Hoffmann-La Roche Ltd. v. Canada (Minister of National Health and Welfare), docket T-1898-93

Date: 19990430

Docket: T-1898-93

BETWEEN:

     HOFFMANN-LA ROCHE LIMITED and

     SYNTEX PHARMACEUTICALS INTERNATIONAL LIMITED,

     Applicants,

     - and -

     THE MINISTER OF NATIONAL HEALTH AND WELFARE

     and APOTEX INC.

     Respondents.

     REASONS FOR ORDER

REED J.

[1]      The respondent Apotex brings a motion to have an order that was issued on March 20, 1996, in these proceedings set aside. That order reads:     

The March 1996 order was given in relation to a Notice of Allegation, dated June 15, 1993, that Apotex had filed with the Minister in connection with its new drug submission for a sustained release naproxen tablet. The Notice of Allegation of non-infringement was necessary because Syntex had listed Canadian Letters Patent No. 1,204,671 (3671 Patent) with the Minister pursuant to section 4 of the Patented Medicines (Notice of Compliance) Regulations , SOR/93-133.

[2]      More recently, however, the 3671 patent was declared invalid and the Apotex formulation to which the Notice of Allegation related was declared not to infringe the 3671 patent (proceeding T-2870-96; decision issued April 19, 1999). Apotex, therefore, seeks an order to set aside the March 1996 order either pursuant to Federal Court Rule 399(2), on the ground that there exists "a matter that arose or was discovered subsequent to the making of the order", or pursuant to the Court's inherent jurisdiction to alter an injunction when circumstances change. Apotex also seeks an order dismissing the application for an order of prohibition, filed by the applicants on August 3, 1993, that initiated the proceedings in this file, T-1898-93.

[3]      After the March 20, 1996, order was granted prohibiting the Minister from issuing a Notice of Compliance, Apotex filed a second Notice of Allegation, dated March 22, 1996, with respect to the same controlled release naproxen tablet. This gave rise to a second application by Hoffmann-La Roche and Syntex Pharmaceuticals, for an order of prohibition to prevent the Minister from issuing a Notice of Compliance on the basis of that second Notice of Allegation (proceeding T-998-96). That application was stayed on the ground that it concerned the same matter that had been before the Court in the earlier proceeding. The stay was granted on the understanding that the March 1996 order from the present proceeding would continue to prevent the issuance of a Notice of Compliance to Apotex.

[4]      In November 1998, a Notice of Compliance was mistakenly issued to Apotex by the Minister. When the text of the reasons in T-998-96 was called to the Minister's attention, he agreed that the Notice of Compliance he had issued was void and that he did not have jurisdiction to issue it.

[5]      A few days prior to the Minister's pronouncement in this regard, Hoffmann-La Roche and Syntex had filed an application for an order declaring that the November 1998 Notice of Compliance was void, and for a declaration that the Minister did not have jurisdiction to issue it (proceeding T-2309-98). Such order was granted by Mr. Justice Evans on April 7, 1999, and a subsequent motion to stay that order pending its appeal was refused on April 21, 1999.

[6]      Hoffmann-La Roche and Syntex argue that the Court does not have jurisdiction under Rule 399(2) to set aside the March 1996 order of prohibition in this case because the subsequent order of the Court on April 19, 1999, in T-2870-96 is not a "matter that arose or was discovered subsequent to the making of the March 1996 order", that the Court's jurisdiction under the Regulations is very narrow and does not contemplate the remedy sought, and, in any event, Mr. Justice Evans' order of April 7, 1999, prevents the Minister from issuing a Notice of Compliance. It is argued that the order sought through this motion is a collateral attack on the April 7 and April 21, 1999, decisions of Mr. Justice Evans.

[7]      Counsel for the applicants' argument that this is not a situation to which Rule 399(2) applies may have merit. I do not need to decide that issue, however, since I have been persuaded that the Court has continuing jurisdiction over the prohibition order in question, which allows the Court to alter that order in response to changed circumstances. The inherent jurisdiction of the Court to do so is clear in the case of an injunction. In I.C.F. Spry, The Principles of Equitable Remedies, 5th ed. (Sydney: The Law Book Company, 1997) at 382 the following description of the law is found:

Counsel for Apotex referred to the following jurisprudence as illustrative: Commonwealth Scientific and Industrial Research Organization v. Perry (1988), 92 F.L.R. 182 (S.C. S.Aust.) at pp. 185-188; State of Pennsylvania v. Wheeling and Belmont Bridge Co. (1855), 59 U.S. 421 at pp. 431-432; United States v. Swift & Co. (1932), 286 U.S. 106 at pp. 114-115; System Federation v. Wright (1960), 364 U.S. 642 at pp. 646-650; R.B. Harbottle (Mercantile) Ltd. v. National Westminister Bank Ltd., [1978] 1 Q.B. 146. Many of these cases are from the United States, but I consider the proposition of law that is asserted to be a fairly trite one.

