Sanofi-Aventis Canada Inc. v. Canada (Health), 2007 FC 545

 

Date: 20070524

Docket: T-979-06

Citation: 2007 FC 545

Ottawa, Ontario, May 24, 2007

PRESENT:     The Honourable Mr. Justice Lemieux

 

 

BETWEEN:

SANOFI-AVENTIS CANADA INC.

Applicant

and

 

THE MINISTER OF HEALTH

Respondent

 

 

 

REASONS FOR JUDGMENT AND JUDGMENT

 

Introduction and Background

[1]       The sole substantive issue raised in this judicial review application is whether the doctrine of issue estoppel applies to prevent the Minister of Health for Canada (the Minister) from deleting a patent from the Patent Register (the Register) maintained by him pursuant to section 3 of the Patented Medicines (Notice of Compliance) Regulations (the Regulations).

 

[2]     The applicant in these proceedings is Sanofi-Aventis Canada Inc. (Sanofi-Aventis); it seeks to quash the May 19, 2006 decision of the Minister delisting Canadian Letters Patent 1,319,682 (the ’682 patent), for the drug CLAROFAN from the Register.  In that same decision, the Minister refused to add to the Register the ’682 patent after having received on March 3, 2006, administrative new drug submission no.104490 from Sanofi-Aventis, namely, a request for a notice of compliance (NOC) for the sole purpose of approving a change in the manufacturer’s name of CLAROFAN from Aventis Pharma Inc. (Aventis) to Sanofi-Aventis as a result of the merger.

 

[3]     The test for the operation of issue estoppel is well-known; three pre-conditions must be met as explained by Justice Binnie, on behalf of the Supreme Court of Canada, in Danyluk v. Ainsworth Technologies Inc. [2001] 2 S.C.R. 460 at para 25:

25     The preconditions to the operation of issue estoppel were set out by Dickson J. in Angle, supra, at p. 254:

                   (1) that the same question has been decided;

                   (2) that the judicial decision which is said to create the estoppel was final; and,

(3) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies.     

 

[4]     Set out in both official languages, in the Annex to these reasons for judgment and judgment, are parts of sections 3, 4, and 6 of the Regulations in force at the time of the decision was made and referred to in argument before the Court. 

 

[5]     Counsel for the applicant grounds his estoppel argument on the fact the ’682 patent was the subject of an NOC proceeding in this Court which resulted in the August 31, 2005 decision of my colleague Justice Beaudry in Aventis Pharma Inc. v. Mayne Pharma (Canada) Inc. (Mayne) and the Minister of Health and Aventis Pharma S.A. (the patent owner) as respondents, 2005 FC 1183.

 

[6]     In that proceeding, Justice Beaudry made an order prohibiting the Minister from issuing an NOC to Mayne for the drug CLAROFAN, containing as its main medicinal ingredient cefotaxime sodium, until the expiry of the ’682 patent.  Justice Beaudry was not satisfied that Mayne’s allegation of the invalidity of the ’682 patent was justified.  The Minister, although a named respondent, did not participate in the NOC proceeding before Justice Beaudry and did not appeal his decision.  Justice Beaudry’s decision was appealed by Mayne to the Federal Court of Appeal (FCA) on September 30, 2005 (Court File No. A-456-05). 

 

[7]     On a motion made by Mayne to the FCA to reverse judgment and postpone the hearing of the appeal on the ground the ’682 patent had been delisted by the Minster, the FCA decided to adjourn both the motion to reverse judgment and the motion to postpone the hearing “until a final decision is rendered by the Federal Court in File T-979-05 [the present proceedings before the Court] and any appeal therefrom.”

Facts

[8]     The material facts are not in dispute are summarized as follows:

 

[9]     The ’682 patent was applied for on January 21, 1977 but it only issued to the patent owner Hoechst-Roussel Canada Inc.(Hoechst) on June 29, 1993.

 

[10]     A few months earlier, on March 12, 1993, the Regulations came into force.  The Regulations then provided, as they do now in subsection 4(4), a patent holder could within thirty days after the issuance of a patent submit a patent list or an amendment to an existing patent list for the purpose of adding a patent to the Register.

 

[11]     Hoechst submitted on April 13, 1993, patent lists for CLAROFAN covering patents 1,121,343 issued on April 6, 1982 and patent 1,175,416 issued on October 2, 1984.  The ’682 patent was not included because it had not yet issued. 

 

[12]     For reasons unknown to the Court, Hoechst did not submit an amended patent list for inclusion of the ’682 patent within the thirty-day period after the issuance of that patent on June 29, 1993.                      

