Toronto, Ontario, May 25th, 2004
Present: The Honourable Mr. Justice von Finckenstein
BETWEEN:
ASTRAZENECA AB and
ASTRAZENECA CANADA INC.
Applicants
and
APOTEX INC. and THE MINISTER OF HEALTH
Respondents
REASONS FOR ORDER AND ORDER
[1] These are two appeals from the Order of Prothonotary Lafrenière, dated May 12th, 2004, made in respect of files T-1878-02 and T-766-03.
[2] Both files involve the same parties, the same medicinal tablets of the Respondents (hereinafter called "Apotex") and the same affidavit. In proceeding T-1878-02, the Applicants (hereinafter called "AstraZeneca") seek orders prohibiting the Minister from issuing a Notice of Compliance ("NOC") to Apotex for omeprazole capsules pending expiry of Canadian Patent
No. 1,292,693, Patent No. 1,302,891, and Patent No. 2,166,483 (collectively the "Patents"). In proceeding T-766-03, AstraZeneca seeks an order prohibiting the Minister from issuing a NOC to Apotex for omeprazole capsules pending expiry of Canadian Patent No. 2,186,037. By agreement, the case was argued in respect of file T-1878-02 (which is scheduled for a hearing on August 17th, 2004) but this decision shall apply to both files T-1878-02 and T-766-03.
[3] In its motions, AstraZeneca sought leave to introduce an affidavit by Dr. Jörgen Lindquist which described the results of testing of Apotex's omeprazole magnesium capsules. Prothonotary Lafrenière denied leave on the basis of unreasonable delay by AstraZeneca. Apotex opposed AstraZeneca's request for leave to introduce the Lindquist affidavit and opposes this appeal. In the alternative, Apotex argues that, should leave to introduce the Lindquist affidavit be granted, it should be allowed to introduce reply evidence
The decision of Kelen J. in T-1747-00
[4] In previous proceedings (Federal Court File T-1747-00) involving the same parties, the same drug and the same patents (as those involved in T-1878-02), AstraZeneca had tried to obtain samples of Apotex's omeprazole capsules. AstraZeneca had moved for production of portions of Apotex's regulatory submission ("NDS") in order to obtain samples of tablets which it argued may have been in the possession of the Minister. By Order dated July 16th, 2001, Prothonotary Aronovitch directed that Apotex produce portions of its NDS. Since Apotex had not submitted to the Minister samples of its omeprazole magnesium tablets, they did not, in fact, form part of its NDS. As a result, Apotex did not produce these relevant tablets to AstraZeneca and consequently, the matter proceeded before Kelen J. without Apotex's samples.
[5] In his decision of September 2002, Kelen J. found in paragraph 51:
Based upon the evidence, I conclude
[1] There will be a reactive material or "interface" spontaneously generated when the enteric coating, which consists of polymers, is sprayed on the core which contains omeprazole and alkaline materials;
[2]The nature of the reactive material or interface cannot be known without analytical testing of the tablets themselves;
[3]The experts disagree whether the reactive material or interface can be considered a "subcoating" within the meaning of the patents or whether the reactive material would form a continuous layer around the core and what its thickness might be;
[4]The reactive material would insulate the core from dissolving and would serve the same purpose to an unknown extent as the subcoating described in claim No. 1 of the Patent
[5] It is not possible to assess conflicting expert evidence in terms of credibility without the benefit of viva voce evidence in this case;
[6] It is not possible to determine whether the allegation of non-infringement is justified based on speculation and conjecture by the experts. This is particularly frustrating when the best evidence, and probably the conclusive evidence, would be the results of analytical testing of the Apotex tablets themselves; (emphasis added)
[6] Kelen J. allowed AstraZeneca's application and prohibited the Minster from issuing a NOC to Apotex in respect of omeprazole magnesium tablets 10, 20 and 40 mg, until after the expiration of the Patents.
