Date: 19990715
Docket: T-805-99
BETWEEN:
MONSANTO COMPANY and G.D. SEARLE & CO.
Applicants
- and -
THE COMMISSIONER OF PATENTS
Respondent
- and -
MERCK FROSST CANADA INC.
Respondent
REASONS FOR ORDERS
DUBÉ J:
[1] Two separate motions were filed, one by the applicants ("Monsanto/Searle") for an extension of time to serve their Notice of Application for Judicial Review and the other by the respondent ("Merck Frosst") for an order dismissing the Judicial Review in question. Both motions are intertwined, were heard together and will be dealt with in these Reasons for Orders.
1. Facts
[2] Each party filed its own Canadian Patent Application: No. 2,152,792, ("the Searle Patent Application") and No. 2,176,974, ("the Merck Frosst Patent Application"). A Final Action dated March 18, 1999, was issued by the Patent Office Examiner in respect of the Searle Patent Application. The Examiner concluded that certain claims of that patent were allowable but maintained her rejection in respect of other claims directed to furanone compounds. These compounds were disclosed in the Merck Frosst Patent Application before the claim date of the Searle Patent Application. With reference to these specific furanones, the Examiner concluded that the Merck Frosst Patent Application was entitled to the earliest claim dates.
[3] On April 7, 1999, the Commissioner of Patents ("the Commissioner") issued a Notice of Allowance in respect of the Merck Frosst Patent Application. On April 13, 1999, Monsanto/Searle responded to the Final Action on their own Patent Application by asking for a reconsideration or, alternatively, that the matter be referred to the Patent Appeal Board. (A hearing was held by that Board on May 12, 1999, and its decision is pending.)
[4] On May 7, 1999, Monsanto/Searle's Judicial Review Application was issued by the Federal Court seeking to quash the Notice of Allowance in respect of the Merck Frosst Patent Application. Monsanto/Searle intended not to serve their Notice of Application before the decision of the Commissioner with respect to their own Patent Application was rendered. Thus, they filed their application for an extension of time for that purpose.
[5] The deadline for service of Monsanto/Searle's Notice of Application for Judicial Review expired on May 17, 1999, and on June 8, 1999, Mr. Justice Lemieux dismissed (on ground of irregularity) Monsanto/Searle's motion for an indefinite suspension of the deadline to serve it. Lemieux J. granted leave to file a new motion before the end of June 1999.
[6] Merck Frosst's instant application, filed on June 16, 1999, is for an order dismissing Monsanto/Searle's Notice of Application for Judicial Review, mainly on the ground that the Notice of Allowance granted to Merck Frosst by the Commissioner on April 7, 1999, is not a "decision" subject to review under section 18.1 of the Federal Court Act ("the Act")1.
[7] Shortly before the instant hearing, Monsanto/Searle decided to serve their Notice of Application for Judicial Review on Merck Frosst.
2. Issue
[8] The fundamental issue to be resolved is whether or not a Notice of Allowance is a "decision" subject to review under section 18.1 of the Act. If it is not, Monsanto/Searle's Application for Judicial Review is clearly improper and bereft of any possibility of success and, therefore, should be dismissed forthwith.
3. Merck Frosst's submissions
[9] It is trite law that not all administrative acts are "decisions" under the aforementioned section 18.1 of the Act. It must be a "decision" made in the exercise of the powers conferred by an Act of Parliament. It must also be a "decision" which "has the legal effect of settling the matter or purports to have such legal effect. Once the tribunal has exercised its jurisdiction or powers in a particular case by a 3decision3 the matter is decided even against the tribunal itself"2.
