Ottawa, Ontario, September 25, 2006
PRESENT: The Honourable Madam Justice Tremblay-Lamer
BETWEEN:
and
THE MINISTER OF HEALTH
Respondents
and
SCHERING CORPORATION
REASONS FOR ORDER AND ORDER
[1] This is an appeal of an Order of Prothonotary Martha Milczynski, dated May 8, 2006, by which she dismissed Novopharm’s motion for summary dismissal of the within application brought under paragraph 6(5)(b) of the Patented Medicines (Notice of Compliance) Regulations, SOR/93‑133 (the Regulations), which empowers the Court to dismiss an application where it is redundant, scandalous, frivolous or vexatious or is otherwise an abuse of process. Novopharm asserted that the application was an abuse of process and that the proceeding was barred from continuing on the basis of res judicata or issue estoppel having regard to the decision in Aventis Pharma Inc. v. Apotex Inc. et al. 2005 FC 1283, (2005), 43 C.P.R. (4th) 161 (F.C.) (the First Aventis ‘206 Application), aff’d 2006 FCA 64, (2006), 46 C.P.R. (4th) 401 (F.C.A.), leave to appeal ref’d, [2006] S.C.C.A. No. 136.
FACTS
The Main Proceeding
[2] On February 12, 2005, Novopharm sent a Notice of Allegation (Novopharm’s NOA) to Aventis pursuant to section 5 of the Regulations in relation to its 1.25 mg, 2.5 mg, 5 mg and 10 mg strengths of oral capsules of the drug ramipril and Canadian Patent No. 1,341,206 (the ‘206 Patent).
[3] Pursuant to subparagraph 5(1)(b)(iii) of the Regulations, Novopharm’s NOA alleges (at section 2.5, pages 6 to 16) that claims 1, 2, 3, 6 and 12 of the ‘206 Patent are not valid and that claim 12 of the ‘206 Patent is not infringed. The remaining claims are not relevant as they do not relate to the “medicine”, ramipril.
[4] In particular, Novopharm’s NOA alleges, at section 2.5, pages 6 to 16, that the ‘206 Patent is invalid on the basis that:
(a) the inventors had not tested all of the compounds claimed in claims 1, 2, 3, 6 and 12 as of either the priority date of the ‘206 Patent or the Canadian filing date of the ‘206 Patent, and that therefore the inventors could not have demonstrated utility for all of the claimed compounds in claims 1, 2, 3, 6 and 12; and
(b) the inventors did not have a sound basis for predicting that all of the compounds covered by claims 1, 2, 3, 6 and 12 would work as of either the priority date of the ‘206 Patent or the Canadian filing date of the ‘206 Patent.
[5] These same allegations of invalidity based on a lack of sound prediction were held to be justified by this Court in the First Aventis ‘206 Application. Novopharm’s NOA cites all of the prior art cited in the Apotex NOA, and by Apotex’s affiants, in the First Aventis ‘206 Application.
[6] In response to Novopharm’s NOA, Aventis commenced an application pursuant to the Regulations, which seeks an order prohibiting the Minister from issuing a Notice of Compliance (NOC) to Novopharm in relation to 1.25 mg, 2.5 mg, 5 mg and 10 mg strengths of oral capsules of the drug ramipril until after the expiry of the ‘206 Patent.
The First Aventis ‘206 Application
[7] In the First Aventis ‘206 Application, Court file no. T-1742-03, Apotex sent an NOA to Aventis in relation to oral capsules of the drug ramipril (the Apotex NOA). The Apotex NOA alleged that the ‘206 Patent was invalid due to a lack of sound prediction with respect to the claims in the patent. This is also an allegation made by Novopharm in Novopharm’s NOA.
[8] In response to the Apotex NOA, Aventis commenced the First Aventis ‘206 Application. Aventis sought an order prohibiting the Minister from issuing an NOC to Apotex in relation to oral capsules of the drug ramipril until after the expiry of the ‘206 Patent. Schering was also a party to the first Aventis ‘206 application, as was the Minister.
