Date: 20020822
Docket: T-2052-01 and T-2169-01
Neutral citation: 2002 FCT 899
OTTAWA, Ontario, this 22nd day of August, 2002
PRESENT: The Honourable Mr. Justice Rouleau
BETWEEN:
BAYER AG and BAYER INC.
Appellants-Applicants
AND:
APOTEX INC. and
THE MINISTER OF NATIONAL HEALTH AND WELFARE
Respondents
REASONS FOR ORDER AND ORDER
[1] On August 20, 2002 the Court entertained appeals from three Orders rendered by Prothonotary Lafrenière all dated July 26, 2002. The appellants-applicants ("Bayer") as well as the respondents ("Apotex") are the same parties concerned in both of these dockets.
[2] The facts that give rise to these appeals may be briefly summarized as follows. By letter dated October 4, 2001, Apotex served on Bayer a purported Notice of Allegation pursuant to section 5 of the NOC Regulations made with respect to a certain patent for a pharmaceutical product to which Bayer held the Canadian patent. On November 19, 2001, in response, Bayer filed a Notice of Application to prohibit the Minister of Health and Welfare from issuing a Notice of Compliance. In late of 2001, Bayer obtained an order from this court which provided for the production by Apotex of its Submission and, as well, an Order that the Minister of Health and Welfare verify that the portion of the Submission produced by Apotex corresponded fully to the information on file with the Minister of Health and Welfare.
[3] In the usual manner, the production by Apotex was respected and the Minister of Health and Welfare confirmed that the productions provided by Apotex conformed with the information filed with the initial Submission.
[4] In a letter dated January 18, 2002, the Minister of Health and Welfare advised Apotex that the Submission was rejected for deficiencies in screening. In an affidavit sworn by one Kenneth R. Clark, a solicitor with the firm representing these appellants-applicants and on file in these proceedings, it is acknowledged that the appellants-applicants were aware of the letter of rejection some time in January 2002.
[5] All of these motions under appeal were initially argued on May 28, 2002 before Prothonotary Lafrenière.
[6] In one motion the appellants-applicants sought leave to file new evidence (the affidavit of one Dianne Azzarello sworn May 21, 2002). The Order appealed reads as follows:
"... AND UPON this court making no determination regarding the relevance or admissibility of this evidence;
AND UPON this court determining that this evidence should have been put forward earlier;
AND UPON this court determining that it is in the interests of justice that there be finality in the establishment of evidence in this matter;
IT IS HEREBY ORDERED THAT:
1. This motion is dismissed."
[7] In a second motion the appellants-applicants primarily sought the production of "any Screening Deficiency Notice and/or Rejection Letters or other similar documents and any related correspondence between the parties relating to the rejection of the Submission".
[8] This motion included a further request for production of documents provided to the Minister in support of the appellants-applicants' Submission. A similar motion had been previously requested and granted by this court. Sometime during late 2001, Apotex had complied with the previous Order with respect to productions and the Minister had confirmed that the information provided by Apotex to these appellants-applicants conformed to the information filed with the initial Submission by Apotex.
[9] Since this Order had already been complied with, the only issue that this second motion needed to resolve was the production of the "Screening Deficiency Notice and/or Rejection Letters". The Prothonotary 's Order with respect to the second motion under appeal reads as follows:
"...AND UPON this court making no determination regarding the relevance or admissibility of these documents;
AND UPON this court determining that motion should have been brought earlier;
AND UPON this court determining that it is in the interests of justice that there be finality in the establishment of the evidence in this matter;
IT IS HEREBY ORDERED THAT:
1. This motion is dismissed."
[10] In the third motion before Prothonotary Lafrenière, the appellants-applicants sought the filing of an Amended Notice of Application. The Prothonotary allowed part of the relief sought and ordered that the appellants-applicants could amend their Notice of Application containing a new paragraph which reads as follows:
"26. Tenth, by order of the Court dated January 2, 2002, resulting from a motion brought under s. 6(7) of the Regulations, Apotex has provided to Bayer its purported submission ("Submission") to the Minister for a Notice of Compliance, and the Minister has verified that the Submission produced by Bayer was the submission which was before the Minister. The Submission was received by the Minister on October 9, 2001, and was rejected by the Minister for deficiencies noted on screening on January 3, 2002. Accordingly, the Notice of Allegation is void for not being in compliance with s. 5(3)(c)(i) of the Regulations, due to its being served after the Submission was filed with the Minister."
[11] He refused to allow the following amendment to the Notice of Application:
"27. Alternatively, the Notice of Allegation is not in compliance with the Regulations as it does not relate to the submission for a Notice of Compliance which is before the Minister, in conformance with s. 5(3)(c)(i) of the Regulations, for the following reasons:
(a) The Submission was rejected by the Minister due to deficiencies noted on screening, and therefore the Submission was never a submission for a Notice of Compliance as defined in s. 5(1) of the Regulations; and
(b) The Submission is a sham submission, and is an abuse of the process of the Regulations, in that it is an attempt by Apotex to circumvent the timing requirements of the Regulations."