[10] The purpose of a Notice of Allowance is defined under subsection 30(1) of the Patent Rules3 as follows:
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30. (1) Where an examiner, after examining an application, has reasonable grounds to believe that the application complies with the Act and these Rules, the Commissioner shall notify the applicant that the application has been found allowable and shall requisition the payment of the applicable final fee set out in paragraph 6(a) or (b) of Schedule II within the six-month period after the date of the notice. |
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[11] A Notice of Allowance is issued by the Commissioner to inform an applicant that its patent application meets the criteria of the Patent Act4 and to request payment of the final fee for issuance of a patent. An applicant cannot have any proprietary right, or even a vested right, until a patent has issued. After the issuance of a Notice of Allowance, the application has not been finally settled: an amendment to the application may still be permitted before payment of the final fee. In fact, subsection 30(7) of the Patent Rules provides that the Commissioner is free to revoke a Notice of Allowance, even after payment of the final fee, before the issuance of a patent:
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30. (7) Where, after a notice is sent in accordance with subsection (1) or (5) but before a patent is issued, the Commissioner has reasonable grounds to believe that the application does not comply with the Act or these Rules, the Commissioner shall notify the applicant, shall return the application to the examiner for further examination, and if the final fee has been paid shall refund it. |
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[12] Thus, a Notice of Allowance does not constitute a final disposition of the application. It is merely one of the administrative steps leading to the issue of a patent. It is not a "decision" contemplated under section 18.1 of the Act. The final "decision" is the issuance of the patent.
[13] As to their own Patent Application, Monsanto/Searle have not yet exhausted all of the remedies, recourses and appeals available, including an appeal to this Court pursuant to section 41 of the Patent Act:
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41. Every person who has failed to obtain a patent by reason of a refusal of the Commissioner to grant it may, at any time within six months after notice as provided for in section 40 has been mailed, appeal from the decision of the Commissioner to the Federal Court and that Court has exclusive jurisdiction to hear and determine the appeal. |
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[14] Monsanto/Searle cannot seek a Judicial Review of a Notice of Allowance to Merck Frosst's Patent Application so as to indirectly review the Final Action rejecting their own application. It is precluded by section 18.5 of the Act in view of the appeal procedure under section 41 of the Patent Act5.
[15] The Court of Appeal in Apotex Inc. v. Canada (A.G.)6 has indicated that, as a general proposition, premature judicial review applications should be avoided and may, in compelling cases, be dismissed. It is a well accepted principle of administrative law that the extraordinary remedies provided for under section 18.1 of the Act shall not be entertained where more appropriate legal recourses are available, or statutory remedies have not been exhausted7. Where other adequate alternative remedies are available, the Court may strike out a judicial review application as it is without any possibility of success8.
[16] In the instant case, should a patent issue to Merck Frosst, a legal remedy is available to Monsanto/Searle in the form of an action in this Court pursuant to section 60 of the Patent Act where Monsanto/Searle may assert any and all grounds of invalidity including priority:
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60(1) A patent or any claim in a patent may be declared invalid or void by the Federal Court at the instance of the Attorney General of Canada or at the instance of any interested person. |
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[17] Moreover, Monsanto/Searle's Judicial Review Application depends on facts subsequent to the impugned "decision". In order to succeed, Monsanto/Searle must allege that on April 7, 1999, it was unreasonable for the Commissioner to determine that Merck Frosst's Patent Application was entitled to the earlier claim date in respect of the furanone compounds9. Facts arising subsequent to the impugned administrative action cannot be invoked in a judicial review application10.
[18] Finally, Monsanto/Searle have no locus standi. They are not "directly affected by the matter" as stipulated under section 18.1 of the Act. Their interest is merely a competitive commercial interest. A consistent body of jurisprudence stands for the principle that such an interest cannot amount to a standing to challenge administrative decisions affecting a rival11. Subsection 18.1(1) provides as follows:
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18.1(1) An application for judicial review may be made by the Attorney General of Canada or by anyone directly affected by the matter in respect of which relief is sought. |
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4. Monsanto/Searle's submissions
[19] Monsanto/Searle claim that their legal right to have their pending Canadian Patent Application issued to patent is compromised due to the premature and improper issuance of a Notice of Allowance to Merck Frosst before the Commissioner has determined whether such application complies with the requirements of the Patent Act.
[20] Under the former Patent Act, applications were dealt with on the basis of "first to invent" rather than "first to file". Where there were overlapping claims in separate applications, the former Patent Act included procedural provisions in then section 43 for staying the issuance of a patent for either application until the conflict was resolved by the Commissioner or by the Federal Court.
[21] Now that the "first to file" system has been adopted, there is no conflict resolution mechanism for staying the issuance of either application pending a final determination. Thus, Merck Frosst stands in a position to be granted a patent monopoly upon payment of a fee notwithstanding that the Examiner has now taken the position that Monsanto/Searle's claims could include the overlapping subject-matter.
