Docket: T-1252-09
Citation: 2012 FC 202
Ottawa, Ontario, February 10, 2012
PRESENT: The Honourable Mr. Justice Lemieux
BETWEEN:
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APOTEX INC.
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Plaintiff
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and
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WARNER-LAMBERT COMPANY LLC
AND PARKE, DAVIS & COMPANY LLC
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Defendants
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REASONS FOR JUDGMENT AND
JUDGMENT
I. Introduction
[1]
By
notice of motion dated November 9, 2011, the Defendants seek the dismissal, on
grounds of mootness and lack of standing, part of an impeachment action
launched by the Plaintiff (Apotex) on August 4, 2009 in which the relief
sought by Apotex is a declaration that the ‘330 and the ‘615 patents are
invalid and that Apotex’s Apo-quinapril tablets will not infringe any valid
claim in either of these patents which are owned by the Defendant, Parke, Davis
& Company LLC (Parke Davis). Mootness and lack of standing are triggered
say the Defendants because the ‘615 patent expired in August 2011.
The ‘330 patent does not expire until January 1, 2019.
[2]
Apotex
responds arguing its impeachment action is not moot because it concerns whether
the '615 patent was ever a valid patent. If the '615 patent is found
to have never been valid, Apotex submits it will seek to avail itself; (1) of a
remedy under an Ontario statute enacted in 1897 known as An Act concerning
Monopolies and Dispensation with penal laws, etc., RSO 1897, c 323 (Ontario
Monopolies Act); and (2) a remedy under section 8 of the Patented
Medicines (Notice of Compliance) Regulations, SOR/93-133, as amended (the
NOC Regulations) for having been kept off the market as a result of having
been subjected to prohibitions proceedings under those Regulations. The NOC
Regulations were substantively amended by SOR/98-166.
[3]
Should
the Court find that part of its action based on the '615 patent to be moot,
Apotex argues the circumstances of this case warrant the exercise of this
Court's discretion to nonetheless hear the entire action because the action
will continue with the ‘330 patent regardless whether the ‘615 patent is struck
or not. Apotex adds the ‘330 and ‘615 patents each have a common originating patent
application.
II. Background
Facts
[4]
The
NOC Regulations were triggered when Apotex sought from the Minister of Health
(the Minister) a Notice of Compliance (NOC) in order to be authorized to market
its Apo-quinapril in Canada. The ‘330 and ‘615 patents were both on
the Patent List such that on July 18, 2003, Apotex served Pfizer Canada
Inc., as a licensee, two notices of allegations: one which alleged
non-infringement of the ‘615 patent and the other the invalidity of the ‘330 patent.
Pfizer Canada Inc., Warner-Lambert and Parke Davis commenced in this Court a
proceeding seeking to prohibit the Minister from issuing a NOC to Apotex until
after the expiry of the ‘330 and ‘615 patents (the prohibition proceedings).
[5]
The
prohibition proceedings launched by the Defendants were dismissed at trial, in
September 2005, but that decision was reversed by the Federal Court of
Appeal (FCA) in May 2007 (see Pfizer Canada Inc. v Canada (Health), 2007
FCA 209); the result was the issuance by that Court of a prohibition order
prohibiting the Minister from issuing a NOC to Apotex in respect of its Apo-quinapril
tablets. Apotex sought from the Supreme Court of Canada leave to appeal the
FCA’s decision which was refused in November 2007. After this decision,
Apotex, two years later, commenced in August 2009 the impeachment
action. The Defendants seek partial dismissal in respect of the now expired ‘615
patent. The action is scheduled to be heard in August 2013 at a 15 day trial.
III. Principles
[6]
Based
on the Supreme Court of Canada’s lead decision in Borowski v Canada (Attorney
General),
[1989] 1 S.C.R. 342 (Borowski), there is no dispute between the parties on
the following points:
a.
This
Court has jurisdiction to dismiss a claim for mootness based on the Court’s
exercise of its inherent power to control its own process.
b.
Where
mootness is the ground asserted to dispose of an action, a motion to strike
under section 221(1) of the Federal Courts Rules, SOR/98-106 (the Rules)
is not the appropriate vehicle; the plain obvious test does not apply to
a motion to dismiss for mootness.
c.
