Date:
20080429
Docket:
T-1942-07
Citation:
2008FC555
Ottawa, Ontario, Tuesday,
this 29th day of April 2008
PRESENT: MADAM PROTHONOTARY
MIREILLE TABIB
BETWEEN:
NYCOMED CANADA INC. and
NYCOMED GmbH
Applicants
-and-
THE MINISTER OF HEALTH and
SANDOZ CANADA INC.
Respondents
REASONS
FOR ORDER AND ORDER
[1]
The Court is seized of a motion brought by the Respondent, Sandoz Canada
Inc., seeking to dismiss the present application on the basis that it is
redundant, frivolous or vexatious, or otherwise an abuse of process, pursuant
to section 6(5)(b) of the Patented Medicines (Notice of Compliance)
Regulations, S.O.R./93-133 (the “Regulations”).
[2]
This application was instituted by the Applicants, Nycomed Canada Inc.
and Nycomed GmbH (collectively referred to as “Nycomed”) pursuant to section
6(1) of the Regulations, and seeks a prohibition order against the
issuance by the Minister of an NOC to Sandoz in relation to its proposed
pantoprazole tablets until after the expiration of Canadian Patent 2,092,694 (‘694
Patent). The other relevant patent, 2,089,748 (‘748 Patent), is being
separately litigated under the Regulations between the same parties in
Court file T-1941-07. A similar motion to dismiss was heard concurrently in
that matter, and is disposed of in earlier reasons for order, indexed as Nycomed
Canada Inc. v. Sandoz Inc., 2008 FC 541 (“Sandoz 1”). Most of the
discussions set out in Sandoz 1 are relevant to and determinative of the
present motion, and this order should accordingly be read in conjunction with
the reasons in Sandoz 1.
Preliminary objection as to
jurisdiction
[3]
As mentioned in Sandoz 1, Nycomed raised as a preliminary matter an
objection to a prothonotary’s jurisdiction to hear and determine a motion to
dismiss an application under the Regulations in circumstances where an
appeal of that order would be expected to become moot as a result of the early
issuance of an NOC to the generic. The reasons given in Sandoz 1 for
rejecting this argument are equally applicable in this matter, and need not be
repeated.
Overview
[4]
The drug at issue, pantoprazole sodium, is an old drug, marketed and
sold in Canada since the mid-1990s. It is classified as a proton pump
inhibitor (“PPI”) or a H+K+- ATPase Inhibitor, and has long been known to
inhibit the secretion of gastric juice or acid in the stomach. Its use as such
is no longer protected by patent. For the purpose of this motion, it is fair
to say that the relevant claims of the ‘694 Patent appear to be for a
composition of pantoprazole both partly resistant and partly non-resistant to
gastric juice and its use for the treatment of H. Pylori. Thus, unlike
the application in Sandoz 1, the present application involves issues of
direct infringement (whether the formulation of Sandoz’ tablets will be both
resistant and non-resistant to gastric juice) and indirect infringement
(inducement of infringing use).
[5]
Sandoz’ Notice of Allegation alleges that if it is issued an NOC in
respect of its proposed pantoprazole product, its making, constructing, using
or selling the product will not infringe any of the claims of the ‘694 Patent,
since its product will not be in a formulation which is not resistant to
gastric juice and that it only seeks approval and will only sell, market and
promote its product for the treatment of conditions where a reduction of
gastric acid secretion is required and not for combating H. Pylori. In
addition, Sandoz’ NOA alleges that the ‘694 Patent does not contain claims for
the medicine itself or the use of the medicine, and that it was improperly
listed as against the relevant Nycomed NOCs. The within application, filed by
Nycomed, alleges that all of Sandoz’ allegations are improper, insufficient or
unjustified.