 

[13]     It was only on May 30, 2000 that Aventis submitted a patent list for the inclusion of the ’682 patent on the Registry.  This patent list was connected to an administrative new drug submission no. 066850 for the issuance of an NOC approving the change of name of the manufacturer of CLAROFAN from Hoechst-Marion (change previously approved by the Minister by the issuance of an NOC on July 17, 1996) to Aventis.  The patent was audited, received an NOC on June 12, 2000 and was added to the Register on June 22, 2000.

 

[14]     It was on October 3, 2003 that Mayne served a Notice of Allegation (NOA) to Aventis claiming it would not infringe the ’682 patent if Mayne was delivered an NOC for cefotaxime sodium for injection.

 

[15]     As a result of receiving the NOA, Aventis, on December 23, 2003, pursuant to the Regulations, filed an application with this Court (Court File T-2434-03) seeking a prohibition order against the Minister from issuing an NOC to Mayne.  Mayne and the Minister were named as respondents.  As noted, the Minister, adopting his usual traditional stance in such proceedings, did not participate in the Mayne-Aventis NOC proceeding leaving the contest between the drug manufacturers involved.

 

[16]     It is common ground between the applicant and the respondent Minister, in the NOC proceedings before Justice Beaudry, Mayne did not, but could have made a motion, specifically contemplated in subsection 6(5) of those Regulations, to dismiss Aventis’ application for prohibition on the basis the ’682 patent was not eligible for inclusion on the Register.

 

[17]     As noted on March 3, 2006, Sanofi-Aventis filed an administrative new drug submission no. 104490 for the issuance of an NOC to approve the change of the manufacturer’s name of CLAROFAN from Aventis to Sanofi-Aventis, again as the result of a merger.

 

[18]     Connected to that submission, was a patent list seeking to list the ’682 patent on the Register.  An audit was performed by Health Canada and an NOC issued on March 21, 2006 in connection with the change of name submission.

 

[19]     However, the ’682 patent was not added to the Register.  By letter dated March 24, 2006, Anne Bowes, Manager, Patents and Liaison, Office of the Patented Medicines and Liaison (OPML) at Health Canada wrote to Franca Mancino, Senior Director of Regulatory Affairs at Sanofi-Aventis, with regard to the current listing of the ’682 patent on the Register arising from submission 066850 which, as will be recalled, was made on May 30, 2000 leading to the ’682 patent being added to the Register in June of 2000, some six years earlier.

 

[20]     In her letter, Anne Bowes stated, in the first paragraph, “it has come to our attention that patent 1,319, 682 (the ’682 patent) is improperly listed on the Patent Register.” 

 

[21]     She noted submission no. 066850 “is for a change in the manufacturer’s name and was submitted in accordance with the policy on Changes in Manufacturer’s name and/or product name published April 24, 1998.”  She continued:

 “….  The Changes in Manufacturer’s Name policy requires that all aspects of the drug product, including the conditions of manufacture and sale, must be identical to those previously authorized, except for the change in either manufacturer or brand name.  The addition of a patent on the basis of a Notice of Compliance for a name change is contrary to the scheme of section 4, which provides for the addition of a patent to be made within the strick time-requirements reflected in subsections 4(3), 4(4) and 4(6) of the PM (NOC) Regulations; see Bristol-Myers Squibb Canada Inc. v. Canada (Attorney General) (2001), 10 CPR (4^th) 318 (F.C.T.D.) and Toba Pharma Inc. v. Canada (Attorney General), [2001] F.C.T. 927 (F.C.T.D.).       

 

The ’682 patent was submitted with the above-noted administrative new drug submission on May 30, 2000 to change the manufacturer name from Hoechst Marion Roussel Canada Inc. to Aventis Pharma Inc.  The ‘682 was incorrectly listed on the Patent Register on June 22, 2000.  As a result, pursuant to the authority vested in the Minister of Health by subsection 3(1) of the Regulations, the ’682 patent will be removed from the Patent Register, subject to any written representations.” [Emphasis mine]

 

 

[22]     She then addressed Sanofi-Aventis’ submission no. 104490 dated March 3, 2006 which included a patent list for the ’682 patent.  She noted submission no. 104490 is also for a change in the manufacturer’s name and was similarly submitted in accordance with the policy and for the reasons previously expressed in her letter, would not be added to the Registry subject to written representation which Sanofi-Aventis may make.

 

[23]     Sanofi-Aventis made submissions to the OPML on April 19, 2006 through legal counsel.  Those written representations focused on the deleting aspect of Anne Bowes’ March 24, 2004 letter.