[22] The Notice of Allowance is a final decision: it affects the legal rights to the patentable material immediately under subsection 30(1) of the Patent Rules. The mere fact that the decision can be changed, based on circumstances unknown at the present time, does not alter the fact that there has been a decision to issue a patent. There is a "decision" where the action is substantive and binding. The fact that it can be pursued at another level does not render the decision any less final or binding simply because it might conceivably be overturned at the next stage12. It is a final "decision" in the sense that it is "a step in a statutory process which leads to a decision affecting rights"13.
[23] Moreover, Monsanto/Searle do have a locus standi in the sense that they are directly affected by the impugned "decision", as stipulated under section 18.1 of the Act. Monsanto/Searle are interested in protecting their commercial interests which are "directly affected" by the Commissioner's issuance of a Notice of Allowance to Merck Frosst. Two patents cannot be allowed to issue with respect to the same subject-matter. Consequently, Monsanto/Searle cannot obtain a Notice of Allowance for their own patentable material which has been acknowledged by the Examiner to overlap with the material in the Merck Frosst Patent Application14.
[24] There is no alternative legal remedy under the Patent Act for Monsanto/Searle to challenge the issuance of a Notice of Allowance to Merck Frosst. A remedy pursuant to section 60 of the Patent Act is unavailable until such time as a patent issues to Merck Frosst. In order to preserve their rights, Monsanto/Searle require a remedy prior to the issuance of a patent. Furthermore, once a patent issues to Merck Frosst, the onus under section 60 of the Patent Act is more burdensome as it provides for a presumption of validity of the patent.
[25] There is no appeal available under the Patent Act to Monsanto/Searle with respect to the "decision" to issue a Notice of Allowance. They would find themselves without redress if judicial review was foreclosed15. It is only in exceptional circumstances that an application for judicial review is struck out. It has to be "so clearly improper as to be bereft of any possibility of success...cannot include cases such as the present where there is simply a debatable issue"16.
[26] Generally, Notices of Application for Judicial Review should be contested at the hearing itself and not beforehand17. Monsanto/Searle's Judicial Review Application is based upon the fact that the "decision" to issue a Notice of Allowance on April 7, 1999, was unfair. It was unreasonable for the Commissioner to determine that Monsanto/Searle had no entitlement to an earlier claim date than the Merck Frosst Patent Application.
5. Analysis
[27] In my view, a Notice of Allowance is not a "decision" contemplated by section 18.1 of the Act. It is merely an administrative step taken by the Commissioner leading to the possible issuance of a patent under subsection 30(1) of the Patent Rules. Under subsection 30(7) of the Patent Rules, the Commissioner may after he has sent the notice in accordance with subsection (1), but before a patent is issued, decide that the application does not comply with the Act or the Rules and return the application to the Examiner for further examination. Thus, the decision of the Commissioner under attack in the proposed judicial review is not the final step. The final step is the issuance by the Commissioner of the Letters Patent.
[28] A person who has failed to obtain a patent from the Commissioner may appeal from the Commissioner's decision to the Federal Court under section 41 of the Patent Act. Should a patent be issued by the Commissioner, a third party who wishes to attack it may do so by launching an action in this Court under section 60 of the Patent Act. That is the scheme of the Patent Act and the Patent Rules. There is no jurisprudence to the effect that a Notice of Allowance has ever been challenged by way of judicial review.
[29] In the instant case, Monsanto/Searle are not seeking a judicial review of the Examiner's decision regarding their own Patent Application. They are attacking the Notice of Allowance with respect to Merck Frosst's Patent Application. As mentioned earlier, Monsanto/Searle responded to the Final Action rejecting their own Patent Application by proceeding before the Patent Appeal Board in accordance with the Patent Act and the Patent Rules. If they are not successful, they may appeal to the Federal Court. That is the proper route to follow by an applicant in reference to its own application.
[30] What can a person do within the scheme of the Patent Act and the Patent Rules with reference to another party's patent application? That person may file a protest under section 10 of the Patent Rules, or make a filing of prior art under section 34.1 of the Patent Act, or, after the patent has issued, launch an action before the Federal Court under section 60 of the Patent Act to have the patent declared invalid or void. At the trial stage, all the grounds of invalidity can be brought before the Court including anticipation, prior art, obviousness and ambiguity. The scheme of the Patent Act and the Patent Rules constitutes a complete code in the sense that a party may not launch a Judicial Review Application against an intermediate administrative act as it would create a judicially sanctioned parallel procedure to the scheme set out by Parliament.
