Docket: T-1791-13
Citation:
2014 FC 1241
Ottawa, Ontario, December 18, 2014
PRESENT: The Honourable Mr. Justice Harrington
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BETWEEN:
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LEO PHARMA INC.
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Applicant
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and
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TEVA CANADA LIMITED AND
THE MINISTER OF HEALTH
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Respondents
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ORDER AND REASONS
[1]
Leo Pharma Inc. has appealed from a decision of
Prothonotary Tabib in which she dismissed its motion for leave to file reply
evidence in an Application under the Patented Medicines (Notice of
Compliance) Regulations. Before analysing her decision the context in which
it was issued should be considered.
[2]
In its underlying application Leo Pharma seeks
an order prohibiting the Minister of Health from issuing a Notice of Compliance
to Teva that would allow it to market its version of a Calcipotriol and Betamethasone
Dipropionate ointment for the topical treatment of psoriasis. Teva has compared
its product to Leo Pharma’s, which is covered by Canadian Patent No. 2,370,565
and which has been listed on Health Canada’s Patent Register. The patent is titled
Dermally Applicable Vitamin D–Containing Pharmaceutical Compositions and
is due to expire 27 January 2020.
[3]
In accordance with the fiercely litigated PM (NOC)
Regulations, Teva served Leo Pharma with a Notice of Allegation the
relevant portion of which claims that the patent is not valid because the
invention was obvious.
[4]
Leo Pharma in turn filed a Notice of Application
in this Court on 31 October 2013, which serves to prohibit the Minister from
issuing a Notice of Compliance for two years or until a decision is rendered,
whichever comes first. The application is scheduled to be heard 14 September
2015. Although the aim of these proceedings is to determine whether the
Minister is free to issue the requested NOC, this Court must consider the
allegation of obviousness that is at issue in this appeal, although its
tentative finding on that point will not bind the Court in the underlying
action on the validity or infringement of the patent. The Patentee is in no way
deprived of all the recourses normally available to enable it to enforce its
rights by commencing an action for infringement should its Application be
dismissed. Likewise, Teva, if unsuccessful, may by action seek a declaration of
patent invalidity.
[5]
The proceedings are somewhat counterintuitive in
that Leo Pharma is to prove a negative, that is to say that Teva’s allegation
is not justified. The normal procedure was followed in this case, which meant
that Leo Pharma filed its evidence first.
[6]
According to the affidavit of Dr. Kenneth Andrew
Walters, filed on behalf of Leo Pharma:
The 565 Patent relates to a pharmaceutical
composition for dermal use that comprises a first pharmacologically active
component (A), which consists of at least one vitamin D or vitamin D analogue,
and a second pharmacologically active agent (B), which consists of at least one
steroid. More specifically, the invention relates to pharmaceutical
compositions containing two or more pharmacologically active compounds that
have low compatibility with respect to the pH value of optimum stability. The
Patent teaches that if these incompatible active ingredients are put in a
non-aqueous topical formulation with a solvent component C, the formulation is
stable and efficacious.
[7]
The current appeal relates to two other paragraphs
in Dr. Walters’ affidavit (paragraphs 55 and 60), to which Dr. Eugene R.
Cooper, retained by Teva, replied.
[8]
In paragraph 55 of his affidavit Dr. Walters
stated:
While the majority of pharmaceutical topical
products containing single active entities, and the combination products used
in acne are cream and gel formulations, the 565 Patent distances itself from
this norm. The preferred embodiment is a non-aqueous ointment composition
comprising the two active ingredients and a solvent (component C). The
selection of a non-aqueous formulation is, in itself, surprising because of the
patient and physician preference for aqueous-based formulations. Although the
vitamin D derivative was available in an ointment formulation, the formulation
contained added water. The 565 Patent further teaches that in the presence of
the solvent (Component C) “the active components can co-exist without
degradation, despite their different pH/stability profiles.” The 565 Patent
describes several suitable candidates that can act as the solvent (Component
C). These include polyoxypropylene-[15]-stearyl ether, 2-octyldodecanol,
isostearyl benzoate, isopropyl palmitate, isopropyl myristate, and several
other solvents.
