Date: 20010104
Docket: A-322-99
CORAM: STONE J.A.
NOËL J.A.
EVANS J.A.
BETWEEN:
SMITHKLINE BEECHAM PHARMA INC.
and
BEECHAM GROUP P.L.C.
Appellants
- and -
APOTEX INC.
and
THE MINISTER OF HEALTH
Respondents
Heard at Ottawa, Ontario, Thursday, December 14, 2000
Judgment delivered at Ottawa, Ontario, Thursday, January 4, 2001
REASONS FOR JUDGMENT BY: NOËL J.A.
CONCURRED IN BY: STONE J.A.
EVANS J.A.
Date: 20010104
Docket: A-322-99
CORAM: STONE J.A.
NOËL J.A.
EVANS J.A.
BETWEEN:
SMITHKLINE BEECHAM PHARMA INC.
and
BEECHAM GROUP P.L.C.
Appellants
- and -
APOTEX INC.
and
THE MINISTER OF HEALTH
Respondents
REASONS FOR JUDGMENT
NOËL J.A.
[1] This is an appeal from the decision of McGillis J.1 in which she dismissed the appellants' ("SmithKline") application under the Patented Medicines (Notice of Compliance) Regulations ("Regulations"), SOR/93-133, as amended SOR/98-166, for an order prohibiting the Minister of Health ("Minister") from issuing a notice of compliance to Apotex Inc. ("Apotex") for its paroxetine hydrochloride tablets until the expiry of Canadian Letters Patent No. 1,287,060 ("`060 patent").
FACTS
[2] The relevant facts are set out in detail by the motions judge in her reasons and as these are not in issue, I need not restate them.
[3] Suffice to say for present purposes that the patented invention generally relates to the novel compound "...crystalline paroxetine hydrochloride hemihydrate, processes for its preparation, composition containing the same and its therapeutic use".
[4] In describing the invention, the `060 patent discloses that:
| In general, the hydrochloride salt of a basic compound is preferred for therapeutic use because of its physiological acceptability. |
| However for commercial use it is also important that the solid product should have good handling qualities. |
| We have found that amorphous paroxetine hydrochloride is a hygroscopic solid of poor handling qualities. |
| It has now been discovered that paroxetine hydrochloride can be produced in crystalline form in a manner reproducible on a commercial scale. |
| The present invention provides crystalline paroxetine hydrochloride hemihydrate as a novel material, in particular in pharmaceutically acceptable form. |
| Paroxetine hydrochloride hemihydrate is stable and non-hygroscopic. |
[5] The patented product is crystalline paroxetine hydrochloride hemihydrate ("hemihydrate") in a pharmaceutically acceptable form. In a further aspect of the invention, hemihydrate can be obtained by compressing crystalline paroxetine hydrochloride anhydrate ("anhydrate"). In one illustration of the invention contained in the `060 patent, it is said (example 8):
| Samples of the anhydrate were compressed at approximately 750 MNm-2 and approximately 375 MNm-2 for periods of about 2 minutes. The former underwent 45% conversion to the hemihydrate, whilst the latter remained unchanged. |
| Upon reexamining the samples after storage for several days, it was seen that the former sample had undergone complete conversion to the hemihydrate, whilst the latter sample had undergone about 50% conversion. |
| After a further week, the conversion of the latter sample was almost complete. |
[6] The `060 patent has ten claims the last of which (claim 10) claims the hemihydrate. The parties are agreed that this is the only relevant claim for purposes of this appeal. What is in issue therefore, is the patented product hemihydrate however made.
[7] SmithKline filed four patent lists, pursuant to the Regulations, in connection with the hemihydrate and listed the `060 patent in all four.