 

[24]     Sanofi-Aventis objected to the removal of the ’682 patent from the Register on the ground “that the doctrine of issue estoppel bars the Minister from raising the issue of the eligibility of the ’682 patent for inclusion on the patent Register.  The question of whether the ’682 patent was properly listed is res judicata between Sanofi-Aventis and the Minister for the following reasons.” [Emphasis mine]

 

[25]     Counsel for Sanofi-Aventis then referred to the prohibition proceeding launched by Aventis as a result of Mayne’s NOA.  Referring to the Federal Court of Appeal’s decision in Genpharm Inc. v. Procter & Gamble Pharmaceuticals Canada Inc. et. al. (2003) 33 C.P.R (4^th) 193, at page 201, he wrote:

“A patent must be included on the Patent Register maintained by the Minster of Health in order to ground a prohibition application.  That is fundamental to the issue of a prohibition order under the Regulations.  In these proceedings, both Mayne and the Minister could have taken the position that the ’682 patent was improperly included on the patent register and have the application dismissed.  Mayne did not take such position.  The Minister did not participate in the proceedings.” [Emphasis mine]

 

 

[26]     Counsel for Sanofi-Aventis further noted Mayne had appealed Justice Beaudry’s decision but not the Minister.  He continued:

“The issue of the eligibility of the ’682 patent for inclusion on the Patent Register could have been raised by the Minister in the above-mentioned proceedings.  Against the Minister, Justice Beaudry’s decision is final, since it was not appealed.  The doctrine of issue estoppel bars the Minister from raising again the eligibility of the ’682 patent for inclusion on the Patent Register.  The doctrine of issue estoppel “… extends to the materials facts and the conclusions of law or of mixed fact and law (“the questions”) that were necessarily (even if not explicitly) determined in the earlier proceedings…The test is “whether the determination on which it is sought to found the estoppel is “so fundamental” to the substantive decision that the latter cannot stand without the former”  As indicated above, the inclusion of a patent on the Patent Register is fundamental to the issue of a prohibition order under the Regulations.

 

A prohibition order was issued by the Court in the above-mentioned proceedings (T-2437-03).  For purposes of issue estoppel, that decision must be taken to have necessarily determined that the ‘682 was eligible for inclusion on the Patent Register.  The Minister is now estopped from arguing that the ’682 patents was not eligible for inclusion on the Patent Register.

 

When Sanofi-Aventis filed its application for a Writ of Prohibition, the eligibility of the ’682 patent for inclusion on the Minister’s Patent register, if an issue, should have been apparent to both Mayne and the Minister.  Although brought under a pubic regulatory regime i.e. the NOC Regulations promulgated under the Patent Act, the litigation is between two (2) private parties (Sanofi-Aventis and Mayne).  The Minister is named as a Respondent but chose not to participate in the proceedings.  No public policy consideration should override the application of the doctrine of issue estoppel.” [Emphasis mine] 

 

[27]     Finally, on the issue of submission 104490, counsel wrote:

“As the Minister is estopped from removing the ’682 patent from the Patent Register with respect to submission 066850, it need not be “added” to the Patent Register with respect to submission 104490.  The ’682 patent must be considered properly listed with respect to submission 066850 and likewise listed with respect to submission 104490.”

[Emphasis mine]

 

   

[28]     On May 19, 2006, David K. Lee, Director of the OPML, responded to Sanofi-Aventis’ written representations.  He advised that the OPML would maintain its position.  The essence of his decision on the deletion of the ’682 patent from the Register is:

“Sanofi-Aventis takes the view the OPML is estopped from removing the ’682 patent from the Patent Register in light of a perceived prior opportunity to do so in T-2437-03.  However, this does not address the long held view of the maintenance of the Patent Register under section 3(1) of the Patented Medicines (Notice of Compliance) Regulations.  In particular, as enunciated by Sharlow J.A. for the majority of the Federal Court of Appeal in Eli Lilly Canada Inc. v. Canada (Minister of Health), [2003] 3 F.C. 140 at 15, subsection 3(1) entitle[s] the Minister to delete from the Patent Register any information that does not meet the requirements of the PM (NOC) Regulations, as they are established from time to time by the Governor in Council.”  In the view of the OPML, the maintenance of the Patent Register is an ongoing duty.

 

The ’682 patent was submitted with the above-noted administrative new drug submission on May 30, 2000 in order to change the manufacturer name from Hoechst Marion Roussel Canada Inc. to Aventis Pharma Inc., in accordance with the policy on Changes in Manufacturer’s Name and/or Product Name published April 24, 1998.  However, the addition a patent on the basis of a Notice of Compliance for a name change is contrary to the scheme of section 4, which provides for the addition of a patent to be made with the strict time-requirements reflected in subsections 4(3), 4(4) and 4(6) of the PM (NOC) Regulations; see Bristol-Myers Squibb Canada Inc. v. Canada (Attorney General) (2001) 10 CPR (4^th) 318 (F.C.T.D.) and Toba Pharma Inc. v. Canada (Attorney General), [2001] F.C.T. 927 (F.C.T.D.).

