Date: 20010920
Docket: T-655-01
Neutral Citation: 2001 FCT 1036
BETWEEN:
RHOXALPHARMA INC.
Applicant
- and -
THE MINISTER OF HEALTH and
ASTRAZENECA CANADA INC.
Respondents
REASONS FOR ORDER
LEMIEUX J.:
INTRODUCTION
[1] This is an appeal by AstraZeneca Canada Inc. ("AstraZeneca") from the July 13, 2001 decision of Prothonotary Lafrenière who refused to order the reattendance of RhoxalPharma Inc.'s ("RhoxalPharma") affiant to answer questions asked and refused during cross-examination on his affidavit filed in support of a judicial review application by RhoxalPharma challenging the Minister of Health Canada's (the "Minister") decision not to strike a certain AstraZeneca patent from the Patent Register (the "Register").
[2] Canadian Patent 2,133,762 ("762") is listed by AstraZeneca on the Register maintained by the Minister pursuant to the Patented Medicines (Notice of Compliance) Regulations, (the "Regulations"). The Register, under AstraZeneca's 762 patent lists separately omeprazole capsules in each strength of 10mg, 20mg and 40mg; omeprazole magnesium enteric coated tablets of similar strengths as well as 10mg and 20mg sustained release tablets of omeprazole magnesium. As a result, AstraZeneca has eight listings for omeprazole and omeprazole magnesium on the Patent Register.
[3] RhoxalPharma requested the removal of the 762 patent on the basis that this patent claimed a combination of active ingredients and was therefore not properly listed on the Register under omeprazole alone. RhoxalPharma in its request to the Minister argued the 762 patent should be listed in the Register as a combination product and since RhoxalPharma was seeking to market omeprazole alone, it would not be required, under the Regulations, to send a notice of allegation to AstraZeneca for a product listed as a combination product.
[4] As noted, the Minister rejected RhoxalPharma's request being of the view the 762 patent contained claims for the use of the medicine and is properly listed on the Register in respect of both omeprazole and omeprazole magnesium.
[5] On April 12, 2001, RhoxalPharma commenced an application for judicial review seeking orders to quash the Minister's decision to refuse to remove the 762 patent from the Register and directing the Minister to remove it from the Register for all strengths and dosage forms (capsules or tablets) of AstraZeneca's medicines, namely, omeprazole and omeprazole magnesium.
[6] In its judicial review proceedings, RhoxalPharma filed the affidavit of Len Arsenault, its Director of Regulatory Affairs, who asserts that this generic company has filed with the Minister an Abbreviated New Drug Submission ("ANDS") under the Food & Drugs Regulations in order to obtain a Notice of Compliance ("NOC") which would allow it to sell the medicine omeprazole.
[7] Mr. Arsenault was cross-examined on June 20, 2001, on his affidavit and asserted RhoxalPharma had filed an ANDS for 20mg omeprazole tablets.
[8] He was questioned about this product and the three other products AstraZeneca had listed on the Register associated with its 762 patent, namely, omeprazole capsules, omeprazole magnesium tablets and omeprazole magnesium tablets covered by the multiple unit pellet system ("MUPS").
[9] Mr. Arsenault refused to answer questions regarding these omeprazole products with the refusals falling into three categories of questions. The first category of refused answers related to whether RhoxalPharma had filed a new drug submission ("NDS") or an ANDS for these omeprazole products, including the strengths (10, 20 or 40 mg) for which the submissions were filed. The second category of refused answers related to the status with the Minister of Health of any submissions filed by RhoxalPharma and the third category of refused answers sought to identify the omeprazole product to which RhoxalPharma had compared its proposed omeprazole product for each of AstraZeneca's products on the Register.
[10] I note for completeness of the record that RhoxalPharma and AstraZeneca are involved in various proceedings under the Regulations in respect of its omeprazole tablets in relation to Canadian patent 2,025,668 (the "668 patent"). In addition, it was during the year 2000 that AstraZeneca listed the 762 patent for the Register.
