Date: 20020703
Docket: T-462-02
Neutral citation: 2002 FCT 742
BETWEEN:
NOVARTIS PHARMACEUTICALS CANADA INC.
and NOVARTIS AG
Applicants
and
RHOXALPHARMA INC.
and THE MINISTER OF HEALTH
Respondents
REASONS FOR ORDER
LEMIEUX J.
[1] RhoxalPharma Inc. (Rhoxal) moves the Court, pursuant to subsection 6(5) of the Patented Medicines (Notice of Compliance) Regulations (the "Regulations") for an order dismissing the application of Novartis Pharmaceuticals Canada Inc. and Novartis AG ("Novartis") filed on March 18, 2002 in response to a Notice of Allegation ("NOA") served by Rhoxal pertaining to 25 mg and 50 mg cyclosporine soft gel capsules for oral administration. Cyclosporine is an immunosuppressant and is sold in Canada in application to recipients of organ transplants. In its NOA, Rhoxal alleges, inter alia, non-infringement of Canadian patents nos 1,308,656 (the 656 patent), 1,322,150 (the 150 patent) and 2,072,509 (the 509 patent) and the invalidity of claim no. 1 of both the 150 and 509 patents.
[2] Novartis' application seeks an order of this Court prohibiting the Minister of Health (the Minister) from issuing notices of compliance (NOC) to Rhoxal in connection with the oral administration of its 25 mg and 50 mg capsules.
[3] Subsection 6(5) of the Regulations reads:
| 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 (a) if the court is satisfied that the patents at issue are not eligible for inclusion on the register or are irrelevant to the dosage form, strength and route of administration of the drug for which the second person has filed a submission for a notice of compliance; or (b) on the ground that the application is redundant, scandalous, frivolous or vexatious or is otherwise an abuse of process. [emphasis mine] |
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 : a) il estime que les brevets en cause ne sont pas admissibles à l'inscription au registre ou ne sont pas pertinents quant à la forme phonologique, la concentration et la voie d'administration de la drogue pour laquelle la second personne a déposé une demande d'avis de conformité; b) il conclut qu'elle est inutile, scandaleuse, frivole ou vexatoire ou constitue autrement un abus de procédure.
|
[4] Rhoxal's basic proposition is Novartis is attempting to re-litigate issues already decided by this Court and notes Novartis has not challenged Rhoxal's allegations of non-infringement with regard to the 150 or 509 patents.
[5] During the hearing, counsel for Rhoxal undertook to withdraw the allegations of invalidity of claim no. 1 of both the 150 and 509 patents if successful on this motion.
BACKGROUND
[6] The basis for Rhoxal's claim Novartis is seeking to re-litigate issues already decided by this Court is based on Justice Tremblay-Lamer's decision of March 1, 2001 dismissing a prohibition application by Novartis in connection with 100 mg capsules of the drug cyclosphorine for oral administration until after the expiration of the 656 patent entitled "Hydrosol of Pharmacologically Active Agents and their Pharmaceutical Compositions Comprising Them" granted on October 13, 1992. .
[7] Claim 2 of the 656 patent refers to pharmaceutical preparations:
2. A pharmaceutical preparation the active ingredient of which comprises a cyclosphorine. Said the preparation comprising either:
(a) a hydrosol, the particles of which comprises said active agent in solid form, have a diameter of from 1 to 10,000 nanometers, and which are stabilized whereby the particle size distribution of said particles is maintained constant; or (b) the stabilized particulate phase of the above hydrosol in dry or isolated form.
[8] In the case before Justice Tremblay-Lamer, Rhoxal's NOA stated it would not infringe the 656 patent by the making, using or selling of its cyclosphorine capsules because:
We have available cyclosphorine soft gel capsules which will not contain a hydrosol and, more precisely, will not contain the hydrosol as described and claimed in the patent. Accordingly, since at least one essential feature of each claim will not be found in our product, the patent will not be infringed.
[9] Before Justice Tremblay-Lamer, Novartis admitted that Rhoxal's capsules did not contain a hydrosol.
[10] Despite this admission, Novartis argued there would be infringement of its 656 patent either directly or indirectly by the sale of the Rhoxal capsules because claim 2 refers to pharmaceutical preparations irrespective of route of administration.