[8]      I recognize that an order of prohibition does not have the same historical roots as an injunction; one is an equitable remedy, the other a remedy at law. The rules relating to each differ, for example, the courts have greater discretion when granting or withholding equitable remedies than when granting or withholding prerogative writs. Nevertheless, the two types of orders are found together in section 18 of the Federal Court Act; and more importantly, the effect of both types of orders is the same. It would be artificial for different consequences to follow depending upon whether the Court "enjoined" a respondent or "prohibited" that person from doing the act to which the order related. In addition, the jurisprudence has held that a proceeding under the Patented Medicine (Notice of Compliance) Regulations is not a final determination of a patentee's rights; it clearly contemplates that a decision in a patent action may lead to a decision that either undercuts or supplants a decision given with respect to the justification, or lack thereof, of a Notice of Allegation (see Eli Lilly & Co. v. Novopham Ltd. [1998] 2 S.C.R. 129 at 184). If the Court is without jurisdiction to grant the order sought, the respondent's success in the patent action is a hollow victory and injustice occurs. I am of the view that the Court has an inherent continuing jurisdiction, in the case of an order of prohibition issued pursuant to the proceedings set out in the Patented Medicine (Notice of Compliance) Regulations, to amend or annul that order in response to changed circumstances in the same manner as the case of an injunction.

[9]      With respect to the inter-relation of this proceeding and those in T-998-96 and T-2309-98, I am not persuaded that granting the order sought constitutes a collateral attack on the decisions given by Mr. Justice Evans. Mr. Justice Evans' order declaring the November 1998 Notice of Compliance to be void and the Minister to be without jurisdiction is based on Mr. Justice MacKay's decision staying the Syntex-Roche application for an order of prohibition in T-998-96. That decision in turn was based on the finding that the Notice of Allegation there in issue was the same as the one considered by the Court in this case. Because of that finding the Court in T-998-96 relied on the order of prohibition in this case to continue to prevent the issuing of a Notice of Compliance to Apotex. In that context, I accept Apotex's position that it is only the March 20, 1996, order that it need concern itself with.

[10]      I turn then to the Minister's position. He initially took the position that the application in T-2309-98 to declare the November 1998 Notice of Compliance void was moot since he had agreed with the applicants that it was void. During the course of that proceeding, however, the Minister's officials became aware that Apotex had been marketing naproxen despite the withdrawal of the Notice of Compliance by the Minister. Thus, when the issue of whether Mr. Justice Evans should stay his decision in T-2309-98 pending its appeal was argued, the Minister took the position that there was a public interest in seeing that the law was obeyed and that the decision should not be stayed.

[11]      After the April 19, 1999, order declaring the 3671 patent invalid and finding that the Apotex formulation was non-infringing, counsel for Apotex attempted to persuade Mr. Justice Evans that this was an additional reason for him to stay his decision in T-2309-98 pending its appeal. Counsel for the Minister took the position that the decision in T-2870-96 was not relevant to the issue before Mr. Justice Evans, stating that the Minister would consent to an order setting aside the March 20, 1996, order if an application for such was made. The Minister's position was set out in a letter dated April 20, 1999, sent to the Court. It reads as follows:

[12]      Mr. Justice Evans refers to this in his reasons (T-2309-98, April 21, 1999) at paragraphs 42-44:

[13]      Counsel for the Minister more recently restated his position in a letter to the Court, dated April 27, 1999:

[14]      I turn then to my analysis. I am not persuaded that the order that is being sought is necessary to allow the Minister to issue a Notice of Compliance. The order that was given in T-2870-96 declared the 3671 patent to be "invalid, void and of no force and effect". In my view, this entitles the Minister to treat the patent as a nullity for section 4 purposes. The Minister is entitled to proceed as though the patent had never been listed. In addition, the March 20, 1996, order of prohibition that issued in this case stated that it would continue "until after the expiration of Canadian Letters Patent 1,204,671". The patent has now been declared invalid, that is for all practical purposes an expiration of the patent. Thus, I think the order by its own terms ceases to have any operative effect with the issuance of the order in

T-2870-96 declaring the patent invalid.

[15]      I can understand, however, why the Minister's legal advisers are being cautious. The spectacle of a Minister being accused of not obeying a Court order is not one they would wish him to encounter. Accordingly, I am prepared, for greater certainty, to grant the order that is requested.

[16]      I have been persuaded that the Court has jurisdiction to set aside the March 20, 1996, order in a situation such as the present, not on the ground that it was void when given, but as a result of changed circumstances. That is, I accept that the Court has a continuing jurisdiction, as exists in the case of injunctions, to modify the order of prohibition. I am not persuaded that the present motion is a collateral attack on Mr. Justice Evans' decisions. The

foundation of the March 20, 1996, order no longer exists, thus, the orders requested must be granted.

                                 Judge

OTTAWA, ONTARIO

April 30, 1999