The T-1878-02 Application
[7] The decision of Kelen J. triggered a new round of applications for NOCs by Apotex. A Notice of Allegation was sent by Apotex to the Applicants on September 26th, 2002, in which Apotex alleged that the relevant patents would not be infringed by its own omeprazole magnesium tablets. It also alleged that the patents themselves were invalid. By Notice of Application dated November 8th, 2002, the Applicants commenced the proceedings in Court File No. T-1878-02 pursuant to the Patented Medicines (Notice of Compliance) Regulations (the "NOC Regulations"), S.O.R./ 93-133for an Order prohibiting the Minister of Health from issuing a Notice of Compliance to Apotex in respect of omeprazole magnesium tablets, 10 and 20 mg, until expiration of the Patents.
[8] AstraZeneca filed its evidence on January 10th, 2003. Apotex filed its responding evidence on April 2nd, 2003.
[9] From the outset AstraZeneca has tried to obtain omeprazole magnesium sample tablets from Apotex. Thus it stated in in paragraph 31 and 32 of its Notice of Application:
Further, and in the alternative, the Applicants submit that Apotex must disclose samples, formulation particulars and process information relating to the NDS for Apotex' omeprazole magnesium presently before the Minister. Such disclosure is necessary in order to allow the Applicants to assess whether a subcoat is present and/or whether the allegation of non-infringement is justified on any of the other alternative bases asserted by Apotex.
The Applicants have no knowledge or access to knowledge regarding the existence, contents or date of filing of any new drug submission or the formulation particulars or process information for magnesium omeprazole product referred to in the letter. Further, the Applicants have no access to samples of Apotex' product.
[10] By correspondence from its counsel dated April 9th, 2003, AstraZeneca again requested that Apotex provide samples of its tablets for testing. Having noticed that Apotex's principal affiant, Dr. Cima, had been provided samples for testing, counsel for AstraZeneca stated:
Please advise whether Apotex will produce samples to our side for testing. If Apotex will not cooperate in this regard, the applicants will have little choice to but to apply to the court. (AstraZeneca's Motion Record Vol I Tab 8A)
[11] On April 18th, 2003, Apotex refused to produce such samples.
[12] On May 2nd, 2003, AstraZeneca brought a motion to strike the affidavits of Dr. Cima claiming that there was insufficient linkage between the samples tested, information reviewed and the assertions of non- infringement made in the Notice of Allegation. AstraZeneca did not ask for production of the samples in that motion.
[13] By order dated June 3rd, 2003, Prothonotary Lafrenière granted that motion and ordered Apotex to file additional evidence as to source and relevance of Dr. Cima's evidence, failing which the impugned evidence would be struck.
[14] Subsequently, Apotex filed an affidavit by Dr Sherman, addressing the deficiencies as to source and content raised in connection with Dr. Cima's affidavit.
[15] Other interlocutory proceedings followed and it was not until Dr. Sherman's cross-examination on January 6th, 2004, that AstraZeneca again raised the issue of the samples. During that cross-examination, it asked Dr. Sherman to produce the samples. Apotex took the request under advisement but belatedly produced the samples on February 19th, 2004.
[16] The samples were then, subsequent to discussions between AstraZeneca's Canadian and Swedish counsel, shipped to Sweden, whee they arrived on March 8th, 2004. They were tested in Sweden by Dr. Lindquist who produced his affidavit on April 15th, 2004.
[17] Counsel for Apotex advised counsel for AstraZeneca on April 12th, 2004 that it would oppose the introduction of the Lindquist affidavit, which prompted the motion before Prothonotary Lafrenière which has now become the subject matter of this appeal.
[18] In his order of May 12th, 2004, Prothonotary Lafrenière refused leave to allow the introduction of the Lindquist affidavit, which he found would greatly assist AstraZeneca, by reason of inexcusable delay. Three reasons were provided for this decision:
i) AstraZeneca made no attempt to bring a motion to compel production of the samples between April 2003 and the cross examination of Dr. Sherman in January of 2004;
ii) AstraZeneca stood by for six weeks after the cross examination of Dr. Sherman while Apotex pondered whether or not to produce the samples rather than moving to force production; and
iii) AstraZeneca waited nearly two months to produce the Lindquist affidavit after it had received the samples.