[9] By Reasons for Order and Order, dated September 20, 2005, my colleague Justice Anne Mactavish dismissed the First Aventis ‘206 Application and held that the allegations of a lack of sound prediction with respect to the ‘206 Patent were justified. Based on the decision of Justice Mactavish it is clear that the claims at issue before her in the First Aventis ‘206 Application were the same claims that are at issue in the present application, namely, claims 1, 2, 3, 6 and 12 of the ‘206 Patent.
[10] Aventis appealed Justice Mactavish’s decision in the First Aventis ‘206 Application. That appeal was dismissed by the Federal Court of Appeal on February 13, 2006. Schering participated in the appeal as a respondent.
Prothonotary Milczynski’s Decision
[11]
On March
15, 2006, Novopharm brought a motion to
dismiss the current application on the basis that it is barred by res
judicata or issue estoppel, that it is redundant, scandalous, frivolous or
vexatious, or otherwise an abuse of process.
[12] The motion was heard by Prothonotary Milczynski on May 5, 2006. By Order dated May 8, 2006, she dismissed Novopharm’s motion, without prejudice, on the basis that the application of the doctrines of res judicata, issue estoppel and abuse of process require that there be a final decision and that a decision is only final and binding when all available reviews have been exhausted or abandoned. In this regard, she relied upon the Supreme Court of Canada’s decision in Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77 at paragraph 46. In her reasons, Prothonotary Milczynski did not question the merits of the motion, or the availability of the relief sought by Novopharm. Her only concern was that the test for res judicata had not been met as the decision in the First Aventis ‘206 Application relied upon by Novopharm was not final as all appeals had not been exhausted given Aventis’ pending leave to appeal to the Supreme Court of Canada.
[13] On April 18, 2006, over a month after Novopharm served Aventis and Schering with its motion to dismiss this application, and over two months after the decision of the Court of Appeal in the First Aventis ‘206 Application was rendered, Aventis filed a motion to the Supreme Court of Canada for leave to appeal from the decision of the Federal Court of Appeal in the First Aventis ‘206 Application.
[14] The leave to appeal to the Supreme Court was dismissed with costs and without reasons on August 3, 2006: [2006] S.C.C.A. No. 136.
[15] I note that if ever there was any doubt on the finality of the decision at issue prior to this determination, it is now clear that the decision is final.
[16] "Discretionary orders of prothonotaries ought not be disturbed on appeal to a judge unless: (a) the questions raised 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 the facts." Merck & Co., Inc. v. Apotex Inc., 2003 FCA 488, [2004] 2 F.C.R. 459 (F.C.A.) at para. 19.
[17] In the present case, the question raised in the motion is clearly one vital to the final issue of the case. I agree with counsel for Novopharm that “for the test as to relevance to the final issue of the case, the issue to be decided should be looked to before the question is answered by the prothonotary, whereas that as to whether it is interlocutory or final (which is purely a pro forma matter) should be put after the prothonotary’s decision. Any other approach, it seems to me, would reduce the more substantial question of “vital to the issue of the case” to the merely procedural issue of interlocutory or final and preserve all interlocutory rulings from attack (except in relation to errors of law).” Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425 at 464-465.
[18] Further, Prothonotary Milczynski’s May 8, 2006 Order was in my view clearly wrong in finding that a decision is only final for the purposes of paragraph 6(5)(b) of the Regulations when all available appeals have been exhausted. I agree with Novopharm that the Supreme Court of Canada’s statement in Toronto (City) v. Cupe, [2003] 3 S.C.R. 77 on which the prothonotary relied, is obiter and cannot displace, the fundamental rule, which in my view, is that a court order stands and is final and binding unless and until it is reversed on appeal. (Wilson v. The Queen, [1983] 2 S.C.R. 594; Dagenais v. Canadian Broadcasting Corp., [1994] 3 S.C.R. 835 at 871; Danyluk v. Ainsworth Technologies Inc., [2001] 2 S.C.R. 460 at para. 19; Dableh v. Ontario Hydro, [1994] O.J. No. 2771 (Ont. Gen. Div.) at para. 9). Further, the potential for inconsistent judgments may be resolved with the possibility of obtaining a stay of an execution of a judgment until the leave application from the Supreme Court of Canada has been decided. In the present case, however, the issue is moot as leave to appeal has been denied by the Supreme Court of Canada.