[11] AstraZeneca brought a motion before Prothonotary Roger Lafrenière (the "Prothonotary") seeking an order compelling Mr. Arsenault to answer what he had refused.
[12] Prothonotary Lafrenière, by order dated July 13, 2001, refused, without written reasons, the order sought by AstraZeneca after he was advised that RhoxalPharma would provide the following answers:
(1) To advise whether the Minister has rejected RhoxalPharma's submission(s) which refer, for comparison purposes, to a product of AstraZeneca;
(2) To advise whether or not RhoxalPharma's submission(s) are presently pending;
(3) To advise to which [AstraZeneca] product RhozalPharma is comparing its proposed product(s).
THE APPLICANT'S POSITION
[13] AstraZeneca appeals Prothonotary Lafrenière's order to this Court on the grounds that all of the answers refused are relevant to RhoxalPharma's standing to seek the delisting from the Register of the 762 patent for all of the various strengths in the dosage forms of omeprazole capsules, omeprazole magnesium tablets or omeprazole magnesium MUPS tablets.
[14] In particular, AstraZeneca argues, if RhoxalPharma does not have an NDS or an ANDS for a particular formulation or strength (the first category of questions), RhoxalPharma may not have standing to pursue the present application for judicial review as it may not be directly affected by the presence of the 762 patent on the Register for all strengths and dosage forms. It points to section 5(1) and 5(1.1) of the Regulations.
[15] AstraZeneca argues questions relating to the current status of an NDS or ANDS (the second category of questions), are also relevant as to whether RhoxalPharma is "directly affected" under section 18 of the Federal Court Act. AstraZeneca argues if RhoxalPharma's ANDS or NDS has been rejected, then, absent an approvable pending submission for each drug for which the 762 patent is listed, RhoxalPharma may lack standing to pursue the delisting of the 762 patent.
[16] Insofar as the third category of questions is concerned, AstraZeneca says that while RhoxalPharma has agreed to identify the comparison product for each of the submission(s), it has not agreed to link this to a particular submission(s). AstraZeneca argues the product strength and dosage form and the link to a particular submission is relevant as to whether RhoxalPharma has made the appropriate comparison and whether RhoxalPharma is in fact directly affected.
RHOXALPHARMA'S POSITION
[17] RhoxalPharma argues none of the answers refused by Mr. Arsenault are relevant. RhoxalPharma says its proceedings against the Minister for having wrongfully added the 762 patent to the Register in year 2000 is sharply drawn. It says the Minister listed the 762 patent separately for omeprazole and omeprazole magnesium in varying strengths rather than having registered it as a combination of its two active ingredients as the title of the 762 patent says it is, namely, "Synergistic Combination of a Substance with Gastric Acid Secretion inhibiting effects and an Acid Degradable Antibiotic".
[18] RhoxalPharma says the point is significant since it is seeking to market omeprazole alone and if the patent had been listed in the Register under a combination product, it would not have to send a notice of allegation with respect to a patent listed under a combination product because it would not be selling it.
[19] Basing itself upon the Federal Court of Appeal's decision in Merck Frosst Canada Inc. v. Apotec Inc. and Novopharm Ltd. (1997), 72 C.P.R. (3d) 517, it states it has sufficient interest to justify the order sought in its judicial review proceedings.
[20] RhoxalPharma disagrees with AstraZeneca's position that it has standing only in connection with the patent list for the specific reference product to which comparison is made in its ANDS. RhoxalPharma argues that once standing is established, the legality of AstraZeneca's listing on the Register is for the Court to determine.
[21] RhoxalPharma argues the only issue in its judicial review proceeding is whether a patent for a combination of omeprazole and antibiotic can be listed under omeprazole alone. If the listing is improper for one dosage form and strength of omeprazole and omeprazole magnesium, it is improper for all dosage forms and strengths of omeprazole and omeprazole magnesium.