Analysis
[19] The standard for review on appeals from the orders of Protonotaries is well established. In Merck & Co. v. Apotex Inc. (2003), 315 N.R. 175, reformulating the test in Canada v. Aqua-Gem Investments Ltd. (1993), 149 N.R. 273, Décary J.A. stated at para.19:
Discretionary orders of Protonotaries ought not to be disturbed on appeal to a judge unless:
a) the questions in the motion are vital to the final issue of the case, or
b) the orders are clearly wrong, in the sense that the exercise of discretion by the prothonotary was based upon a wrong principle or upon a misapprehension of facts.
[20] In this case, in light of Kelen J.'s judgement, there is no doubt but that the evidence related to the testing of the tablets is vital to the outcome of this case. As Kelen J. stated in the portion of his September 2002 judgement quoted above: "the best evidence, and probably the conclusive evidence, would be the results of analytical testing of the Apotex tablets themselves".
[21] However, as matters stand right now, this best evidence will not be before the court. Apotex knew from day one that these sample tablets would be crucial to the outcome of the case. Yet, it refused to supply them to AstraZeneca. Once it filed Dr. Sherman's affidavit, it was fully predictable that on cross-examination AstraZeneca would ask for the samples. However, even subsequent to the cross-examination, Apotex delayed a further full six weeks before furnishing the samples. In addition, it opposed the introduction of Dr. Lindquist's affidavit, causing further delay and forcing the bringing of this motion.
[22] AstraZeneca, on the other hand, showed no great urgency in trying to obtain the samples. It sent an e-mail in April of 2003 requesting the samples, but when Apotex refused to supply them, it took no further action until the cross-examination of Dr. Sherman in January 2004. Notwithstanding several interlocutory proceedings, particularly its motion to strike Dr. Cima's affidavit for lack of source and relevance, it did not bring the matter before the court until April 2003. It also stood by for six weeks while Apotex decided whether or not to furnish the samples, then took a month and a half to produce the Lindquist affidavit, notwithstanding that it had been fighting for over a year to obtain these samples for testing.
[23] AstraZeneca proffers as excuse (for waiting until the cross-examination of Dr. Sherman before asking for the samples) that it is not aware of any legal mechanism to force production of samples before a cross examination given that the samples were not part of Apotex's NDS. As AstraZeneca did not attempt to bring a motion to that effect or to tie it to some of the various interlocutory proceedings that have occurred in the interim, I find it difficult to accept this as the reason for AstraZeneca's inaction.
[24] This being a proceeding under the NOC Regulations, time is of the essence. The automatic stay expires in twenty four months and the court does everything in its power to ensure that a hearing is scheduled and a decision made within that time frame. For that reason, the hearing has been scheduled for August 17th, 2004, although all of the prior steps necessary for the hearing are far from completed. All parties agree that there is very little time left to complete the necessary pre-hearing steps before August 17th, 2004.
[25] Yet, both parties have engaged in litigation brinkmanship and are playing the court against the August 17th deadline. Prothonotary Lafrenière is absolutely correct in finding there are inexcusable delays, by both sides. I wholeheartedly applaud his emphasis on celerity and his attempt to do everything possible to maintain the August hearing date. However, given the culpability of both sides in causing this delay, it is the court that becomes the victim. If his order is allowed to stand, the hearing in August will go forward without, in the words of Kelen J., " the best evidence, and probably the conclusive evidence....... the results of analytical testing of the Apotex tablets themselves" being available.