[19] I agree with Novopharm that, from a policy perspective, a flexible application of the doctrine of abuse of process is appropriate due to the summary nature of the proceedings and the 24‑month time period in which they must be conducted. If litigants were required to await the outcome of leave applications to the Supreme Court of Canada, it would only encourage such applications, would create unnecessary duplicative litigation and would effectively permit parties to sidestep the intent of paragraph 6(5)(b) of the Regulations.
[20] In light of the above, I will review the matter de novo.
2. Test for Paragraph 6(5)(b)
[21] Paragraph 6(5)(b) of the Regulations provides as follows:
|
6(5) In a proceeding in respect of an application under subsection (1), the court may, on the motion of a second person, dismiss the application
[…]
(b) on the ground that the application is redundant, scandalous, frivolous or vexatious or is otherwise an abuse of process. |
6(5) Lors de l’instance relative à la demande visée au paragraphe (1), le tribunal peut, sur requête de la seconde personne, rejeter la demande si, selon le cas :
[…]
b) il conclut qu’elle est inutile, scandaleuse, frivole ou vexatoire ou constitue autrement un abus de procédure. |
[22] I agree with Novopharm that as a matter of statutory interpretation, it is clear that the legislature did not intend to restrict the Court’s ability to dismiss proceedings under paragraph 6(5)(b) to cases where the traditional test for res judicata or issue estoppel (the latter being one form of res judicata) has been met.
[23] This Court has generally held that in order to strike out a proceeding for being redundant, scandalous, frivolous, vexatious or otherwise an abuse of process, the moving party must show that the case is “so clearly futile that it has not the slightest chance of success”. This test has been applied several times in s. 6(5)(b) cases: Pfizer Canada Inc. v. Apotex Inc. (1999), 1 C.P.R. (4th) 358 (F.C.T.D.) at paras. 28-32; Bayer Inc. v. Apotex Inc. (1998), 85 C.P.R. (3d) 334 (F.C.T.D.) at paras. 23-24; AB Hassle v. Apotex Inc., 2001 FCT 530, (2001), 12 C.P.R. (4th) 289 (F.C.T.D.) at para. 28; AstraZeneca AB v. Apotex Inc. 2002 FCT 1249, (2002), 23 C.P.R. (4th) 213 (F.C.T.D.) at para. 11.
[24] When dealing with a paragraph 6(5)(b) motion, the courts have also applied the “plain and obvious” test such that an application will be dismissed where it is “plain and obvious” that the applicant has no chance of success: Apotex Inc. v. Merck Frosst Canada Inc. (1999), 87 C.P.R. (3d) 30 (F.C.A.) at paras. 5-6; GlaxoSmithKline Inc. v. Apotex Inc., 2003 FC 1055, (2003), 29 C.P.R. (4th) 350 (F.C.) at paras. 12-13.
[25] Novopharm submits that in this application Aventis and Schering are attempting to re-litigate the same issue that was already fully litigated and decided by Justice Mactavish, namely whether the ‘206 Patent is invalid on the basis of a lack of sound prediction. The Court has already made a determination of this issue and Aventis and Schering should not be permitted to re-litigate the same question again, as this would constitute an abuse of process.