[9]
Dr. Cooper replied at paragraph 140 of his
affidavit:
I note that at paragraph 55 of the [Walters]
Affidavit, Dr. [Walters] indicates that the combination products used in acne
were cream and gel formulations. Dr. [Walters] is ignoring a number of approved
combination ointment formulations used to treat other conditions including:
a. Diprogen® was sold as both an ointment and a cream. The
ointment contained betamethasone diproprionate (active ingredient), gentamicin
(active ingredient) and white petrolatum. It was indicated for use in the
topical treatment of corticosteroid responsive dermatoses when complicated by
secondary infection caused by organisms sensitive to gentamicin or when the
possibility of such infection is suspected.
b. Valisone-G® was sold as both an ointment and a cream. The
ointment contained betamethasone valerate (active ingredient), gentamicin
(active ingredient) and petrolatum. It was indicated for use in the topical
management of secondarily infected allergic or inflammatory dermatoses
responsive to corticosteroid therapy (e.g., contact dermatitis, seborrheic
dermatotitis, neurodermatitis, intertrigo, exfoliative dermatitis, stasis
dermatitis and psoriasis.
c. Locacorten Vioform® was sold as both an ointment and a cream.
The ointment contained flumethasone (active ingredient), clioquinol (active
ingredient) and a petrolatum base. It was indicated for the treatment of skin
disorders complicated by bacterial and/or fungal infections. It was also
indicated for treating atopic dermatitis, seborrheic dermatitis,
neurodermatitis, eczematoid dermatitis, psoriasis, anogenital pruritus, lichen
simplex, lichen planus, chronic neurodermatitis, stasis dermatitis, and
intertrigo.
d. Diprosalic® was sold as a lotion and an ointment. The ointment
contained betamethasone dipropionate (active ingredient), salicylic acid
(active ingredient), white petrolatum and mineral oil. It was indicated for the
topical management of subacute and chronic hyperkeratotic and dry dermatoses
responsive to corticosteroid therapy.
e. Cortisporin® was sold as a cream and an ointment. The ointment
contained polymyxin B sulfate (active ingredient), bacitracin zinc (active
ingredient) neomycin sulfate (active ingredient), hydrocortisone (active
ingredient) and special white petrolatum. It was indicated for use in the
treatment of corticosteroid-responsive dermatoses with secondary infection.
These formulations are all simple ointment
formulations containing a petrolatum base. Accordingly, the skilled person
would be well aware that simple ointment formulations can be used to formulate
two active ingredients together.
(Footnotes omitted.)
[10]
Leo wishes to file reply evidence to the effect
that the five combination formulations referred to by Dr. Cooper cannot not be
compared to the patented formulations because there is no known incompatibility
in the optimum pH stability of the active ingredients. The ingredients are thus
easier to combine.
[11]
The other bone of contention is paragraph 60 of
Dr. Walters’ affidavit, where he said:
Overall, the 565 Patent teaches the skilled
person how to make a pharmaceutical product containing two previously
incompatible active ingredients that, when applied to the skin of a patient,
will have a therapeutic effect that is greater than the effect of the
individual active ingredients when applied separately, as described on p13 of
the Patent
[12]
Dr. Cooper commented as follows at paragraph 203
of his affidavit:
With respect to paragraph 60, I note that
the 565 Patent does not actually mix a calcipotriol formulation with a betamethasone
formulation and show that it was in fact incompatible. I note that Diprosone
ointment contained only betamethasone dipropionate and white petrolatum. The
Disprosone [sic] ointment was not stabilized with an acid. There is no
information in Leo’s affidavits or the 565 Patent to show that adding this
formulation to the calcipotriol ointment will cause any degradation to either
active ingredient. Likewise there is no data to show that betamethasone
dipropionate could not have been added to the calcipotriol ointment. As well,
none of the formulations tested in Patel contained betamethasone dipropionate.
As such, there is no data showing that they are not stable when mixed together.
(Footnote omitted)
[13]
Leo Pharma wishes in reply to produce a report
showing that a combination of Diprosone and Calcipotriol was tested (post-patent)
and found to be unstable.
I.
The Prothonotary’s Decision
[14]
Prothonotary Tabib:
a.
was satisfied that Leo could not have
anticipated the specific content of the evidence adduced by Dr. Cooper;
b.
was not convinced that allowing Leo to file a proposed
reply would cause substantial or serious prejudice, provided that Teva were
allowed to file sur reply evidence; and
c.
was of the view that Leo was not splitting its
case;
d.