[22] Specifically, as to the first category of questions regarding RhoxalPharma NDS or ANDS submissions, RhoxalPharma argues irrelevance based on the wording of subsection 5(1) of the Regulations. It says it is the use of a reference product which triggers the necessity of sending a notice of allegation and except for the fact that a reference product is mentioned and used, the contents of the underlying submission plays no part whatsoever in the process. It says it has obviously filed for a Notice of Compliance by comparison or reference to a drug for which there is a patent list. RhoxalPharma has agreed to reveal the nature of the reference product(s) and this in turn will allow AstraZeneca to determine the alleged "extent" of RhoxalPharma's interest in the proceedings and this alone establishes proper standing. It adds the number of submissions, whether they are abbreviated or not, whether they are omeprazole or omeprazole magnesium tablets, capsules or MUPS and for what strength, are not relevant and will not advance the debate on the standing issue.
[23] The second category of questions regarding status and whether or not the submission(s) has or have been accepted is not relevant given the wording of subsection 5(2) of the Regulations. It argues it is not the acceptance of a submission which eliminates the necessity of making an allegation but the issuance of the Notice of Compliance. It argues it will have standing so long as the 762 patent remains on the Register. Whether or not its submission is accepted, such a Notice of Compliance cannot be issued until the 762 patent has been addressed. However, RhoxalPharma says it agrees to answer that part of the question which deals with the rejection of a submission which makes use of a reference product but will not identify the particular submission otherwise than with reference to a specific comparison product of AstraZeneca.
[24] In respect of the third category, RhoxalPharma has agreed to reveal the reference product(s) mentioned in its submission(s) but again will not reveal the number of submissions it has standing or the nature of the products for which it is seeking approval.
THE STANDARD OF REVIEW
[25] The applicable standard of review has been defined by the Federal Court of Appeal in Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425 at 463, where Justice MacGuigan, adopting English jurisprudence said "discretionary orders of prothonotaries ought not to be disturbed on appeal to a judge unless":
(a) they are clearly wrong, in the sense that the exercise of discretion by the prothonotary was based upon a wrong principle or upon a misapprehension of the facts, or
(b) they raise questions vital to the final issue of the case.
Where such discretionary orders are clearly wrong in that the prothonotary has fallen into error of law (a concept in which I include a discretion based upon a wrong principle or upon a misapprehension of the facts), or where they raise questions vital to the final issue of the case, a judge ought to exercise his own discretion de novo.
[26] Clearly, the Prothonotary's decision is discretionary and, in my view, for the reasons expressed below, not vital to the final issue of the case. In those circumstances, the appropriate Aqua-Gem test is whether the Prothonotary's decision is clearly wrong. Since the Prothonotary's order did not provide written reasons, I am compelled to pursue the analysis somewhat more fully than otherwise would be the case (see, Wellcome Foundation Ltd. et al. v. Novopharm Ltd. (1999), 177 F.T.R. 182).
ANALYSIS
(1) The principles
[27] I take as the point of departure what Justice Hugessen wrote in Merck Frosst Canada Inc. et al. v. The Minister of Health et al. (1997), 80 C.P.R. (3d) 550, sustained by the Federal Court of Appeal in (1999), 3 C.P.R. (4th) 288, a case involving a motion to compel answers to questions and for documentation to be produced in an application for judicial review challenging the decision of the Minister of Health to issue a NOC to Apotex after the Court had dismissed an application by Merck for an order of prohibition under the Patented Medicines (Notice of Compliance) Regulations.
[28] Justice Hugessen, at paragraph 4 of the reported case, set out certain principles on cross-examination in the context of judicial review proceeding. He wrote this:
[4] It is well to start with some elementary principles. Cross-examination is not examination for discovery and differs from examination for discovery in several important respects. In particular:
(a) the person examined is a witness, not a party;
(b) answers given are evidence, not admissions;
(c) absence of knowledge is an acceptable answer; the witness cannot be required to inform him or herself;
(d) production of documents can only be required on the same basis as for any other witness, i.e. if the witness has the custody or control of the document;
(e) the rules of relevance are more limited.