[26] This is an unacceptable result. When exercising his discretion, a Prothonotary must take into account not only the position of the parties but also the interest of the court. It is not in the interest of the court to have matters proceed to a hearing when the best and probably conclusive evidence is available but cannot be furnished in time thanks to the strategic manoeuvring of the parties. The NOC Regulations are meant to provide for a speedy disposition of disputes between pharmaceutical companies in respect of patentable medicine, but such speedy resolution cannot come at the expense of the court being deprived of relevant and probably conclusive evidence.
[27] If, as a result of my order, the hearing date in August is not achievable, the parties have only themselves to blame. As delay works in favour of the patent-holder in these proceedings, I would normally be reluctant to place hearing date in jeopardy. However, here Apotex clearly took a gamble by a) not producing the samples in the first place, b) waiting six weeks to furnish the samples that they were clearly required to provide, and c) opposing AstraZeneca's request to introduce the Lindquist affidavit. While AstraZeneca did its part to contribute to the delay, Apotex cannot claim to be an innocent victim, but rather it is suffering as a result of a backfire of its own delaying tactics.
[28] To prevent the court from not having the best evidence before it, I feel that I have no choice but to set aside the decision Prothonotary Lafrenière. AstraZeneca will be granted leave to file the Lindquist affidavit. Apotex has asked to be given leave to file evidence in response to the Lindquist affidavit. I do not see why this is necessary. Apotex has already introduced the evidence of Dr Cima as to the testing of Apotex's tablets. Apotex will also have the opportunity to cross-examine Dr Lindquist. Thus, the examination of Apotex's tablets by both sides' experts and the cross- examination of these experts will be before the court. In light of the tight time frame, I do not see that it is fair or necessary to allow Apotex to introduce further counter-evidence on testing.
[29] The parties shall apply forthwith to the scheduling Prothonotary for a rescheduling of matters so that the August 17th hearing date can be met. If that should prove to be impossible, the scheduling Prothonotary shall set a new date and a new schedule. If necessary, this court will entertain a motion for an extension of the stay until the new hearing date.
ORDER
THIS COURT ORDERS that this appeal is allowed.
1. The Applicants may file the affidavit of Dr. Jörgen Lindquist dated April 15th, 2004 in respect of both File T-1878-02 and File T-766-03.
2. The Parties shall forthwith schedule a telephone conference with the case management Prothonotary to attempt to reschedule matters so that the August 17th hearing date can be met, failing which, the case management Prothonotary shall set a new hearing date and a new schedule.
3. The Applicants shall have their costs payable in the event of the cause.
"K. von Finckenstein"
J.F.C.
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-766-03
STYLE OF CAUSE: ASTRAZENECA AB and
ASTRAZENECA CANADA INC.
Applicants
and
APOTEX INC. and THE MINISTER OF HEALTH
Respondents
PLACE OF HEARING: TORONTO, ONTARIO
DATE OF HEARING: MAY 20, 2004
REASONS FOR ORDER
AND ORDER BY : von FINCKENSTEIN J.
DATED: MAY 25, 2004
APPEARANCES:
Mr. J. Sheldon Hamilton
Mr. Yoon Kang FOR THE APPLICANTS
Mr. Andrew Brodkin
Ms. Nathalie Butterfield FOR THE RESPONDENTS, APOTEX INC.
Mr. Eric Peterson FOR THE RESPONDENTS, THE MINISTER OF HEALTH
SOLICITORS OF RECORD:
Smart & Biggar
Toronto, Ontario FOR THE APPLICANTS
Goodmans LLP
Toronto, Ontario FOR THE RESPONDENTS, APOTEX INC.
Morris Rosenberg
Deputy Attorney General of Canada
Toronto, Ontario FOR THE RESPONDENTS, THE MINISTER OF HEALTH
FEDERAL COURT
TRIAL DIVISION
Date: 20040525
Docket: T-766-03
BETWEEN:
ASTRAZENECA AB and ASTRAZENECA CANADA INC.
Applicants
and
APOTEX INC. and THE MINISTER OF HEALTH
Respondents
REASONS FOR ORDER
AND ORDER