In
deciding whether to dismiss for mootness a two stage analysis is required: (1)
the first question is whether the action is moot; and (2) the second question
is whether there are factors present which compel the exercise of this Court’s
discretion to hear a case on the merits even if moot.
d.
Whether
an action or other proceeding before the Court is moot turns on an assessment
by the Court whether the changed circumstances, here the expiry of the '615 patent,
results in there being no live controversy between the parties that can
be resolved by a decision in that proceeding, here Apotex’s impeachment action.
e.
The
second stage of the mootness analysis is whether the Court should hear a moot
case. The Supreme Court of Canada has identified two main factors which, if
met, favour the exercise of discretion. The first factor is if the continued
presence of an adversarial context remains between the parties. The main gauge
of that factor is whether a dismissal for mootness will have nonetheless
practical effect on a party’s rights, in other words, collateral consequences,
in this case to Apotex.
[7]
It
is Apotex's burden to show the Court, on a balance of probabilities, a
dismissal of its impeachment action against the Defendants as it relates to the
‘615 patent will have such an effect on its rights (see Sanofi-Aventis
Canada Inc. v Apotex Inc., 2006 FCA 328 at para 21). Apotex argues this
will be the case because any remedy which it has in terms of its future Ontario
monopolies’ action or a future action pursuant to section 8 of the NOC Regulations
depend upon a finding the ‘615 and the ‘330 patents are invalid.
[8]
The
second main factor identified to persuade a Court to hear a moot proceeding is
the concern for judicial economy and the scarcity of judicial resources. This
factor was recently relied on by Justice Barnes in Apotex Inc. v Canada (Health), 2011 FC
1308. A third factor identified by the Supreme Court of Canada concerning the
role of the Court in the adjudicative process does not arise here.
IV. The
Arguments
1. By
Parke Davis et al
[9]
First,
the moving parties say it is settled law the fact the ‘615 patent has expired
triggers a finding Apotex’ impeachment action, on which the expired patent is
partly based, is moot and for that part of the action, there is no live
controversy between the parties in respect of that patent. They submit there
is jurisprudence directly on point citing the FCA’s decision in Hässle v
Apotex Inc., 2008 FCA 88 (Hässle) where Justice Sexton stated: “There
is no question that the invalidity action involving an expired patent is moot:
the thing that [Apotex] seeks to be declared invalid no longer exists...” [Emphasis
added]. They cite other FCA jurisprudence, namely:
·
Apotex
Inc. v Bayer AG, 2004 FCA 242 (Bayer)
·
Sanofi-Aventis
Canada Inc. v Apotex Inc., supra (Aventis) at para 14
·
Pfizer
Canada Inc. v Canada (Health) and Ratiopharm
Inc., 2011
FCA 215, (Ratiopharm) at paras 10, 11 and 13.
[10]
Moving
to the second stage of the Borowski test, they say, for
several reasons, Apotex will not experience any collateral consequence (and
therefore no presence of a continued adversarial context) if its impeachment
action is partly dismissed on account of the expired ‘615 patent since; (1)
there is presently no live proceeding which is impacted by a decision on that
patent and; (2) more important, a finding that the ‘615 patent is invalid will
not have any effect on its rights under section 8 of the NOC Regulations
(an action for damages) because a declaration of invalidity in an impeachment
action is not one of the specified events triggering the application of that
section. On possibility of a successful action under the Ontario Monopolies
Act, they submit is speculative and remote, there having been no reported
cases under that Act.
[11]
Not
having shown the maintenance of its impeachment action is necessary to preserve
past or future rights, the hearing of evidence on the validity or non-infringement
of the ‘615 patent, they urge on the Court, is clearly a waste of scarce
judicial resources.
2. By Apotex
[12]
Counsel
for Apotex makes these points.
[13]
First,
the perspective of Apotex’ impeachment action is important. That action is the
necessary tool, if successful, in obtaining a declaration of invalidity of the
‘615 and ‘330 patents which will open the door to two action for damages on
account of Apotex being unlawfully barred from entering the market for its Apo-quinapril
tablets. A declaration of invalidity means the ‘615 patent was never valid
i.e. void ab initio. As such, there remains a live controversy between
the parties; Apotex’ rights - to be compensated for past damages are affected.
The expiry of the ‘615 patent does not render reliance on it in its impeachment
action moot.