[8] By letters dated October 15, 1996, and August 27, 1997, Apotex provided two notices of allegation, both of which were to the same effect. The full text of the first notice ("the notice of allegation") provides:
| We will be submitting to the Federal Minister of Health a New Drug Submission for tablets containing the medicine paroxetine hydrochloride. It is our position that manufacture and sale of our product will not infringe any relevant patent. The Patented Medicines (Notice of Compliance) Regulations require that we serve on you a Notice of Allegation so as to be able to include a copy of same and proof of service in our submission. |
| Accordingly, this is a Notice of Allegation pursuant to Section 5(3)(b) of the said Regulations. With respect to patents 1287060, 1290340 and 1310649 we allege that no claim for the medicine itself and no claim for the use of the medicine, would be infringed by the making, constructing, using or selling by Apotex Inc. of tablets containing the medicine paroxetine hydrochloride. The legal and factual basis for the aforesaid allegation is as follows. |
| None of the aforesaid patents contains any claim for the medicine itself or the use of the medicine, paroxetine hydrochloride. Furthermore, with respect to any claims that might be considered to be claims for a medicine, even if not the medicine, the product sold by us will not be within the scope of any such claims. |
| Specifically, with respect to patent 1287060: |
| i) claims 1 to 6 inclusive are claims for processes only, and not for the medicine itself or the use of the medicine. |
| ii) claims 7 to 8 are claims for intermediates which may be used for the production of the medicine, but are not claims for the medicine itself. |
| iii) claims 9 and 10 relate only to crystalline paroxetine hydrochloride hemihydrate, which is not the same compound as the medicine, paroxetine hydrochloride. |
| iv) In any event, the tablets to be made and sold by Apotex Inc. will not be made using crystalline paroxetine hydrochloride hemihydrate, but will be made using the medicine paroxetine hydrochloride. |
| Specifically with respect to patents 1290340 and 1310649, these patents have claims only for processes and intermediates that may be useful to make the medicine, and such claims are not claims for the medicine itself or the use of the medicine. |
[9] On December 4, 1996, SmithKline filed an application for an order prohibiting the Minister from issuing a notice of compliance to Apotex which was eventually dismissed by the aforesaid decision of McGillis J.
JUDGMENT APPEALED FROM
[10] The motions judge identified two principal questions to be determined:
| i) whether Apotex' allegation is ambiguous and contains insufficient facts to justify its allegation of non-infringement; |
| ii) whether SmithKline has discharged its burden of establishing that Apotex' allegation of non-infringement is not justified. |
[11] With respect to the first issue, the motions judge noted that the notice of allegation was ambiguous, given the absence of specific reference to the anhydrate, but that this ambiguity was not such as to make the notice deficient. As to the sufficiency of the facts alleged, she held that the notice of allegation, when considered in its totality, was capable of leading to a conclusion of non-infringement.
[12] With respect to the second question, the motions judge determined that the central issue before her was the question of the conversion of the anhydrate to the hemihydrate. Absent such conversion, Apotex' anhydrate tablets would clearly not fall within the claims of the `060 patent.
[13] SmithKline therefore set out to demonstrate that the anhydrate would convert over time to the hemihydrate, and that Apotex' allegation of non-infringement was false. A series of experiments were conducted towards that end. These led SmithKline's experts to conclude both that the anhydrate converts into the hemihydrate over time and that the anhydrate is converted to the hemihydrate as a result of the tableting process.
[14] Despite the conclusions reached by SmithKline's experts, the motions judge concluded that it had not been established, on a balance of probabilities, that Apotex' allegation of non-infringement was not justified. The motions judge found that the results of the experiments raised nothing more than a possibility of infringement "over time". The motions judge found not only SmithKline's tests to be unreliable because of the conditions in which they were conducted, but also that the appellants had not demonstrated what time frame could be applied to the expression "over time".
[15] As SmithKline's experiments were flawed, the motions judge also disregarded the apparent concession by Apotex' expert that the tableting process converts the anhydrate to the hemihydrate. According to the motions judge, this concession was made on the premise that SmithKline's experiments had been validly conducted.
[16] She concluded that the evidence adduced by SmithKline raised "nothing more than a possibility of infringement" by Apotex and held that it had not established, on a balance of probabilities, that Apotex' allegation of non-infringement was not justified
GROUNDS OF APPEAL
[17] SmithKline alleges that the motions judge committed three errors in holding as she did. First, the notice of allegation, as drafted by Apotex, was ambiguous in that it failed to refer to the anhydrate and deficient in that the facts alleged, even if taken as proven, could not give rise in law to the conclusion that the `060 patent would not be infringed (Merk Frosst Canada Inc. v. Canada (Minister of National Health and Welfare), (1994) 55 C.P.R. (3d) 302 at 319). According to counsel, the motions judge in effect rewrote the notice of allegation so as to cure this deficiency, thereby giving rise to a new cause of action (Bayer AG v. Canada (Minister of National Health and Welfare), (1995) 60 C.P.R. (3d) 129 at 134).
[18] Even if the notice of allegation could lead to a conclusion of non-infringement counsel argued, the motions judge disregarded the jurisprudence of this Court in failing to give effect to the common law presumption which operated in its favour as a result of Apotex' failure to disclose its tableting process (Hoffmann-La Roche v. Canada (Minister of National Health and Welfare), (1996) 70 C.P.R. (3d) 206 at 212, para. 10 and Eli Lilly & Co. v. Nu-Pharm Inc., (1996) 69 C.P.R. (3d) 1 at 20). Counsel argues that when effect is given to this presumption, it becomes clear that SmithKline has met its evidentiary burden.