[29] Justice Hugessen then looked at relevance as being of two sorts: formal relevance and legal relevance. He wrote this at paragraph 7 and 8 of this reasons for judgment:
[7] Formal relevance is determined by reference to the issues of fact which separate the parties. In an action, those issues are defined by the pleadings, but in an application for judicial review, where there are no pleadings (the notice of motion itself being required to set out only the legal as opposed to the factual grounds for seeking review), the issues are defined by the affidavits which are filed by the parties. Thus, cross-examination of the deponents of an affidavit is limited to those facts sworn to by the deponent and the deponent of any other affidavits filed in the proceeding.
[8] Over and above formal relevance, however, questions on cross-examination must also meet the requirements of legal relevance. Even when a fact has been sworn to in a proceeding, it does not have legal relevance unless its existence or non-existence can assist in determining whether or not the remedy sought can be granted. (I leave aside questions aimed at attacking the witness' personal credibility which are in a class by themselves). Thus, to take a simple example, where the deponent sets out his or her name and address, as many do, it would be a very rare case where questions on those matters would have legal relevance, that is to say, have any possible bearing on the outcome of the litigation.
[30] Justice Hugessen, expanding on what he had said as a member of the Federal Court of Appeal in Merck Frosst Canada Inc. et al. v. The Minister of Health and Welfare et al. (1994), 55 C.P.R. (3d) 302, a case involving an application by Merck under the Patented Medicines (Notice of Compliance) Regulations to prohibit the issuance of a NOC to Apotex, then embarked on a discussion of the regulatory regime governing the marketing of drugs in Canada, anchored on the Food and Drugs Act with its primary purpose being health and safety concerns. He wrote this at paragraphs 10 and 11:
[10] ... the law is clear that Merck, as a patentee and holder of an NOC for a medicine does not have any right to raise non-compliance by the Minister with the Food and Drugs Act or the Regulations made thereunder in respect of the issuance or proposed issuance of an NOC to another drug manufacturer. Specifically, Merck does not have the right to object to the issuance of a NOC to Apotex for the same medicine for which Merck holds a NOC on the grounds of non-compliance with that Act and those Regulations by either Apotex or the Minister. . . .
[11] Some of the cases have used concepts such as absence of standing and non-justicibility as a convenient shorthand to describe this limitation on the patentees rights... . It is not lack of standing or justiciability in the strict sense of those words which prevents the applicants from raising non-compliance with the health and safety concerns of the Food and Drugs Act, and Regulations; it is simply that those matters are of no concern to them and cannot be raised by them in an attack on a decision of the Minister to issue an NOC. It is the Minister himself who is charged with the protection of the public health and safety and no private interest on the applicants arises from his alleged failure to perform his duties with respect to other persons.
[31] Justice Hugessen then pointed out that the Regulations (the Patented Medicines (Notice of Compliance) Regulations) whose clear intention is to facilitate the protection of private commercial patent rights had been grafted upon the food and drug regulatory regime as an exception to the performance of the Minister's functions to issue a NOC under the Food and Drugs Act giving green light to the marketing of the drug in Canada.
[32] Of the Regulations, Justice Hugessen wrote this:
-- the "linkage" Regulations -- do give the Merck applicants a right, at the very least by implication, to enforce compliance by both Apotex and the Minister with those Regulations and to object to the issuance of an NOC on the grounds of non-compliance therewith.
[33] Justice Hugessen allowed certain questions on the basis of Merck's principal contention in the judicial review proceedings before him, that there was non compliance with the Regulations as a result of the non concordance or lack of sequence in the timing as between Apotex's new drug submissions and its notices of allegation and detailed statements required under the Regulations.