[14]
Second,
the burden is on the moving parties to establish, on a balance of
probabilities, Apotex’ impeachment action it moot and should not continue.
[15]
Third,
the Ratiopharm case relied upon by the moving parties is obiter
as it was only offered as guidance and did not deal with an impeachment action
brought by Ratiopharm but was a motion under Rule 399 of the Federal
Courts Rules (SOR/98-106) (the Rules).
[16]
Fourth,
the fact there has been no decided case under the Ontario Monopolies Act is
irrelevant citing the Ontario Court of Appeal’s judgment in Gilbert Surgical Supply Co. v Frank W.
Horner Ltd., [1960] 34 CPR 17 where that court reversed a decision of a motions’ judge
who had struck out on the grounds of no reasonable cause of action an action
for triple damages commenced under the Ontario Monopolies Act arising
out of the defendant’s enforcement activities under a patent it had received
under the Patent Act (R.S.C., 1985, c. P-4) (Patent Act) for
the manufacture of a pharmaceutical product. The Ontario Court of Appeal was
of the view that, at this early stage of the litigation, it could not be
concluded the action “…cannot possibly succeed or that clearly and beyond all
doubt, no reasonable cause of action has been shown.” with Aylesworth J.A.
expressing the view “Not only is there in issue the question of the
interpretation and application of a difficult statute, but there is substantial
indication in the statement of claim as delivered, that there may be important
questions of fact to be decided concerning the extent of the respondent's
patent…”. [Emphasis added] Apotex mentions it has
recently commenced two other actions in the Ontario Superior Court of Justice
under the Ontario Monopolies Act.
[17]
Fifth,
Apotex says the scope of section 8 of the NOC Regulations is not settled law to
the point where it can be asserted there can be no success under section 8 of
the NOC Regulations. He says there are conflicting decisions in the FCA.
[18]
Counsel
argues in Ratiopharm the FCA did not examine the 2006 decision in
AB Hassle v Apotex Inc., 2006 FCA 51, at paragraph 29 where Justice
Sharlow found, in the event of a declaration of invalidity under section 60 of
the Patent Act, either the prohibition order would cease to have any
effect or that order could be set aside under Rule 397 of the Rules.
[19]
Sixth,
the fact its impeachment action will continue with the ‘330 patent militates in favour of this Court
permitting its action to proceed in respect of the ‘615 patent. Scarce Court
resources will not be substantially saved because both the ‘615 and ‘330
patents have a common originating patent application. The pleadings are
closed, affidavits of documents have been exchanged and discoveries have been
completed. The action with both the ‘615 and ‘330 patents in play has been set
down for trial.
V. Analysis
1. Is
Apotex’ impeachment action moot as it relates to the Defendants’ ‘615 patent?
[20]
Apotex,
in its impeachment action, seeks a declaration of invalidity of the ‘615 patent,
now expired. In my view, it is too late for Apotex to argue that its
impeachment action is not moot in so far as the '615 patent is concerned. This
issue has been decided recently against Apotex by the Federal Court of Appeal
in Hassle, supra. That case is, for the most part, identical to the
case before me:
·
An
NOC proceeding following an allegation by Apotex that the ‘751 patent was
invalid. (As noted in the case before the Court Apotex did not urge that the
‘615 patent was invalid.)
·
The
issuance of a prohibition order barring, until the expiry of the ‘751 patent, the
Minister from issuing an NOC to Apotex to market its generic product after
finding that Apotex’ allegation of invalidity was not justified.
·
The
commencement by Apotex of an impeachment action in which Apotex sought a
declaration of the ‘751 patent was invalid which action had been set down for a
10 day trial.
·
The
expiry of the '751 patent in January 2007.
·
A
motion by Hassle to dismiss the impeachment action in its entirety on the grounds
of mootness and lack of standing i.e. lack of being an interested party.
·
A
decision by a Prothonotary of this Court, sustained on appeal by a Motions
Judge, that “it was not plain and obvious that a determination of the
impeachment action could have no legal effect or consequences on the parties or
that Apotex had no longer any standing to pursue its action.”
[21]
The
FCA allowed the appeal from the decision of the Motions Judge. First, it
found the lower court had applied the wrong test, the plain and obvious test,
which is not the correct one to assess whether a proceeding is moot. As noted,
Justice Sexton, writing for the FCA, also found: “There is no question that the
invalidity action involving an expired patent is moot: the thing that [Apotex]
seeks to be declared invalid no longer exists.” He stated the real question at
bar was whether the Court should exercise its discretion to decide a moot
dispute (i.e. the impeachment action). He refused to hear the matter on
grounds of judicial economy.