[12] The opening remarks from counsel for the appellants-applicants were to the effect that Prothonotary Lafrenière was unduly concerned with delay and did not sufficiently consider the appellants-applicants' additional evidence (the affidavit of Dianne Azzarello) and its relevance to the proceedings; it was not prejudicial to the respondents and should have been allowed to be filed since cross-examinations had not yet been initiated and were not to be concluded until October of this year; that he failed to take into account the value of this additional evidence and seek to balance its impact and "weigh the seriousness of the delay against the potential value of the affidavits and that either may outweigh the other." (See Maxim's Limited v. Maxim Bakery Limited, 29 CPR 3d 240).
[13] Counsel further argued that though the appellants-applicants were aware of the Letter of Deficiencies since January, 2002, a four month delay was not inordinate when one considers the court's decision in Janssen Pharmaceutica Inc. v. Nu-Pharm Inc., 58 CPR 3d 164, wherein it allowed the filing of additional evidence some 16 months after proceedings had been initiated.
[14] The affidavit of Dianne Azzarello is that of a pharmacist who has been employed in the pharmaceutical industry in the area of clinical research, sales and regulatory affairs since 1983. Her affidavit expresses the opinion that in light of the Minister of Health and Welfare's policies with regards to Management of Drugs Submissions there is no doubt in her mind that if no further information and material is submitted the Submission would be rejected and that this evidence would assist in bringing a close to the Submission and the court would avoid the eventual lengthy debate of determining patent infringement or validity.
[15] With respect to the second Order under appeal in which the Prothonotary failed to order the production of "any screening deficiency notice and/or rejection letter", it is submitted that there is no evidence in the court file regarding the meaning of "rejected for deficiencies noted on screening" and that to provide this document would not prejudice the respondents and could assist the applicants in their submissions that because of screening deficiency the Notice of Allegation is void for not being in compliance with section 5(3)(c)(i) of the Regulations.
[16] Turning to the third Order under appeal wherein a partial amendment to the Notice of Application was allowed and a second paragraph disallowed, counsel submits that the allegations in the proposed amendments by adding paragraphs 26 and 27, are two distinguishable and distinct arguments. Paragraph 26 allows for a challenge that the Notice of Allegation is void for non compliance with section 5(3)(c)(i) of the Regulations due to its being served after the Submission was filed with the Minister; whereas paragraph 27 of the proposed amendment to the application which was denied provides an alternative argument focussing mainly on the fact that due to deficiencies noted on screening the Submission is void.
[17] Counsel concludes by suggesting that, although the Prothonotary has ample discretion, this court is in a position to set aside his determinations since the exercise of his discretion was based on a wrong principle of law or a misapprehension of the facts; that the delay was not excessive, that he did not apply sufficient weight and relevance to the additional evidence and did not balance the potential value of this evidence.
[18] Counsel for the respondents contends that although the Prothonotary's reasons are not exhaustive he undoubtedly was guided by the often expressed view of the Federal Court of Appeal that the patented medicines regulations and applications for notices of compliance must be dealt with expeditiously. Having knowledge of the Minister advising Apotex of screening deficiencies should have triggered an immediate response from the appellants-applicants if they sought to file further and additional evidence, rather than delaying four months.
[19] Ms. Azzarello's affidavit expresses an opinion as to what the Minister's ultimate decision could be in light of the policies with regards to the Management of Drugs Submissions. The fact that the appellants-applicants knew since January, 2002 of the letter of deficiencies, which is not contested in these proceedings, does not prevent the appellants-applicants from arguing that this drug Submission could eventually be rejected and such an application could be brought at any time.
[20] It is the Minister's function to determine whether or not the drug Submission should be pursued and the view of an outside expert bears no weight on the proceedings before this court whose function it is to determine patent infringement or validity.
[21] The Prothonotary refused to order the production of a "Screening Deficiencies Notice and/or Rejection Letters". Counsel refers the court to section 6(7)(a) of the Patent Medicine Regulations:
(7) On the motion of a first person, the court may, at any time during a proceeding,
(a) order a second person to produce any portion of the submission for a notice of compliance filed by the second person relevant to the disposition of the issues in the proceeding and may order that any change made to the portion during the proceeding be produced by the second person as it is made; and
[22] The only obligation imposed on the second person is to produce any portion of the Submission for a notice of compliance filed by the second person. There is no requirement to provide production of documents forwarded by the Minister to the second person (Apotex).
[23] Turning to the issue of delay, counsel correctly points out that in Janssen, supra, though evidence was allowed to be introduced some 16 months after the matter was initiated, additional evidence was allowed because an entirely new issue was raised just prior to the scheduled hearing that was not known and could not have been known by the other party and, it should be noted, it was immediately followed by a motion to file new evidence, not four months after the new issue was disclosed.