[34] In his view, questions which go to establish the factual foundation for those arguments have legal relevance.
[35] There can be no doubt the Federal Court of Appeal continues to draw sharply the permissible areas of inquiry arising from the NOC Regulations from those connected with the Food and Drugs Act. One recent example is the Federal Court of Appeal's decision in Merck and Co. Inc., docket A-475-98, September 23, 1999, where Marceau J.A. said this at paragraph 4:
[4] . . . The Patented Medicines (Notice of Compliance) Regulations recently adopted pursuant to the Patent Act ... ought not to be interpreted rigidly, without regard to their true intent and scope. The judicial process they introduced a few years ago following the abolition of the compulsory licensing system, with a view to bringing some protection to patent holders whose proprietary rights might be inadvertently but too easily affected, is separate and distinct from the long-standing administrative process imposed by the Food and Drugs Regulations ... adopted pursuant to the Food and Drugs Act, whose purpose is to satisfy the requirements of safety and efficacy. Of course, both processes can only be triggered by a drug manufacturer who contemplates marketing of a new product. But nothing requires that they both set in motion at the same time. The judicial process has nothing to do with the administrative one and vice-versa. These are parallel processes. Matching them is achieved only through their results: the Minister cannot issue a NOC without regard to the findings established by the two processes.
[36] Another example arises from the Federal Court of Appeal's decision in Eli Lilly and Co. v. Novopharm Ltd. (1999), 3 C.P.R. (4th) 476 (F.C.A.) on appeal from the Trial Division where the motions judge had concluded that Eli Lilly had failed to establish that the relevant patent would be infringed if the Minister issued a NOC to Novopharm but at the same time concluded that the materials filed by Novopharm in its new drug submission (NDS) relating to the 1g and 10g dosage forms were insufficient and therefore the Minister could only issue a NOC in respect of the 500mg product. More specifically, the motions judge determined that "a reference of the medicine in one dosage ... on the new drug submission [was not] sufficient to comply with the ... regulations and protect the other dosage forms of the [drug ...]". Since the NDS filed by Novopharm contained detailed information only with respect to the 500mg form, the motions judge held the Minister could not determine the safety and efficacy of the 1g and 10g forms and issue a NOC for those sizes.
[37] Justice Strayer, on behalf of the Court, in his reasons for judgment allowing the appeal, said this at pages 478-79:
The special procedure for an application for prohibition under section 6 of the Patented Medicines (Notice of Compliance) Regulations ..., is related to the protection of patent rights and should stand or fall on the validity of the second person's (here Novopharm's) allegations filed under paragraph 5(1)(b) of the Regulations. Those allegations all relate to possible infringement of the patents in the patent list filed by the first person (here, Lilly). It was not a proper use of this procedure to issue prohibition based on the alleged failure of Novopharm to make the proper NDS to the Minister, the making of such a submission under subsection 5(1)(d) being a necessary step in the filing of a Notice of Allegations. Once the learned motions judge found, as he did, that there had been no adequate NDS by Novopharm he should have refused to issue a prohibition order as it was premature to do so. He should have assumed that the Minister would refuse to issue a NOC in the absence of a proper NDS and that no possible need would arise for a prohibition order until the NDS was completed.
[38] Justice Strayer, in Novopharm Ltd., supra, endorsed what Décary J.A. had written in A.B. Hassle v. Canada (Minister of National Health and Welfare) (1999), 3 C.P.R. (4th) 73. That case involved a prohibition order issued in circumstances where Novopharm Ltd. had withdrawn its notice of allegation but had not withdrawn the new drug submission filed with the Minister of Health. Justice Décary found that the withdrawal of the notice of allegation rendered the prohibition application moot and that at the date of the hearing of the application, the Minister was not in a position to issue a NOC since the conditions set out in section 5(3) of the Regulations were no longer met. In these circumstances, he said "absent evidence in a given place that the Minister is prepared to ignore his legal duties and exceed his jurisdiction, the Court should not embark in the hearing of a prohibition application".