[22]
The
FCA, in Bayer had dealt with the issue of whether an expired patent
rendered moot an appeal to it. Justice Rothstein, as he then was, had
no trouble finding the appeal was moot because the ‘067 patent had
expired and an NOC had issued to Apotex. He was of the view “the live
controversy between the parties has ceased to exist.” See also Aventis
at para 14 and Ratiopharm at paras 10, 11 and 13.
2. Should the Court
Applying the Relevant Factors Exercise its Discretion to Allow Apotex’s Impeachment
Action to Proceed to Trial?
[23]
As
previously mentioned, the two factors which are relevant for the determination
in this case are the collateral consequences factor in not letting continue
Apotex’s impeachment action in respect to the '615 patent and the factor of judicial
economy.
(a)
The practical effect test
[24]
There
has been recent jurisprudence by the FCA on this point, namely, its 2010
decision in Apotex Inc. v Syntex Pharmaceuticals International Inc.,
2010 FCA 155 (Syntex) and the Ratiopharm case. The previously
mentioned Bayer and Aventis cases serve as background.
(i) The Bayer
case
[25]
In
the Bayer case the FCA, as noted, decided the appeal was moot because
the underlying patent had expired. The Court then considered the issue of
whether it should hear the case, notwithstanding. Justice Rothstein, writing
on behalf of his colleagues, deciding to hear the appeal being of the view, at paragraphs
8 and 9:
First, this is a case in which there may be
"collateral consequences" from the outcome of the appeal that provide
the necessary adversarial context referred to in Borowski. Section 8
of the Regulations provides that a patentee may be liable to a generic
manufacturer for loss suffered by the generic if an order prohibiting the
Minister from issuing a Notice of Compliance to the generic is reversed on
appeal.
[…]
Second, a decision on the appeal will have a practical
effect on the rights of the parties. If Apotex is successful, its access to
the remedy under section 8 will be preserved. If the appeal is dismissed for
mootness, Apotex will be denied access to that remedy with no other remedy
being available to it.
[Emphasis added]
[26]
Justice
Rothstein referred to the NOC Regulations as amended by SOR/98-166
which imported changes to the first enacted NOC Regulations in 1993. He
referred to the Regulatory Impact Analysis which stated the 1998 version of the
NOC Regulations indicated more clearly to the Court on the circumstances
where damages could be awarded to a generic manufacturer to compensate for loss
suffered by reason of delayed market entry of its drug under the NOC
Regulations and the factors that may be taken into account in calculating
damages. Unlike the former section 8, the current section 8 expressly
refers to the reversal on appeal of a prohibition order giving rise to
liability by a patentee to a generic manufacturer.
[27]
Justice
Rothstein then wrote:
There is no indication
in section 8 that the reversal on appeal must occur prior to expiry of the
patent at issue or the issuance of a Notice of Compliance to the generic.
Nor is there any rationale for such a requirement. If a generic manufacturer has
been wrongly excluded from the market during the lifetime of a patent, the
fact that an appeal is decided after the patent expires should have no
bearing on the generic's entitlement to damages. In my respectful opinion,
it would be inconsistent with the object of the current Regulations to deprive
a generic manufacturer of the opportunity to avail itself of section 8 of the
Regulations merely because a patent has expired or a Notice of Compliance has
issued. The liability referred to in section 8 arises from the period prior to
the expiry of the patent or issuance of the Notice of Compliance to the generic
and the mere fact that the appeal is decided after that date has no bearing on
the application of section 8.
[Emphasis added]
(ii) The Aventis
case
[28]
As
noted, this case was decided by the FCA on October 11, 2006. Aventis, the patentee,
had appealed to the FCA an order from Justice Tremblay-Lamer dismissing an
application by Aventis for a prohibition order under the NOC
Regulations. Its ‘457 patent expired December 13, 2005. Apotex moved to
dismiss the appeal on grounds of mootness. Having failed to persuade the
FCA that its appeal was not moot, Aventis had argued on the second branch of
the test that it should hear the appeal nevertheless because, absent a favourable
decision on appeal, it will be exposed to damages pursuant to section 8 of the
NOC Regulations and that, as a result, it finds itself in the same
position as Apotex did in the Bayer case and, as such, the Court should exercise
its discretion the same way. The FCA did not accept the argument for the
following reasons:
We first note that unlike
Apotex in the Bayer case, Aventis has, as a patentee the right to
undertake a patent infringement action (circumstances permitting) and, if
successful, obtain compensation either in the form of damages or loss of
profits.