Nevertheless, she was not satisfied that the
proposed reply:
i
would assist the Court in making its final
determination; and
ii
would serve the interests of justice.
[15]
She was of the view that if the reply evidence
were to be permitted, Teva should be given a right of sur reply, which would
give rise to further controversy and potential motions, with a significant risk
that the proceedings would be delayed and the controversy would distract us from
the real issues in dispute. She was further of the opinion that all that Dr.
Cooper said in paragraph 203 was that there were no data in the patent or in
Leo’s evidence that demonstrates that two ointments would not be stable if
mixed together.
[16]
Leo wishes to adduce in reply evidence post-patent
tests that allegedly demonstrate that normally such mixtures are unstable.
However, did Dr. Cooper opine that the two ointments would or might be stable
when mixed? Consequently, is Leo’s proposed reply to an argument that has not
in fact been made, but rather to diffuse an innuendo or to guard against a
possibility?
II.
Analysis
[17]
A decision under Rule 312 of the Federal
Courts Rules to allow reply evidence by way of affidavit is discretionary
in nature. Any decision of a prothonotary, whether interlocutory or final,
whether discretionary or not, may be appealed to a judge of the Federal Court
in accordance with Rule 51 of the Federal Courts Rules. In turn, the
decision of that judge, whether interlocutory or final, whether discretionary
or not, may be appealed to the Federal Court of Appeal (Federal Courts Act,
s. 27). This can lead to a very tight timetable in PM (NOC) applications in
which each side files extensive affidavit evidence and schedules weeks upon
weeks of cross-examination. Cross-examinations are currently to be completed by
17 April 2015.
[18]
The Federal Court judge sitting in appeal of a
discretionary order of a prothonotary should not exercise his or her discretion
anew unless the questions raised in the motion are vital to the final issue in
the case, or the order is clearly wrong in the sense that the exercise of
discretion was based upon a wrong principle or upon a misapprehension of the
facts (Merck & Co v Apotex Inc, 2003 FCA 488, [2004] 2 FCR 459, 30
CPR (4th) 40).
[19]
It is well established, and conceded by Leo,
that a decision under Rule 312 is not vital to the outcome of the case (Solway
Pharma Inc v Apotex Inc, 2007 FC 913, 62 CPR (4th) 54).
[20]
Therefore, this appeal turns on whether the
decision was clearly wrong as being based upon a wrong principle or upon a
misapprehension of the facts.
[21]
Even more caution must be exercised when the prothonotary
is acting as case manager. She has a detailed grasp of the issues and is called
upon to render a great number of decisions, many in an informal setting (Constant
v Canada, 2012 FCA 87, [2012] FCJ No 354 (QL); and Taseko Mines Limited
v Minister of the Environment (17 April 2014), Ottawa, FC, T-1977-13
(interlocutory order)).
[22]
The appeal turns on Prothonotary Tabib’s view that
reply evidence would not assist the Court in reaching its final decision or
that the interests of justice would be served.
[23]
Although not to be read au pied de la lettre,
Mr. Justice O’Keefe in Merck Frost Canada and Co v Canada (Minister of
Health), 2003 FCT 287 at para 12, 25 CPR (4th) 56, set out five factors
normally considered by the Court in determining whether or not reply evidence
should be allowed:
(a) the
respondent’s evidence could not have been anticipated by the applicant;
(b) it
may assist the Court in making its final determination;
(c) to
refuse to do so would cause substantial prejudice to the applicant;
(d) it
will serve the interests of justice;
(e) it
will not cause unreasonable delay.