Sandoz’ motion
[6]
As was the case in Sandoz 1, Sandoz’ present motion is
exclusively based on sub-section 6(5)(b) of the Regulations, which
permits the Court, on motion, to dismiss an application, in whole or in part,
on the ground that it is redundant, scandalous, frivolous or vexatious or
otherwise an abuse of process. This motion does not invoke sub-section 6(5)(a)
of the Regulations, pursuant to which an application may be dismissed on
the ground that a patent is not eligible for inclusion on the register. In
fact, Sandoz served and filed, concurrently with the present motion, a separate
notice of motion specifically based on sub-section 6(5)(a), which is now
scheduled to be heard on May 28, 2008.
[7]
Sandoz’ contention that the present application constitutes an abuse of
process is based on the following grounds:
1)
That the ‘694 patent has been held to not contain claims for the
medicine or the use of the medicine at issue, and that there are therefore no
relevant claims against which an allegation may be considered, by judgment
issued on March 3, 2008 in Solvay Pharma Inc. v. Apotex Inc., [2008]
F.C.J. No. 378, 2008 FC 308 (the “Apotex” case).
2)
That the ‘694 patent has been held to be ineligible for listing on the
patent register in both the Apotex case and in a subsequent case, Nycomed
Canada Inc. et al v. Genpharm et al., 2008 FC 313 (the “Genpharm”
case).
[8]
It is to be noted that although it makes fleeting reference to the fact
that Apotex’s allegations of non-infringement were held to be justified in Apotex,
Sandoz’ motion record contains no argument whatsoever that the determination
reached in Apotex on the non-infringement allegations should equally
apply in this case and that Nycomed’s application should therefore be dismissed
as an abuse of process. Nycomed, in its responding motion record, notes that
omission and specifically states that it would be improper for Sandoz to later
attempt to argue that the determination of the non-infringement issues in Apotex
constitutes grounds for dismissal of this application. Without prejudice to
that position, and out of an abundance of caution, Nycomed did include in its
evidence some expert evidence going to issues of direct and indirect
infringement.
[9]
After Nycomed’s record had been filed, a decision was issued by
Prothonotary Lafrenière in Nycomed Canada Inc. v. Novopharm Ltd., 2008
FC 454 (“Novopharm”) in which he dismissed a similar application in
respect of the ‘694 Patent on the basis of the determination made in Apotex.
It is only then that Sandoz, in supplementary submissions, first raised and
attempted to rely on the argument that the allegations of non-infringement had
already been determined in Apotex.
[10]
Despite the fact that Nycomed’s forethought has meant that it has not
been prejudiced by Sandoz’ conduct, Sandoz’ attempt to raise an additional
ground for dismissal, at the eleventh hour and without properly amending its
notice of motion, should not be permitted. All arguments arising out of the Apotex
case were clearly available to Sandoz at the time its motion was initially
filed, and should either have been raised at that time, or added by way of
formal amendment. To raise them after Nycomed had filed its record, and
apparently solely because they appear to have been successfully argued in a
recent case, is inappropriate and abusive of the Court’s process; these
arguments therefore should not and will not be considered for determination on
this motion.
[11]
On the grounds that have properly been raised in its notice of motion –
abuse of process in relation to ineligibility for listing and irrelevance – Sandoz
relies on no expert evidence at all. It relies only on the decisions of the
Court in Apotex and Genpharm and on a comparison between the
notices of allegation and notices of application in the Apotex case and
the present case. Curiously, Sandoz has not introduced the notice of
allegation or notice of application in the Genpharm case. As in Sandoz
1, Nycomed has yet to serve its evidence on the merits of the application
and still has until May 15 to do so. While Nycomed has filed the evidence of
five experts in opposition to this motion, going to issues of claim
construction and ineligibility for listing (as well as direct and indirect
infringement), the evidence also makes it clear that it is brought solely for
the purpose of responding to Sandoz’ motion, and that it is not intended to
constitute the whole of the evidence to be brought on the merits of the
application or on the eventual 6(5)(a) motion. More particularly, Nycomed
indicates that more fulsome evidence is intended to be filed in opposition to the
6(5)(a) motion.