[29]
Second,
it was of the view Aventis’ potential exposure to damages under section 8 was too
remote and speculative to justify it hearing the appeal. The reason it came to
this conclusion was because in the specific circumstances Apotex had proceeded
with two different Notices of Allegations decided by two different Judges of
this Court, i.e. failure in the first Notice to plead invalidity of the ‘457 patent
but being successful on that plea in the second Notice (Aventis, paras
19, 20 and 21).
[30]
In
sum, the FCA was not satisfied, on the balance of probabilities, a decision on
the appeal would have a practical effect on Aventis’ rights.
(iii) The Syntex
case
[31]
This
case, as noted, was decided by the FCA in June 2010. It was on appeal
from my colleague Justice Hughes’ decision reported at 2009 FC 494. He had
dismissed Apotex’s action for damages under section 8 of the NOC Regulations
against Syntex and Hoffman La Roche finding the 1993 version of the NOC
Regulations applied to the action and section 8, as then in force,
was not triggered by the events in the action.
[32]
Given
the unique facts of this case and the fact that it turned on the 1993 version
of the NOC Regulations, many of the questions of law decided in that case are
not relevant to the case to be decided here. However, one finding is of
interest, Justice Hughes held, in construing the 1993 version of the NOC
Regulations and that based on the facts at hand, those Regulations
prevented Apotex from recovering damages.
[33]
Dawson
J.A. wrote the reasons of the FCA. She recited the unique facts of the case
and noted Justice Hughes’ had found no undue delay on the Minister’s part to
issue an NOC to Apotex.
[34]
She
wrote at paras 36 and 37:
Under the 1993 version of the Regulations, when an innovator commenced a
proceeding seeking a prohibition order it obtained the equivalent of an
interlocutory injunction prohibiting the issuance of a notice of compliance for
up to 30 months. The innovator need not have satisfied the criteria for
obtaining injunctive relief and no undertaking for damages was required. In
that circumstance, section 8 of the Regulations was intended to provide redress
to the generic where the innovator failed to establish that the generic's
allegations of invalidity or non-infringement were not justified. In my view,
section 8 was not intended to provide redress where the innovator prevailed in
the prohibition proceeding, even if the generic was later successful in patent
litigation. It follows that I agree with the Judge that Apotex can not
"reach back and apply the finding of invalidity in the action so as to
argue that the '671 patent had 'expired' within the meaning of section 8"
of the 1993 version of the Regulations.
I do not find the interpretation of the Regulations
advanced by Apotex to be correct because it would require extensive judicial
re-writing of section 8. Further, as noted by Apotex at paragraph 62 of its
memorandum of fact and law, Apotex' interpretation requires that no
prohibition order issue on the patent in respect of which the section 8 action
is brought. Here a prohibition order did issue with respect to the patent
which forms the basis of the section 8 action.
[Emphasis added]
(iv) The Ratiopharm
case
[35]
This
case was decided by the FCA on June 28, 2011. The proceeding before it
was a motion pursuant to Rule 399 of the Rules by Ratiopharm to set aside the
prohibition order which that Court issued on June 9, 2006 in favour of
Pfizer when allowing an appeal from the FC which had dismissed a request for
such an order.
[36]
Subsequent
to the FCA 2006 Order, Ratiopharm took an impeachment proceedings under the Patent
Act to have Pfizer’s '393 patent declared invalid. By judgment dated July
8, 2009, Justice Hughes found the patent invalid on a number of grounds. That
decision was affirmed by the FCA in 2010 FCA 204. Ratiopharm’s motion before
the FCA was to set aside the FCA’s prohibition order which was made under Rule
399(2)(a) “by reason of a matter that arose or was discovered subsequent to the
making of the Order” (the prohibition order of 2006) or on the basis of
Rule 399(2)(b), the order had been obtained by fraud.