(2) Application of the principles
[39] To determine relevance on this application to compel answers on cross-examination refused on that ground of relevance, as argued by counsel for AstraZeneca, it is necessary to examine "the legislative scheme and the nature and scope of the proceedings before the Trial Division" (see, Merck Frosst Canada et al.( F.C.A), 55 C.P.R. (3d) 302 supra, a matter which Justice Hugessen stressed in Merck Frosst Canada Inc. (F.C.T.D.) 80 C.P.R. (3d) 550, supra, when he said at paragraph 8 "even when a fact has been sworn to in the proceeding, it does not have legal relevance unless its existence or non- existence can assist in determining whether or not the remedy sought can be granted . . . have any possible bearing on the outcome of the litigation".
[40] In the appeal before me, counsel for AstraZeneca argues relevance primarily on the basis it may affect RhoxalPharma's standing to obtain the remedies it seeks.
[41] In this respect, in my view, AstraZeneca's argument is based on an incorrect view of the nature of the proceedings which RhoxalPharma launched against the Minister of Health, a proceeding from which AstraZeneca is a party.
[42] In my assessment, RhoxalPharma seeks judicial review of the decision of the Minister of Health to list the 762 patent under omeprazole alone (as well as under omeprazole magnesium) arguing it should have been listed as a combination product in respect of which it would not have to make a notice of allegation under section 5 of the Regulations because its NOC was for omeprazole alone. In other words, the fundamental premise of RhoxalPharma's judicial review application is that the Minister erred in listing the 762 patent in the way he did, that is, in eight different ways and that is why these eight listings should be removed.
[43] Counsel for AstraZeneca did not argue, as I understood him, that RhoxalPharma did not have any standing at all to challenge the Minister's decision since RhoxalPharma had established it had filed with the Minister an ANDS and was seeking an NOC to market omeprazole alone with 20mg strength. As such, RhoxalPharma was directly affected by the Minister's decision under section 18.1 of the Federal Court Act.
[44] What counsel for AstraZeneca says he needs to know for the purposes of RhoxalPharma's standing is whether RhoxalPharma has live and pending approvable submissions for the other drug strengths and dosage forms against which the 762 patent is listed.
[45] I accept the submissions of counsel for RhoxalPharma on this point that knowing whether RhoxalPharma has live and approvable submissions for the seven other drugs and medicines listed against the 762 patent does not advance the debate in determining whether the scope of the Minister's alleged error equates the remedy sought. As I have said, RhoxalPharma has established that it is directly affected by the Minister's decision and it matters not whether it has live and approvable submissions to the Minister of Health for other 762 patent listed drugs other than omeprazole in 20mg form.
[46] As a result, the questions asked have no legal relevance on the outcome of the litigation and this appeal should be dismissed.
[47] I should add that I interpret counsel for RhoxalPharma's willingness to provide certain answers on the status of its pending submission and certain other details as an unsuccessful effort by it to convince AstraZeneca that it was directly affected by the Minister's decision which it seeks judicial review of.
[48] Finally, to the extent that counsel for AstraZeneca justifies relevance on issues such as: (1) whether a notice of allegation (NOA) would be required under section 5 of the Regulations, (2) what form that NOA might take, (3) whether a proper submission to the Minister by RhoxalPharma supports the NOA; (4) the proprietary of any comparison between the drug in RhoxalPharma's submission and AstraZeneca's listed drug, (5) whether the Minister might issue a NOC without a NOA are not relevant as they are either anticipatory thus premature or trench upon the Minister's mandate under the Food and Drugs Act and Regulations or unjustifiably presume he will act illegally based on the case law cited above.
DISPOSITION
[49] For all of these reasons, this appeal from the Prothonotary's decision of July 13, 2000 is dismissed with costs in any event of the cause.
"François Lemieux"
J U D G E
OTTAWA, ONTARIO
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