[11] Justice Tremblay-Lamer summarized the arguments before her as follows:
¶ ¶ 11 The applicants submit that a "pharmaceutical preparation" can exist in several forms obtained prior or after the ingestion. The respondent's capsule itself need not contain a hydrosol to infringe the patent. It will infringe as long as a hydrosol is formed in aqueous medium, e.g. addition to water or gastrointestinal fluid, by following the manufacturer's instructions, for example, through ingestion.
¶ ¶ 12 The applicants also allege that the respondent is infringing the patent by inducing patients and others to infringe it by virtue of complying with the instructions which will be attached to the respondent's capsules.
¶ ¶ 13 The respondent takes the position that there is no infringement of the patent because, at the time of sale of its capsules, there is no hydrosol.
¶ ¶ 14 The respondent argue that "pharmaceutical preparation" referred to in Claim 2 of the patent does not cover a hydrosol formed in situ. Neither the disclosure nor the patent claims refer to a hydrosol formed in situ.
¶ ¶ 15 The respondent also allege that there can be no inducement to infringe because its capsules do not infringe the patent. In any event, the respondent argues that the applicants have not established that it would be such. [emphasis mine]
[12] The application judge said the only issue before her was whether the formation of a hydrosol after ingestion of a capsule is an infringement of the patent.
[13] As noted, she came to the conclusion Rhoxal's capsules did not infringe the 656 patent. She made that finding on her construction of claim 2 of the 656 patent.
[14] Justice Tremblay-Lamer stated:
¶ ¶ 34 Neither the disclosure nor the patent claims refer to a hydrosol formed in situ. The lack of such a reference in what is otherwise a complete description of the hydrosol, its advantages, uses and the process by which it is made, leads to the conclusion that an ingested pharmaceutical preparation which forms a hydrosol in situ is not covered by the patent.
¶ ¶ 35 Although Claim 2 is silent with regards to the route of administration and therefore may not be limited only to pharmaceutical preparations for intravenous use, I am satisfied that a contextual examination of the patent can only lead to the conclusion that it covers pre-ingestion solutions.
[15] Neither the disclosure nor the patent claims refer to a hydrosol formed in situ. The lack of such a reference in what is otherwise a complete description of the hydrosol, its advantages, uses and the process by which it is made leads to the conclusion that an ingested pharmaceutical preparation which forms a hydrosol in situ is not covered by the patent.
[35] Although claim 2 is silent with regards to the route of administration and therefore may not be limited only to pharmaceutical preparations for intravenous use, I am satisfied that a contextual examination of the patent can only lead to the conclusion that it covers pre-ingestion solutions.
[16] Novartis appealed the application judge's decision to the Federal Court of Appeal but before the appeal could be heard, Rhoxal was issued a NOC for 100 mg capsules on April 24, 2001. Rhoxal subsequently brought a motion to the Federal Court of Appeal to have the Novartis appeal dismissed on the basis it was now moot having regard to the issuance of the NOC.
[17] Novartis disputed that motion. One of the arguments it raised was the appeal was not moot because further NOCs for different dosage strengths could be prohibited if the appeal was granted or, alternatively, Rhoxal would rely on Justice Tremblay-Lamer's decision in support of future NOAs for different dosage strengths of cyclosphorine.
[18] Rhoxal's written memorandum before the Federal Court of Appeal on the mootness question addressed future NOAs and on what evidentiary basis such NOAs should be decided. Rhoxal wrote:
7 ... each of these issues would obligatorily be submitted to judicial scrutiny of a court of law to which new evidence relevant to the issue would be presented. Thus, it is not appropriate in this forum to anticipate these cases.
