing a notice of compliance (NoC) to Apotex in respect of its tablets of domperidone maleate based upon the notice of allegation (NoA) dated October 1, 1996 filed and served by Apotex on or about October 1, 1996, or in the alternative, an order staying, or in the further alternative, setting aside, the said order of Mr. Justice Gibson;

5.      Its costs of this proceeding; * * *

[3]      The applicant submits its grounds as facts. As facts the statement appears to be reliable, but as grounds, the matter is in contention.

1.      Apotex, a Canadian manufacturer of generic drugs, filed an NDS with the Minister seeking approval of its tablets of its brand of the drug domperidone maleate.

2.      The respondent, Janssen Pharmaceutica naamloze vennootschap (Janssen Ph.), is the owner of Canadian Letters Patent No. 1,085,852. This patent was included on a patent list submitted pursuant to subsection 4(1) of the regulations by the respondent, Janssen Pharmaceutica Inc. (Janssen Canada), with a consent of the respondent, Janssen Ph.

3.      By NoA dated April 27, 1993, and served upon Janssen Canada, Apotex alleged that its manufacture and sale of its domperidone maleate tablets would not infringe any claim for domperidone maleate itself, or claim for the use of domperidone maleate contained in any patent owned by Janssen Ph. Apotex alleged that it would not infringe the Janssen Patent because it would acquire licensed domperidone maleate from a company holding a compulsory licence.

4.      In responde to the NoA, Janssen commenced a proceeding, recorded as Federal Court file No. T-1453-93, seeking an order prohibiting the Minister from issuing an NoC to Apotex with respect to its domperidone maleate formulations.

5.      On December 14, 1995, Mr. Justice Gibson granted the application for prohibition in T-1453-93. His Lordship ruled that the compulsory licence upon which Apotex relied did not extend to domperidone maleate but extended only to domperidone, and hence, ruled that Apotex' allegation of noninfringement by reason of acquiring licensed domperidone maleate was not justified.

6.      By NoA dated October 1,1996, and served upon Janssen Canada on or about October 1, 1996, Apotex alleged that its manufacture and sale of domperidone maleate tablets would not infringe any patent held by Janssen Ph. for which a patent list had been filed. Apotex alleged that it would acquire licensed domperidone from a company holding a compulsory licence for domperidone.

7.      By letter dated November 19, 1996, Mr. Anthony Creber from the law firm Gowling, Strathy & Henderson, solicitors for Janssen, wrote to Apotex stating their intention not to commence any proceeding for an order of prohibition, based upon Mr. Justice Gibson's order of December 14, 1996.

[4]      The applicant also asserted the regulations, themselves, as one of their grounds for relief.

[5]      The parties participated just as energetically in this proceeding as if Janssen's patent were not going to expire in a matter of weeks, as it did expire, on September 16,1997. However, the jurisprudence principally relied on by the applicant did not finally expire until January 8, 1998, when the Supreme Court of Canada denied leave, with costs, in Apotex v. M.N.H.W. & Eli Lilly, T-1237-95, A-339-97, S.C. #26259. The issue there was a second NoA by Apotex Inc. after Madam Justice McGillis had granted Eli Lilly an order in the nature of prohibition on February 5, 1995, against the Minister, regarding patent protection of the chemical, nizatidine, "until after the expiration of Canadian patents * * * and * * *". The originating notice was almost identical with the one herein, having been drawn by the same lawyer, as Apotex' counsel related. The decision of McGillis, J. was upheld on appeal on April 1, 1996, A-82-95, (1996) 66 C.P.R. (3d) 329. Apotex already did serve the second NoA on February 13, 1995. The second NoA alleged that Apotex would use only nizatidine manufactured by a non-infringing process. Relying on the prohibition already given by Madam Justice McGillis, Eli Lilly did not again apply for prohibition pursuant to subsection 6(1) of the regulations.

[6]      There, as here, Apotex applied for a declaration and mandamus to compel the Minister to issue to it an NoC. The Associate Chief Justice found that the first NoA, and the second one were "not essentially the same", and that res judicata did not apply. He thereupon allowed Apotex' motions, on April 15,1997.

[7]      Eli Lilly appealed (apparently very promptly) and the Federal Court of Appeal with one precision oriented variation to the Associate Chief Justice's order, unanimously affirmed it, and dismissed Eli Lilly's appeal. The Appeal Court adopted the Associate Chief Justice's reasons, too, of treating a second NoA independently of the first one [or, perforce, any previous NoA], "if distinct from the first" [or the previous ones].

[8]      Counsel for Janssen raised the matter of regulation 7(1)(f), as if the Court of Appeal had somehow overlooked that provision in adjudicating Apotex v. M.N.H.W. and Eli Lilly above-considered. Paragraph 7(1)(f) looks solid and unignorable:

7.(1) The Minister shall not issue a notice of compliance to a second person before the latest of

(a) * * *

(b) * * *

* * *

(f) the expiration of any patent that is the subject of an order [of prohibition] pursuant to subsection 6(1).