[19] In any event, SmithKline alleges that its evidentiary burden has been met by the unqualified concession made by Apotex' expert, who stated in his affidavit that the anhydrate is converted to the hemihydrate as a result of the tableting process. Counsel claims that the motions judge misread the affidavit when she held that this concession was a function of the experiments that SmithKline's experts had conducted.
ANALYSIS
[20] With respect to the first ground of appeal, counsel for the appellant conceded during the hearing that the failure to make express reference to the anhydrate in the notice of allegation was not fatal since the information subsequently provided by Apotex confirmed the use of the anhydrate. However, he pointed to the detailed statement of fact which accompanied the notice of allegation and submitted that paragraphs iii) and iv) (reproduced at paragraph 8 of these reasons) set out the only facts that are relevant to the allegation of non-infringement insofar as it relates to claim 10 of the `060 patent. He added that the facts alleged in these paragraphs, if assumed or proven, cannot give rise in law to a conclusion that the `060 patent will not be infringed by Apotex and that the notice of allegation is accordingly deficient.
[21] Specifically, SmithKline submits that paragraph iii) states an undisputed fact that cannot support a conclusion of non-infringement and that paragraph iv) fails to allege that the tablets to be sold by Apotex will not contain the hemihydrate. Because the patent teaches that anhydrate converts to the hemihydrate under pressure and that the process of tableting requires the anhydrate to be placed under pressure, SmithKline submits that it was essential for Apotex to state as a fact that its anhydrate tablets, when sold, would not contain the hemihydrate.
[22] The motions judge did not appear to disagree with the position of SmithKline in this regard. However, she read the notice of allegation as embodying the requisite statement of fact:
| I am satisfied that the notice of allegation, when considered in its totality, alleges that Apotex would not infringe the '060 patent by making, constructing, using or selling tablets containing hemihydrate. (paragraph 33 of her reasons) (My emphasis). |
SmithKline argues that in so holding, the motions judge, in effect, rewrote the notice of allegation and ignored the jurisprudence of this Court insofar as it has held that a notice of allegation once filed cannot be amended (Bayer AG, supra. See also Hoffmann-La Roche, supra at 211, para. 7).
[23] As I read the Regulations as they stood at the relevant time, three discrete obligations rested on Apotex under section 5 in the circumstances of this case. The first was to make an allegation pursuant to subsection 5(1)(b)(iv) that,
| ... no claim for the medicine itself and no claim for the use of the medicine would be infringed by the making, constructing, using or selling by that person of the drug for which the submission for the Notice of Compliance is filed. |
The second, under paragraph 5(3)(a), was to "provide a detailed statement of the legal and factual basis for the allegation". The third, under paragraph 5(3)(b), was to "serve a notice of the allegation on the first person and proof of such service on the Minister".
[24] While I find no difficulty with Apotex combining the notice of allegation and the detailed statement in a single document, it must not be forgotten that each serves a distinct purpose. As I see it, the notice of allegation under subparagraph 5(1)(b)(iv) serves the dual purpose of informing the Minister and the patentee that no infringement of a listed patent would result in the event that the notice of compliance is issued. The detailed statement, on the other hand, is intended to place the patentee in the position of deciding whether to oppose the issuance of a notice of compliance by instituting a section 6 proceeding or to stand aside. In order to be in that position, the patentee must be made fully aware of the grounds for which it is alleged that the patent will not be infringed (Hoffman-La Roche, supra at 211, para. 8).
[25] I take no exception to the contents of the notice of allegation per se. It merely tracks the regulatory language of subparagraph 5(1)(b)(iv).
[26] SmithKline's concern is that the notice of allegation was not sufficiently substantiated by the detailed statement. On this point, I would not differ from the conclusion reached by the motions judge but have difficulty with the reason she gave for arriving at that conclusion and which is recited in paragraph 22 of these reasons. In my respectful view, a deficiency in a detailed statement cannot be cured by reading that statement along with a notice of allegation. As I have indicated, the whole purpose of the detailed statement is to make the patentee fully aware of the grounds on which the person seeking a notice of compliance claims that the patent will not be infringed. Whether that purpose has been accomplished must depend, in my view, on the facts and law relied upon in the detailed statement itself.
