Date: 20120229
Docket: A-211-11
Citation: 2012 FCA 68
CORAM: DAWSON J.A.
TRUDEL
J.A.
STRATAS
J.A.
BETWEEN:
APOTEX INC.
Appellant
and
ASTRAZENECA CANADA INC. and
AKTIEBOLAGET HÄSSLE
Respondents
REASONS FOR JUDGMENT
STRATAS J.A.
[1]
Apotex
Inc. appeals from the judgment dated May 20, 2011 of the Federal Court (per Justice
Mosley) (2011 FC 598) which dismissed an appeal from an order dated April 8,
2011 of Prothonotary Lafrenière.
[2]
In
the relevant portions of his order, the Prothonotary granted leave to the
respondents to amend their pleading by adding five paragraphs. He refused leave
to add two other paragraphs. That aspect of his order has not been appealed.
[3]
Broadly
speaking, the five paragraphs allege that Apotex is estopped from litigating
certain findings of fact made in a decision of the United States District
Court, Southern District of New York. They read as follows:
43. Apotex’s Omeprazole
capsules are the same formulation in Canada and the United States.
44. The proceeding in
the United States District Court, Southern District of New York (In re
Omeprazole Patent Litigation, M-21-81, MDL Docket No. 1291) (“the U.S.
Proceeding”):
(a) involved the same
parties (or their privies) that are before the Court in the present action;
(b) determined that
Apotex’s Omeprazole capsules infringe U.S. Patent No. 4,786,505 (“’505”), the United States equivalent of the ’693
patent;
(c) determined that
Apotex failed to show that any claims of the ’505 patent are invalid;
(d) resulted in a final
decision (In re Omeprazole Patent Litigation, 490 F. Supp. 2d 381
(S.D.N.Y. 2007), affirmed by 281 Fed. App. 974 (Fed. Cir. 2008) and 536 F. 3d
1361 (Fed. Cir. 2008), petition for writ of certiorari denied by 129 S. Ct. 1593).
45. Matters of fact were
fully litigated and finally decided in the U.S. Proceeding and by reason of
issue estoppel and abuse of process are binding in respect of the present
action. The findings of fact that are binding in the present proceeding include
the following:
(a) Apotex’s
Omeprazole capsules all use identical pellets;
(b) Apotex’s
Omeprazole capsule pellet cores contain omeprazole, povidine (“PVP”), magnesium
hydroxide, and mannitol;
(c) Apotex
applies an enteric coating to its Omeprazole capsule pellet cores;
(d) Apotex’s
Omeprazole capsule pellets are dried until the moisture content is not more
than 1.5% by weight;
(e) Apotex’s Omeprazole
capsule pellets contain an enteric coating layer that includes copolymerized
methacrylic acid (“MACP”) and triethyl citrate;
(f) Apotex’s
Omeprazole capsules are oral pharmaceutical preparations;
(g) Apotex’s Omeprazole
capsule pellets contain a therapeutically effective amount of omeprazole;
(h) Apotex’s Omeprazole
capsule pellets have cores with a microenvironmnetal pH between 7 and 12;
(i) Apotex’s
Omeprazole capsule pellets have a core region containing omeprazole, a sublayer
around the core region, and an enteric coating;
(j) The sublayer in
Apotex’s Omeprazole capsule pellets is 2 to 6 microns thick;
(k) Apotex’s Omeprazole
capsule pellets have a continuous, inert sublayer that hugs the surface of the
core and separates the core from the enteric coating; and
(l) Apotex’s
Omeprazole capsule pellets contain an in situ formed sublayer that is
inert, continuous and rapidly disintegrating in water.
46. Further, by reason
of issue estoppel and abuse of process, excluding matters regarding claim
construction, Apotex is precluded from contesting or making any allegations
inconsistent with the findings of fact that were fully litigated and finally
decided in the U.S. Proceeding as they are binding in respect of the present
action.
48. Further, in Apotex
Inc. v. AB Hassle, AstraZeneca AB and AstraZeneca Canada Inc., 2003 FCA 409
(“the Canadian Proceeding”), a final decision in a matter involving the same
parties (or their privies) that are before the Court in the present action, the
Court of Appeal determined that “claim 1 describes a pharmaceutical preparation
which, in its finished product form, contains a subcoating or separating layer
between the core and enteric coating, however the subcoating or separating
layer is formed”. By reason of issue estoppel and abuse of process, this
finding is binding in the present action.
[4]
Before
the Prothonotary, Apotex argued that the paragraphs sought to be added to the
pleading are not sustainable in law and would raise significant new issues at a
late stage of the proceedings, causing it irremediable prejudice. The
Prothonotary rejected these arguments in the case of these five paragraphs. He
concluded that the amendments would survive a motion to strike and would not
cause irremediable prejudice to Apotex.
[5]
Apotex
advanced substantially the same arguments before the Federal Court judge. The
Federal Court judge found that the Prothonotary’s decision to grant the
amendments was not vital to the final outcome of the case. Accordingly, it was
incumbent on Apotex to demonstrate that the Prothonotary based his decision on
a wrong principle or upon a misapprehension of the facts. The Federal Court
judge found that Apotex had not made this demonstration. Further, the Federal
Court judge observed that even if he exercised his discretion de novo,
he would have allowed the amendments.
[6]
In
its written submissions in this Court, Apotex advanced substantially the same
arguments made before the Federal Court. However, at the hearing of this
appeal, Apotex limited its submissions in two respects. First, it conceded that
the Federal Court was right in applying a deferential standard of review, i.e.,
Apotex must demonstrate that the Prothonotary based his decision on a wrong
principle or upon a misapprehension of the facts. Second, in light of a recent
adjournment of the upcoming trial, Apotex no longer argued that the amendments
would cause it irremediable prejudice.
[7]
In
my view, substantially for the reasons offered by the Federal Court, Apotex has
not demonstrated that, in granting the amendments, the Prothonotary based his
decision on a wrong principle or upon a misapprehension of the facts.
[8]
In
this Court, Apotex emphasized that the amendments could not succeed in law. It
submitted that issue estoppel cannot arise from the foreign court’s
construction of the claims in the patent. It invoked authority to support this:
Johnson & Johnson Inc. v. Boston Scientific Ltd., 2008 FC 552. In
its view, the facts alleged in the paragraphs sought to be added to the
pleading are inextricably bound or related to the foreign court’s construction
of the claims.
[9]
A
review of the paragraphs sought to be added to the pleading shows that this
argument cannot be accepted. On their face, the paragraphs allege facts, not
the foreign court’s construction of the claims in the patent, and allege a
legal result, that issue estoppel arises from them. Indeed, paragraph 46, set
out above, alleges that Apotex is barred from relitigating matters but it
expressly excludes matters of claims construction. In my view, it is not plain
and obvious at this time that the facts alleged are inextricably bound or
related to the foreign court’s construction of the claims and that these
paragraphs cannot succeed in law.
[10]
It
will be for the trial judge to determine on the evidence whether the facts
alleged in these paragraphs are proven and whether, in law, they give rise to
issue estoppel.
[11]
Therefore,
for the foregoing reasons, I would dismiss the appeal with costs.
“David Stratas”
“I
agree
Eleanor R. Dawson J.A.”
“I
agree
Johanne Trudel J.A.”
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