[9]      The Court of Appeal in its judgment wrote:

It [the original prohibition] had to be taken as having an absolute effect; it imposed a prohibition without restriction and qualification which was meant to remain operative until the expiration of the patents, as provided in paragraph 7(1)(f) of the Regulations. Such an order, it was urged, cannot be set aside or varied collaterally on a simple judicial review proceeding where its involvement is raised only indirectly. Furthermore, added counsel, an order with an absolute effect was precisely what was contemplated by the Regulations, which did not provide for the possibility of further proceedings with the result that the second notice of allegation could have no legal meaning, which is why Eli Lilly did not react to it.

I have come to the view that neither of these two arguments has merit. I do not see why a court, in a clear situation, could not proceed to an assessment of the scope and meaning of an order of the type issued by McGillis J., and then attach to it an effect which is not absolute. There is no doubt that this is possible only exceptionally, but when the order was clearly made in a particular context, was rendered to give effect to stated reasons, and its wording in general terms can be explained, I think it can be done. This is precisely the position adopted by the Manitoba Court of Appeal in Allen v. Manitoba (Judicial Council), [1993] 3 W.W.R. 749.

[10]      The above-cited Court of Appeal decision is binding on this Court, especially so, in light of the closely parallel sequence of events. Therefore, this Court would be obliged to come to the same conclusion, if the first NoA and the second NoA be "not essentially the same".

[11]      It must be mentioned that all parties through their respective counsel averred that the regulations are enacted to prevent infringement of drug patents (transcript, pp. 46 & 47). However, Apotex' counsel argues that when the proceedings and considerations are outside or beyond the regulations, as these are, then the purposes on which regulations 6(1) and (2) are based do not apply in this kind of proceeding. Because these regulations are designed to assist in the prevention of infringement, they are not designed to keep a second person out of the market. He argued in effect that in this application for mandamus, Apotex is held to no high standard of disavowing infringement, because the patentee failed to respond or to invoke its right (within 45 days) to apply for prohibition pursuant to the regulations. Infringement or not, it was argued, may be considered in the new drug submission, but now, because of Janssen's default, he said it was Apotex' right to demand the issuance of an NoC, without being bothered by all the formalities and burdens of responding under the regulations.

[12]      The applicant is right in this line of reasoning, based on the Federal Court of Appeal judgment in Eli Lilly v. Apotex and M.N.H.W., A-339-97 (Sept. 29/97) which, since January 8, 1998, is a final, definitive judgment. What remains is to determine if there be no essential difference between the first and second NoA.

[13]      Counsel for all parties argued long and assiduously on the present proceeding and on Janssen's motion for summary judgment to dismiss Apotex' action (T-2855-96) for a declaration of non-infringement, actually running out the day which was scheduled, on their estimation, for these matters. The Court was inundated with boxes of documents, so solemnly did counsel approach their tasks. Because of the need for written reply, and the imminent expiry of patent No. 1,085,852, this Court applied itself to the deliberation of the result with no greater deference for the litigation than was evinced by the litigants, themselves. As a result, the matters in issue herein have become, and are now long since moot. There is no longer an extant patent, and therefore no prospect of infringing it. The Minister needs no longer to be prohibited from issuing Apotex an NoC, or not.

[14]      The originating motion by Apotex for the remedies set out at the beginning of these reasons, is quashed.

[15]      What about costs? It can be disclosed that this exchange occurred between the Court and Janssen's counsel:

* * * And * * * that patent only expires in about six more weeks, and then the Minister will be free to issue a Notice of compliance.

THE COURT: So today, are you wasting your time dealing with it?

MR. CREBER: Well, I don't say I have tried, but ---

THE COURT: As an officer of the Court, I won't plant that idea with you.

MR. CREBER: No. Mr. Radomski was entitled to have his day in Court, and I can't object to that

Rather than purportedly expediting, it would have been practical to seek a stay during the short time remaining until the patent was to expire.

[16]      No costs will be awarded for or against Apotex and Janssen. There are no special reasons for costs, within the meaning of rule 1618. The Minister however got caught up in this matter and was relying on regulation 7(1)(f) mentioned earlier, and most certainly did not wish to risk being held in contempt of Mr. Justice Gibson's earlier order of prohibition. The jurisprudence in Eli Lilly v. Apotex developed definitively only after the hearing day in this matter. Costs follow the event, and the event was not accorded sufficient time by the protagonists. The Minister has a special reason, then for being awarded his party and party costs, either taxed or agreed upon, by Apotex which shall pay such costs, if asked.

                                

Judge

Ottawa, Ontario

February 20, 1998