15. In any event, if further NOC proceedings are filed, they will be decided on the evidence before the court at the time they are filed. An appeal in this case, whether or not Novartis is successful would not bar RhoxalPharma from sending further NOA's or bar Novartis from responding to these NOA's with NOC proceedings. [emphasis mine]
[19] As noted, the Federal Court of Appeal, on November 28, 2001 dismissed the appeal by Novartis on the grounds it was moot. The Chief Justice of the Federal Court wrote the following brief reasons:
[1] We are of the view, based on the decision of this Court in Pfizer Canada Inc. v. Apotex Inc. (2001), 11 C.P.R. (4th) 245 (F.C.A.), motion for leave to appeal dismissed . . ., Supreme Court of Canada Bulletin of Proceedings, September 28, 2001, that the motion to dismiss the appeal on the ground that the appeal is moot should be allowed, and accordingly, the appeal will be dismissed with costs to RhoxalPharma Inc.
[20] On January 31, 2002, Rhoxal delivered to Novartis a NOA related to cyclosphorine soft gel capsules 25 mg and 50 mg dosage strengths for oral administration. Rhoxal wrote:
We confirm that the capsule fill and the capsule shells are essentially identical in composition to the capsule fill and shell of the 100 mg capsules. The same manufacturing equipment and process conditions are used. Indeed, the capsule fill liquid used for the 25 mg and 50 mg capsules is the same capsule fill liquid used in the 100 mg capsules. However, the 25 mg and 50 mg capsules are smaller in size than the 100 mg capsules. More specifically, the 25 mg capsules contain one quarter the weight of capsule fill liquid when compared to the 100 mg capsules. Similarly, the 50 mg capsules contain one half of the weight of capsule fill liquid when compared to the 100 mg capsules. Since less capsule fill liquid is used, the capsule shells of the 25 mg and 50 mg capsules are smaller than the 100 mg capsules with the 25 mg capsules being the smallest.
In view of the above facts and in view of the decision of the Federal Court of Appeal in File No. T-936-99 ... it is clear that there is no infringement. However, for the sake of certainty, we are ready to disclose the manufacturing instructions for the 25 mg and 50 mg capsules upon agreeing to the usual confidentiality agreement.
[21] In response to Rhoxal's January, 2002, NOA, Novartis, on March 18, 2002 filed the application which Rhoxal now seeks to have dismissed.
[22] Paragraph 11 of the Novartis' application reads:
The RhoxalPharma capsule containing cyclosphorine will form a hydrosol when added to an aqueous environment such as the stomach. Therefore, when the RhoxalPharma product is taken by patient, a hydrosol is formed within the scope of claim 2 of the 656 patent.
ANALYSIS
[23] In its written argument to the Court, Rhoxal said there was but one issue:
Is the Novartis application redundant, frivolous, vexatious or otherwise an abuse of process?
[24] Rhoxal answered the question by stating the Novartis' application is without merit because there is nothing left to litigate as the issue of the infringement of the 656 patent had already been decided by this Court.
[25] In support of its proposition that Novartis was seeking to re-litigate a decided issue, Rhoxal relied upon the doctrine of res judicata and issue estoppel.
[26] However, in argument before me, counsel for Rhoxal abandoned these two doctrines as the foundation of its motion.
[27] As I understood him, the focus of counsel for Rhoxal's argument centres on Novartis' attempt to re-litigate an issue which Justice Tremblay-Lamer had decided against. He argued this Court should not countenance Novartis' effort and it did not matter much whether this re-litigation was characterized as a redundancy, as a frivolous or vexatious application or an application which was otherwise an abuse of process under subsection 6(5) of the Regulations.
[28] In essence, in my view, Rhoxal's counsel is arguing Novartis' application is an abuse of process made for the sole purpose of obtaining a statutory stay under the Regulations. Novartis, he argued, is simply trying to re-litigate a decided issue with new evidence.
[29] There is considerable force to Rhoxal's argument Novartis is trying to shore up with better evidence an issue which Justice Tremblay-Lamer decided against i.e., the patent did not cover a hydrosol formed in a person's stomach and this Court should not give its stamp of approval to such an effort.
[30] Justice Hansen of this Court was of such a view in Glaxo Group Limited et al. v. The Minister of Health and Apotex Inc., [2001] F.C.T. 16. After citing Justice Rothstein's decision in Hoffman-La Roche Ltd. v. Canada (1998), 85 C.P.R. (3d) 50, she wrote the following:
¶ ¶ 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.