[31] One obvious confusion resulting from the instant attempt at judicial review is that it is not clear whether the decision under attack is the decision of the Examiner or the decision of the Commissioner. If it be the decision of the former, he is neither a federal board, a commission or a tribunal under section 18.1 of the Act. If it is the decision of the Commissioner, he has not yet completed his task until the patent is, or is not, issued.
[32] The transparent and admitted purpose of this judicial review is to estop the Commissioner from making a decision favouring Merck Frosst until Monsanto/Searle have obtained a decision on their own Patent Application from the Patent Appeal Board. That would be tantamount to an injunction against the Commissioner which may, or may not, simplify matters depending on the decision of the Patent Appeal Board. Expediency alone is not a ground for launching a judicial review in the face of statutory and regulatory procedures already in place.
[33] Similarly, if the Merck Frosst Patent Application had been rejected, Merck Frosst would have had to follow the route to the Patent Appeal Board and then, if necessary, to the Federal Court. The Court would not have allowed Merck Frosst to attack a Notice of Allowance favourable to Monsanto/Searle by way of judicial review.
[34] In Cangene Corp. v. Eli Lillly and Co.18, Jerome, A.C.J., (as he then was) was dealing with an application for an order extending the time to commence an application for judicial review of a decision of the Commissioner of Patents. Although the situation is different from the instant application, his words are timely (at 379):
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I am not prepared to grant the application. The provisions of the Patent Act clearly demonstrate that Parliament has provided a comprehensive scheme for challenging the decisions of the Commissioner of Patents. The procedure set out in the Act and the Rules does not contemplate the type of judicial review proceedings which the applicant in the present case seeks to commence. |
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[35] Further on, Jerome, A.C.J. refers to section 42 which is now section 41 and goes on to say:
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The right of appeal is given only to those persons who have failed to obtain a patent by reason of a refusal or a rejection from the Commissioner, in the present case, the respondent Eli Lilly. A third party such as Cangene does not have any such right. |
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[36] In Pharmascience Inc. v.Canada (Commissioner of Patents)19, Pinard J. of this Court was dealing with an application by Pharmascience for judicial review of the decision of the Commissioner of Patents who had granted the respondent G.D. Searle & Co. a late entry allowance. He dismissed the application on the ground that Pharmascience had not satisfactorily explained its one year delay in seeking judicial review and further that Pharmascience lacked standing as it was not a party directly affected by the decision. He said as follows at 5, 6 and 7:
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Pharmascience lacks standing. Subsection 18.1(1) of the Federal Court Act limits judicial review to "anyone directly affected by the matter in respect of which relief is sought". In my view, the only person "directly affected" by decisions taken during the prosecution of a patent application before the Canadian Patent Office is, generally, the patent "applicant" as defined in section 2 of the Patent Act. |
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Rule 10 of the Patent Rules allows someone to file a protest against the grant of a patent, on the basis that the patent application contravened subsection 38.2(1) of the Patent Act in that the application included the addition of new subject matter or that an amendment went beyond what could reasonably be inferred to have been included in the original application. In my opinion, Rule 10 provides an adequate alternative remedy that should have been exhausted by Pharmascience before seeking judicial review, at least with respect to the voluntary amendment decision. As for subsection 60(1) of the Patent Act, I am of the view that the |
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provision allows a third party, after the grant of a patent, to challenge the entitlement of any subject matter to a claim to priority by way of proceedings for invalidity (see, for example, Richter Gedeon Vegyészeti Gyar RT v. Merck & Co. (1996), 68 C.P.R. (3d) 8). As noted by Searle, judicial review could become an effective tool to delay the grant of a patent while the third party's application for regulatory approval is processed and granted. In Novopharm Ltd. v. Aktiebolaget Astra (1996), 68 C.P.R. (3d) 117 at 122, this Court held that discretion to entertain judicial review will be refused where the tribunal proceeds by stages in reaching a conclusion on the ultimate matter and judicial review of each and every preliminary or interlocutory decision could bring proceedings to a halt. |
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[37] Consequently, the Notice of Allowance is not a decision subject to judicial review either by the applicant or a third party. A Notice of Allowance merely informs an applicant that its patent application meets the criteria of the Patent Act but does not ipso facto entitle the applicant to the right of a patent. Monsanto/Searle, as to their own application, must proceed under the scheme of the Patent Act and the Patent Rules. They cannot interfere with the role of the Commissioner with reference to the Merck Frosst Patent Application so as to protect their own Patent Application. At this stage of the proceedings, they have no locus standi to launch a judicial review attacking an administrative step leading to the issue or non-issue of a patent in another party's patent application. They are not yet "directly affected by the matter", apart from their own obvious competitive commercial interest as a rival in the same field.