 

As such, the OPML remains of the view that the ’682 patent was incorrectly listed on the Patent Register on June 22, 2000.  Pursuant to the authority vested in the Minister of Health by subsection 3(1) of the Patented Medicines (Notice of Compliance) Regulations, the ’682 patent will be removed from the Patent register for submission 066850 five business days from the date of this letter.”         

 

 

[29]     Mr. Lee concluded his decision addressing submission 104490 which included a patent list for the addition of the ’682 patent on the Register in the following manner:

“In light of the reasons above, the TPD is unable to agree with Sanofi-Aventis’ view that the ’682 patent must be considered properly eligible to be listed on the Patent Register with respect to the above-noted submission.

 

As a result the ’682 patent will not be added to the patent Register for submission 104490 pursuant to the authority vested in the Minister of Health by subsection 3(1) of the Patented Medicines (Notice of Compliance Regulations).”

 

[30]     The applicant’s judicial review application was supported by Mr. Mancino’s affidavit who was not cross-examined.

 

[31]     The respondent’s response was supported by Anne Bowes’ affidavit.  The purpose of her affidavit was to provide the operational background and history to the functioning of the Register.  She was cross-examined.

 

(1) The position of the parties

 

[32]     The sole substantive ground advanced by counsel for the applicant to set aside the Minister’s May 19, 2006, decision was the same as advanced in his representations to the Minister on issue estoppel because of the opportunity provided in the proceedings before Justice Beaudry.

 

[33]     The basis for the applicant’s argument rests on the proposition that at the time the applicant started its NOC proceeding in November, 2003, and certainly by the time Justice Beaudry heard the NOC application on June 20, 2005, it was settled law an administrative submission for the sole purpose of obtaining an NOC to change a drug manufacturer’s name is not a submission which can support the listing of a patent on the Register.

[34]     He relies on Genpharm Inc., above, a case where the Federal Court of Appeal held issue estoppel could be invoked to bar Genpharm from raising the eligibility of a Proctor & Gamble Pharmaceuticals patent for inclusion on the Registry for failure to comply with the thirty (30) day requirement in the Regulation because Genpharm could have raised the issue in a prior judicial proceeding.

 

[35]     Counsel for the applicant made an additional point.  He states when the ’682 patent was listed by the Minister on the Register on June 22, 2000, the practice of the OPML was to list patents against any submission for an NOC, including an administrative submission for a change of a drug manufacturer’s name relying upon Mr. Mancino’s affidavit arguing the applicant cannot be faulted for having listed the ’682 patent in connection with administrative new drug submission number 066850 citing Bristol-Myers Squibb Canada Inc. v. Attorney General of Canada et al. (2001), 10 C.P.R. (4^th) paragraph 15, page 323 (T.D.).                                      

 

[36]     On a subsidiary point, the applicant’s counsel urged I strike Anne Bowes’ affidavit on the ground it provides opinions on the state of the law without being qualified to do so.

(2) The Minister

 

[37]     Counsel for the Minister argued, in reply, the doctrine of issue estoppel, a subset of res judicata, did not apply in the circumstances because the deletion of the ’682 patent from the Register and the refusal to add it afterwards was an administrative action taken by the Minister in an administrative proceeding in the discharge of his regulatory duty to maintain the Registry.       

 

[38]     Put in another way, counsel for the Minister argues in order for issue estoppel to apply, the second proceeding in which as issue is to be estopped must be a judicial proceeding.  

 

[39]     Counsel for the Minister did not dispute, in 2000, the Minister’s policy was to accept an administrative submission for an NOC changing a drug manufacturer’s name to support the listing of a patent on the Register.

 

[40]     He also argues the Minister could not have moved to dismiss under subsection 6(5) of the Regulations because such a motion could only be made by a “second person” i.e., Mayne in the NOC prohibition proceedings.     

 

Analysis

The Standard or Review

 

[41]     This judicial review application raises a pure question of law, namely, the proper application of the doctrine of issue estoppel to a regulatory provision mandating a duty on the Minister to maintain the Register.  This Court is in a better position than the Minister to apply the law and to interpret the Regulations.  The standard of review is correctness (see, Eli Lilly Canada Inc. v. Canada [2003] 3 FC 140 (FCA).     