[31] Lord Diplock in Hunter v. Chief Constable of West Midlands et al., [1981] 3 All.E.R. 727, spoke about abuse of process of the High Court in these terms at page 729:
It concerns the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people. The circumstances in which abuse of process can arise are very varied; those which give rise to the instant appeal must surely be unique. It would, in my view, be most unwise if this House were to use this occasion to say anything that might be taken as limiting to fixed categories the kinds of circumstances in which the Court has a duty (I disavow the word discretion) to exercise this salutary power.
[32] In Canam Enterprises Inc. v. Coles (2000), 51 O.R. (3d) 481 (O.C.A.), Justice Finlayson of the Ontario Court of Appeal, for the majority, said this about abuse of process at paragraph 31 of the report:
[31] However, we are not limited in this case to the application of issue estoppel. The court can still utilize the broader doctrine of abuse of process. Abuse of process is a discretionary principle that is not limited by any set number of categories. It is an intangible principle that is used to bar proceedings that are inconsistent with the objectives of public policy.
[33] In that same case, Goudge J.A. claimed the concept of abuse of process at paragraphs 55 and 56 of the report:
[55] The doctrine of abuse of process engages the inherent power of the court to prevent the misuse of its procedure, in a way that would be manifestly unfair to a party to the litigation before it or would in some other way bring the administration of justice into disrepute. It is a flexible doctrine unencumbered by the specific requirements of concepts such as issue estoppel... .
[56] One circumstance in which abuse of process has been applied is where the litigation before the court is found to be in essence an attempt to relitigate a claim which the court has already determined. See Solomon v. Smith, supra. It is on that basis that Nordheimer J. found that this third party claim ought to be terminated as an abuse of process.
[34] As I see it, the case law has established the following parameters surrounding the doctrine of abuse of process:
(1) it is a flexible doctrine, not limited to any set number of categories;
(2) its purpose is a public policy one used to bar proceedings that are inconsistent with that purpose;
(3) its application depends on the circumstances and is fact and context driven;
(4) its aim is to protect litigants from abusive, vexatious or frivolous proceedings or otherwise prevent a miscarriage of justice.
[35] I am of the view Novartis' application filed on March 18, 2002, is not an abuse of process and, as a result, should not be dismissed under subsection 6(5) of the Regulations.
[36] The circumstances surrounding the application which Novartis filed are unique and arise when Rhoxal was successful in having the Novartis appeal from Justice Tremblay-Lamer's judgment dismissed for mootness.
[37] As noted, in that proceeding before the Federal Court of Appeal, Rhoxal said if it filed new NOAs for different dosage strengths of its cyclosporine capsules, Novartis could respond with new evidence in NOC proceedings.
[38] Novartis' application which Rhoxal seeks to strike, is in response to Rhoxal's new NOAs for its cyclosporine capsules in dosage strengths of 25 mg and 50 mg. In the circumstances, Novartis' application cannot vex Rhoxal, cannot be unfair to it and cannot bring the administration of justice into disrepute.
[39] For all of these reasons, Rhoxal's application is dismissed with costs.
"François Lemieux"
J U D G E
OTTAWA, ONTARIO
JULY 3, 2002
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF SOLICITORS AND SOLICITORS ON THE RECORD
COURT FILE NO.: T-462-02
STYLE OF CAUSE: NOVARTIS PHARMACEUTICALS CANADA INC. ET AL v. RHOXALPHARMA INC.
PLACE OF HEARING: MONTREAL, QUEBEC
DATE OF HEARING: MAY 27th, 2002
REASONS FOR ORDER OF THE HONOURABLE MR. JUSTICE LEMIEUX
DATED: JULY 3rd, 2002
APPEARANCES:
ANTHONY CREBER AND
JENNIFER WILKIEFOR APPLICANTS
MARTIN SHEENAN AND
KARINE JEIZILRESPONDENT RHOXALPHARMA
SOLICITORS OF RECORD:
GOWLING LAFLEUR HENDERSON
OTTAWA, ONTARIOFOR APPLICANTS
FASKEN MARTINEAU DUMOULIN
MONTREAL, QUEBECRESPONDENT RHOXALPHARMA
DEPARTMENT OF JUSTICE RESPONDENT MINISTER
CIVIL LITIGATION SECTION
OTTAWA, ONTARIO