[24] Finally, counsel for the respondents submits that the Prothonotary's Orders which are discretionary ought not to be disturbed unless the Prothonotary has made palpable and overriding errors of law or was misdirected in his appreciation of the facts. He advances that the appellants-applicants have not identified any error made by Prothonotary Lafrenière and that all of these appeals should be dismissed.
[25] I am satisfied that a reading of the Patent Medicine Regulations imposes no obligation on the respondents to provide the appellants-applicants with the Letter of Deficiencies. It could well be that these respondents may wish to further pursue their notice of allegation and submit further evidence to overcome the deficiencies and, if such a situation arose, the respondents would still be under the continued obligation of the Order of production to provide the appellants-applicants with any new material that may be submitted and, as a result, Bayer would be permitted to file additional evidence. I am satisfied that Prothonotary Lafrenière properly exercised his discretion and his decision does not give rise to any palpable or reviewable error.
[26] Concerning the affidavit of Dianne Azzarello, it contains no evidence whatsoever that is pertinent to the debate that is to be pursued before this court. She expresses an opinion that due to the existing written policies with respect to the Management of Drugs Submissions the Minister should exercise his discretion to reject the Submission. This in no way would advance the debate as to validity or non-infringement. N.O.C. applications normally call for two complete and distinct procedures. The procedure before the Minister of Health and Welfare to determine whether or not the Drug Submission filed by the respondents meets all safety and health requirements is not and should not be the concern of Bayer in these proceedings. The Court is not a participating party. It is the function of this court to determine validity or non-infringement and I have to conclude that the Prothonotary's Order to refuse the additional evidence was proper not only because of delay but also because the evidence is not pertinent to the ultimate debate that is within the purview of these proceedings.
[27] Turning to the third Order, that of failing to allow a second paragraph to amend the Notice of Application, I am satisfied that proposed paragraph 27(a) should be included in an amended Notice of Application but I am deleting therefrom paragraph 27(b). There is some authority under section 6(5)(b) of the Patent Medicine Regulations that could allow the court to entertain an application that this Submission is "frivolous or vexatious or is otherwise an abuse of the process". I am satisfied that should the appellants-applicants wish to bring such an application in light of the Minister's Letter of Deficiencies, there could be an alternative argument of non compliance with section 5(3)(c)(i) of the Regulations, that is that the Notice of Application was served after the Submission was filed with the Minister. Further, it could be submitted that due to deficiencies noted on screening, the Submission could be determined to be void.
[28] IT IS HEREBY ORDERED THAT the appeal from the decision regarding the relevance or admissibility of the additional evidence (the affidavit of Dianne Azzarello) is hereby dismissed with costs which I fix at $1,500.00
[29] IT IS HEREBY FURTHER ORDERED THAT the appeal from the Prothonotary's Order in which he refused to order the production of "Screening Deficiency Notice and/or Rejection Letters" is hereby dismissed with costs which I fix at $1,500.00
[30] With respect to the third motion under appeal, I hereby allow the appellants-applicants to further amend their Notice of Allegation by adding the following:
"27. Alternatively, the Notice of Allegation is not in compliance with the Regulations as it does not relate to the submission for a Notice of Compliance which is before the Minister, in conformance with s. 5(3)(c)(i) of the Regulations, for the following reasons:
(a) The Submission was rejected by the Minister due to deficiencies noted on screening, and therefore the Submission was never a submission for a Notice of Compliance as defined in s. 5(1) of the Regulations;
Since success on this third appeal is divided, I make no order as to costs.
JUDGE
OTTAWA, Ontario
August 22, 2002
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF SOLICITORS AND SOLICITORS ON THE RECORD
COURT FILE NO.: T-2052-01 and T-2169-01
STYLE OF CAUSE: BAYER AG and BAYER INC.
v.
APOTEX INC. and THE MINISTER OF HEALTH
PLACE OF HEARING: OTTAWA, ONTARIO
DATE OF HEARING: AUGUST 20, 2002
REASONS FOR ORDER AND ORDER OF THE HONOURABLE MR. JUSTICE ROULEAU
DATED: AUGUST 23, 2002
APPEARANCES:
MR. NEIL BELMORE FOR THE APPLICANTS
MR. ANDREW BRODKINFOR THE RESPONDENT,
MS. JULIE PERRIN APOTEX, INC.
SOLICITORS ON THE RECORD:
GOWLING LAFLEUR HENDERSON LLPFOR THE APPLICANTS
TORONTO, ONTARIO
GOODMANS LLPFOR THE RESPONDENT,
TORONTO, ONTARIO APOTEX, INC.
MR. MORRIS ROSENBERG FOR THE RESPONDENT,
DEPUTY ATTORNEY GENERAL OF CANADA THE MINISTER OF HEALTH
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