[26] The doctrine of abuse of process was discussed at length by the Supreme Court of Canada in Toronto (City) v. Canadian Union of Public Employees (C.U.P.E.), Local 79, [2003] 3 S.C.R. 77. I recently reviewed the doctrine and the Supreme Court’s decision in Aventis Pharma Inc. v. Apotex Inc., 2005 FC 1504, [2005] F.C.J. No. 1843 (F.C.)(QL) at paragraphs 28 to 29:
28 The doctrine provides the Court with an inherent and residual discretion to prevent the misuse of its procedure. The doctrine is flexible and is "unencumbered by the specific requirements of res judicata": C.U.P.E., supra, at para. 42. Whereas issue estoppel focuses "on the motive or status of the parties, the doctrine of abuse of process concentrates on the integrity of the adjudicate process": C.U.P.E., supra, at para. 51. As explained by Layden-Stevenson J. in AB Hassle, supra, at para. 94:
While critics have argued that when the doctrine of abuse of process is used as proxy for issue estoppel it obscures the true question, while adding nothing but a vague sense of discretion, that is not so. In all of its applications, the primary focus of the doctrine of abuse of process is the integrity of the adjudicative function of courts. The focus is less on the interests of the parties and more on the integrity of judicial decision making as a branch of the administration of justice. When the focus is properly on the integrity of the adjudicative process, the motive of the party who seeks to relitigate cannot be a decisive factor. [emphasis added]
29 Abuse of process has a strong public policy dimension. Arbour J. in C.U.P.E., supra, stated that the policy grounds for both issue estoppel and abuse of process are essentially the same. At pages 103‑104, she quoted from D. J. Lange, The Doctrine of Res Judicata in Canada (2000) at pp. 347-48:
The two policy grounds, namely, that there be an end to litigation and that no one should be twice vexed by the same cause, have been cited as policies in the application of abuse of process by relitigation. Other policy grounds have also been cited, namely, to preserve the courts' and the litigants' resources, to uphold the integrity of the legal system in order to avoid inconsistent results, and to protect the principle of finality so crucial to the proper administration of justice.
[27] There is no dispute that in the NOA giving rise to this proceeding, Novopharm alleges that the ‘206 Patent is invalid on the basis of a lack of sound prediction. There is also no dispute that this allegation relating to the ‘206 Patent was already found to be justified by Justice Mactavish and the Federal Court of Appeal in previous proceedings. The central issue to be decided in the present application, specifically whether the ‘206 Patent lacks sound prediction, has thus already been fully litigated by Aventis and Schering.
[28] In my view, whether one characterizes the particular kind of abuse as redundant, scandalous, frivolous or vexatious, it is an abuse of process for Aventis and Schering to re-litigate the very issue that was decided in the First Aventis ‘206 Application. One of the purposes of the Regulations is to reduce unnecessary litigation. It would be contrary to the purposes of the Regulations to allow a first person to re-litigate the same issues in subsequent litigation, and thereby benefit from additional 24‑month injunction periods with each “re-litigation". Such an attempt to challenge a determined matter by seeking a second prohibition under the Regulations on precisely the same issue is undeniably an abuse of process.
[29] Furthermore, barring narrow exceptions, such re-litigation is an inefficient use of judicial resources, denigrates the integrity of the justice system and violates the principle of finality which is crucial to the proper administration of justice. In order to ensure the just and expeditious resolution of cases, courts must guard against repetitious litigation which wastes the time and resources of both litigants and the courts, and threatens the principle of finality.
[30] Aventis and Schering submit that while Justice Mactavish’s decision was upheld by the Court of Appeal, it is trite law that any decision in a section 55.2 proceeding is not a final determination of validity or infringement. Indeed, there may subsequently be a full trial centred on the validity issue. In this regard, Schering cites Justice Mactavish’s decision in the First Aventis ‘206 Application, at paras. 19, 23-24 aff’d by F.C.A., at paragraph 7. Firstly, I note that the purpose of her statements, as well as the purpose of those of the Court of Appeal, was to caution against equating NOC proceedings to actions for the determination of patent validity or infringement. Moreover, while what Schering asserts is true, this does not change the fact that to bring an application under the Regulations in response to an NOA, the allegations of which have been found to be justified in a previous case on the same basis, is in my opinion an abuse of process. Simply because the Novopharm NOA raises additional support for the sound prediction argument does not change the fact that Justice Mactavish’s decision on sound prediction will stand (particularly since it was upheld by the Court of Appeal) and that the same result would have to be reached in the current application.
[31] In light of the decision in the First Aventis ‘206 Application, and because the Court of Appeal’s decision is binding, it should come as no surprise that this application will be dismissed on the very same grounds, and the NOA found to be justified on the basis of sound prediction.