[27] That being said, the detailed statement in this case was not insufficient in the sense that it left SmithKline having to guess at the real grounds for the respondents' allegation that the patent would not be infringed. Indeed, SmithKline appears to have well understood at the time the section 6 application was commenced that conversion of the anhydrate to the hemihydrate was raised by the detailed statement and that Apotex' tablets would not contain the hemihydrate. This is apparent from the evidence which it filed in support of its application. In my view, therefore, the detailed statement did provide the factual and legal basis required by paragraph 5(3)(b) of the Regulations sufficient to make the appellants fully aware of the grounds on which the respondents claimed that the patent would not be infringed if the notice of compliance issued.
[28] SmithKline alleges that the motions judge committed a related error when she said at paragraph 39 of her reasons:
| Apotex has alleged in its notice of allegation that its tablets will not infringe the '060 patent. That allegation is presumed to be true, "...except to the extent that the contrary has been shown..." by SmithKline. [See Merck Frosst Canada Inc. v. Canada (1994), 55 C.P.R. (3d) 302 at 319 (F.C.A.)]. |
According to SmithKline, this passage shows that the motions judge extended the presumption which attaches to the allegations of fact (Hoffmann-La Roche, supra at 211, para. 4) to the conclusion of law advanced by Apotex in its notice of allegation.
[29] In my view, this is not a fair reading of the motions judge's reasons which show that she drew a clear distinction between the mandatory allegation of non-infringement (subparagraph 5(1)(b)(iv) of the Regulations) and the facts advanced in support of it (see in particular paragraph 33 of her reasons). The motions judge in the above quoted passage was obviously repeating in shorthand the basic rule that the facts advanced by a second person in support of a notice of allegation are presumed to be true.
[30] Even if the notices of allegation were not deficient, SmithKline maintains that the allegation remains unjustified when regard is had to the common law presumption which operates in its favour. According to SmithKline, the motions judge failed to give effect to this presumption.
[31] In support of this contention, SmithKline relies on the fact that the only information provided to it by Apotex pertained to the method and process for making the anhydrate; no information was provided as to how the anhydrate would be tableted and what steps would be taken to avoid conversion. As this information was within the exclusive knowledge of Apotex, SmithKline argues that the motions judge was bound to presume that Apotex' tableting process would result in the anhydrate converting into the hemihydrate.
[32] SmithKline has established only one of the two conditions precedent to the application of the common law presumption:
| ... before giving effect to the presumption the court would have to be satisfied that the information was not in the possession of the respondents, and was peculiarly within the knowledge of the appellant. It would also be necessary for the Respondents to show that the required information was not adduced in evidence by the Appellant and that the Respondents did not have available other means of accessing it (Nu-Pharm, supra at 19.) (My emphasis). |
[33] The record on appeal does not show that SmithKline made any attempt to obtain this information or to compel its production. Yet the case law, as it stood at the relevant time, suggests that the information might well have been accessible to SmithKline upon the appropriate motion being brought (SmithKline Beecham Pharma Inc. v. Apotex Inc., (1969) 3 C.P.R. (4th) 22 at 27). Further, if asked, Apotex might have supplied it voluntarily. It follows that the common law presumption cannot come to the aid of SmithKline in this instance.
[34] Finally, SmithKline argues that the motions judge erred by failing to give effect to Apotex' concession that the anhydrate will convert to the hemihydrate over time and more importantly that "the anhydrate form is converted to the hemihydrate form as a result of the tableting process" (Petrov affidavit, para. 10, Appeal Book at 579).
[35] The motions judge said with respect to these concessions at paragraph 39 of her reasons:
| In my opinion, Mr. Petrov simply confirmed that he agreed with the conclusions of [SmithKline's experts] in the context of the experiments conducted by them. |
As she found these experiments to be unreliable and inconclusive, she concluded that nothing flowed from Mr. Petrov's concession.
[36] I do not see how Mr. Petrov's affidavit can be read otherwise than as suggested by the motions judge. Mr. Petrov agreed with the opinions expressed by SmithKline's experts based on the experiments that they conducted. To treat his affidavit as an unqualified concession that conversion will result from any tableting process however conducted would give it, from Apotex' perspective, the effect of a confession to judgment. In my view, the motions judge did not misconstrue the concession made by Mr. Petrov in his affidavit when she held that it was made by reference to the experiments conducted by SmithKline's experts.
[37] I would dismiss the appeal with costs.
"Marc Noël"
J.A.
"I agree
A.J. Stone"
"I agree
John M. Evans"
__________________
1Reported at 166 F.C.R. 67.
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