 

What this case is not about

 

[42]     The sole issue raised by counsel for the applicant in this judicial review application has been noted.  The applicant did not argue the Minster had no discretion to delete the ’682 patent from the Register nor the exercise of his discretion to delete in the circumstances of this case was an unlawful exercise of that authority.

 

[43]     Moreover, in argument, counsel for the applicant recognized, rightfully so in my view, that shortly after the ’682 patent was placed on the Register in June of 2000, jurisprudence began to emerge from this Court and the Federal Court of Appeal to the effect a submission to obtain an NOC for the sole purpose of sanctioning a drug manufacturer’s change of name or changing the brand name of a drug was not a submission which could support a request that a patent in respect of that drug be added to the Register.

 

[44]      According to counsel for the applicant, this jurisprudence became settled law by the time Justice Beaudry heard in June of 2005 the prohibition application sought by Aventis-Pharma against Mayne.

 

[45]     I need only refer to the following cases to illustrate the accuracy of counsel for the applicants’ submission on this point:

(1) Bristol-Myer Squibb Canada Inc. v. Canada (Attorney General) 10 C.P.R. (4^th) 318, a decision of Campbell, J. dated January 19, 2001 sustained by the Federal Court of Appeal on January 23, 2002 reported at 16 C.P.R. (4^th) 425;

 

(2) Toba Pharma Inc. v. Canada (Attorney General) [2002] FCT 927, a decision of Justice Blais dated September 3, 2002;

 

(3) Ferring Inc.v. Canada (Attorney General) 2003 FCA 274, a decision of the Federal Court of Appeal dated June 19, 2003;

 

(4) Hoffman-Laroche Ltd. v. Canada (Minister of Health) [2005] FCA 140, a decision of the Federal Court of Appeal dated May 12, 2005.

[46]     I note the Bristol-Myer Squibb and Ferring cases, above, dealt with the authority of the Minister to delete a patent from the Register which had been listed supported only by an NOC submission related to a change of name after the Minister had given notice the patent had been improperly included on the Register and had received submissions as to why the deletion should not occur.

 

[47]     To close off this point, I refer to the Federal Court of Appeal’s decision in Eli Lilly Canada Inc. v. The Minister of Health [2003] 3 F.C. 140.  This case involved the removal of a drug from the Register.  This case confirmed the Minister’s authority to ensure that all patents on the patent list conformed to the Regulations, and to refuse to list, or to remove, any patent that does not conform.  Eli Lilly was overruled by the Supreme Court of Canada but not on this point.  

 

[48]     I should mention the Supreme Court of Canada’s recent decision in Astra Zeneca Inc. v. Canada (Minister of Health) [2006] 2 S.C.R. 560, has no implications on the results of this case.  While not specifically dealing with the jurisprudence on administrative decisions not supporting an addition to the Register, it received indirect favorable comment from Justice Binnie who wrote the Court’s reasons, (see paragraphs 5 and 19).

 

[49]     Based on the foregoing, counsel for the applicant was correct in limiting his submissions to the application of the doctrine of issue estoppel to the circumstances of this case.

Discussion

[50]     Counsel for the applicant argues the Federal Court of Appeal’s decision in GenPharm, above, is determinative of the present judicial review application since the Court found the question of whether a patent is eligible for inclusion on the Register is subject to the doctrine of issue estoppel if the three-part requirement for its application is met, namely:

                   1.  The same question has been decided;

                   2.  The judicial decision which is said to create the estoppel was final; and

3. The parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies. 

 

[51]     GenPharm, above, concerned a 2003 prohibition application initiated, pursuant to the Regulations, by Proctor & Gamble Pharmaceuticals Canada Inc. against GenPharm, (P&G) which GenPharm, sought to have summarily dismissed under paragraph 6 (5)(a) of the same Regulations on the grounds the relevant patent was not eligible for inclusion on the Register.    

 

[52]     There has been a prior NOC litigation between the same parties in 2001 where P&G obtained a prohibition order against GenPharm a decision which was affirmed by the Federal Court of Appeal reported at (2002) 20 C.P.R. (4^th)1.

 

[53]     In the 2001 prohibition proceedings under the Regulations, GenPharm attempted to argue the relevant patent was not eligible to be included on the Register but had been precluded from doing so, the applications judge ruling that such argument could not be brought at such a late stage, only one week before the hearing.      

 

[54]     Justice Rothstein, then a member of the Court of Appeal, ruled the fact GenPharm was not allowed to raise the issue in the prior proceedings did not prevent the application of issue estoppel.  On the contrary, he wrote, “it is further evidence that GenPharm could have, but failed, to raise the eligibility issue in a timely manner in the first litigation.  Justice Rothstein then went on to dismiss a number of submissions put forward by GenPharm. 