[37]
Ratiopharm
also sought an order dismissing the original application for prohibition filed in
2004 in the Federal Court.
[38]
Ratiopharm
argued before the FCA that, upon the setting aside of the 2006 the prohibition
order, it would be entitled to seek compensation pursuant to section 8 of the
NOC Regulations for losses incurred during the time it was held off the
market because of the NOC proceedings. The 2006 prohibition order expired once
an NOC issued to Ratiopharm whose product is on the market. The FCA held the
issue was moot in terms of a determination under section 399(2)(a) of the Rules
but was no moot in terms of Rule 399(2)(b). Justice Létourneau, writing for
the FCA, went on to say:
… However, Ratiopharm’s challenge and the recurring
litigation surrounding the interpretation and application of section 8 show
that there still seems to be some ambiguity concerning the interplay between
NOC and impeachment proceedings. I think it would be in the public interest and
in the interest of would-be litigants to provide what we hope will be clear
guidance.
[Emphasis added]
[39]
Under
the heading “Whether
the decision of Hughes J. in the impeachment proceedings is a new matter under
Rule 399(2)(a)” he wrote at paragraph 14 of his reasons:
I begin my analysis with two settled principles. First, NOC
proceedings and impeachment proceedings are different in scope, purpose and
procedure. Consequently, different legal consequences ensue. Second, NOC
proceedings are not preemptive of an impeachment proceeding under the Act to
have a patent declared invalid. They are not a final determination of a
patentee’s rights.
[Emphasis added]
[40]
He
then quoted at paragraphs 6 to 9 of Justice Layden-Stevenson’s decision, as she
then was, in Fournier
Pharma Inc. v Canada (Minister of Health), 2004 FC 1718, on the
nature, purpose and scope of the NOC proceedings and their relationships with
impeachment proceedings.
[41]
He then
wrote at paragraphs 16,17 and 18 as follows:
As this Court said in AB
Hassle v. Canada (Minister of
National Health and Welfare) (2000), 7 C.P.R. (4th) 272, at pages 286-287, the first
person gains a significant short-term advantage when it obtains a prohibition
order. However, it exposes itself to a claim for compensatory damages under
section 8 if the application for prohibition is withdrawn, discontinued or
dismissed by the court hearing the application. The remedy of section 8 is also
available if the prohibition order granted is reversed on appeal. This
balance struck between the rights and obligations of the parties "promotes
the use of the PM (NOC) Regulations for the purpose for which they are
intended: the prevention of infringement": see Apotex Inc. v.
Merck & Co. Inc.,
[2010] 2 F.C.R. 389, at paragraph 60, 2009 FCA 187.
The section 6 proceedings are
instituted by the patentee who seeks a prohibition against the Minister.
"Since they take the form of a summary application for judicial review,
it is impossible to conceive of them giving rise to a counterclaim by the
respondent seeking a declaration" of invalidity or non-infringement:
see the statement of Hugessen J.A. in Merck Frost Canada
Inc. v. Canada (Minister of National Health and Welfare) (1994), 55
C.P.R. (3d) 302 (F.C.A.) at pages 319 and 320, approved by the Supreme Court of
Canada in Eli Lilly & Co. v. Novopharm Ltd.,
[1998] 2 S.C.R. 129, at paragraph 95. "Patent invalidity, like patent
infringement, cannot be litigated in this kind of proceeding"
notwithstanding that paragraph 7(2)(b) of the NOC
Regulations seems to envisage such declaration: ibidem.
The scope of application of section 8 and
its interplay with impeachment proceedings were reviewed by our Court in Apotex
Inc. v. Syntex Pharmaceuticals International Ltd., 2010 FCA 155. Writing
for a unanimous court, Dawson J.A. held at paragraph 36:
[36] Under the 1993 version of the
Regulations, when an innovator commenced a proceeding seeking a prohibition
order it obtained the equivalent of an interlocutory injunction prohibiting the
issuance of a notice of compliance for up to 30 months. The innovator need not
have satisfied the criteria for obtaining injunctive relief and no undertaking
for damages was required. In that circumstance, section 8 of the Regulations
was intended to provide redress to the generic where the innovator failed to
establish that the generic's allegations of invalidity or non-infringement were
not justified. In my view, section 8 was not intended to provide redress where
the innovator prevailed in the prohibition proceeding, even if the generic was
later successful in patent litigation. It follows that I agree with the Judge
that Apotex can not "reach back and apply the finding of invalidity in the
action so as to argue that the '671 patent had 'expired' within the meaning of
section 8" of the 1993 version of the Regulations. [Emphasis omitted]
[Emphasis added]
[42]
Justice
Létourneau concluded at paragraph 19 on this point:
Counsel
for Ratiopharm argued that this finding of Dawson J.A. was made in respect of an
earlier version of section 8 and, therefore, should not be followed.