[24]
Although Teva agrees in the result, it takes
issue with the prothonotary’s opinion that Leo Pharma could not have
anticipated the evidence of Dr. Cooper. For its part, Leo Pharma maintains that
Dr. Cooper did not simply reply to Dr. Walters but actually stepped outside the
four corners of the Notice of Allegation, which is not permitted (AB Hassle
v Canada (Minister of National Health and Welfare), [2000] FCJ No 855 (QL),
7 CPR (4th) 272). On that basis it would have been open to Leo Pharma to move
to have the paragraphs in question struck. However, its chance of success would
be slight. As Mr. Justice Evans held in Apotex Inc. v Lundbeck Canada Inc.,
2008 FCA 265 at para 6, [2008] FCJ No 1275 (QL):
The fact that the Federal Courts Act,
R.S.C. 1985, c. F-7, provides for appeals as of right in interlocutory matters
from a Prothonotary to a Judge of the Federal Court, and then to the Federal
Court of Appeal, is not an open invitation to subject discretionary decisions
at first instance to close scrutiny. The interests of justice are normally best
served in summary and, indeed, in other proceedings, by minimising delays in
the determination of the substantive matter. Whenever possible, the resolution of
ongoing evidential wrangles (and some procedural issues) should be left to be
decided by the judge hearing the application, or conducting the trial.
[25]
It is important to keep in mind that the issue in
Lundbeck was whether an affidavit should be struck. The issue here is
whether additional evidence should be allowed. While the judge hearing the
application on the merits can deal with evidence which is in the record, he or
she obviously cannot deal with evidence which is not in the record.
[26]
I see no reason to interfere with the prothonotary’s
decision with respect to paragraph 203 of Dr. Cooper’s affidavit. Stability or
instability is at the heart of the case. Leo Pharma did not produce a study
when it could have easily done so. Furthermore, I would not have exercised my
discretion in favour Leo Pharma, which should have anticipated the issue. It is
too late to bring forth that evidence now.
[27]
However, I have come to the conclusion that the
learned prothonotary erred with respect to paragraph 140 of Dr. Cooper’s affidavit.
Having found, as she did, that Leo Pharma could not have anticipated that
evidence, that she was not convinced that a proposed reply would cause
substantial or serious prejudice, and that Leo Pharma was not splitting its
case, in my view she erred in law in concluding that proposed reply would not
assist the Court in making its final determination and that the evidence would
not serve the interests of justice.
[28]
The principle audi alteram partem
applies. In light of the conclusion that Leo Pharma was taken by surprise, it
is only fair and just that it be given an opportunity to reply.
[29]
It falls upon the judge who hears the case on
the evidence to construe the patent. Claims are to be read in the light of
expert evidence provided to the Court as to the technical meaning of the terms
and concepts (Free World Trust v Électro Santé Inc, 2000 SCC 66, [2000]
2 SCR 1024; and Whirlpool Corp v Camco Inc, 2000 SCC 67, [2000] 2 SCR
1067). Cross-examinations have yet to be completed.
[30]
It seems to me that the prothonotary was
interpreting the patent before all the evidence was in. Leo Pharma is right in
asserting that the applications judge may have a different point of view.
[31]
In NV Bocimar SA v Century Insurance Co, [1987]
1 SCR 1247, 39 DLR (4th) 465 (cited to SCR), the Supreme Court disagreed with
the Court of Appeal, which had interpreted expert evidence based on affidavits
in a way contrary to the trial judge. In speaking for the Court, Mr. Justice
Le Dain said (at 1250):
The Court of Appeal appears to have taken
the position that it could assess the weight of the evidence in support of the
facts on which the expert witnesses expressed an opinion because the evidence
of those facts was before the trial Court in a documentary form. The findings
of the trial Judge were similar to the assumed facts and the opinions in the
affidavits of the expert witnesses. In coming to a different conclusion, on a
balance of probabilities, from that of the trial Judge with respect to some of
those facts, the Court of Appeal in effect rejected the expert testimony which
was based in part on those facts. It did so without having heard the expert
witnesses and without being in a position to determine what their testimony
would have been had the factual basis for their testimony been qualified to the
extent considered necessary by the Court of Appeal. In doing so, the Court of
Appeal, in my respectful opinion, erred.
[32]
In my opinion, the same principle applies to
forming an opinion before the expert testimony is complete.
[33]
For these reasons, I shall allow the appeal in
part. Leo Pharma shall be given leave to reply to paragraph 140 of Dr. Cooper’s
affidavit. That reply evidence has already been sketched out, which is
sufficient for present purposes (Lundbeck, above).
[34]
It is more appropriate that the prothonotary set
out the delays for the filing of this reply evidence, and then to determine
whether or not sur reply evidence is required.
[35]
Costs shall be in the cause.
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