Prior litigation involving
the ‘694 Patent
[12]
It is helpful to review, before considering Sandoz’ argument, the
allegations made and conclusions reached in each of the cases relied upon by
Sandoz as prior determinations of the issues herein.
[13]
The Apotex case was decided by Justice Gauthier on the merits of
Nycomed’s application for a prohibition order.
It covered two patents, the ‘694 and ‘748 Patents. In respect of the ‘694
Patent, Apotex’s NOA had made allegations of invalidity and non-infringement,
as well as an allegation that some of the claims were irrelevant as not being
claims for the medicine itself or the use of the medicine, and that the patent
was improperly listed against the relevant NOCs. No motion had been brought by
Apotex for dismissal of the application pursuant to section 6(5)(a) on grounds
of ineligibility for listing. Nycomed objected to the determination of the
eligibility issue on the merits of the application. It is not clear from the
decision whether Nycomed had adduced substantive evidence on the eligibility
issue, but in any event, the evidence brought by Nycomed on the present motion
is to the effect that it had adduced no specific expert evidence before Justice
Gauthier in respect to listability and had otherwise limited evidence at its
disposal on that issue.
[14]
Justice Gauthier, in her decision, did conclude that claim 3 of the ‘694
Patent was not a claim for pantoprazole or pantoprazole sodium or its use and
therefore not a relevant claim. However, her comments at paragraph 69 are to
the effect that this conclusion was to be considered obiter, as her
determinative conclusion was that it had not been established that the
allegations of non-infringement were not justified.
[15]
On eligibility for listing, the Court held clearly that it had no
jurisdiction to consider or determine the eligibility for listing of patents on
the merits of an application, as these issues could only be resolved by way of
a motion brought pursuant to sub-section 6(5)(a) of the Regulations.
Her subsequent conclusion that the ‘694 Patent was not eligible for listing was
clearly intended to be obiter, in the event that her finding of lack of
jurisdiction was overturned on appeal.
[16]
As mentioned above, the Court’s determinative conclusions on the
application was that the particular claims for which Nycomed was asserting
direct or indirect infringement on the part of Apotex, being claims 3, 6 and 13
of the ‘694 Patent, would not be infringed by Apotex.
[17]
In Genpharm, Prothonotary Milczynski was seized of a formal
motion to dismiss the application on grounds, inter alia, of
ineligibility for listing of the ‘694 Patent pursuant to sub-section 6(5)(a).
For whatever reason, the issue before Prothonotary Milczynski was whether the
patents (the ‘694 and ‘748 Patents) were eligible to be included on the
register against a single NOC, being the 055738 NOC (‘738) issued to Nycomed
on April 14, 1998 in respect of its 40mg enterically–coated Pantoloc® tablets.
She held that the ‘694 Patent was not relevant to the ‘738 submission and was
therefore improperly listed against that NOC and dismissed the application with
respect to the ‘694 Patent.
[18]
Because Prothonotary Milczynski did not dismiss the application in its
entirety, having determined that the other patent, the ‘748 Patent, was
properly listed, Genpharm could not receive its NOC. Nycomed has appealed the
decision of Prothonotary Milczynski to a judge of the Court and as of the
hearing of this motion, the appeal was still pending.