[32] Aventis and Schering submit that the evidence filed in this case addresses specific issues in the Novopharm NOA, some of which are different than those raised in the Apotex NOA. They also assert that they have different evidence in this application than they had in the First Aventis ‘206 Application. As stated by Justice Dolores Hansen in Glaxo Group Ltd. v. Canada (Minister of Health), 2001 FCT 16, [2001] F.C.J. No. 159 (T.D.)(QL) at paragraph 16:
In Hofffman-LaRoche, supra, the factors that led Rothstein J. to conclude there was an abuse of process are analogous to the facts before me. The applicants and the patents are the same in both proceedings, the Notices of Allegation are in all material respects identical, and the issues were fully litigated in the first proceeding. The only distinguishing aspect between the first and current applications is that Glaxo believes it has a better evidentiary basis on which to litigate the issues. Litigants who have already litigated a matter, but lost, should not be permitted to re-litigate because they have acquired new evidence. This, in my view, is an abuse of the Court's process. [Emphasis added]
[33]
In my view, Aventis
and Schering
are essentially attempting to revise and tweak the arguments which they had put
before Justice Mactavish and which she ultimately rejected when she dismissed
the First Aventis ‘206 Application. This kind of approach obviously cannot be
condoned. Significantly,
Aventis and Schering have not asserted that this allegedly “better evidence”
was unavailable at the time of the prior application. In my opinion, it seems
obvious that they are simply attempting to bolster the evidence presented on
the First Aventis ‘206 Application, which is a clear abuse of process and
impermissible.
[34] Finally, Schering relies on two decisions, both rendered by Justice Carolyn Layden-Stevenson, for the proposition that in order to strike out an application under paragraph 6(5)(b), the second person must demonstrate that each of the grounds advanced by the first person is futile: AstraZeneca AB, above, at para. 7; AstraZeneca Canada Inc. v. Apotex Inc., 2002 FCT 1250 (2002) 23 C.P.R. (4th) 378 at para. 8.
[35] I agree with Schering that a paragraph 6(5)(b) motion should only be granted when the second person has shown that the entire application is futile. However, in the First Aventis ‘206 Application, Justice Mactavish found, at paragraphs 174 to 177, that Apotex’s NOA was sufficient with respect to the sound prediction issue. The NOA relating to this application raises the same allegations that were raised in the First Aventis ‘206 Application with regard to the invalidity of the ‘206 Patent. Specifically, both NOAs allege invalidity on the basis of a lack of sound prediction and both ground these allegations on the same factual basis. Given that Novopharm’s NOA is in all material respects identical to Apotex’s NOA regarding the claim of sound prediction, the new application is clearly futile as Justice Mactavish’s decision regarding the sufficiency of the NOA remains in place. To reiterate, allowing Aventis to argue the sufficiency of the NOA, as it intended to do, would amount to a re-litigation of that issue, which is an abuse of process.
CONCLUSION
[36] There is no question that it is “plain and obvious” that Aventis has no chance of success with respect to their current ‘206 application as the Federal Court is bound to follow the decision of the Federal Court of Appeal in the First Aventis ‘206 Application. In other words, the case is “so clearly futile that it has not the slightest chance of success”.
[37] In light of the foregoing, the Order of Prothonotary Milczynski, dated May 8, 2006, will be set aside, and the application dismissed, with costs, as an abuse of process.
ORDER
THIS COURT ORDERS that
[1] The motion for appeal of Prothonotary Milczynski’s Order, dated May 8, 2006, is granted.
[2] The NOC application is dismissed as an abuse of process.
[3] The whole with costs.
FEDERAL COURT
SOLICITORS OF RECORD
DOCKET: T-1965-05
STYLE OF CAUSE: Sanofi-Aventis
and
Novopharm Limited and The Minister of Health
PLACE OF HEARING: Ottawa, Ontario
DATE OF HEARING: September 5, 2006
REASONS FOR ORDER: TREMBLAY-LAMER J.
APPEARANCES:
SOLICITORS OF RECORD:
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Smart & Biggar Toronto, Ontario
|
|
|
Heenan Blaikie Toronto, Ontario
Gowling Lafleur Henderson Ottawa, Ontario
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FOR THE RESPONDENT NOVOPHARM LIMITED
FOR THE RESPONDENT/PATENTEE SCHERING CORPORATION |