With respect, I think the finding is still good and sound law under the new
section 8 and ought to be applied in this case. The invalidity of the '393
Patent found in the impeachment proceedings is a fact discovered after the 2006
order. However, it is not a new matter within the meaning of Rule 399(2)(a)
which, as a matter of law, would warrant setting aside the 2006 order on the
basis that the '393 Patent had "expired" within the meaning of
paragraph 7(2)(a) and section 8 of the NOC Regulations. The subsequent
decision invalidating the '393 Patent does not provide a basis upon which the
prohibition order issued by this Court should be set aside.
[Emphasis
added]
[43]
Justice
Létourneau went on to rule that the application of Rule 399(2)(b) was not
established on the evidence as a basis to set aside the 2006 order. As a
result he dismissed Ratiopharm’s motion.
[44]
Counsel
for Apotex argued there was potential at the level of the Supreme Court of
Canada to clarify what he claimed was conflicting jurisprudence. He mentioned
Ratiopharm had sought leave to appeal from the FCA’s decision submitting that:
Ratiopharm’s proposed appeal raises the
following issues of national importance: (a) Is liability for damages by an
innovator drug company to a generic drug company required in order to maintain
the balance at the heart of the Regulations when the patent used to
prohibit the approval of a generic drug under the Regulations is later
declared invalid in an action, and should the order of prohibition be set aside
pursuant to Federal Courts Rule 399(a), as a matter subsequently arising, or
pursuant to the Court’s inherent jurisdiction…
[Emphasis added]
[45]
I
was advised that on December 22, 2011 that Court refused to grant leave and, as
usual, did not provide reasons.
[46]
Counsel
for Apotex also mentioned his client had filed a motion to the Supreme Court of
Canada, filed on June 11, 2011 for reconsideration of that Court’s decision
refusing leave in Syntex, was still outstanding.
VI. Conclusions
[47]
The
Defendants’ motion to dismiss Apotex’ impeachment action must be granted.
[48]
The
expiry of the ‘615 patent renders Apotex’ impeachment action, to the extent its
success depends on the ‘615 patent, moot.
[49]
The
fundamental issue in this case was always whether the Court should exercise its
discretion to hear the action which is partly dependant upon the existence of
the ‘615 patent.
[50]
Counsel
for Apotex has not satisfied me, on the balance of probabilities, that it will
experience an adverse effect on its rights if its impeachment action is struck
insofar as the ‘615 patent is concerned. The jurisprudence established by the
FCA is clear that in the circumstances of this case there is no reach-back
under section 8 of the NOC Regulations.
[51]
Apotex
argued forcefully that the Defendants’ motion should not be granted on grounds
or judicial economy because the impeachment action would continue in any event
with the ‘330 patent emphasizing that both the ‘615 patent and the ‘330 patent
had a common source, that they were both heard together at trial and in the FCA
and that the evidence would be dovetailing.
[52]
This
argument has a certain attraction but I cannot accept it for the following
reasons. First, in this decision I have ruled, on a balance of probabilities,
Apotex’ rights will not be affected if the ‘615 patent, now expired, is struck
from the impeachment action. In the circumstances, there is no purpose in
pursuing the ‘615 patent at trial. Second, the invalidity of the ‘615 patent
was not put in issue during the NOC proceedings. New evidence would be
required at trial. Apotex has not provided this Court by way of affidavit what
impact the pursuit of a non-issue would have on the trial. Third, in the
circumstances, it makes no sense to use up court time and engage a judge in
examining complex evidence and rendering a decision which has no practical
purpose.
JUDGMENT
THIS COURT’S JUDGMENT
is that
the Defendants’ motion is granted with costs. That
part of Apotex’ impeachment action grounded on the ‘615 patent, now expired, is
dismissed.
“François
Lemieux”
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