Relevance of the patent
claims
[19]
The issue of whether the ‘694 Patent contains relevant claims that are
required to be addressed in an NOA turns on a determination of whether it
contains a claim for the medicine itself or for the use of the medicine. That
determination is one that can be properly made on the merits of an application,
if properly alleged in the generic’s notice of allegation (see Apotex,
par. 66). Sandoz’ NOA does appear to contain allegations to the effect that
the ‘694 Patent is not relevant as containing no claim for the medicine or the
use thereof. However, contrary to Sandoz’ assertions, no determination has
been made in Apotex to the effect that the ‘694 Patent contains no
claims for the use of the medicine. While Justice Gauthier indeed finds
that claim 3 of the patent does not contain a claim for the medicine, she
specifically mentions that Apotex’s NOA, in respect of allegations of
irrelevant claims, deals only with claim 3 of the ‘694 Patent; accordingly,
that is the only claim that she herself addresses and determines on the issue
of relevance. Indeed, the Court comments that Apotex’s failure to make these
allegations regarding claims 6 and 13 are presumably explained by the fact that
these claims were obviously intended to cover a particular use of pantoprazole.
[20]
There are no other cases in which the relevance of any other claims of
the ‘694 Patent has been discussed. Accordingly, Sandoz’ argument to the
effect that it has been determined that the ‘694 Patent in its entirety
contains no relevant claim for the medicine or the use thereof is without
foundation and is dismissed.
Eligibility for listing
[21]
Insofar as Sandoz’ argument that this application is an abuse of process
on the basis of a prior determination, made in Apotex, that the ‘694
Patent is not eligible for listing, it is also ill-founded and must be
dismissed. As mentioned above, the Court’s decision in Apotex is to the
specific effect that it had no jurisdiction to consider or determine the
eligibility for listing of the patents. That case can therefore not stand as a
determination, final or otherwise, as to that issue and any comment made by the
Court as to the arguments raised by the parties on that issue are clearly obiter
and therefore not binding.
[22]
The only true prior determination as to the eligibility for listing of
the ‘694 Patent was made in the Genpharm case. However, Sandoz
mischaracterizes that decision when it states that it determined that the ‘694
Patent was ineligible for inclusion “on the register”. The Genpharm
case stands only for the proposition that there is no linkage between the ‘694
Patent and one of the NOCs against which it is listed, being the ‘738 NOC. Any
linkage between the ‘694 Patent and the other NOCs against which it is listed
and which are specifically referred to Sandoz’ NOA, being the 066552 NOC and
the 087266 NOC was not at issue before Prothonotary Milczynski and was not
determined in Genpharm. Accordingly, even if Genpharm could stand as a
binding determination on the issue of eligibility for listing of the ‘694
Patent, from which an argument of abuse of process could be drawn, it would be
limited to its eligibility for listing as against the ‘738 NOC and would
therefore not justify the dismissal of this application as it relates to the
‘694 Patent, there still being no determination as to whether that patent was
properly listed against other relevant NOCs.
[23]
The comments I made in Sandoz 1 as to whether it would, in any
event, be appropriate to dismiss an application as an abuse of process based on
a prior determination of ineligibility for listing outside the context of a
formal motion to dismiss pursuant to sub-section 6(5)(a) also remain apposite.
[24]
In view of the conclusion I have come to, I need not determine whether
the pending appeal of the Genpharm decision would prevent the
application of the principles of abuse of process in the particular
circumstances of this case (see Eli Lilly Canada Inc. v. Novopharm Ltd.,
2008 FC 513).
Non-infringement
[25]
As held above, Sandoz’ argument that Nycomed’s application is an abuse
of process in view of the earlier determination in Apotex that similar
allegations of non-infringement were justified was not properly raised in this
motion and will not be determined.
[26]
However, should it have been appropriate for me to exercise my
discretion to consider these arguments, I would have rejected them.
[27]
As discussed in Sandoz 1, the decision in Apotex
determines only the issue of whether Apotex would likely infringe or
induce the infringement of the ‘694 Patent. The issue in this application is
whether Sandoz would infringe or induce the infringement of that
patent. The Apotex decision therefore cannot stand as a prior
determination of the infringement issues in this application.