6. Disposition
[38] It follows that Monsanto/Searle's application for an extension of time is dismissed with costs under rule 410(2) of the Federal Court Rules and Monsanto/Searle's Judicial Review Application is dismissed with costs.
OTTAWA, ONTARIO
July 15, 1999
Judge
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1 R.S.C. 1985, c. F-7.
2 Canada (A.G.) v. Cylien, [1973] F.C. 1166 (C.A.), per Jackett, C.J.; Singh v. Canada (Secrétaire d'Etat) (1994), 82 F.T.R. 68, per Tremblay-Lamer, J. and Cyanamid Agricultural de Puerto Rico, Inc. v. Commissioner of Patents (1983), 74 C.P.R. (2d) 133 (F.C.T.D.).
3 (1996) SOR/96-423.
4 R.S.C. 1985, c. P-4.
5 Cangene Corp. v. Eli Lily and Ca. (1995), 63 C.P.R. (3d) 377 (F.C.T.D.).
6 Apotex Inc. v. Canada (A.G.), [1994] 1 F.C. 742 at 771 (C.A.), aff's [1994] 3 S.C.R. 1100.
7 Anderson v. Canada (Armed Forces), [1997] 1 F.C. 273 (C.A.); Pharmascience Inc. v. Commissioner of Patents, [1998] F.C.J. No. 1735 (QL)(T.D.) and Cangene, supra, no. 4.
8 Bast v. Canada (A.G.), [1998] F.C.J. No. 1250, at para. 23 (QL).
9 Arduengo v. Canada (Minister of Citizenship and Immigration), [1997] 3 F.C. 468 at 480, 482 (T.D.).
10 Arduengo v. Canada, supra, no. 9, at 480.
11 Glaxo Canada Inc. v. Canada (1990), 31 C.P.R. (3d) 29 (F.C.A.), affirming (1987), 18 C.P.R. (3d) 206; Pfizer Canada Inc. v. Canada (Minister of National Health and Welfare) (1986), 12 C.P.R. (3d) 438 (F.C.A.); Apotex Inc. v. Canada (A.G.) (1986), 9 C.P.R. (3d) 193 (F.C.T.D.) and Apotex Inc. v. Canada (A.G.) (1993), 48 C.P.R. (3d) 296 (F.C.T.D.).
12 Anderson v. Canada (Armed Forces), supra, at 286 (C.A.); Mahabir v. Canada (Minister of Employment and Immigration), [1992] 1 F.C. 133 at 140 (C.A.) and Pfeiffer v. Canada (Superintendant of Bankruptcy), [1996] F.C.J. No. 585 at para. 17 (T.D.).
13 Tomlinson v. Canada (Attorney General), [1996] F.C.J. No. 70 at para. 4 (T.D.).
14 Consolboard Inc. v. Macmillan Bloedel (Saskatchewan) Ltd. (1981), 56 C.P.R. (2d) 145 (S.C.C.) and Whirlpool Corporation et al. v. Camco Inc. et al. (1997), 76 C.P.R. (3d) 150 (F.C.T.D.).
15 Telecommunications Workers Union v. Canada (Canadian Radio-television and Communications Commission - CRTC), [1992] F.C.J. No. 926 at 3 (C.A.).
16 David Bull Laboratories (Canada) Inc. v. Pharmacia Inc. et al., [1995]1 F.C. 588 at 600 (C.A.).
17 Bast v. Canada (Attorney General), [1988] F.C.J. No. 1250 at para. 13 (F.C.T.D.); David Bull, supra, no. 16 at 596-97 and Lazar v. Canada (A.G.), T-459-98, June 16, 1998 (F.C.T.D.).
18 (1995), 63 C.P.R. (3d) 377.
19 [1988] F.C.J. No. 1735 (QL) (TD).
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