  

[55]     In Danyluk v. Ainsworth Technologies Inc. [2001] 2 S.C.R. 460, Justice Binnie, on behalf of the Supreme Court of Canada, had an opportunity to examine the rationale behind the development of the doctrine of issue estoppel.  He wrote the following at paragraphs 18, 19 and 20:

18     The law rightly seeks a finality to litigation. To advance that objective, it requires litigants to put their best foot forward to establish the truth of their allegations when first called upon to do so. A litigant, to use the vernacular, is only entitled to one bite at the cherry. The appellant chose the ESA as her forum. She lost. An issue, once decided, should not generally be re-litigated to the benefit of the losing party and the harassment of the winner. A person should only be vexed once in the same cause. Duplicative litigation, potential inconsistent results, undue costs, and inconclusive proceedings are to be avoided.

 

19     Finality is thus a compelling consideration and judicial decisions should generally be conclusive of the issues decided unless and until reversed on appeal. However, estoppel is a doctrine of public policy that is designed to advance the interests of [page474] justice. Where as here, its application bars the courthouse door against the appellant's $300,000 claim because of an administrative decision taken in a manner which was manifestly improper and unfair (as found by the Court of Appeal itself), a re-examination of some basic principles is warranted.

 

20     The law has developed a number of techniques to prevent abuse of the decision-making process. One of the oldest is the doctrine estoppel per rem judicatem with its roots in Roman law, the idea that a dispute once judged with finality is not subject to relitigation: Farwell v. The Queen (1894), 22 S.C.R. 553, at p. 558; Angle v. Minister of National Revenue, [1975] 2 S.C.R. 248, at pp. 267-68. The bar extends both to the cause of action thus adjudicated (variously referred to as claim or cause of action or action estoppel), as well as precluding relitigation of the constituent issues or material facts necessarily embraced therein (usually called issue estoppel): G. S. Holmested and G. D. Watson, Ontario Civil Procedure (loose-leaf), vol. 3 Supp., at 21 s. 17 et seq. Another aspect of the judicial policy favoring finality is the rule against collateral attack, i.e., that a judicial order pronounced by a court of competent jurisdiction should not be brought into question in subsequent proceedings except those provided by law for the express purpose of attacking it: Wilson v. The Queen, [1983] 2 S.C.R. 594; R. v. Litchfield, [1993] 4 S.C.R. 333; R. v. Sarson, [1996] 2 S.C.R. 223. [Emphasis mine]

 

[56]     In his reasons at paragraph 24, Justice Binnie set out his view as to the scope of issue estoppel:

“Issue estoppel was more particularly defined by Middleton J.A. of the Ontario Court of Appeal in McIntosh v. Parent, [1924] 4 D.L.R. 420, at p. 422:

 

When a question is litigated, the judgment of the Court is a final determination as between the parties and their privies. Any right, question, or fact distinctly put in issue and directly determined by a Court of competent jurisdiction as a ground of recovery, or as an answer to a claim set up, cannot be re-tried in a subsequent suit between the same parties or their privies, though for a different cause of action. The right, question, or fact, once determined, must, as between them, be taken to be conclusively established so long as the judgment remains. [Emphasis added.]

 

This statement was adopted by Laskin J. (later C.J.), dissenting in Angle, supra, at pp. 267-68. This description of the issues subject to estoppel ("[a]ny right, question or fact distinctly put in issue and directly determined") is more stringent than the formulation in some of the older cases for cause of action estoppel (e.g., "all matters which were, or might properly have been, brought into litigation", Farwell, supra, at p. 558). Dickson J. (later C.J.), speaking for the majority in Angle, supra, at p. 255, subscribed to the more stringent definition for the purpose of issue estoppel. "It will not suffice" he said, "if the question arose collaterally or incidentally in the earlier proceedings or is one which must be inferred by argument from the judgment." The question out of which the estoppel is said to arise must have been "fundamental to the decision arrived at" in the earlier proceeding. In other words, as discussed below, the estoppel extends to the material facts and the conclusions of law or of mixed fact and law ("the questions") that [page477] were necessarily (even if not explicitly) determined in the earlier proceedings.”

 

 

[57]     In his book, The Doctrine of Res Judicata in Canada, Second Edition, Lexus-Nexus, 2004, Donald Lange states “this paragraph in Justice Binnie’s reasons in Danyluk, above, reflects the traditional view as to the scope of issue estoppel.”