[28]
For Sandoz to have succeeded on this argument, it would have had to
establish that it would be impossible for Nycomed to adduce evidence sufficient
to show that Sandoz’ non-infringement allegations are unjustified. Merely
pointing to similarities between some aspects of the Apotex and Sandoz product
monographs is not sufficient. Similarities in some of the factors from which
inducement may be inferred does not preclude the possibility that other factors
exist and could be adduced in evidence to show an intent on the part of Sandoz
to induce infringement. In particular, Sandoz has not shown that Nycomed could
not possibly adduce evidence relating to Sandoz’ marketing or promotional
practices which would support an inference of intention to induce
infringement. Indeed, some evidence to that effect has been led by Nycomed on
this motion, including evidence from a pharmacist that Sandoz’ sales
representatives would visit pharmacists and actually promote the complete
interchangeability and equivalence “for all purposes” between Sandoz’ product
and Nycomed’s.
[29]
Further, the infringement issues in this application include direct
infringement, in particular, whether Sandoz’ tablets are in a form which is
partially not resistant to gastric juice. The uncontradicted evidence led on
this motion by Nycomed is to the effect that portions of stability data for the
tablets showing initial assay potency of pantoprazole and the percentage of
pantoprazole found at various phases in the dissolution tests were expected to
be provided by Sandoz but had not yet been received. I note that in Apotex,
that very data (but for Apotex’s product) was produced and showed that all of
the pantoprazole sodium that was assayed in Apotex’s tablets during the
manufacture was accounted for in the buffer stage of the dissolution test,
supporting Apotex’s contention that none of the pantoprazole intended to be in
the core of the tablets would have found its way onto the enteric coating, as
hypothesized by Nycomed. Sandoz has not shown that its own data, when
produced, would not show the opposite: That not all of the pantoprazole
assayed during the manufacture was accounted for in the buffer stage.
Suggestion, in Sandoz’ data, that some of the pantoprazole used in manufacture
may not be contained in the core may support a finding of direct infringement.
[30]
The above should not be taken as the only aspects upon which Nycomed’s
evidence could permissibly and materially differ from that in Apotex.
That particular evidence is specifically discussed here merely as an example of
why Sandoz could not have succeeded on this motion in showing that Nycomed’s
application is bound to fail.
Costs
[31]
Nycomed was successful in opposing this motion and accordingly shall
have its costs. In addition, the only two grounds properly raised by Sandoz on
this motion, eligibility for listing and irrelevance of the patent, were based
on a reading of the Court’s decisions in Apotex and Genpharm
which could not reasonably be supported on the clear reasons given by the Court
in both cases. This motion was therefore ill-considered, ill-founded and
should not have been brought. It has unnecessarily wasted the Court’s time and
the efforts of Nycomed, at a time where Nycomed should have been concentrating
on constituting its evidence on the merits of the application. I have already
mentioned that Sandoz’ eleventh hour arguments with respect to non-infringement
were inappropriate. Even though these allegations were not raised in the
notice of motion, Nycomed chose, out of an abundance of caution, to lead some
evidence on that aspect. Although the Court will not generally compensate a
party for costs it has incurred unnecessarily and out of excessive caution,
Nycomed’s caution was eventually proven justified; although the evidence it has
led was only discussed in obiter, its expert’s costs of adducing that
evidence, to the extent they are not already compensated by the order of costs
already made in Sandoz 1 (and I suspect that in large part, they are)
will be payable by Sandoz.
[32]
As mentioned in Sandoz 1, Sandoz’ repeated and unjustified
insistence that this motion be heard on an urgent basis and its shifting
scheduling demands also contribute to the Court’s determination that Nycomed’s
costs should be assessed at the high end of Column V of Tariff B. As the costs
of the telephone conferences to schedule and reschedule the motion and the
costs of counsel’s travel to attend the hearing of the motion are already
covered in the order of costs in Sandoz 1, they will not be assessed as
costs on this motion. Nycomed’s costs of expertise on the eligibility issue
and on whether the patent includes claims for the medicine itself or the use
thereof are, however, recoverable on this motion.
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