 

[58]     At paragraphs 33 and 34 of his reasons, Justice Binnie writes issue estoppel requires a two-step analysis.  In his view, “the rules governing issue estoppel should not be mechanically applied.  The underlying purpose is to balance the public interest in the finality of litigation with the public interest in ensuring that justice is done on the facts of a particular case (there are corresponding private interests).” [Emphasis mine]      

 

[59]     According to Justice Binnie, “the first step is to determine whether the moving party has established the pre-conditions for the operation of issue estoppel”, adding, “if successful the Court must still determine whether, as a matter of discretion, issue estoppel ought to be applied.”    

Conclusions

[60]     For the reasons set out below, I conclude the applicant has not established two of the three pre-conditions for the operation of issue estoppel and as a result the applicant’s judicial review application must be dismissed with costs.  The affidavit of Anne Bowes is not struck but I place no reliance on any opinions expressed therein.      

(i) Not the Same Parties

[61]     The third requirement to the operation of issue estoppel is that the parties to the decision before Justice Beaudry or their privies were the same persons as the parties to the administrative proceedings in which the estoppel is raised or their privies.  

[62]     In my view, the parties before Justice Beaudry were Sanofi-Aventis, the privy of Aventis-Pharma Inc. and Mayne-Pharma (Canada) Inc. who are the first and second persons described in the Regulations.   

 

[63]     In the proceeding before the Minister, who is the regulator, there was only one party – Sanofi-Aventis.  Alternatively, it could be argued the Minister and Sanofi-Aventis were the parties in that proceeding which led to the impugned decision. 

 

[64]     In Toronto (City) v. Canadian Union of Public Employees C.U.P.E. (Local 79) [2003] 3 S.C.R. 77, Justice Arbour, on behalf of a unanimous Supreme Court of Canada, found, in that case, the requirement of mutuality of parties had not been met.        

 

[65]     The fact-situation in Toronto (City), above, was as follows.  A recreational instructor employed by the City of Toronto was fired after being charged, plead not guilty but was convicted of sexually assaulting a boy under his supervision, a conviction maintained on appeal.  He grieved his dismissal.  An arbitrator, after hearing his testimony, held that the presumption raised by the criminal conviction had been rebutted and that he had been dismissed without just cause.       

 

[66]     On judicial review of the arbitrator’s decision, issue estoppel was raised, the question being whether the grievor could re-litigate in arbitration the issue decided against him in the criminal proceeding.

 

[67]     Justice Arbour referred to the three pre-conditions which must be met if the doctrine is to be applied.   She expressed the view the requirement the issue must be the same as the one decided in the prior litigation and the requirement the prior judicial decision must have been final were met.  However, she held the third requirement- the parties to both proceedings must be the same, or their privies – had not been met.  Her reasoning was as follows:

“The first two requirements of issue estoppel are met in this case. The final requirement of mutuality of parties has not been met. In the original criminal case, the lis was between Her Majesty the Queen in right of Canada and Glenn Oliver. In the arbitration, the parties were CUPE and the City of Toronto, Oliver's employer. It is unnecessary to decide whether Oliver and CUPE should reasonably be viewed as privies for the purpose of the application of the mutuality requirement since it is clear that the Crown, acting as prosecutor in the criminal case, is not privy with the City of Toronto, nor would it be with a provincial, rather than a municipal, employer (as in the Ontario v. O.P.S.E.U. case, released concurrently).”

           

[68]     In Danyluk, above, Justice Binnie wrote about this third requirement in the following terms:

“This requirement assures mutuality. If the limitation did not exist, a stranger to the earlier proceeding could insist that a party thereto be bound in subsequent litigation by the findings in the earlier litigation even though the stranger, who became a party only to the subsequent litigation, would not be: Machin, supra; Minott v. O'Shanter Development Co. (1999), 42 O.R. (3d) 321 (C.A.), per Laskin J.A., at pp. 339-40….

 

[69]     Counsel for the applicant argues that the Minister was a named party in the proceedings before Mr. Justice Beaudry; he could have participated in the proceedings but chose not to.  He could have raised the issue of the non-eligibility of the ’682 patent to be on the Register but he chose not to.  He could have appealed Justice Beaudry’s decision to the Federal Court of Appeal but did not and therefore Justice Beaudry’s decision is final as against him.     

 

[70]     I do not accept these arguments being of the opinion, for the purpose of the operation of the doctrine of issue estoppel, the Minister was not a party to the first proceeding because there was no lis between the Minister and Aventis-Pharma (the first person) or Mayne-Pharma (the second person).       

 

[71]     In my view, he was named as a party respondent because Rule 303 of the Federal Courts Rules,1978 required the applicant to name him as a respondent since the relief sought in the prohibition application is an order against the Minister from issuing the NOC sought by the second person.

 

[72]     To accept counsel for the applicant’s arguments would favour form over substance.      

 

[73]     This Court and the Federal Court of Appeal have recognized that the Regulations are public law but, as a substantive matter, litigation under the Regulations is a private matter.  I cite the following cases:

• In GenPharm Inc., above, Justice Rothstein, then a member of the Federal Court of Appeal, wrote at paragraph 32 as follows:

 

“As to public policy, the litigation here, although brought under a public regulatory regime, i.e. the NOC Regulations promulgated under the Patent Act, is between two private parties. The Minister is named as a respondent, but she did not participate in the proceedings. Genpharm has not suggested any public policy considerations that should override the application of the doctrine of issue estoppel. In the absence of public policy arguments being raised by Genpharm, it would be inappropriate for the Court to engage in its own public policy analysis.”

 

• In that same case, Justice Evans recognized at paragraph 48 most NOC litigation is substantively between private parties and involves issues on which the Minister often takes no position;

 

• In Sierra Club of Canada v. Canada (Minister of Finance), [2000] F.C.J. No. 732, (C.A.) referring to the case of AB Hassle v. Canada (Minister of National Health and Welfare) [2000] F.C.J. No. 283, Justice Evans again recognized that the substantive dispute under the Regulations is “typically between the private parties”;

 

• In Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare) [1997] F.C.J. No. 1142 Justice Rothstein, then a member of the Federal Court Trial Division, stated in note 1 “however, in the context of the litigation here, the outcome will be to the benefit of one private party and to the detriment of the other and it is in this sense that the litigation is best characterized as private.” 

         

 

[74]     In addition, I agree with counsel for the Minister under subsection 6(5) of the Regulations only a second person may apply to have a prohibition application dismissed on the grounds the patents listed on the Register were not eligible for inclusion. The Minister, if he had participated in the proceedings, could not have made such a motion confirming the jurisprudence of this Court the real parties to an NOC proceedings are the drug manufacturers.  

No Final Decision

[75]     As recognized by the Supreme Court of Canada in Danyluk at paragraphs 56-58 and Toronto (City), at paragraph 46 for issue estoppel to operate, there must be a final decision which has not been appealed or internally reviewed where available.    

 

[76]     The thrust of the jurisprudence of this Court is that a decision in not final for the purposes of issue estoppel where there is an appeal pending or until the appeal period has expired or leave to appeal has been denied:  Novopharm Ltd. v. Eli Lilly and Co. [1999] 1 F.C. 515 (T.D.); Benisti Import-Export Inc. v. Modes TXT Carbon Inc., [2002] F.C.J.  No. 1081 (T.D.) at par. 17; Wells v. Canada (Minister of Transport) (1993), 48 C.P.R. (3d) (T.D.); Leblanc v. Canada [2003] F.C.J. No. 1005 (T.D.); Nordic Laboratories Inc. v. Deputy M.N.R. (1996), 64 ACWS (3d) 583 (Fed. T.D.) at 9). 

 

[77]     The theoretical support for the proposition the prior decision must be final so as to estopp a second decision is because (1) the second decision is not yet bound by the findings in the first decision (2) the appeal process in the first instance may have an impact on the issue in the second decision, e.g., if Mayne is successful in overturning the prohibition order it will make moot the eligibility of the ’682 patent to be on the Register, (see Lange, above, at pages 94-95).    

 

[78]     In this case Mayne has an appeal pending before the Federal Court of Appeal.  Justice Beaudry’s decision is not final.  It does not matter if the Minister has not appealed.

 

JUDGMENT

 

The application for judicial review is dismissed with costs.

 

 

“François Lemieux”

ANNEX

 

 

FEDERAL COURT

 

SOLICITORS OF RECORD

 

 

DOCKET:                                          T-979-06

 

STYLE OF CAUSE:                          Sanofi-Aventis Canada Inc. v. The Minister of Health

 

 

PLACE OF HEARING:                    Montréal, PQ

 

DATE OF HEARING:                      April 16, 2007

 

 

REASONS FOR JUDGMENT:       LEMIEUX J.

AND JUDGMENT

 

DATED:                                             May 24, 2007

 

 

APPEARANCES:

 

Mr. François Grenier	FOR THE APPLICANT
Rick Woyiwada	FOR THE RESPONDENT

 

SOLICITORS OF RECORD:

 

Leger Robic Richard LLP Centre CDP Capital 1001, Victoria Square Bloc E 8th Floor Montreal, PQ H2Z 2B7	FOR THE APPLICANT
John H. Sims, Q.C. Deputy Attorney General of Canada	FOR THE RESPONDENT